Grasso v. Crow

Opinion

VOGEL (C. S.), P. J.

Introduction

Plaintiffs and appellants Antoinette Grasso and Kathleen Grasso appeal from an order denying their motion for attorney fees expended in successfully pursuing their claims against defendant and respondent Robert T. Crow for breach of contract, breach of warranty under California Uniform Commercial Code section 3416,

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breach of indorser’s obligations under section 3415, and money had and received. We disagree with plaintiffs’ contention that section 3416 sanctions an award of attorney fees, and we affirm the trial court’s order.

[849]

Factual and Procedural Background

Defendant received a check in the amount of $84,945.43, which he presented to Uncle Sam’s, a check cashing business, in July 1993.

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It was determined at a court trial on plaintiffs’ complaint that defendant caused payment to be stopped on the check even before he presented it to Uncle Sam’s, but still received from Uncle Sam’s the cash proceeds from the check, less a 7 percent commission. Judgment was awarded to plaintiffs in the amount of $84,945.43, plus 10 percent interest.

The trial court then denied plaintiffs’ motion to collect attorney fees, and the plaintiffs filed the present appeal from that order.

Discussion

Section 3416, subdivision (b),

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provides that “A person to whom the warranties under subdivision (a) are made and who took the instrument in good faith may recover from the warrantor as damages for breach of warranty an amount equal to the loss suffered as a result of the breach, but not more than the amount of the instrument plus expenses and loss of interest incurred as a result of the breach.”

In this, a case of first impression, plaintiffs argue that the term “expenses . . . incurred as a result of the breach” is broad enough to include attorney fees incurred as a result of a breach of warranty. In support of this contention, plaintiffs cite the official comments accompanying the statute, which provide as follows: “6. Subsection (b) states the measure of damages for breach of warranty. There is no express provision for attorney’s fees, but attorney’s fees are not meant to be necessarily excluded. They could be granted because they fit within the phrase ‘expenses incurred as a result of the breach.’ The intention is to leave to other state law the issue as to when attorney’s fees are recoverable.” (Off. Code com., 23B West’s Ann. Cal. U. Com. Code (1997 pocket supp.) foll. § 3416, p. 82.)