Toro Enterprises, Inc. v. Pavement Recycling Systems, Inc.

Opinion

GILBERT, P. J. Here two provisions in a construction contract demonstrate that the greater does not always include the lesser. Subcontractor Pavement Recycling Systems, Inc. (Pavement), appeals from an order denying its motion for attorney’s fees after it prevailed against general contractor Toro Enterprises, Inc. (Toro), on a cross-complaint for contractual indemnity. We reverse because Pavement was entitled to recover its attorney’s fees under the terms of the subcontract.

[956]FACTUAL AND PROCEDURAL BACKGROUND

A general contractor, Toro, undertook a roadway construction project for the City of Oxnard. Toro engaged a subcontractor, Pavement. Near the project, Haffiza Ali was in an auto accident. She sued Toro and others.

Toro cross-complained against Pavement for defense and indemnity, based on a general defense and indemnity provision in their subcontract (section 11). Section 11 provides in relevant part: “To the fullest extent permitted by law, Subcontractor shall defend, indemnify and hold harmless Owner and Contractor and their agents and employees from claims, demands, causes of actions and liabilities of every kind and nature whatsoever arising out of or in connection with Subcontractor’s operations performed under this Agreement and caused or alleged to be caused, in whole or in part, by any act or omission of Subcontractor . . . .” Pavement cross-complained against Toro for implied contractual indemnity and for equitable indemnity. Pavement did not dispute the existence of the subcontract. Ali amended her complaint to add Pavement as a defendant.

Pavement successfully moved for summary judgment against Ali’s complaint and Toro’s cross-complaint. The court entered judgment in Pavement’s favor, and declared Pavement to be the “prevailing party.” Pavement voluntarily dismissed its own cross-complaint.

Pavement moved for an award of attorney’s fees against Toro, based on a fee provision in the subcontract (section 13). The trial court denied the motion. The court reasoned, “The attorney’s fee clause as found in paragraph • 13 relates to disputes between the parties regarding the performance of work and payment for work performed. It is not sufficiently broad to include indemnity claims arising from a third-party tort action.”

Section 13 provides: “DISPUTE RESOLUTION: Any dispute resolution procedure in the prime contract shall be deemed incorporated into this Agreement, and shall apply to any dispute arising hereunder, except disputes not involving the acts, omissions or otherwise the responsibility of [Oxnard] under the prime contract .... Subject to compliance with all applicable laws, . . . [Toro’s] sole obligation is to present any timely-filed claims by [Pavement] to [Oxnard] . . . [and] to pay to Subcontractor the proportionate part ... to which [Pavement] is entitled. For disputes not involving the . . . responsibility of [Oxnard] under the prime contract, the parties hereto shall submit any and all disputes arising under or relating to the terms and conditions of the Subcontract to arbitration .... No demand in arbitration shall be made after the date when the institution of legal. . . proceedings . . . would be barred by the applicable statute of limitations. In any dispute