Procedural Posture

Defendant school district appealed a judgment from the Superior Court of San Diego County (California), which, in a jury trial, found that the school district had breached a construction contract and awarded damages, prejudgment interest, attorney fees, and costs to plaintiff contractor. The trial court also entered judgment against the school district on its performance bond cross-complaint against the contractor and its surety.

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Overview

There was no attorney fee provision in the construction contract. The performance bond included an attorney fee provision that made the contractor and its surety liable for the school district’s attorney fees incurred to enforce the bond. The court held that the reciprocity principles of Civ. Code, § 1717, subd. (a), entitled the contractor and its surety to recover attorney fees for their defense of the performance bond claim to the extent that the school district could have recovered attorney fees if it had prevailed on that claim. Whether the cross-complaint sought enforcement of the bond was determined from the pleadings. Because the cross-action was brought against both the contractor and its surety, specifically alleged a cause of action for breach of the performance bond, and specified that the school district sought attorney fees pursuant to the bond, the court found that it was an action on the bond. Because Civ. Code, § 2808, required that the liability of the principal be established in order to recover against the surety on a performance bond, the contractor was entitled to the attorney fees it had incurred in litigating both liability and enforcement of the bond.

Outcome

The court affirmed the judgment of the trial court.