ARMSTRONG, J.
Ye Hyung Choi and his daughter, Jeon Won ("Addie") Sim, appeal from the judgment entered against them and in favor of respondent C-1 Construction, Inc., on C-1's complaint and their cross-complaint. C-1 appeals from the order denying an award of attorney's fees. We affirm the judgment in favor of C-1, but reverse the ruling on attorney's fees, finding that C-1 was entitled to its fees.
Choi (and others) owned a medical building on Western Avenue in Los Angeles, and wished to convert it into a shopping mall. The parties often referred to this property as "Lux Plaza." C-1 performed some work on the project. The relationship soon ended, and in April 2007, C-1 sued Choi, Sim, and others, including Choi's former wife Jong Choi,
Choi cross-complained against C-1, C-1 owner Won Kim, and an individual named Chin Lee, also alleged to be an owner of C-1. There were numerous causes of action, but only the cause of action for fraud seems to have gone to the jury. The cross-complaint alleged that C-1 had been hired for the demolition phase only, and that C-1 had departed from the terms of the agreement by demolishing too much of the building, necessitating additional work and expense.
The case was tried to a jury. C-1 called Kim, Sim, Joon Han, (project manager at the architectural firm of Warde Han), and a City of Los Angeles building inspector. Sim also testified for defendants, as did structural engineer Seungil Ha, Chin Lee, and Brad Avrit, a civil engineer, called as an expert.
Kim, Sim, and Han described the initial part of these transactions similarly: in September 2006, at defendants' behest, Han invited Kim and other contractors to attend a meeting at Lux Plaza, then a vacant hundred year old building. Three other contractors were present, as was Sim. Han, who ran the meeting, introduced Sim as the owner of the property. She said nothing to indicate that this was not the case.
Kim brought Chin Lee with him to the meeting. Lee is a civil engineer, and Lee and Kim both testified that they were old friends and often assisted each other without charge. After the meeting, with Lee's help, Kim prepared a bid. He submitted it to Han. A few days later, Kim met with Han and Sim to go over the bid. At that meeting and/or at meetings which took place during the following weeks, Kim and Sim reviewed the bid in detail, and Sim added additional work to the project. On October 10, Kim submitted a revised bid for the project.
Kim testified that at a meeting at the Coffee Bean in the Silver Lake area, Sim presented him with a contract, telling him that it was the contract she wanted. The contract was an American Institute of Architects (AIA) form contract which Sim had changed by deleting some clauses and adding several typed pages of additional provisions, including an attorney fee provision.
Kim testified that at the Coffee Bean meeting, he and Sim negotiated the liquidated damages clause and a few other matters, and reached an agreement. At the end of the meeting, Sim said that she would prepare a new document for signature, reflecting the terms they had agreed on. She did not do so, but she did give Kim keys to the building and said that since everything had been agreed on, C-1 could start work. After obtaining building permits for the entire project, C-1 began work.
In her testimony, Sim agreed that she brought her draft of the AIA contract to the meeting, but said that she gave it to Lee, who was also at the meeting, and that she did so in order to get his opinion on its legality, since his wife was a lawyer and he was experienced. She did not remember any negotiation. She testified that she never awarded C-1 a contract for the entire project. Instead, at some point Kim moved construction equipment onto the site, and she orally agreed to award him the demolition work only.
Kim also introduced into evidence a different version of the AIA contract, in which various blanks had been filled in: Sim was listed as "owner's representative," C-1 as contractor, and $1.720 million, which was the amount of C-1's revised bid, as the contract price. Kim's testimony was that he first saw the document at his deposition in this matter. Sim testified that she had had someone type the information onto the form, although she remembered little else about it.
It was undisputed that C-1 demolished walls which, on the original plans, were to be kept, but the circumstances were disputed. C-1's evidence was that, as Sim knew, termite damage meant that the plans had to be changed. Kim testified that from the outset, the smell of mildew at the building indicated that there was rot. At early meetings with Sim, he raised the issue of termite damage and the possibility of additional demolition. Sim agreed, as long as the price was the same.
Kim testified that as the demolition proceeded, he discovered that structures which were slated to be kept had extensive termite damage. He called the building inspector assigned to the area, who said that the walls could not be kept. City of Los Angeles building inspector Sako Aghazarian testified similarly; that he was the inspector responsible for the project, that he was called to inspect, and that he observed so much dry rot that he instructed the contractor to replace certain walls. He would not have allowed the project to go forward otherwise.
Kim's testimony was that he notified Han about the problem, and told Sim of the meeting with the inspector and his plan to demolish the wall. She was happy because she would get a new building for the same price.
Han testified that Sim had obtained a termite report on the building in 2005, that the report showed termite damage throughout the building, and that Sim had been managing the building, knew that there were termites, and told him that there were termites. He discussed the report with Sim. He also testified that he was present at a meeting where Kim told Sim about termite damage discovered during demolition, and about the meeting with the building inspector. At that meeting, it was decided that additional demolition would be done. To the extent that, in late November, conditions at the site were not in accord with the plans, the cause was unforeseen termite and dry rot damage.
In contrast, Sim testified that she saw a termite report on the property in June of 2006, but did not remember who obtained it, or why, or what it said. She also testified that after demolition started, she did not go to the property until early November. At that point, she discovered that there had been more demolition than the plans called for. She immediately started to look for another contractor. She testified that Kim never discussed additional demolition with her, and that in November, she formed the opinion that C-1 was not capable of performing the work. She also testified that she could not read structural plans and had no expertise with which to judge C-1's work.
For defendants, structural engineer Ha testified that at Warde Han's direction, he drew up structural plans for the building, and that the demolition was not in accord with the plans. On questioning by C-1, he testified that he knew nothing about any termite problems in the building. Ha and expert witness Avrit testified to the proper procedures a contractor should follow to comply with a city inspector's request to demolish a wall. They were not the procedures C-1 followed here.
C-1's evidence about the end of the relationship was that around November 14 or 15, during demolition, Sim went to the job site and told C-1 to leave, saying that the work was a week behind schedule. Kim reminded Sim about the extra work and told her that there was plenty of time to get the project completed on schedule. A week later, a new contractor started on the project, and Sim called C-1 and asked that it remove its last piece of equipment.
About a week later, Kim presented Sim with an invoice for the work C-1 had done. She refused to pay it. After additional meetings concerning the invoice, C-1 filed a mechanic's lien. It was undisputed that C-1 was not paid for its work.
Kim also testified that after the mid-November verbal termination notice, "I agreed with her. I agreed with her and gave her an invoice . . ." and that when Sim complained that C-1 had damaged the structure, he offered to make repairs even though the damaged portion was slated for demolition. He made the offer because "I want to avoid hassling with her . . ., and so I just want to move on."
C-1 entered into evidence photographs of the building site, and various documents, including its original and revised bids, evidence of payment to subcontractors, and letters exchanged between C-1 and Sim after C-1 stopped working on the project.
Sim also testified that her parents and siblings owned Lux Plaza, that she was not an owner, but that her parents had authorized her to hire C-1.
C-1 asked for damages of $217,265. It presented evidence of $183,000 in lost profit, calculating that the contract price was $1,720,800 and that C-1's costs to complete the contract would have been $1,537,800. C-1 also presented evidence that it had performed extra work in the amount of $34,000, in addition to the work in the bid proposal, along with evidence that C-1 had originally agreed not to charge for that work, but that when Sim refused to pay, Kim changed his mind.
In special verdicts, the jury was asked whether C-1 had entered into a contract with Sim, Choi, or Jong Choi, whether C-1 did all, or substantially all, of the significant things the contract required it to do, whether C-1 was excused from having to do all, or substantially all, of the significant things the contract required it to do, and whether Sim, Choi, or Jong Choi breached the contract. It answered "yes" to those questions, and found that damages for the breach were $184,966.12.
The jury was then asked whether "any of the following persons" (Sim, Choi, and Jong Choi) were liable for those damages, and answered yes in each instance.
The jury was then asked whether Sim, acting on behalf of Choi and Jong Choi, requested by words or conduct that C-1 perform construction services, including demolition, on Lux Plaza for the benefit of the owners of Lux Plaza and whether C-1 had performed the services as requested. The jury answered yes to both questions, and when asked the reasonable value of those services, found a value of $94,966.12. Again, the jury found that Sim, Choi, and Jong Choi were liable to C-1 construction for that amount.
In questions relating to the cross-complaint for promissory fraud, the jury was asked whether Kim or Lee had represented to Sim that C-1 was capable of performing construction work at Lux Plaza in a timely and workmanlike manner. It answered yes to that question, then found that the representation was not false.
Finally, the jury was asked whether C-1 had entered into a contract with Choi and Jong Choi through Sim, as their agent, to perform demolition work at Lux Plaza. The jury answered yes to that question, and answered no when asked whether C-1 had breached that agreement.
To begin with, defendants raise several contentions concerning the special verdict form. They argue that the form was inconsistent and ambiguous, failed to establish any definitive or valid contract on which C-1 might sue, allowed the jury to find two contracts when C-1 sought to prove only one contract, allowed the jury to find a contract without specifying which of the defendants entered into the contract or the terms of the contract which gave rise to liability, and allowed a finding of breach by all three defendants without specifying what each defendant did.
Defendants did not raise these issues below, and may not do so now. (Shaffer v. Debbas (1993) 17 Cal.App.4th 33, 47, fn. 3.) The reporter's transcript of counsels' colloquy with the court establishes that the verdict form was drafted by counsel for both sides and was acceptable to both sides. The only objection defendants raised concerned damages. That is, defendants argued that the form should instruct the jury that if it found breach of contract and damages for breach of contract, it should skip the next questions, which concerned quantum meruit recovery. Counsel for C-1 agreed that an award of damages for both breach of contract and quantum meruit raised issues of double recovery, but argued that a finding on reasonable value of services was relevant to a claim C-1 had on a surety bond, and the court agreed.
On appeal, defendants' challenges to the special verdict do not concern damages, and it is fundamental that we will not consider claims made for the first time on appeal which could have been but were not presented to the trial court. (Gonzalez v. County of Los Angeles (2004) 122 Cal.App.4th 1124, 1131.)
Defendants challenge the application of the forfeiture rule, citing Woodcock v. Fontana Scaffolding & Equip. Co. (1968) 69 Cal.2d 452, 456, which found no forfeiture because the failure to object was not the result of a desire to reap a technical advantage or engage in litigious strategy. Woodcock did not involve a special verdict form drafted by the parties, but a general, though ambiguous, verdict. As the Supreme Court later observed, under such circumstances, the lack of objection is not critical because "a court generally can avoid or cure an ambiguity in a verdict by interpreting it — as we did in Woodcock," by reading the verdict in connection with the pleadings, evidence and instructions, "obviating a need for reversal and retrial." (Keener v. Jeld-Wen, Inc. (2009) 46 Cal.4th 247, 270.) Woodcock is not applicable here.
Defendants next argue that C-1 did not prove the existence of a contract, or of any contractual term under which termination would be a breach. They cite the evidence concerning the contract which Sim brought to the Coffee Bean meeting, essentially arguing that the parties did not agree to the terms.
With Kim's testimony, C-1 produced evidence that the parties agreed to the terms of the AIA form, with Sim's changes and addendum and with the changes agreed on at the Coffee Bean meeting. That is substantial evidence that a contract was formed. The AIA contract provides that an owner may terminate for specified reasons concerning the contractor's breach, or for no reason, if proper notice is given and the contractor is paid for the work done. The contract here included additional provisions drafted by Sim, which provide that the owner may terminate for failure to "achieve satisfactory progress," and that when there is cause for termination, the owner may "eject the contractor from the job" site and hire a replacement contractor to finish the work, if the contractor is given notice and an opportunity to cure the problem.
While there was evidence that C-1 did not make satisfactory progress, and that its performance was not acceptable, there was also evidence to the contrary. There was no evidence of notice and undisputed evidence that C-1 was not paid. There is thus substantial evidence for the jury's finding of breach.
Along these lines, defendants contend that there was no breach because C-1 did not substantially perform, in that it failed to comply with the plans by demolishing structures which were slated to be kept. C-1 produced evidence that compliance with the plans was impossible, that Sim was so notified, and that she agreed to the changed work. The jury was entitled to credit this evidence and to reject defendants' evidence on this subject, and apparently did do. It is not a finding we disturb on appeal.
Defendants also argue that C-1 failed to substantially perform because it failed to notify the structural engineer when additional demolition was required. In support, they cite Ha's testimony that such notification was the standard and practice in the industry, and some evidence that the plans on this project required such notice. They do not, however, establish that any failure to notify Ha was material, especially given the evidence that Han and Sim were notified.
Defendants' next argument, that the termination was by mutual consent, is also a challenge to the substantial evidence for the jury's finding of breach. Choi and Sim focus on Kim's testimony that after Sim asked C-1 to leave the job site, falsely claiming that the work was behind schedule, "I agreed with her. I agreed with her and gave her an invoice." In defendants' view, this establishes mutual consent. The jury could have so interpreted the testimony, but the testimony is also susceptible to another interpretation, that Kim understood that Sim had terminated the contract and chose not to argue with her about it. That is not the same as mutual termination.
Finally under this heading, defendants contend that any contract is unenforceable under Business and Professions Code section 7031 because Chin Lee was not a licensed contractor. That statute provides that ". . . . no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required by this chapter without alleging that he or she was a duly licensed contractor at all times during the performance of that act or contract . . . ." (Bus. & Prof. Code, § 7031, subd. (a).)
Defendants argue that C-1 sought compensation for Lee's work, but in support of the argument, they cite the evidence that Lee assisted Kim by working with him on the bid and by attending some meetings. There is no evidence that C-1 sought to recover for those services.
Defendants also reference Business and Professions Code section 7114, which provides that "Aiding or abetting an unlicensed person to evade the provisions of this chapter or combining or conspiring with an unlicensed person, . . . or acting as agent or partner or associate, or otherwise, of an unlicensed person with the intent to evade the provisions of this chapter constitutes a cause for disciplinary action," and Business and Professions Code section 7116, which provides that "The doing of any wilful or fraudulent act by the licensee as a contractor in consequence of which another is substantially injured constitutes a cause for disciplinary action." Defendants cite the evidence that Kim represented to Sim that Lee was working with C-1, and argue that through that representation, and that by involving Lee in the project, C-1 violated these and other provisions of the Contractor's Licensing Law. They do not, however, cite any authority holding that any such violation would prevent C-1 from recovering in this case.
Defendants contend that Sim has no liability as an owner of Lux Plaza, in part because she was not an owner. We cannot see that the judgment against Sim was based on that theory.
The complaint alleged both that Sim was an owner of Lux Plaza and that she was an agent for the owners. At trial, C-1 proceeded on the theory that she was an agent, having stipulated, in a statement of the case for the court to read to prospective jurors, that "This lawsuit is between plaintiff C-1 Construction and the defendants, the Chois and Miss Sim, the Chois being owners of real property known as Lux Plaza. . . ." At C-1's request, the jury was instructed that "If a third party has contracted with an agent without knowledge of the principal's existence, and later learns of the agency relationship, the third party may recover from either the agent or the principle." (Standard Oil Co. v. Doneux (1961) 192 Cal.App.2d 608, 611.)
In closing argument, counsel for C-1 argued that "the true owners were not disclosed . . ." and that ". . . it doesn't matter whether or not Addie Sim was the owner of the property. She was an authorized agent for her parents, and she certainly could bind her parents to a contract. But you're going to be given the law. In some situations, if you're an agent and you don't disclose the fact you're an agent acting for an undisclosed principal, you can be liable, as well."
Defendants also argue that there was no evidence that the true owners were not disclosed. There was such evidence, in the evidence Kim never spoke to Choi, and that Sim allowed C-1 to believe that she was the owner.
Defendants' first argument under this heading concerns the jury's finding that the reasonable value of the services C-1 performed was $94,966.12. Defendants argue that quantum meruit recovery was barred by the jury's finding of breach of contract. We need not consider the contention in further detail, because the judgment did not include an award in that amount. The judgment was for $184,966, the amount the jury found as damages for the breach of contract. Defendants have not demonstrated that they were harmed by the finding, and so have not demonstrated reversible error.
Similarly, defendants argue that the damage award should not have included sums for extra work performed by C-1 but which were not included in the contract. We cannot see that the award does include such sums. C-1 asked for damages of $34,000 for such work, above the amount it sought for lost profits, but the jury did not include that sum in the award.
Defendants argue that the damages were excessive in other ways. First, they cite the testimony of expert witness Brad Avrit, who testified that the plans for the project provided that if during construction the contractor found a discrepancy between the plans and the actual conditions, the contractor was to notify the structural engineer, and that as to unforeseen site conditions, "the contractor shall provide appropriate work to cover costs." As defendants read this testimony, the plans provide that if the contractor failed to inform the structural engineer about hidden conditions, the contractor would bear the cost associated with the hidden conditions. Defendants note the evidence that Kim did not inform Ha, the structural engineer, about the termite damage, and argue that Kim was responsible for the cost of demolishing the termite damaged structures, and that those costs should be deducted from the damage award.
Defendants also argue that C-1 included full equipment rental for eight months, although it only worked for one month, charged too much for temporary facilities, charged more for demolition than the subcontractor charged, and charged profit including supervision and overhead, thus charging supervision and overhead twice. Defendants argue that the jury awarded damages for superintendence and for bond and insurance premiums which, under the proposal, were to be included in overhead.
In support of these contentions, defendants cite testimony concerning C-1's November invoices, and testimony concerning C-1's evidence of payments to subcontractors on the demolition, neither of which was a basis of C-1's damages request. They also cite testimony concerning other exhibits which are not found in our record. Without the exhibits, we really cannot analyze the testimony. More fundamentally, these arguments misunderstand the basis of the damages request, and award, which was based not on sums spent, but on lost profits for the entire contract.
After trial, C-1 moved for attorney fees under the fee provision in the contract at issue, that is, the AIA contract with Sim's changes and the changes the parties agreed to at the Coffee Bean meeting. The fees clause provides that "if either party becomes involved in arbitration or litigation arising from this Contract or the performance of it, the court or tribunal in such arbitration or litigation or in a separate suit shall award reasonable costs and expenses of arbitration and litigation, including expert witness fees and attorney fees, to the prevailing party or parties." The trial court denied the motion, finding that as a matter of law, there was no fees clause, in that there was no written contract with such a clause.
Our review of this ruling is de novo (Khajavi v. Feather River Anesthesia Medical Group (2000) 84 Cal.App.4th 32, 60) and we agree with C-1 that there is no legal requirement that an attorney fee clause be in writing. What matters is mutual consent of the parties. (Ibid.) The evidence here was that Sim drafted a contract which included an attorney fee provision, presented the contract to C-1, and that C-1 agreed to the contract, with specified changes not relevant here. The parties thus agreed to an attorney fee clause, and C-1's motion should have been considered on the merits.
The judgment in favor of C-1 Construction on the complaint and the cross-complaint is affirmed. The ruling on C-1 Construction's fees motion is reversed, and the matter remanded to the trial court for further proceedings on that motion. C-1 Construction to recover fees on appeal and on its cross-appeal.
We concur:
TURNER, P. J.
MOSK, J.