MCCLAIN CO. V. PAGE & WIRTZ CONSTR. CO., 1985-NMSC-013, 102 N.M. 284, 694
P.2d 1349 (S. Ct. 1985)
THE McCLAIN CO., INC.,
Plaintiff-Appellee,
vs.
PAGE & WIRTZ CONSTRUCTION CO., et al.,
Defendants-Appellants.
SUPREME COURT OF NEW MEXICO
1985-NMSC-013, 102 N.M. 284, 694 P.2d 1349
Appeal from District Court of
Bernalillo County, Jack L. Love, District Judge.
Miller & Wess, Hartley B. Wess,
Albuquerque, New Mexico, for Appellants.
Delayo & Olson, Thomas F. Blueher,
Albuquerque, New Mexico, for Appellee.
Sosa, S.J., wrote the opinion. WILLIAM R.
FEDERICI, Chief Justice, WILLIAM RIORDAN, Justice
{1} This is an appeal from
the trial court's refusal to award attorney's fees in a breach of contract
action. We affirm the trial court.
{2} The sole issue on appeal
is the award of attorney's fees. The threshold question to be decided is
whether there was substantial evidence to support the trial court's finding
that the defendant breached his contract, making him ineligible to receive
attorney's fees under the contract.
{3} Plaintiff McClain Co.,
Inc. (McClain), a subcontractor, entered into a contract with defendant Page
& Wirtz Construction Co. (P & W), a general contractor, for the
installation of a wood gymnasium floor in a new school building in Carlsbad.
Near the time of completion, an unexpected torrential rain fell and water
entered the building.
{4} McClain then brought suit
for payment for work performed under the contract. P & W counterclaimed for
$64.75. This sum represented the amount incurred to complete the job, over and
above what was allegedly owed to McClain. The trial court found both parties
breached their contract and concluded that both parties failed to sustain their
allegations. The court then dismissed both parties' claims with prejudice,
stating neither party was entitled to recover, and ordered each party to pay
its own attorney's fees.
{5} At trial evidence was
presented that work on the floor stopped after the rain,
{*285}
and that P & W and McClain disagreed on how to proceed with the repair
and completion of the floor. Additionally evidence was heard as to the cause of
the floor damage and the cost to repair it. After McClain refused to do further
work on the floor, P & W hired a new subcontractor to complete the floor.
{6} Other findings by the
trial court were: McClain and P & W agreed McClain should pull off the job
and wait to see if any damage resulted from the water which ran under the wood
floor; McClain refused responsibility for water damage to the floor and refused
to repair or continue work on the floor without a work order from P & W;
McClain left the job after the rain; McClain had not allowed a two inch
expansion void around the perimeter according to the job specification; P &
W refused to pay McClain for the work completed prior to the rainfall; and P
& W paid another subcontractor to finish the floor. The trial court's final
finding was:
Both parties breached their contract. Defendant failed to
provide a building that was reasonably safe from weather; and Plaintiff failed
to make the best of a bad situation when the floor was damaged.
{7} P & W claims it did
not materially breach the contract. It contends the court erred because under
the contract, if the subcontractor breaches the contractor may declare the
contract terminated and charge the expenses for taking over the contract work,
including legal fees, to the subcontracting party.
{8} P & W urges that the
trial court did not have substantial evidence before it to sustain a finding
that the plaintiff's failure to continue to perform was a result of P & W's
initial breach of failing to provide a building that was reasonably safe form
poor weather.
{9} We find there was
substantial evidence before the trial court to make a finding of breach by P
& W.
Toltec International, Inc. v. Village of Ruidoso, 95 N.M. 82,
619 P.2d 186 (1980).
{10} The general rule in New
Mexico is that absent a statute or court rule, each party to a litigation must
pay his own attorney's fees.
Martinez v. Martinez 101 N.M. 88,
678 P.2d
1163 (1984);
State v. Lujan, 43 N.M. 348,
93 P.2d 1002 (1939).
Exceptions have been granted in rare cases, but this cause of action does not
come within any recognized exception.
Gregg v. Gardner, 73 N.M. 347,
388
P.2d 68 (1963).
{11} Since territorial times
New Mexico has permitted contractual provisions, such as the one here, for
attorney's fees.
Bank of Dallas v. Tuttle, 5 N.M. 427,
23 P. 241 (1890).
The present agreement provides for attorney's fees for breach by the
subcontractor. Ordinarily this would sustain an award of attorney's fees under
Bank
of Dallas, but we are obliged to consider that the trial court found that
the other party also breached the agreement. We find no New Mexico case where
an award of attorney's fees was made to a party found to have breached his
agreement. The Ninth Circuit has considered this question and held against an
award, stating:
In seeking attorneys' fees, [appellant] asked the court to
enforce part of the very contract for whose termination [appellant] was partly
at fault. The court in its discretion could conclude that allowing attorney's
fees when both parties had acted improperly would be inequitable and
unreasonable. [Citation omitted.]
United States ex rel A.V. DeBlasio Construction, Inc. v.
Mountain States Construction Co., 588 F.2d 259, 263 (9th Cir.1978). See also
Cable Marine, Inc. v. M/V TRUST ME II, 632 F.2d 1344 (5th Cir.1980); First
Atlantic Building Corp. v. Newbauer Construction, 352 So.2d 103 (Fla.
App.1977).
{12} Under the facts of this
case, P & W, as a breaching party should not be awarded the attorney's fees
provided under the contract. The trial court is affirmed.
WILLIAM R. FEDERICI, Chief Justice, WILLIAM RIORDAN, Justice,
concur.