PYLMAN v. HICKMOTT FOODS INC

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Court of Appeal, First District, Division 1, California.

John PYLMAN, Plaintiff and Appellant, v. HICKMOTT FOODS, INC., Clement Perrucci, Alfred A. Morici, Cal Growers, Inc., Clemco, Defendants and Respondents.

L & S FARMS, Plaintiff and Appellant, v. HICKMOTT FOODS, INC., Clem Perrucci, Alfred A. Morici, Cal Growers, Inc., Defendants and Respondents.

Louis D. GIANNONI, Plaintiff and Appellant, v. HICKMOTT FOODS, INC., Clem Perrucci, Alfred A. Morici, Cal Growers, Inc., Defendants and Respondents.

SHIGAKI BROS., INC., Plaintiff and Appellant, v. HICKMOTT FOODS, INC., Clem Perrucci, Alfred A. Morici, Cal Growers, Inc., Defendants and Respondents.

WILCOX FARMS, Plaintiff and Appellant, v. Clem PERRUCCI, Alfred A. Morici, Cal Growers, Inc., Clemco, Defendants and Respondents.

Tony CASTANHO, Plaintiff and Appellant, v. Clem PERRUCCI, Alfred A. Morici, Cal Growers, Inc., Clemco, Defendants and Respondents.

A018682.

Decided: April 23, 1987

Joseph S. Genshlea, Sara A. Clark, Weintraub Genshlea, Hardy Erich & Brown, Sacramento, for plaintiffs and appellants. Samuel J. Cohen, Joseph E. Dworak, Russell J. Hanlon, Berliner, Cohen, & Biagini, San Jose, J. Philip Martin, McGrane & Martin, San Francisco, for defendants and respondents.

Plaintiff tomato growers sued to recover amounts owed on contracts with a cannery for the sale of tomatoes.   Plaintiffs sought to “pierce the corporate veil”, and hold individual shareholders of the cannery liable.   The six separate actions were coordinated for trial.   Defendants prevailed in the trial court.

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The judgment is affirmed, except with respect to the issues of apportionment of costs and attorney's fees.

State of Facts 1

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Statement of Facts

Plaintiffs claim Hickmott owed them $746,378 on April 21, 1978, the day Hickmott filed for bankruptcy.   When it became apparent Hickmott would be unable to pay its debts, plaintiffs sought to impose liability on Hickmott's shareholders.

Procedural History

Plaintiffs brought separate separate lawsuits in Solano, Sacramento, and Yolo County Superior Courts for breach of contract against Hickmott, Clement Perrucci, Alfred Morici, Clemco and Cal Growers, Inc.3  Plaintiffs sought to impose liability on Hickmott's shareholders based on an alter ego theory.   Anthony Morici, Jr., named as a defendant by some of plaintiffs, was later dropped from the roster of defendants.

Coordinated trial before Judge Ellis R. Randall of Solano County Superior Court, without jury, lasted 48 days.   Judgment was entered for defendants on June 1, 1982.  [[ ]]

Attorney's Fees and Costs

A. Ambiguity of contract provision

The trial court awarded defendants $290,437.73 in costs and attorney's fees, payment to be apportioned equally among the six plaintiffs.   The contracts between plaintiffs and Hickmott, and the promissory notes given by Hickmott to two of the plaintiffs contained provisions providing for attorney's fees.10  All six plaintiffs requested attorney's fees in their complaints.

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D. Apportionment of attorney's fees and costs

The trial court ordered each plaintiff to pay one-sixth of the costs and attorney's fees of defendants, in spite of the disparities in the amounts claimed by plaintiffs (lowest—$16,920;  highest—$385,318).   Plaintiffs have objected to this apportionment but have not briefed the issue, themselves.

In general, a reviewing court does not consider issues omitted from an appellant's opening brief.  (Sprague v. Equifax, Inc. (1985) 166 Cal.App.3d 1012, 1050, 213 Cal.Rptr. 69.)   However, as noted by Witken, this rule is largely for the convenience of the reviewing court and has been relaxed in certain cases.  (9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, § 480, pp. 471–472;  see, e.g. Tan v. California Fed. Sav. & Loan Assn. (1983) 140 Cal.App.3d 800, 811, 189 Cal.Rptr. 775.)

 We will consider the issue since it presents a question of law, and because defendants are aware that plaintiffs dispute the apportionment of attorney's fees.   Furthermore, while plaintiffs have not challenged the award of costs, nothing in the record suggests they were disportionately caused by any particular plaintiff.   We believe, therefore, that costs should be apportioned in the same manner as attorney's fees.

The amount and apportionment of costs and attorney's fees is left to the discretion of the trial court.  (Hadley v. Krepel (1985) 167 Cal.App.3d 677, 682, 214 Cal.Rptr. 461;  Civ.Code, § 1717;  Code Civ.Proc., § 1032.)   Equal apportionment of payment of costs and attorney's fees is an acceptable method in certain circumstances.  (Hillman v. Newington (1880) 57 Cal. 56;  Union Oil Co. v. Domengeaux (1939) 30 Cal.App.2d 266, 86 P.2d 127.)   Equal apportionment would usually be appropriate in an alter ego action, since each plaintiff must make an identical showing in order to prevail.

Plaintiffs in this action, however, attempted to recover such disparate amounts, based upon similar or identical factual situations, that they ought not to suffer equally the expense of having lost the litigation.   Fundamental fairness requires that their grossly disproportionate stakes in the outcome be reflected in the award of costs and attorney's fees.   Under these circumstances, a more appropriate result is to require that plaintiffs pay proportionately to the amounts of their respective claims.

 We think this situation is analoguous to the “common fund” doctrine, in which prevailing litigants are required “to bear a fair share of the litigation costs.”  (Quinn v. State of California (1975) 15 Cal.3d 162, 167, 124 Cal.Rptr. 1, 539 P.2d 761.)   In explaining the application of the “common fund” doctrine, the California Supreme Court noted that, when a reasonable apportionment between parties benefited by a recovery is necessary, the apportionment will “often involve only a relatively simple proportional calculation ․” (Id., at p. 175, 124 Cal.Rptr. 1, 539 P.2d 761.)   Thus, it also seems “fair” in the present case that the losing litigants should pay the prevailing litigants' costs in proportion to the amounts the losing litigants sought to recover.

We conclude that the trial court abused its discretion when it ordered equal payment of costs and attorney's fees.   That order will be reversed, and on remand the trial court should apportion the amount of costs and attorney's fees in proportion to the amount of each plaintiff's claim.

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3

The judgment is affirmed except with respect to the apportionment of costs and attorney's fees between plaintiffs.   That portion of the judgment is reversed, with direction that costs and attorney's fees be apportioned as set forth in this opinion.

FOOTNOTES

1.   The trial in this case lasted 48 days and the record on appeal exceeds 8,000 pages.   The facts set forth below present a brief overview of the parties and the transactions that led to this suit.   When appropriate, more detail is supplied in the discussion of appellants' contentions.

3.   Two of the plaintiffs, John Pylman and Shigaki Brothers, Inc., received promissory notes from Hickmott.   Their complaints included counts asking for payment on the promissory notes.   Pylman also included a count for fraud.Clemco and Cal Growers, Inc. were added as defendants after the filing of the original complaints.   Plaintiffs at one time believed the two entities held shares in Hickmott.

10.   Paragraph 14 of the contracts between Hickmott and plaintiffs provides:“BREACH.   In the event Seller breaches or becomes in default under any of the covenants, terms or conditions of this Agreement in addition to any other remedies which Buyer may have at law or in equity, Buyer may refuse to accept delivery of any portion or all of the tomatoes, in which event Buyer shall have no obligation to pay for such tomatoes it refuses to accept, and Seller may dispose of same free and clear of this Agreement;  provided that Seller shall remain liable to Buyer for any materials, services or monies furnished or advanced by Seller.   If suit shall be brought by Buyer against Seller because of a breach hereof, or for collection of any sums owed Buyer by Seller, Seller shall pay all costs, expenses and a reasonable attorneys' fee incurred by Buyer in connection with such suit.”  (Emphasis added.)The following language appears in the promissory note given to plaintiff Pylman:  “In case this note shall not be paid at maturity the undersigned promise to pay in addition all costs of collection and reasonable attorney's fees.”   There is similar language in the note given to plaintiff Shigaki Bros., Inc.

HOLMDAHL, Associate Justice.

RACANELLI, P.J., and NEWSOM, J., concur.