The chances of a contractor recovering attorneys fees on a public works project got better. The appellate court ruled in Mepco Services Inc. v. Saddleback Valley Unified School District (2010) 189 Cal. App. 4th 1027 in a public works project where a contractor must provide a performance bond under the contract, if it provides for attorneys fees then the contractor can request and be granted fees under the provision in the bond. Because public works projects do not usually contain attorneys fees provisions, the ruling is a boost for public works contractors.
Obviously public entity attorneys will claim that unless the public entity makes a claim on the bond the bond attorney’s fees provision should not apply to it. However, the contractors attorneys will argue that the attorney’s fees provision in the bond are part of the contract terms and it is not necessary for the public entity to pursue the bond in order for the contractor to seek attorney’s fees. This ruling may discourage public works projects from making claims against the bond in order to gain an advantage in the litigation.