Justia California Court of Appeals Opinion Summaries

Articles Posted in Construction Law
by
After Mount Diablo School District hired Taber to modernize eight school campuses, the plaintiffs challenged the District’s use of a lease-leaseback agreement for the construction project. The court of appeal affirmed the dismissal of most of plaintiff’s claims, except a claim against Taber of conflict of interest. Plaintiff alleged Taber provided preconstruction services regarding the project, so a conflict of interest arose when the District subsequently awarded Taber the contract. The court of appeal affirmed summary judgment in Taber’s favor, finding no violation of Government Code section 1090(a). Section 1090 only prohibits a contract made by a financially-interested party when that party makes the contract in an “official capacity.” Where the financially-interested party is an independent contractor, section 1090 applies only if the independent contractor can be said to have been entrusted with “transact[ing] on behalf of the Government.” In this case, it cannot reasonably be said that Taber was hired to engage in or advise on public contracting on behalf of the District. The District contracted with Taber for Taber to provide preconstruction services in anticipation of Taber completing the project. Taber provided those services (planning and setting specifications) in its capacity as the intended provider of services, not as a de facto official of the District. View "California Taxpayers Action Network v. Taber Construction, Inc." on Justia Law

by
A general contractor and subcontractor filed suit against each other, and at issue was the "retention" clause in the parties' contract. The Court of Appeal held that the trial court properly granted summary judgment for the general contractor and dismissed the subcontractor's cross-claims. The court held that the purpose of the retention clause was, as the subcontractor put it in oral argument, to "ensure proper performance." In this case, the subcontractor did not finish the job swiftly and must suffer the consequences of its contractual failing. Finally, the court held that the trial court properly awarded attorney fees to the general contractor, as the prevailing party. View "Regency Midland Construction, Inc. v. Legendary Structures Inc." on Justia Law

by
Henry and Deborah Luzuriaga contracted with a general contractor for the construction of a commercial building. The general contractor contracted with Precision Framing Systems, Inc. (Precision) for the framing, including the necessary trusses. And Precision contracted with Inland Empire Truss, Inc. (Inland) for the fabrication of the trusses. Precision never received full payment. Accordingly, it recorded a mechanic’s lien claim. Meanwhile, there was a problem with some of the trusses. After Precision had already recorded its mechanic’s lien claim, Precision and/or Inland came back to the site and repaired the trusses. Precision filed this action to foreclose its mechanic’s lien. Ms. Luzuriaga filed a cross-complaint. The trial court granted summary judgment against Precision on its complaint. It ruled that the mechanic’s lien claim was filed prematurely. Precision appealed, contending primarily that there was a triable issue of fact as to whether it had ceased to provide work, because: (1) “ceas[ing],” within the meaning of the statute, can be a gradual process; (2) the repair of the trusses was not part of Precision’s “work;” (3) there was evidence that Precision completed all of its work before it recorded its mechanic’s lien claim; and (4) there was evidence that the repairs were done by Inland. Henry Luzuriaga and the Luzuriagas’ bonding company cross-appealed. After review, the Court of Appeal affirmed, agreeing with the trial court that the evidence showed, beyond a triable issue of fact, that Precision had not yet “cease[d] . . . work” when it recorded its mechanic’s lien claim. This mooted the cross-appeal. View "Precision Framing Systems Inc. v. Luzuriaga" on Justia Law

Posted in: Construction Law
by
Fistes appealed from the trial court's judgment sustaining without leave to amend defendants' demurrer to Fistes' third amended complaint, seeking a declaration that the contract the District awarded to GDL for the remediation of school properties was void due to violations of the Public Contract Code and the Government Code. The Court of Appeal held that Fistes alleged facts sufficient to establish standing under Code of Civil Procedure section 526a based on its payment of state taxes that fund the District. The court also held that the district court erred in sustaining the demurrer based on uncertainty without leave to amend. In this case, although Fistes has not adequately alleged a cause of action against the Lopezes, it has made a sufficient showing for leave to amend. Accordingly, the court reversed and remanded for further proceedings. View "A.J. Fistes Corp. v. GDL Best Contractors, Inc." on Justia Law

by
A general contractor was covered as an additional insured on a commercial general liability (CGL) policy issued to its roofing subcontractor. The insurer refused to defend the general contractor after it was sued by homeowners for construction defects concerning roofing, prompting this lawsuit. After a bench trial, the trial court concluded the insurer owed no duty to defend. It believed the exclusion in the additional insured endorsement for damage to "property in the care, custody or control of the additional insured" precluded any duty to defend the general contractor in construction defect litigation. The general contractor disputed the insurer's interpretation of the policy and contended there was a duty to defend. After review, the Court of Appeal agreed and reversed judgment: “the facts indicate only shared control between the general contractor and its roofing subcontractor. Because the insurer did not prove coverage for the underlying construction defect litigation was impossible, it owed the general contractor a duty to defend the homeowner claim.” View "McMillin Homes Construction v. Natl. Fire & Marine Ins. Co." on Justia Law

by
Webcor, the general contractor for the rehabilitation of the California Memorial Football Stadium in Berkeley, hired ACCO to perform ventilation and plumbing services. Strouse, an ACCO employee, suffered a workplace injury when his leg fell into a 12-inch deep expansion joint after the plywood safety cover gave way. He sued Webcor for negligence. Webcor filed a cross-complaint against ACCO for indemnity. A jury found Webcor 100 percent liable for Strouse’s injuries. The court of appeal affirmed, upholding the trial court’s use of a jury instruction (CACI 1009B), which omits any language that a hirer “affirmatively contribute” to the plaintiff’s injury, and uses “substantial factor” causation in lieu of “affirmative contribution.” Counsels’ arguments properly directed the jury to determine whether Webcor affirmatively contributed to the injury and there was no indication of jury confusion. The court rejected an argument that the trial court erroneously instructed on negligence per se based on regulations promulgated under the California Occupational Safety and Health Act. The undisputed evidence established that Webcor affirmatively contributed to Strouse’s injuries, and the jury apportioned no fault to ACCO or Strouse, so the failure to instruct the jury regarding the precise language of “affirmative contribution,” even if erroneous, was harmless. View "Strouse v. Webcor Construction, L.P." on Justia Law

by
The Subletting and Subcontracting Fair Practices Act governs public works projects, requires a prime contractor to obtain the awarding authority's consent before replacing a subcontractor listed in the original bid (Pub. Contract Code 4107(a)), and limits the awarding authority’s ability to consent. If the original subcontractor objects to being replaced, the awarding authority must hold a hearing. San Francisco entered a contract with prime contractor Ghilotti for a major renovation of Haight Street. Consistent with its accepted bid, Ghilotti entered a contract with subcontractor Synergy for excavation and utilities work. After Synergy broke five gas lines and engaged in other unsafe behavior, the city invoked a provision of its contract with Ghilotti to direct Ghilotti to remove Synergy and substitute a new subcontractor. Under protest, Ghilotti terminated Synergy and identified two potential replacement contractors. Synergy objected. A hearing officer determined that Synergy’s poor performance established a statutory ground for substitution. Synergy and Ghilotti argued that the hearing officer lacked jurisdiction because Ghilotti had not made a “request” for substitution. The trial court agreed. The court of appeal reversed. Although the statute contemplates that the prime contractor will normally be the party to seek substitution, the procedure followed here “complied in substance with every reasonable objective of the statute.” View "Synergy Project Management, Inc. v. City and County of San Francisco" on Justia Law

by
In the underlying action, a plaintiff filed a tort action against the subcontractor and developer for injuries allegedly arising from the subcontractor's work. The subcontractor did not defend the developer, and the jury found that plaintiff's injuries were not caused by the subcontractor's work. The court held that, where plaintiff in an underlying tort action alleges that his injuries arose out of the subcontractor's work, the developer is entitled as a matter of law to a defense under the indemnity clause. In this case, the trial court erred by submitting the question of the subcontractor's duty to defend to a jury. The court also held that the developer was entitled to a jury trial in its action for damages alleging breach of the covenant to provide insurance. Accordingly, the court reversed the trial court's judgment and remanded. View "Centex Homes v. R-Help Construction Co., Inc." on Justia Law

by
Appellants, Sorokine and Koudriavtseva, are husband and wife. DBS and Kornach are California licensed contractors; DBS worked on their San Rafael house, while Kornach did not. Kornach, a longtime friend of Sorokine’s, had purchased materials for DIY projects at the property because of the discounts afforded to licensed general contractors. Sorokine does not speak English; Kornach often interpreted for Sorokine. After Koudriavtseva fired DBS, she hired unlicensed builders to complete the work and remedy alleged defects. DBS sued, alleging breach of contract and foreclosure of mechanic’s lien. Appellants’ response named as cross-defendants DBS, Komach, and ACIC, which had issued a surety bond to Kornach. The court of appeal reversed a directed verdict against appellants on a claim they violated an Internal Revenue Code provision and awarding $20,000 in sanctions and $122,995 in attorney fees against them. There was no evidence that appellants knew that 1099s issued to Komach were incorrect. The court also reversed directed verdicts against appellants on claims they had asserted against others; appellants were unable to prove damage because the trial court had granted a motion in limine preventing appellants from introducing evidence of payments made to an unlicensed contractor. The court also reversed an award of cost of proof damages to Kornach based on requests for admissions propounded by a different party. View "Design Built Systems v. Sorokine" on Justia Law

by
Berkeley appealed the judgment against it in a construction dispute regarding a building on the Merced Campus. After the University denied Berkeley's claim for compensation for work performed, Berkeley filed suit alleging causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and breach of the implied covenant of the correctness of the plans and specifications. The Court of Appeal held that the jury's findings were not fatally inconsistent and the verdict was not against the law; the trial court did not err in instructing the jury that specification 03300 of the contract constituted a performance specification, and Berkeley was required to exercise its skill and judgment in selecting the means, methods, and equipment necessary to meet the end result called for in the specification; there was no abuse of discretion or deprivation of a fair trial; Berkeley has not demonstrated any prejudicial error in the trial court's exclusion of evidence of the total cost method of calculating damages; and Berkeley has not established any reversible error in the trial court's award of mediation fees as costs. However, the court held that the expert witness fees were improperly included in the award of costs and therefore must be modified. The court otherwise affirmed the judgment. View "Berkeley Cement, Inc. v. Regents of the University of California" on Justia Law