Justia California Court of Appeals Opinion Summaries

Bellingham Marine hired Major Engineering to construct a travel lift pier at the Channel Islands Harbor. Bellingham hired Moffatt, a civil engineering firm, to prepare the plans, which required that the concrete have a specific air entrainment and that the concrete, when cured, attain a specific compressive strength. Major's contract with Bellingham provided that if the concrete failed to meet the compression strength standard, that it would be removed and replaced at Major's expense. Major hired State, which submitted a concrete mix design. Moffatt, at the request of Major, reviewed and approved the design. It was not part of Moffatt's job duties. State delivered seven truck loads of wet pre-mixed concrete. After the concrete was cast, Major's testing lab took a sample that showed the concrete had inadequate compressive strength. Major demolished and rebuilt the affected portion of the pier. It sued; State filed a cross-complaint for implied equitable indemnity and contribution, alleging that Moffatt failed to use reasonable care in reviewing and approving the mix design. The court dismissed, finding that Moffatt was not in privity of contract with Major or State and that the cross-complaint was barred by the economic loss rule. The court of appeal affirmed. View "State Ready Mix Iv. Moffatt & Nichol" on Justia Law

The School District entered into a construction contract with Amoroso. Pursuant to Public Contract Code 22300, Amoroso elected to have the retention held in an escrow account in the form of securities. The escrow agreement stated that “District shall have the right to draw upon the securities and/or withdraw amounts from the Escrow Account in event of default by Contractor as determined solely by District.” The District gave written notice of material breach on March 30, 2011, based on Amoroso’s failure to complete, timely or at all, any of the three project phases and requested that Amoroso cure by April 4. Amoroso contested the assertions of material breach by letter dated April 1. The District sent notice of termination on April 18 and filed suit. On April 28, the parties entered into an “Exit and Demobilization Agreement,” “in lieu of any final termination or statement of default under the Contract.” The District sent a letter requesting withdrawal of $3.5 million from the escrow account, attaching its attorney’s memorandum as to why withdrawal was permissible. Amoroso unsuccessfully sought an injunction. The court of appeal affirmed, rejecting Amoroso’s claim that a public project owner must await judicial resolution of the underlying contract dispute before it can withdraw retention funds. View "Pittsburg Unified Sch. Dist. v. S.J. Amoroso Constr. Co., Inc." on Justia Law

The Ventura County Board planned a five-story ambulatory care clinic at the 40-acre Ventura County Medical Center. The 1993 Environmental Impact Report (EIR) stated that the building would be up to 75 feet high and included drawings that did not show building height. The Board filed a Notice of Determination (NOD) that mentioned nothing about height. Detailed plans showed the height to the roofline as 72 feet. Parapets rose to 88.5 feet. The county delayed until 2005 when Board decided to relocate the Clinic 200 feet north and 160 feet west, purportedly to reduce environmental impact and to more centrally locate the project around parking. The relocated building would be about 5 feet lower due to topography. The Board prepared an EIR "Addendum" and again filed a NOD that did not mention height. In 2007 the plans were modified to show a height of 90 feet, including parapets. In 2008, a neighbor saw an "auger rig" at the construction site and inquired. He was shocked to learn that the equipment was going to be used to construct a 90-foot high building and joined an organization that unsuccessfully sought an injunction. The court ordered preparation a supplemental EIR. Construction was completed in October 2010. The court of appeal affirmed. View "Ventura Foothill Neighbors v. Cnty. of Ventura" on Justia Law

Five Corners Rialto, LLC obtained a construction loan from Vineyard Bank to develop a 70-unit townhome project. Thomas DelPonti and David Wood, principals of Five Corners, guaranteed the loan. Five Corners contracted with general contractor Advent, Inc. to build the project in two phases. Everything went according to schedule for the first 18 months. However, when Phase I of the Project was nearly complete, the Bank stopped funding approved payment applications, preventing completion and sale of the Phase I units, which, in turn, caused Five Corners to default on the loan. The Bank reached an agreement with Five Corners, requiring Advent to finish Phase I so the units could be sold at auction, and promising to pay the subcontractors if they discounted their bills and released any liens. Advent paid the subcontractors out of its own pocket in order to keep the project lien-free, so the auction could proceed. However, the Bank foreclosed against Five Corners. Advent filed an unbonded stop notice. The Bank (through its assignee California Bank and Trust), sued Five Corners and the Guarantors under various theories for the deficiency following a Trustee’s Sale of the Deed of Trust, while Advent sued the developer and the Bank for restitution for the amounts it paid out of pocket. The cases were consolidated and tried. Advent amended its complaint to conform to proof to add causes of action for breach of the assigned contract and promissory estoppel. The trial court awarded judgment in favor of Advent on these causes of action. The court denied Advent judgment for enforcement of its stop notice claim. In the Bank’s action against the Guarantors, the court found that the Bank breached the loan contract, exonerating the Guarantors. The court awarded attorneys’ fees to Advent and the Guarantors. The Bank appealed the judgments against it; Advent appealed the portion of the judgment denying enforcement of the stop notice. Finding no reversible error, the Court of Appeal affirmed.View "Cal. Bank & Trust v. Del Ponti" on Justia Law

This case was one of a number of cases which have, in the aftermath of the "Great Recession" that hit Riverside and San Bernadino counties particarly hard. This appeal stemmed from the construction of a Kohl’s department store in Beaumont. The developer of the store was Inland-LCG Beaumont, LLC, and the general contractor was 361 Group Construction Services, Inc. Somewhere in the process of construction, the money dried up and 361 refused to pay its subcontractors for work they had done. Those subcontractors included Cass Construction, TNT Grading Inc., Palomar Grading & Paving and R3 Contractors. These four subcontractors recorded mechanic’s liens and sued to foreclose those liens. With one exception they obtained judgments of foreclosure. The one exception was TNT, who, by the time of the trial to foreclose its mechanic’s lien, was a suspended corporation and thus unable to prosecute an action. The two owners of the property, Kohl’s and Wells Fargo, appealed the judgments obtained by the three successful subcontractors, Cass, R3 and Palomar Grading. The Court of Appeal took a "soup-to-nuts" approach in reviewing the multiple issues presented on appeal, and affirmed in all respects except to the degree that liens of Palomar Grading and Cass should include prejudgment interest. To that degree the Court reversed the judgment and remanded it with instructions to the trial court to recalculate the prejudgment interest at 7 percent. On balance, Cass and R3 were still the prevailing parties in this appeal: Of 10 issues raised, they prevailed, either singly or together, in 9. They recovered their costs on appeal from Kohl’s and Wells Fargo. For Palomar Grading, the only issue on which it has appeared in this appeal was the issue of the proper rate of prejudgment interest, and on that issue it lost. "However, it would be unfair to allow Kohl’s and Wells Fargo to recover all their appellate costs from Palomar Grading because they won on the lone prejudgment interest rate issue. Most of this appeal has concerned their unsuccessful challenges to the foreclosure judgments obtained by Cass and R3."View "Palomar Grading v. Wells Fargo" on Justia Law

Defendants / cross-complainants Intervest-Mortgage Investment Company and Sterling Savings Bank (together Intervest) appealed a judgment in favor of plaintiff / cross-defendant Moorefield Construction, Inc. The parties' dispute stemmed from an uncompleted medical office building development in San Jacinto. Moorefield was the general contractor for the development, and Intervest was the construction lender. The developer, DBN Parkside, LLC, encountered financial difficulties toward the end of the project. As a result, DBN did not fully pay Moorefield for its construction services and defaulted on its construction loan from Intervest. Moorefield filed a mechanic's lien against the development property, and Intervest took title to the property in a trustee's sale under the construction loan. Moorefield's sought to foreclose on its mechanic's lien. Intervest's cross-complaint against Moorefield sought a declaration of the relative priority of the lien, equitable subrogation to a priority position over the lien, quiet title, and judicial foreclosure. After a bench trial, the court entered judgment in favor of Moorefield on the complaint and cross-complaint, declared Moorefield's mechanic's lien was superior in priority to Intervest's construction loan deed of trust, and ordered foreclosure and sale of the property to satisfy Moorefield's mechanic's lien. Intervest appealed, arguing: (1) the court erred in finding Moorefield's agreement to subordinate its mechanic's lien to the construction loan deed of trust was unenforceable; (2) the court should have applied the doctrine of equitable subrogation to give Intervest partial priority over Moorefield's mechanic's lien; (3) substantial evidence does not support the court's finding that Moorefield commenced work prior to the recording of Intervest's deed of trust; and (4) substantial evidence does not support the court's finding that Moorefield's mechanic's lien was timely filed following completion of construction. After review, the Court of Appeal concluded Moorefield's agreement to subordinate its mechanic's lien to the construction loan deed of trust was enforceable and therefore reversed the trial court's judgment. View "Moorefield Constr. v. Intervest-Mortgage" on Justia Law

Appellant Leticia Garcia was charged with sexually abusing a girl she babysat. At trial, the prosecutor attempted to show she was a lesbian. The prosecutor asserted during closing argument that her supposed attraction to other women gave her a motive to sexually abuse the victim. While disavowing the notion that all lesbians are child molesters, she nonetheless argued it was very telling that appellant “is attracted to females” and the victim was “a female child.” In the end, the jury convicted appellant, and the trial court sentenced her to 16 years in prison. After review of appellant's argument on appeal, the Court of Appeal believed appellant’s sexual orientation was not relevant to any issue in this case. The trial court was largely successful in limiting the jury’s exposure to evidence regarding appellant’s sexual orientation, so the Court found no abuse of discretion in the denial of appellant’s requests for a mistrial during the evidentiary phase of the trial. "But we cannot overlook the fact the prosecutor repeatedly attempted to make an issue out of appellant’s sexual orientation and emphasized this issue to the jury in closing argument. This was prejudicial misconduct. It leaves us with no confidence the jury could have evaluated the charges against appellant in a fair and impartial manner and requires us to reverse the judgment." View "California v. Garcia" on Justia Law

A contractor entered into a public works contract to modernize a building at a Santa Clara County community college. Will was the subcontractor for the heating, ventilation, and air conditioning (HVAC) work. The subcontract provided that the project was to be built according to the specifications of the prime contract. The subcontract and general contract did not specify whether Will was required to fabricate any material necessary to complete the HVAC work. The subcontract required Will to “pay not less than the [applicable prevailing wage] to all laborers, workmen, and mechanics employed by him at the project site.” California’s prevailing wage law generally requires that workers employed on public works be paid the local prevailing wage for work of a similar character. (Lab. Code,1771.) Since 1991, Will has fabricated materials at a permanent, offsite facility it operates in Hayward. An employee of Will complained to the Department of Industrial Relations, Division of Labor Standards Enforcement alleging he should have been paid prevailing wages for work related to the project, involving the fabrication of sheet metal at the Hayward facility. DLSE issued a civil wage and penalty assessment. The Department of Industrial Relations reversed, in favor of Will. The trial court reversed. The court of appeal held that offsite fabrication is not covered by the prevailing wage law if it takes place at a permanent, offsite manufacturing facility and the location and existence of that facility is determined wholly without regard to the particular public works project. View "Sheet Metal Workers’ Int'l. Ass'n v. Duncan" on Justia Law

The Eastern Municipal Water District (EMWD) hired general contractor S.J. and Burkhardt, Inc. (SJB) for a public works construction project in 2006. Safeco Insurance Company (Safeco) executed performance and payment bonds for the project. Plaintiff Golden State Boring & Pipe Jacking, Inc. (GSB) was a subcontractor for the project, completing its work by September 2006, but it did not receive payment. In March 2008, SJB sent a voluntary default letter to Safeco. In July 2008, GSB sued SJB, EMWD, and Safeco for the unpaid amounts under the contract, separately seeking payment from Safeco under its payment bond. EMWD filed a cross-complaint to interplead retained sums. Safeco made a motion for summary judgment on the cause of action for payment under the bond on the ground that GSB’s claim was untimely. The trial court granted the motion, finding that there had been three cessations of labor that triggered GSB’s duty to file a stop notice in order to secure payment under Safeco's payment bond. At a subsequent court trial on the contract claims, GSB was awarded judgment against SJB, and Safeco was awarded judgment on the interpleader action. GSB appealed the summary judgment ruling, arguing: (1) the trial court erroneously overruled its objections to evidentiary matters presented in support of Safeco’s summary judgment; and (2) the court erred in finding the action was untimely. Finding no reversible error, the Court of Appeal affirmed. View "Golden State v. Eastern Municipal Water Dist." on Justia Law

The Project area includes Treasure Island, 404 acres of landfill placed on former tidelands in San Francisco Bay, plus Yerba Buena Island, an adjacent, 160-acre, natural rock outcropping. Treasure Island and the causeway to Yerba Buena Island were constructed in the 1930s for the Golden Gate Exposition. During World War II, the area was converted to a naval station, which operated for more than 50 years. Conditions include aging infrastructure, environmental contamination, deteriorated buildings, and impervious surfaces over 65 percent of the site. In 2011, after more than a decade of planning, study, and input, the board of supervisors approved the Project, amended the general plan and code maps and text, and approved policies and standards for the redevelopment. The Environmental Impact Report (EIR) envisions a new, mixed-use community with about 8,000 residential units (about 25 percent designated as affordable units); up to 140,000 square feet of commercial and retail space; about 100,000 square feet of office space; restoration of historic buildings; 500 hotel rooms; utilities; 300 acres of parks, playgrounds, and public open space; bike and transit facilities; and a new ferry terminal and intermodal transit hub. Construction would be phased over 15-20 years. CSTI unsuccessfully challenged the EIR’s approval under the California Environmental Quality Act, Pub. Res. Code 21000. The court of appeal affirmed, rejecting an argument that the EIR should have been prepared as a program EIR, not a project-level EIR. Opponents claimed that there was insufficient detail about matters such as remediation of hazardous materials, building and street layout, historical resources and tidal trust resources, for “project-level” review. View "Citizens for a Sustainable Treasure Island v. San Francisco" on Justia Law