Justia California Court of Appeals Opinion Summaries

Articles Posted in Construction Law
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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

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Petitioners sought a writ of mandate and declaratory relief, alleging that the City of Monterey Park breached its duty under Labor Code section 1072 to award a 10-percent bidding preference only to contractors who declare in their bids they will retain existing employees for at least 90 days. The trial court held that there was no such duty and ruled in favor of the City. The Court of Appeal held that words "shall declare as part of the bid" in Labor Code section 1072, subdivision (a), mean the bidder must state in its bid whether it will retain the employees of the prior contractor for 90 days. If the public agency (or "awarding authority") gives the statutory preference to bidders who do not agree in their bids to retain the employees of the prior contractor for at least 90 days, a bidder who makes the commitment is not really getting a statutory preference. The court held that whether a variance is inconsequential is a question of fact, subject to review for substantial evidence, that is not properly decided on demurrer. Therefore, the court reversed and remanded with directions for the trial court to vacate its order sustaining the demurrer without leave to amend and to enter a new order overruling the demurrer. View "International Brotherhood of Teamsters v. City of Monterey Park" on Justia Law

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The Court of Appeal affirmed the superior court's denial of JMS's petition for writ of administrative mandate seeking to set aside an administrative decision by the District that allowed a contractor to substitute another subcontractor in the place of JMS on a construction project. The court held that the hearing officer had jurisdiction to approve the request for substitution under Public Contract Code section 4107; neither substitution hearing nor the substitution decision affected a fundamental vested right; the hearing afforded JMS the due process required for a substitution hearing; substantial evidence supported the substitution decision; and thus the petition was properly denied. View "JMS Air Conditioning & Appliance Service, Inc. v. Santa Monica Community College District" on Justia Law

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In 2012, the Campbell Union School District (CUSD) Governing Board enacted a fee on new residential development under Education Code section 17620. The fee, $2.24 per square foot on new residential construction, was based on a study that projected that “it will cost the District an average of $22,039 to house each additional student in new facilities.” This figure was based on a projected $12.8 million cost to build a new 600-student elementary school and a projected $24.4 million cost to build a new 1,000-student middle school. SummerHill owns a 110-unit residential development project in Santa Clara, within CUSD’s boundaries. In 2012 and 2013, SummerHill tendered to CUSD under protest development fees of $499,976.96. The trial court invalidated the fee and ordered a refund of SummerHill’s fees. The court of appeal affirmed, holding that the fee study did not contain the data required to properly calculate a development fee; it failed to quantify the expected amount of new development or the number of new students it would generate, did not identify the type of facilities that would be necessary to accommodate those new students, and failed to assess the costs associated with those facilities. View "SummerHill Winchester LLC v. Campbell Union School District" on Justia Law

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The Court of Appeal affirmed the trial court's judgment denying Acco's petition for writ of mandamus seeking review of an administrative decision adopted by the Registrar, finding Acco in violation of Business and Professions Code section 7110 for failing to obtain a building permit before replacing a boiler. The court held that the Legislature's use of the term "willful" in section 7110 only requires a showing of general intent. The court also held that there was substantial evidence to support the Administrative Judge's determination that Acco willfully violated the applicable building laws. The court noted that the fact that an individual employee may not have been aware of a specific local permit requirement does not excuse a corporate licensee from complying with the building laws. View "Acco Engineered Systems v. Contractors' State License Board" on Justia Law

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Plaintiffs Travelers Property Casualty Company of America, the Travelers Indemnity Company of Connecticut, and St. Paul Fire and Marine Insurance Company (collectively, Travelers) filed this action against certain subcontractors to recover attorneys’ fees and costs Travelers incurred in defending developers Westlake Villas, LLC and Meer Capital Partners, LLC (collectively, Westlake) in a prior construction defect action. Travelers' claims were based on alleged subrogation to the rights of its additional insured, Westlake. The Westlake entities were suspended corporations under Revenue and Taxation Code section 23301, and could not assert these claims on their own behalf. Defendant Engel Insulation, Inc. moved for judgment on the pleadings on the basis that Travelers was also barred under this statute from prosecuting these claims. On appeal, Travelers contended the trial court erred in granting Engel’s motion without leave to amend. The Court of Appeal disagreed: an insurer could not file its own action to assert claims solely as a subrogee of a suspended corporation. View "Travelers Property Casualty Co. of Amer. v. Engel Insulation, Inc." on Justia Law

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Plaintiff Jose Sandoval was severely burned by an "arc flash" from a live circuit breaker while working with contractor TransPower Testing, Inc. and its principal Frank Sharghi, at a cogeneration plant owned by defendant Qualcomm Incorporated (Qualcomm). The jury returned a special verdict finding that Qualcomm retained control over the safety conditions at the jobsite; that it negligently exercised such control; and that its negligence was a substantial factor in causing Sandoval's harm. The jury found Sandoval's employer, ROS Electrical Supply (ROS), not liable, and apportioned fault between the defendants. Following the verdict, Qualcomm moved for judgment notwithstanding the verdict (JNOV) and for a new trial. The trial court denied the JNOV motion but granted the motion for new trial on the theory the jury had improperly apportioned liability. Qualcomm appealed order denying its JNOV motion, arguing Sandoval failed to proffer any evidence to show that Qualcomm, as the hirer of an independent contractor, "affirmatively contributed" to Sandoval's injury under the "retained control" exception to the general rule that a hirer is not liable for the injuries of an independent contractor's employees or its subcontractors; the order only partially granting its new trial motion; and the original judgment. Sandoval appealed the order granting Qualcomm a new trial on the apportionment of fault issue. The Court of Appeal concluded substantial evidence supported the jury's finding that Qualcomm negligently exercised retained control over the safety conditions at the jobsite. Therefore, the Court concluded the trial court properly denied Qualcomm's JNOV. Furthermore, the Court concluded the trial court properly exercised its discretion when it granted Qualcomm a limited new trial only on the issue of apportionment of fault as between Qualcomm and TransPower. View "Sandoval v. Qualcomm Incorporated" on Justia Law

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The underlying action was initiated by homeowners from two residential developments in Rocklin against appellants Centex Homes and Centex Real Estate Corporation (Centex) for alleged defects to their homes. Centex and cross-defendant and respondent St. Paul Fire and Marine Insurance Company (St. Paul) have a history of insurance coverage disputes. St. Paul was an insurer for subcontractor Ad Land Venture (Ad Land), and agreed to defend Centex as an additional insured subject to a reservation of rights. Centex filed a cross-complaint against its subcontractors and St. Paul that sought, as the seventh cause of action, a declaration that Centex was entitled to independent counsel under Civil Code section 28601 because St. Paul’s reservation of rights created significant conflicts of interest. Centex appealed after the trial court granted St. Paul’s motion for summary adjudication of Centex’s seventh cause of action. Centex argued any possible or potential conflict was legally sufficient to require St. Paul to provide independent counsel. The Court of Appeal disagreed. Alternatively, Centex contended independent counsel was required because counsel appointed by St. Paul could influence the outcome of the coverage dispute and St. Paul controlled both sides of the litigation. The Court of Appeal concluded that because Centex failed to establish a triable issue of material fact regarding these assertions, the Court affirmed the judgment. View "Centex Homes v. St. Paul Fire & Marine Ins. Co." on Justia Law

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The underlying action was initiated by homeowners from two residential developments in Rocklin against appellants Centex Homes and Centex Real Estate Corporation (Centex) for alleged defects to their homes. Centex and cross-defendant and respondent St. Paul Fire and Marine Insurance Company (St. Paul) have a history of insurance coverage disputes. St. Paul was an insurer for subcontractor Ad Land Venture (Ad Land), and agreed to defend Centex as an additional insured subject to a reservation of rights. Centex filed a cross-complaint against its subcontractors and St. Paul that sought, as the seventh cause of action, a declaration that Centex was entitled to independent counsel under Civil Code section 28601 because St. Paul’s reservation of rights created significant conflicts of interest. Centex appealed after the trial court granted St. Paul’s motion for summary adjudication of Centex’s seventh cause of action. Centex argued any possible or potential conflict was legally sufficient to require St. Paul to provide independent counsel. The Court of Appeal disagreed. Alternatively, Centex contended independent counsel was required because counsel appointed by St. Paul could influence the outcome of the coverage dispute and St. Paul controlled both sides of the litigation. The Court of Appeal concluded that because Centex failed to establish a triable issue of material fact regarding these assertions, the Court affirmed the judgment. View "Centex Homes v. St. Paul Fire & Marine Ins. Co." on Justia Law

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McMillin Management Services, L.P. and Imperial Valley Residential Valley Residential Builders, L.P. (collectively "McMillin") filed suit against numerous insurance companies, including respondents Lexington Insurance Company (Lexington) and Financial Pacific Insurance Company (Financial Pacific). McMillin alleged that it had acted as a developer and general contractor of a residential development project in Brawley and hired various subcontractors to help construct the Project. As relevant here, McMillin alleged that Lexington and Financial Pacific breached their respective duties to defend McMillin in a construction defect action (underlying action) brought by homeowners within the Project. McMillin alleged that Lexington and Financial Pacific each owed a duty to defend McMillin in the underlying action pursuant to various comprehensive general liability (CGL) insurance policies issued to the subcontractors that named McMillin as an additional insured. The trial court granted Lexington's motion for summary judgment, reasoning, that there was no possibility for coverage for McMillin as an additional insured under the policies "[b]ecause there were no homeowners in existence until after the subcontractors' work was complete[ ] . . . ." On appeal, McMillin contended that the fact that the homeowners did not own homes in the Project at the time the subcontractors completed their work did not establish that its liability did not arise out of the subcontractors' ongoing operations. The trial court granted Financial Pacific's motion for summary judgment, finding McMillin did not establish homeowners in the underlying action had sought potentially covered damages arising out of the subcontractors' drywall installation. The Court of Appeal reversed as to Lexington, and affirmed as to Financial Pacific. View "McMillin Management Services v. Financial Pacific Ins. Co." on Justia Law