Justia California Court of Appeals Opinion Summaries

Concrete Construction (Contractor) was sued by employees of Nibbi Concrete, who were injured after a shoring system designed by Contractor collapsed. Subsequently, Contractor sued Employer for indemnification based on a specific provision in the parties’ contract. The trial court dismissed, relying on the allegations in the underlying lawsuit that set forth claims only against Contractor and not against Employer. The court of appeal reversed, stating that the allegations in the underlying lawsuit are not determinative of Contractor’s claim for indemnity. View "Aluma Systems Concrete Constr. of Cal. v. Nibbi Bros., Inc." on Justia Law

Pulte Homes Corporation sued Williams Mechanical, Inc. for defective performance of a plumbing subcontract. Even before the action was filed, however, Williams was defunct; first, it was suspended by the Secretary of State, and thereafter, it dissolved voluntarily. Pulte served Williams though an attorney whom Williams had designated as its agent for service of process. The attorney, however, did not notify Williams of the action; he also did not identify or notify Williams’s liability insurer. Williams failed to respond to the complaint, and Pulte obtained a default judgment. Pulte then notified Williams’s liability insurer of the default judgment. About four and a half months later, the insurer retained counsel to represent Williams, and Williams’ counsel filed a motion to set aside the default judgment. The trial court granted the motion. Pulte appealed, arguing (1) Williams lacked the capacity to defend this action because it had been suspended; and (2) Williams failed to establish that it was entitled to relief from the default and default judgment. After review, the Court of Appeal held the trial court abused its discretion by ruling that Williams was entitled to relief. Accordingly, the Court did not address whether Williams had the capacity to defend. View "Pulte Homes Corp. v. Williams Mechanical" on Justia Law

RGW entered into a contract with Watson for the delivery of 146 sealed expansion joints for use on the Caltrans project for the construction of Highway 99. Watson filed a breach of contract action, contending it was entitled to an adjustment of the price on RGW’s original purchase order because the items ordered were changed. The trial court concluded that RGW’s purchase order was ambiguous and allowed the jury to decide what the contract meant and what price was appropriate. The jury decided in favor of Watson, finding the amount of the subject agreement was $605,990. The jury awarded Watson damages of $383,032. The court concluded that the trial court correctly (1) determined that RGW’s purchase order was ambiguous and (2) allowed the jury to evaluate the conflicting parol evidence before deciding the meaning of the contract. The court also concluded that the price adjustment owed to Watson for the change in the order was sufficiently certain to meet the statutory requirements for an award of prejudgment interest. Accordingly, the court affirmed the judgment, except for its failure to award prejudgment interest to Watson. View "Watson Bowman Acme Corp. v. RGW Construction" on Justia Law

The Coyote Valley Band of Pomo Indians and Findleton entered into the Construction Agreement for a gaming facility. In 2008 (10 months later), the Tribe suspended construction because the financial meltdown had adversely affected its ability to secure financing. In 2012, Findleton sought to compel ADR under the Agreement The Tribe asserted that it had not waived its sovereign immunity or consented to suit in the state court and that Findleton’s failure to exhaust his tribal administrative remedies deprived the court of jurisdiction. Findleton cited resolutions by the Tribal Council, waiving immunity. The Tribe has a General Council, consisting of all tribal members 18 years or older, and the Tribal Council, an elective body consisting of seven members of the General Council whose powers are more narrowly circumscribed. The Tribe’s constitution does not permit the Tribal Council to waive sovereign immunity without the General Council’s “consent” and “prior approval.” The court of appeal reversed the trial court’s dismissal of the action, finding that the Council was authorized to waive the Tribe’s immunity and did so in resolutions adopted in 2008 and on June 2, 2007, “in order to attract other individuals and entities to do business with the Tribe.” View "Findleton v. Coyote Valley Band of Pomo Indians" on Justia Law

After TEC, a subcontractor, submitted a written bid to Flintco, a general contractor, to perform glazing work on a project, Flintco used TEC's bid price in compiling its own bid to the owner of the project. Flintco was awarded the contract and sent TEC a letter of intent to enter into a subcontract and a standard-form subcontract, both of which documents differed materially from TEC’s bid. TEC refused to enter into a subcontract. Flintco secured another subcontractor for that scope of work and sued TEC on a theory of promissory estoppel seeking the difference between TEC’s bid and the amount Flintco was required to pay the replacement subcontractor. The trial court entered judgment for TEC. The court concluded that Flintco failed to demonstrate that there was no substantial evidence to support the trial court’s finding that Flintco did not reasonably rely on TEC’s bid price without considering the material conditions stated in TEC’s bid, the proposed subcontract Flintco sent TEC constituted a counteroffer because it contained material variations from the conditions in TEC’s bid, and the counteroffer gave TEC the right to withdraw its bid. Accordingly, the court affirmed the judgment. View "Flintco Pacific v. TEC Mgmt. Consultants" on Justia Law

Education Code section 17406 governs lease-leaseback construction agreements. Plaintiffs filed suit alleging that the lease-leaseback agreements entered into by defendants were a sham to avoid the competitive bid process and are therefore void. The court concluded that the trial court properly sustained the demurrer to all causes of action alleging the district was required to obtain competitive bids where competitive bids were not required under section 17406. The court also concluded that the trial court should have overruled the demurrer to the conflict of interest cause of action for violation of Government Code section 1090 where, at this early stage in the proceedings, section 1090 may apply. The court rejected defendants' arguments that plaintiffs lack standing to raise the issue and that section 1090 always excludes all independent contractors. Finally, the court concluded that the sanctions against plaintiffs' attorney must be reversed because the litigation is not frivolous. Accordingly, the court reversed in part and affirmed in part. View "McGee v. Balfour Beatty Constr." on Justia Law

In 2007, the Sonoma County project’s owner sued Hearn, the general contractor, Second Generation, the roofer, and other subcontractors for design and construction defects. Hearn cross-complained against Second Generation and others. In 2009, Hearn assigned its interests under its subcontracts to two insurers, North American and RSUI. Hearn then settled with the owner and all but two subcontractors, one of which was Second Generation. Hearn filed an amended cross-complaint, purportedly in the name of the insurers, against those subcontractors, adding breach of a contractual obligation to obtain insurance and seeking equitable contribution for Hearn’s defense costs premised on a breach of that duty. In 2013, the court dismissed the cross-complaint against Second Generation on procedural grounds, awarded $30,256.79 in costs and granted prevailing party attorney fees of $179,119. Second Generation moved to amend the orders to name North American as a judgment debtor owing the amounts awarded against Hearn. The trial court denied the motion, stating: Hearn remains the only proper party and that the subcontractor’s exclusive remedy was to pursue a separate action against Hearn’s insurers. The court of appeal reversed, finding that, after the assignment, Hearn was “out of this case.” View "Hearn Pac. Corp. v. Second Generation Roofing, Inc." on Justia Law

Pursuant to Public Contract Code section 7107, when a project owner pays a direct contractor the amount it had previously withheld as retentions, the direct contractor must pay its subcontractors their share of the retention within seven days or face penalties. The court concluded that, in this case, the decision by the owner to stop withholding future retentions and pay full progress payments to the contractor was not equivalent to a payment by the owner of past retentions under section 7107. Accordingly, the court concluded that the subcontractor is not entitled to late payment penalties under section 7107. The court affirmed the trial court's judgment. View "Blois Construction v. FCI/Fluor/Parsons" on Justia Law

Picerne Construction Corp. agreed to build an apartment complex for Castellino Villas. After construction started, Castellino refinanced the property, replacing the original lender with Bank of the West. Picerne subsequently claimed money due, recorded a mechanic’s lien, and brought this action against Castellino and Bank of the West to foreclose on the lien. Following a bench trial, the trial court entered judgment in favor of Picerne. Castellino argued on appeal: (1) Picerne did not have a valid mechanic’s lien because it did not record its claim within 90 days after substantial completion of the project; (2) the doctrine of judicial estoppel prevented Picerne from taking contrary positions at arbitration and at trial; (3) Picerne did not timely record a claim of mechanic’s lien as to nine distinct buildings within the project; and (4) the trial court erred in calculating the amount of the lien. Bank of the West agreed that Picerne failed to timely record its claim of mechanic’s lien. In addition, Bank of the West contends (5) that Picerne’s complaint against it is time-barred because Picerne did not name Bank of the West as a defendant in the original complaint even though it was aware of facts indicating it had a claim against the bank. After review, the Court of Appeal concluded: (1) Picerne timely recorded its mechanic’s lien; (2) Castellino failed to demonstrate the applicability of judicial estoppel; (3) the property constituted one residential unit; (4) the trial court overstated the principal sum due and failed to subtract the $115,453.50 setoff from the principal sum, but the other claims of error with regard to the lien amount have no merit; and (5) the action against Bank of the West was not time-barred because Picerne timely substituted Bank of the West in place of a Doe defendant when Picerne learned of the bank’s interest in the property. The Court modified the judgment to provide that the mechanic’s lien was in the amount of $2,416,855.06 and affirmed the judgment as modified. View "Picerne Construction v. Castellino Villas" on Justia Law

Plaintiff, Hub Construction, supplied rebar and other materials to the general contractor on a construction project on property owned by defendant, Esperanza Charities. At issue is whether a mechanic's lien is invalid because the plaintiff lienholder did not strictly comply with the then-effective statutory requirement governing proof that the preliminary written notice was served on the defendant property owner by certified mail. Esperanza stipulated that the notice was served by certified mail, that the U.S. Postal Service website tracking certified mail items showed the notice was delivered, and that defendant actually received the notice. However, Esperanza contends that the lien is invalid because Hub has no return receipt, and the applicable statute at the time required proof that notice was served. The trial court dismissed the case. The court reversed, concluding that, while strict compliance with the notice provisions of the mechanic's lien law is required, the applicable precedents do not require or justify applying that rule to the statutory provisions governing proof that the required notice was properly given. A stipulation eliminates the need for proof. View "Hub Construction Specialties v. Esperanza Charities" on Justia Law