Justia California Court of Appeals Opinion Summaries

PegaStaff is a temporary staffing agency. A large part of PegaStaff’s business was providing staffing to PG&E) The California Public Utilities Commission (PUC) adopted General Order 156 (GO 156) to implement Public Utilities Code Article 5, the purpose of which is to encourage and develop the use of women-, minority-, and disabled veteran-owned business enterprises within the public utility sector. PegaStaff is not a minority enterprise, and after PG&E adopted a program to increase the utilization of minority enterprises, PegaStaff’s provision of labor to PG&E was substantially reduced. PegaStaff attributes this reduction to the implementation of a tier system preferential to minority enterprises and the transfer of many of its contingent workers to minority enterprises. PegaStaff filed suit, alleging constitutional challenges to Article 5 and GO 156. The trial court determined that it did not have subject matter jurisdiction to consider PegaStaff’s constitutional challenges and granted the PUC’s motion for judgment on the pleadings. The court of appeal affirmed. Remaining defendants also sought and obtained judgment on the pleadings. The court of appeal reversed, finding that the trial court erred in determining that it lacked subject matter jurisdiction to consider its claims against PG&E and another staffing agency. The suit will not interfere with PUC’s regulatory authority. View "Pegastaff v. Pac. Gas & Elec. Co." on Justia Law

The Judicial Council of California, (JCC) entered into a contract with Jacobs Facilities, a wholly owned subsidiary of Jacobs. Performance of the contract required a license under the Contractors’ State License Law. Facilities was properly licensed when it commenced work. Later, Jacobs, as part of a corporate reorganization, transferred the employees responsible for the JCC contract to another subsidiary and caused the new subsidiary to obtain a contractor’s license, while permitting the Facilities license to expire. Facilities remained the signatory on the JCC contract until a year later, when the parties entered into an assignment to the new, licensed subsidiary. JCC sued under Bus. & Prof. Code 7031(b), which requires an unlicensed contractor to disgorge its compensation. Defendants contended that Facilities had “internally” assigned the contract to the new subsidiary prior to expiration of its license; JCC ratified the internal assignment when it consented to the assignment to the new subsidiary; and Facilities had “substantially complied” with the law. After the jury found for defendants on the other defenses, the substantial compliance issue was not decidedd. The court of appeal reversed, concluding Facilities violated the statute when it continued to act as the contracting party after its license expired, and remanded for a hearing on substantial compliance. View "Judicial Council of Cal. v. Jacobs Facilities, Inc." on Justia Law

This case involved the County's approval of a no-bid contract for pharmacy administrator services under the Affordable Care Act (ACA), 42 U.S.C. 300gg et seq. On appeal, the County challenged the trial court's judgment against it. The court agreed with the County that the trial court failed to accord sufficient deference to the County’s evaluation of its needs for the services of a pharmacy administrator who could provide the necessary data management and provision of pharmaceuticals to address its needs in implementing provisions of the ACA. Accordingly, the court reversed with directions that the trial court enter judgment in favor of the County. View "Weinstein v. County of Los Angeles" on Justia Law

PegaStaff, an agency that provides temporary staffing, provides staffing to Pacific Gas & Electric (PG&E), through a staffing agency with which PG&E directly contracted, initially Corestaff and later Agile. The California Public Utilities Commission (CPUC) adopted General Order 156 to implement Public Utilities Code Article 5, the purpose of which is to encourage and develop the use of women, minority and disabled veteran-owned business enterprises (WMDVBEs) within the public utility sector. PegaStaff is not a WMDVBE and after PG&E adopted a program to increase the utilization of WMDVBEs, its provision of staff to PG&E was substantially reduced. PegaStaff filed suit against the CPUC, PG&E, Corestaff and Agile, challenging the constitutionality of Article 5 and General Order 156. The trial court determined that it did not have subject matter jurisdiction, entered judgment in favor of the CPUC, and denied PegaStaff’s motion to transfer its claims. The court of appeal affirmed. PegaStaff was required to first exhaust its administrative remedies and it has not done so. View "PegaStaff v. Cal. Pub.Utils. Comm'n" on Justia Law

After Rio School District’s new school was completed, the District and its general contractor (FTR) engaged in a decade-long legal battle, resulting in a judgment for FTR exceeding $9 million. Public Contract Code section 7107 allows a public entity to withhold funds due a contractor when there are liens on the property or a good faith dispute concerning whether the work was properly performed. The trial court assessed penalties against District because it did not timely release the retained funds. The court of appeal affirmed in part. A dispute over the contract price does not entitle a public entity to withhold funds due a contractor; the doctrine of unclean hands does not apply to section 7107; the trial court properly rejected the District's action under the False Claims Act, Government Code section 12650 and properly assessed prejudgment interest, subject to adjustment for any extra work claims found untimely on remand. The trial court erred in its interpretation of a contract provision imposing time limitations to submit the contractor's claims for extra work as requiring a showing of prejudice and erred in awarding fees for work not solely related to FTR's section 7107 cause of action. View "East West Bank v. Rio School Dist." on Justia Law

Lydig Construction was the general contractor on a large public works project. Martinez Steel was the original steel supply subcontractor on the project. Lydig sued Martinez for additional costs Lydig incurred because Martinez failed to timely supply steel for the project; Lydig, with the public agency's approval, had been required to replace Martinez as the steel supplier. Lydig moved for a right to attach order and a writ of attachment and presented the trial court with its business records and declarations from its employees. Martinez opposed Lydig's motion and presented declarations from one of its employees that set forth its contention Lydig owed it for, among other items, steel Martinez had delivered to the project. Martinez filed a cross-complaint in which it alleged claims that, if successful, would entirely offset Lydig's claims against it. The trial court granted Lydig's motion and issued writs of attachment in the amount of $203,315. The court of appeal affirmed, rejecting Martinez's contentions that its cross-complaint, as a matter of law, prevented the trial court from issuing a writ of attachment against it and that Lydig's application for a writ of attachment was not supported by substantial evidence. View "Lydig Constr., Inc. v. Martinez Steel Corp." on Justia Law

Since 1962, Athens has been the exclusive residential waste hauling franchisee for Montebello. In 2008, a candidate for the City Council approached Athens about becoming the city’s exclusive commercial waste hauling franchisee. The candidate won election and the Council approved a contract granting Athens an exclusive residential and commercial waste hauling franchise. The Mayor, who had voted against the exclusive franchise, refused to sign the contract. The City Attorney advised the Mayor that he had a ministerial duty to execute contracts passed by the Council under Government Code 40602. If the Mayor refused to do so, the City Attorney warned, he would be deemed “absent” under Government Code 40601 and the Mayor Pro Tempore would be directed to execute the contract in his stead. Weeks passed without the Mayor signing the contract, until, at the apparent direction of the City Attorney, the Mayor Pro Tempore signed it. Torres sought to invalidate the contract. The trial court found the contract void ab initio because it had not been executed by the Mayor. The court of appeal affirmed; neither the City Attorney nor the Mayor Pro Tempore had authority to deem the Mayor “absent” under the statute, so the signature was ineffective. View "Torres v. City of Montebello" on Justia Law

The California Department of Forestry and Fire Protection (Cal Fire) responds to a wide variety of emergencies throughout the state, including more than 5,600 wildfires each year. Although Cal Fire itself owns and operates more than 3,000 fire and emergency response vehicles, it also depends on the availability of equipment and services it hires from private vendors. Fairview Valley Fire was a vendor of emergency vehicles and services, which it provided to Cal Fire and other governmental agencies for a number of years. Cal Fire sent Fairview a letter that suspended Fairview's right to provide emergency vehicles and services. The suspension was based on Cal Fire's investigation of a 2006 incident in which a Fairview employee impersonated a high-ranking fire department officer at a morning briefing being conducted at a fire incident and thereafter contacted Cal Fire personnel and, in violation of Hired Equipment Policies and Procedures (HEPP), was able to have Fairview vehicles and personnel hired outside the normal Cal Fire rotation. Cal Fire's investigation also disclosed that Fairview personnel falsified shift tickets so that Fairview was paid for two operators of a vehicle in instances when it was only entitled to payment for one, resulting in a $6,433 overpayment to Fairview. The investigation also found that, during the incident, Fairview employees obtained several hundred gallons of diesel fuel and then attempted, unsuccessfully, to avoid paying for the fuel. Fairview appealed its suspension to the Cal Fire regional chief; the appeal was ultimately rejected. Fairview then filed a civil complaint against Cal Fire alleging: one cause of action for breach of contract arising out of a dispatcher's request for two water tenders during the Witch Creek fire; a cause of action for declaratory relief challenging Cal Fire's decision not to use its services; and a cause of action for declaratory relief challenging the lack of competitive bidding under the HEPP. After review, the Court of Appeal affirmed the trial court's judgment in favor of Cal Fire: the Court agreed with Cal Fire that the agency was not required to employ the formal competitive bid process set forth in the Public Contract Code. Under the express terms of Cal Fire's written policies and procedures, no binding contract arises between Cal Fire and an equipment vendor until a vendor's equipment is actually dispatched by Cal Fire in an emergency. Further, the Court of Appeal also found the trial court properly dismissed Fairview's causes of action challenging its suspension as a Cal Fire vendor. Moreover, Fairview had no claim related to the underlying suspension because, while the case was pending in the trial court, Cal Fire lifted the suspension. View "Fairview Valley Fire v. CA Dept. of Forestry" on Justia Law

FTR has constructed buildings for public entities for 15 years. In 1999, FTR submitted the winning bid of $7.345 million to construct a District school. During construction, FTR submitted approximately 150 proposed change orders (PCO). FTR claimed some were necessary because the District’s plans were inadequate or misleading. The District denied most of the PCOs on the grounds that the work was covered under the basic contract, the amounts claimed were excessive, or that a PCO was not timely under the contract. Construction was completed in 2001. Public Contract Code 7107 allows a public entity to withhold funds due a contractor when there are liens on the property or a good faith dispute concerning whether the work was properly performed. The court of appeal held that the trial court properly assessed penalties against District because it did not timely release retained funds; properly rejected the District's action under the False Claims Act, Government Code 12650; and properly assessed prejudgment interest. The court erred in its interpretation of a contract provision imposing time limitations to submit claims for extra work as requiring a showing of prejudice and erred in awarding fees for work not solely related to FTR's section 7107 cause of action. View "FTR Int'l, Inc. v. Rio Sch. Dist." on Justia Law

The Los Angeles Memorial Coliseum Commission and Los Angeles Memorial Coliseum Association alleged that defendants, who promoted and staged music events at the Coliseum and related venues, paid an employee of the Commission for services related to those music events and that such payments were inappropriate and not disclosed to plaintiffs. The trial court dismissed. The court of appeal reversed in part, finding that the plaintiffs adequately stated causes of action under the conflicts of interest prohibition in Government Code section 1090, conspiracy to defraud, violation of the Unfair Competition Law (UCL), and accounting. The court upheld dismissal of claims of violation of the False Claims Act, fraud, and negligence. View "Los Angeles Mem'l Coliseum Comm'n v. Insomniac, Inc." on Justia Law