Justia Government Contracts Opinion SummariesArticles Posted in California Courts of Appeal
Stronghold Engineering, Inc. v. City of Monterey
Stronghold and the city entered into a 2015 contract to renovate the Monterey Conference Center. Before filing a lawsuit asserting a claim for money or damages against a public entity, the Government Claims Act (Gov. Code 810) requires that a claim be presented to the entity. Without first presenting a claim to the city, Stronghold filed suit seeking declaratory relief regarding the interpretation of the contract, and asserting that the Act was inapplicable.Stronghold presented three claims to the city in 2017-2019, based on its refusal to approve change orders necessitated by purportedly excusable delays. Stronghold filed a fourth amended complaint, alleging breach of contract. The court granted the city summary judgment, reasoning that the declaratory relief cause of action in the initial complaint was, in essence, a claim for money or damages and that all claims in the operative complaint “lack merit” because Stronghold failed to timely present a claim to the city before filing suit.The court of appeal reversed. The notice requirement does not apply to an action seeking purely declaratory relief. A declaratory relief action seeking interpretation of a contract is not a claim for money or damages, even if the judicial interpretation sought may later be the basis for a separate claim for money or damages which would trigger the claim presentation requirement. View "Stronghold Engineering, Inc. v. City of Monterey" on Justia Law
Westlands Water Dist. v. All Persons Interested
Westlands Water District (Westlands) appeals from a judgment of dismissal entered in a validation action filed pursuant to, inter alia, Code of Civil Procedure section 860 et seq. The subject matter was an anticipated contract between Westlands and the United States concerning the ongoing delivery of federal reclamation project water and repayment of certain financial obligations. The superior court declined to grant relief and ultimately dismissed Westlands’ validation action for multiple reasons. Most pertinently, the draft was found to be materially deficient in its failure to specify Westlands’ financial obligations under the anticipated contract. The Fifth Appellate District affirmed the judgment. The court explained that the “Repayment Obligation” cannot be determined without knowing the “Existing Capital Obligation” and/or the contents of exhibit D. The “Existing Capital Obligation” cannot be determined without knowing the contents of exhibit D. In the absence of exhibit D, both terms are useless for purposes of determining Westlands’ financial obligations, i.e., “the scope of the duty and the limits of performance.” Moreover, as Westlands admitted during the motion proceedings, exhibit D was not merely omitted from the draft attached to the complaint. Despite being expressly incorporated into the contract by reference, exhibit D did not exist when the complaint and the December 2019 motion were filed. Even when the motion was heard, there was only meager parol evidence of estimates ranging from $200 million to $362 million. Given the circumstances, the court agreed the contract presented for validation was missing an essential term and, therefore uncertain, i.e., not sufficiently definite to be binding and enforceable. View "Westlands Water Dist. v. All Persons Interested" on Justia Law
Earley v. Workers’ Comp. Appeals Bd.
Five Petitioners argued the Board’s grant-for-study procedure is an unauthorized way to extend the 60-day deadline. A statute requires the Workers’ Compensation Appeals Board (Board) to make a reasoned decision when granting reconsideration. The Second Appellate District granted Petitioners, the Board, and Amicus Curiae’s requests for judicial notice of items relating to the legislative and statutory history of the Board’s reconsideration procedure and to the Board’s records. The court issued a peremptory writ of mandate commanding the Board to end its practice of granting petitions for reconsideration solely for purposes of further study and to comply with section 5908.5 when granting petitions for reconsideration, including the requirement that the Board “state the evidence relied upon and specify in detail the reasons for its decision.” The court also held that the Board is not required to issue a final ruling on the merits within 60 days. Statutory language negates the Petitioners’ argument to the contrary. View "Earley v. Workers' Comp. Appeals Bd." on Justia Law
Discovery Builders, Inc. v. City of Oakland
The Monte Vista Villas Project, on the site of the former Leona Quarry, has been in development since the early 2000s. The developers planned to close the 128-acre quarry site, reclaim it, and develop the land into a residential neighborhood with over 400 residential units, a community center, a park, pedestrian trails, and other recreational areas. In 2005, the developers entered into an agreement with Oakland to pay certain fees to cover the costs of its project oversight. The agreement provided that the fees set forth in the agreement satisfied “all of the Developer’s obligations for fees due to the City for the Project.” In 2016, Oakland adopted ordinances that imposed new impact fees on development projects, intended to address the effects of development on affordable housing, transportation, and capital improvements, and assessed the new impact fees on the Project, then more than a decade into development, when the developers sought new building permits.The trial court vacated the imposition of the fees and directed Oakland to refrain from assessing any fee not specified in the agreement. The court of appeal reversed, finding that any provision in, or construction of, the parties’ agreement that prevents Oakland from imposing the impact fees on the instant development project constitutes an impermissible infringement of the city’s police power and is therefore invalid. View "Discovery Builders, Inc. v. City of Oakland" on Justia Law
TruConnect Communications, Inc. v. Maximus, Inc.
The Lifeline Program provides discounted telecommunications services to low-income Californians. The California Public Utilities Commission (CPUC) administers the program under Pub. Util. Code 871. A “third-party administrator,” qualifies applicants, and there are procedures for service providers to seek reimbursement from CPUC for “LifeLine-related costs and lost revenues.” TruConnect provides free wireless telephone service through LifeLine. CPUC changed the third-party administrator to Maximus. TruConnect claimed Maximus was “woefully unequipped” and asked CPUC to delay the rollout of new software. The launch nonetheless went forward. Maximus recruited TruConnect to assist. TruConnect allegedly invested hundreds of thousands of man-hours. Maximus subsequently subcontracted work to Solix. TruConnect claims it incurred losses of more than $14 million in connection with the launch. TruConnect sought reimbursement from CPUC, which paid some claims but denied compensation for “lost opportunities,” customers who wanted TruConnect’s services but were unable to enroll because of the flawed rollout.TruConnect sued Maximus and Solix. The trial court dismissed the action for lack of jurisdiction. The court of appeal reversed and remanded for determination of whether the lawsuit is nonetheless barred because CPUC is an indispensable party or for other reasons. Section 1759 does not bar the lawsuit since recovery would not conflict with a CPUC order or interfere with its oversight of LifeLine. View "TruConnect Communications, Inc. v. Maximus, Inc." on Justia Law
City of Chula Vista v. Stephenshaw
This dispute arose out of 2011 legislation that dissolved California’s redevelopment agencies and created a process for winding down their affairs. The Department of Finance (Department) determined that certain reimbursement agreements between the City of Chula Vista (City) and its former redevelopment agency (Agency) were not “enforceable obligations” under the redevelopment dissolution laws. Thus, despite having approved payment under the agreements on prior “recognized obligation payment schedules” (ROPS), the Department denied payment authorization on the fiscal year 2018-2019 and 2019-2020 ROPS. The City and the Chula Vista Redevelopment Successor Agency (together, plaintiffs) filed this action seeking to compel the Department to recognize the reimbursement agreements as enforceable obligations and approve the use of property tax revenues for such items on all current and future ROPS. The trial court denied the petition and entered judgment in favor of the Department. On appeal, plaintiffs argued the Department erred in rejecting the items as enforceable obligations under Health and Safety Code section 34171(d)(2). Alternatively, plaintiffs contended the Department should have been estopped from denying the items based on its prior approvals. The Court of Appeal concluded some of the disputed items were enforceable obligations, and reversed the trial court's judgment in part. View "City of Chula Vista v. Stephenshaw" on Justia Law
Childhelp, Inc. v. City of L.A.
In 2014 the Los Angeles City Council passed a resolution directing various City departments and officials to prepare and execute the necessary approvals and agreements to convey the property to Childhelp in exchange for Childhelp’s agreement to continue using the property to provide services for victims of child abuse. Ultimately, however, the City decided not to transfer the property to Childhelp. Childhelp filed this action against the City for, among other things, declaratory relief, writ of mandate, and promissory estoppel, and the City filed an unlawful detainer action against Childhelp. After the trial court consolidated the two actions, the court granted the City’s motion for summary adjudication on Childhelp’s cause of action for promissory estoppel, sustained without leave to amend the City’s demurrer to Childhelp’s causes of action for declaratory relief and writ of mandate, and granted the City’s motion for summary judgment on its unlawful detainer complaint. Childhelp appealed the ensuing judgment. The Second Appellate District affirmed. The court explained that Childhelp had occupied the property for almost 30 years and had an expectation it would eventually own the property. The 2014 resolution certainly suggested the City was seriously considering selling the property to Childhelp. But it was undisputed the parties never completed the transaction in accordance with the City Charter. While Childhelp cites cases reciting general principles of promissory estoppel, it does not cite any cases where the plaintiff successfully invoked promissory estoppel against a municipality in these circumstances. The trial court did not err in granting the City’s motion for summary adjudication on Childhelp’s promissory estoppel cause of action. View "Childhelp, Inc. v. City of L.A." on Justia Law
Edelweiss Fund LLC v. JPMorgan Chase & Co.
Edelweiss brought a qui tam action against financial institutions (California False Claims Act (Gov. Code 12650) (CFCA)), alleging that the defendants contracted to serve as remarketing agents (RMAs) to manage California variable rate demand obligations (VRDOs): tax-exempt municipal bonds with interest rates periodically reset by RMAs. Edelweiss claims that the defendants submitted false claims for payment for these remarketing services, knowing they had failed their obligation to reset the interest rate at the lowest possible rate that would enable them to sell the series at par (face value), and “engaged in a coordinated ‘Robo-Resetting’ scheme where they mechanically set the rates en masse without any consideration of the individual characteristics of the bonds or the associated market conditions or investor demand” and “impose[d] artificially high interest rates on California VRDOs.” Edelweiss alleged that it performed a forensic analysis of rate resetting during a four-year period and that former employees of the defendants “stated and corroborated” this robo-resetting scheme.The trial court dismissed the complaint, concluding that the allegations lacked particularized allegations about how the defendants set their VRDO rates and did not support a reasonable inference that the observed conditions were caused by fraud, rather than other factors.The court of appeal reversed. While allegations of a CFCA claim must be pleaded with particularity, the court required too much to satisfy this standard. The court rejected an alternative argument that Edelweiss’s claims are foreclosed by CFCA’s public disclosure bar. View "Edelweiss Fund LLC v. JPMorgan Chase & Co." on Justia Law
GRFCO, Inc. v. Super. Ct.
The California Department of Industrial Relations, Division of Labor Standards Enforcement (Division) debarred the following from acting as public works contractors: (1) GRFCO, Inc. (GRFCO), a contractor; (2) George Rogers Frost, the principal in GRFCO; (3) Garcia Juarez Construction (GJC), a contractor and apparent alter ego of GRFCO; and (4) James Craig Jackson, the principal in GJC and an employee of GRFCO. The Division found that, in six instances, the contractors violated apprenticeship requirements, and in two instances, Frost and Jackson had made false certifications under penalty of perjury. The trial court denied the contractors’ petition for administrative mandate. On appeal, the contractors contended: (1) there was insufficient evidence that the apprenticeship violations were knowing; (2) there was insufficient evidence to support the false certification findings; (3) the contractors were debarred because they refused to join a union, in violation of the First Amendment; (5) the Division, hearing officer, and/or the investigator were biased; and (5) the hearing officer erred by denying the contractors' request to reopen, which was based on new evidence of bias. Finding no error, the Court of Appeal affirmed. View "GRFCO, Inc. v. Super. Ct." on Justia Law
Marin v. Department of Transportation
Decedent was employed by Jones as a construction worker. Jones was under contract with DOT to perform construction work on I-580 in Oakland. Much of this work was performed at night because it required lane closures. A car operated by a drunk driver entered the closed lanes of the project site and struck Decedent, who died on the scene. A wrongful death lawsuit against DOT asserted vicarious liability for the negligence of its employees; failure to discharge a mandatory duty; and dangerous condition on public property. The court dismissed the mandatory duty claim. DOT offered evidence that it did not instruct or control Jones as to how to comply with its safety obligations but that Jones complied with its safety plan on the night in question and that the contract between DOT and Jones delegated to Jones the responsibility for selecting the means for performing, including ensuring worker safety.The trial court concluded DOT was not liable for Decedent’s death as a matter of law because DOT delegated to Jones its duty to provide a safe work environment and the conduct of the drunk driver was not reasonably foreseeable. The court of appeal affirmed, rejecting arguments that admissible evidence was wrongfully excluded. Plaintiffs failed to present evidence that DOT retained control over the construction site and actually exercised that control in such a way as to affirmatively contribute to Decedent's injuries, as required under California law. View "Marin v. Department of Transportation" on Justia Law