A Public Entity's Determination That A Subcontractor Could Be Substituted Under Public Contracts Code Section 4107 Is Denied Preclusive Effect In Subsequent Litigation
Kemp Bros. Construction, Inc. v. Titan Electric Corp. (2007) Cal.App.4th
In this case, Kemp was a prime contractor on two public works projects for the Los Angeles Unified School District ("LAUSD"). It subcontracted the electrical work to Titan Electric on both projects. Partway through performance, Titan began to struggle with its payroll obligations and Kemp agreed to informally advance payments to Titan to assist in completing the work. When problems continued, Kemp stopped the advance payments and Titan was unable to meet its payroll. Kemp then retained another electrical subcontractor who completed the work. Simultaneously, Kemp requested that the LAUSD approve Titan's substitution as the listed subcontractor under Public Contracts Code Section 4107, arguing that Titan was failing and refusing to perform its work and/or delaying or disrupting the progress of the work. The LAUSD hearing officer agreed that Titan had been disrupting and delaying the work and therefore determined that Kemp had the statutory right to substitute Titan.
Continue Reading Questions & commentsCONTRACT CLAUSE REQUIRING CONTRACTOR TO CONTINUE PERFORMING WORK DURING PENDENCY OF DISPUTE BETWEEN IT AND OWNER AND REQUIRING IT TO COMPLETE WORK BEFORE FILING SUIT FOR DAMAGES HELD UNENFORCEABLE DUE TO OWNER'S MATERIAL BREACH
Barton Properties, Inc. v. Superior Gunite Corp., California Court of Appeal, Second Appellate District (not officially published)
In an unpublished decision, Barton Properties, Inc. v. Superior Gunite Corp, the Second Appellate District of the California Court of Appeal has held that a "continued performance" clause in a construction contract was rendered unenforceable by the owner's material breach of contract. The clause at issue provided that in the event of the dispute between the parties, the contractor would
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