Calabrese v. Monterey County

• Decision Date: 18 May 1967
• Citation: 59 Cal.Rptr. 224,251 Cal.App.2d 131
• Court: California Court of Appeals Court of Appeals
• Parties: Phillip H. CALABRESE, doing business under the firm name and style of Phil Calabrese Construction Co., Plaintiff and Appellant, v. COUNTY OF MONTEREY, a political subdivision of the State of California, Defendant and Respondent. Civ. 23435.

Page 224

59 Cal.Rptr. 224

251 Cal.App.2d 131

Phillip H. CALABRESE, doing business under the firm name and style of Phil Calabrese Construction Co., Plaintiff and Appellant, v. COUNTY OF MONTEREY, a political subdivision of the State of California, Defendant and Respondent.

Civ. 23435.

Court of Appeal, First District, Division 2, California.

May 18, 1967.

Hearing Denied July 26, 1967.

Thompson & Thompson, Monterey, for appellant.

William H. Stoffers, County Counsel, County of Monterey, by Roy E. Anderson, Deputy County Counsel, County of Monterey, Salinas, for respondent.

SHOEMAKER, Presiding Justice.

Plaintiff Phillip Calabrese brought this action against the County of Monterey to recover damages in the amount of $40,866.05 for extra work and materials furnished in connection with the construction of a highway in said county.

Defendant county answered and raised he defense, among others, that plaintiff's cause of action was barred by his failure to present it to the county within one year of its accrual, as required by statute (former Gov.Code, §§ 710--715).

An amended pretrial conference order provided that prior to any trial on the merits, two issues would be tried first and separately: (1) defendant's contention that plaintiff's action was barred by the claims statute, and (2) plaintiff's contention that defendant was estopped from asserting noncompliance with said statute.

This limited trial was held and the following evidence produced: On February 26, 1959, the Department of Public Works, Division of Highways, of the State of California, entered into a written contract with plaintiff whereby plaintiff undertook to grade and surface 2.2 miles of highway in the County of Monterey. The contract incorporated the Standard Specifications of the Department of Public Works, Division of Highways.

Section 10, article (b), of said specifications provided in pertinent part that: 'It is anticipated that utility facilities and other improvements * * * that are required to be removed, altered or relocated as a part of the highway improvement will be removed, altered or relocated in advance of construction operations at no cost to the Contractor. * * * Any unavoidable delays to the Contractor's operations as a direct result of utility facilities and other improvements not being removed or relocated as above provided, will be considered right of way delays within the meaning of Section 8, article (h), of these specifications and the State will compensate the Contractor to the extent provided therein but not otherwise.'

Section 8, article (h), of the specifications provided that if the state's failure to acquire or clear rights of way should cause the contractor to sustain loss which could not have been avoided by the judicious handling of forces, equipment and plant, he should be paid such amount as the State Highway Engineer might find to be a fair and reasonable compensation for such part of the contractor's actual loss as in the engineer's opinion was unavoidable.

Plaintiff commenced performance on March 9, 1959. In April 1959, it became apparent that plaintiff could not continue to work with any efficiency around certain utility poles which had not been removed from the right of way. After a meeting attended by plaintiff, representatives of the Division of Highways, the Monterey County Road Commissioner and a construction engineer from said county, it was agreed that work would have to be suspended for a period of two months while the utility poles were removed from the right of way.

Construction work resumed following the two-month stoppage and was completed on September 4, 1959. Notice of completion was filed by the Department of Public Works on September 8, 1959 and recorded on September 10, 1959. All progress payments, under the contract, were in the form of warrants signed by the State Controller.

Sometime later in the month of September 1959, plaintiff addressed a letter to District V of the Division of Highways which set forth plaintiff's claim for additional compensation on account of certain 'clearing and grubbing' and excavating expenses allegedly incurred as a result of the state's failure to remove the utility poles from the right of way.

In December 1959, plaintiff met with Wofford, an assistant engineer of the Division of Highways, who was in charge of all operations in the district where plaintiff did his work. Wofford advised him as to the proper procedure to be followed in presenting his claim.

Plainiff thereafter filed a claim with the Board of Review, and a hearing was scheduled for May 3, 1960. The day before said hearing, plaintiff employed Thompson, an attorney, to represent him at the hearing.

Thompson testified that the hearing was very informal in nature and that plaintiff and a representative of the Division of Highways presented their respective positions relative to plaintiff's claim. Thompson subsequently received a letter dated August 19, 1960 from the State Highway Engineer, advising that his claim was turned down.

On September 27, 1960, Thompson wrote the State Highway Engineer, stating that he had been informed that the May 3 hearing was 'informal' in nature and that to further process plaintiff's claim, a request for a 'formal' hearing should be made. Thompson asked to be advised of the procedural steps required under the administrative rules of the Division of Highways.

By letter of October 10, 1960, the State Highway Engineer advised Thompson that he was required to file the claim with the State Board of Control preparatory to bringing suit thereon.

On February 14, 1961, Thompson filed a claim with the Board of Control, and a hearing was scheduled for September 5, 1961. Before said hearing, Thompson was furnished a copy of a letter, dated May 2, 1961, which had been filed with the Board of Control by Finch, an attorney for the Department of Public Works. This letter stated that plaintiff had already been compensated for the utility delay and that a change order establishing the damages resulting from said delay had been prepared and executed by all the parties. The letter further stated that 'this is a Federal-Aid Secondary project involving Federal and County funds. Federal law requires that the State supervise these county FAS projects and award the contracts. As a result, the State is the nominal contracting party, but the county is the real party in interest. A denial of this claim would be necessary for the claimant to commence an action at law on this matter.'

Thompson testified that he did not understand the above-quoted portion of the letter. He had previously reviewed plaintiff's contract with the Division of Highways, had found no mention of the county and had been under the impression that plaintiff and the state were the only parties to the contract. He also knew that plaintiff had been paid by the state. He had read section 8, article (h) and section 10, article (b), of the specifications incorporated in the contract and had concluded that the state alone was responsible for utility delays.

At the hearing on September 5, 1961, Thompson was advised by the chairman of the Board of Control that the board preferred not to hear plaintiff's claim on the merits, since the procedure involved was technical and a mere formality required as a condition to plaintiff's commencing an action at law. When Thompson expressed dismay and indicated that he wanted a full hearing, Finch, who was representing the State Highway Engineer, stated that it would be improper to hear the claim on its merits because even though the state was the nominal contracting party and plaintiff was required to pursue the administrative remedies he had thus far completed, the County of Monterey was the ultimate real party in interest and the claim would have to be paid from county funds. According to Thompson's testimony, he was then for the first time fully aware of the state's claim that plaintiff's cause of action was against the county only.

The chairman of the Board of Control then informed Thompson that plaintiff's claim was summarily denied, that his administrative remedies had been exhausted and that he could take whatever procedural steps were required against the County of Monterey. By letter dated September 6, 1961, Thompson was advised that the board had denied plaintiff's claim on the preceding day.

On June 4, 1962, Thompson, acting as the attorney for Calabrese, filed his complaint to recover damages for the utility delay from the State of California, Department of Public Works.

On September 4, 1962, Thompson filed plaintiff's utility delay claim with the County of Monterey. Thompson's testimony was to the effect that he was still unaware of the basis, if any, of plaintiff's cause of action against the county, and he filed the claim merely as a precautionary measure and in reliance upon the representations made by Finch at the hearing before the Board of Control. He was also of the opinion that he was required to file plaintiff's claim against the county within one year of the Board of Control's decision denying plaintiff's claim.

On September 7, 1962, Thompson dismissed plaintiff's action against the Department of Public Works, since he had concluded that the true 'defendant' was the county.

Within a few days after filing the claim against the county, Thompson talked with Thornberry of the county counsel's office and was informed that the state and county had entered into some sort of agreement prior to the execution of plaintiff's contract of February 1959. Thompson asked for a copy of the agreement. Thornberry sent it to Thompson some two months after the filing of the claim against the county. This agreement, dated December 1, 1958, was between the County of Monterey and the 'Department of Public Works (Division of Highways) of the State of California.' It provided in pertinent part that in connection with federal-aid secondary projects, the county would...