Camrock Co. v. Sec. Paving Co.
| Decision Date | 01 November 2022 |
| Docket Number | C091102 |
| Parties | CAMROCK CO., INC., Plaintiff and Respondent, v. SECURITY PAVING COMPANY, INC., Defendant and Appellant. |
| Court | California Court of Appeals Court of Appeals |
CAMROCK CO., INC., Plaintiff and Respondent,
v.
SECURITY PAVING COMPANY, INC., Defendant and Appellant.
C091102
California Court of Appeals, Third District, Sacramento
November 1, 2022
NOT TO BE PUBLISHED
(Super. Ct. No. 34201600198773CUBCGDS)
RENNER, J.
Prime contractor Security Paving Company, Inc. (Security Paving) appeals from a judgment entered in favor of subcontractor Camrock Co., Inc. (Camrock) after a court trial.[1] Camrock sued Security Paving for breach of contract and common counts, alleging nonpayment for construction work on two state highway projects for the California Department of Transportation (Caltrans). Security Paving defended the action
on the ground that Camrock's causes of action were barred by the applicable statutes of limitations. The trial court rejected Security Paving's statutes of limitations defense and entered judgment in Camrock's favor. Security Paving appeals, arguing the trial court erred in determining the accrual date of the applicable statutes of limitations and entered an excessive damage award, which was not supported by substantial evidence. We reject both contentions and affirm the judgment.[2]
I. BACKGROUND
In December 2010, Security Paving entered into a contract with Caltrans to perform construction work on a state highway in Kern County (the 06 Project). In October 2011, Security Paving entered into a second, separate contract to perform work in Los Angeles County (the 07 Project). Camrock acted as a subcontractor to Security Paving on both the 06 Project and the 07 Project.
A. The 06 Project
Security Paving and Camrock entered into a written subcontract on a standard subcontract form for the 06 Project in January 2011 (the 06 subcontract). The 06 subcontract called for Camrock to reconstruct metal beam guard rails along a state highway. Camrock's scope of work included removing wooden posts along an existing metal beam guard railing spanning approximately two miles and replacing them with metal posts. The cost to complete Camrock's work was $310,050. However, the 06 subcontract was a unit price contract, meaning that Camrock could be paid more or less than $310,050, depending on the actual quantities installed.
Camrock began work on the 06 Project in late August 2011. At the time, Security Paving was already behind schedule and incurring liquidated damages penalties with
Caltrans at the rate of $3,000 per day. These penalties would eventually become the subject of an arbitration between Security Paving and Caltrans.
Within days of starting work, Camrock discovered that many of the existing wooden posts along the highway had not been installed to the required depth of three feet. Most were only two and one-half feet deep, and some were only one foot deep, most likely due to the rocky terrain. Camrock promptly notified Security Paving that installing new metal posts at the required depth of three feet would involve drilling through surface and subsurface rocks and boulders, which would be more difficult and expensive. Around the same time, Caltrans submitted two change orders (change order no. 1 and change order no. 2), enlarging Camrock's scope of work and increasing the contract price. Camrock requested another change order for extra work resulting from the unexpectedly rocky site conditions. Caltrans rejected Camrock's request.
Camrock submitted a notice of differing site conditions to Security Paving. Security Paving submitted the notice to Caltrans on Camrock's behalf. Caltrans denied the claim. Caltrans informed Security Paving that the existence of surface and subsurface rocks was obvious and should have been considered by Camrock at the time of bidding. Caltrans also asserted that Camrock's claim was untimely, and therefore, waived. Security Paving did not tell Camrock that Caltrans had rejected the claim, and consequently, Camrock would not be paid for the extra work.
B. The 07 Project
Security Paving was awarded the contract for the 07 Project in September 2011. Security Paving then approached Camrock about performing additional work on the 07 Project. By then, Camrock had been working on the 06 Project for approximately two months.
Security Paving and Caltrans entered into a second, separate subcontract with Camrock for the 07 Project (the 07 subcontract). The 07 subcontract called for Camrock to remove 4,090 linear feet of double metal beam guard railing near the Tejon Pass for
$6.50 per foot. The terms of the 07 subcontract were set forth on the same standard subcontract form used for the 06 subcontract. However, the parties were not sure whether they signed the form, and no signed 07 subcontract was ever offered into evidence.
Camrock began work on the 07 Project in late October 2011 and completed work in early November 2011. Caltrans paid Security Paving for the 07 Project in late November 2011. Camrock submitted an invoice for the 07 Project in early January 2012. Security Paving did not pay the invoice. Camrock filed a stop notice with Caltrans for $26,580 on March 15, 2012. Camrock was not paid for its work on the 07 Project.
C. Camrock's Termination and Substitution from the 06 Project
Camrock resumed work on the 06 Project in November 2011, after completing the 07 Project. As before, Camrock experienced difficulties associated with the rocky terrain. Camrock kept Security Paving and Caltrans informed of these issues.
On December 12, 2011, Security Paving sent a letter declaring that Camrock was in breach of the subcontract for the 06 Project and demanding that the subcontractor complete work by December 15, 2011. Camrock responded that it would not be able to meet that deadline.
On December 16, 2011, Security Paving sent Camrock a letter terminating the subcontract for the 06 Project. Security Paving also sent Caltrans a letter requesting substitution of Camrock. By then, Camrock had completed a substantial portion of work on the 06 Project.
Camrock objected to the substitution. A substitution hearing was held in February 2012. The substitution was approved on February 16, 2012. Camrock was not paid for its work on the 06 Project.
D. Arbitration Between Caltrans and Security Paving
Caltrans and Security Paving became involved in arbitration concerning the imposition of liquidated damages penalties for the 06 Project. The arbitration claim was
eventually settled. As part of the settlement, Caltrans made a final payment to Security Paving of $144,000 for the 06 Project. That payment was made on October 14, 2014. Camrock was never informed of the final payment to Security Paving, the result of the arbitration between Security Paving and Caltrans, or the disposition of its own claims for payment.
E. Complaint, Cross-Complaint, and Court Trial
Camrock commenced the present action on August 11, 2016. Camrock's Judicial Council form complaint asserts causes of action for breach of contract and common counts against Security Paving.
The complaint attaches a copy of the 06 subcontract. The complaint alleges Security Paving breached the 06 subcontract by failing to pay Camrock's final invoice for the 06 Project dated August 9, 2012. The complaint seeks damages in the amount of $356,436 for the 06 Project.
The complaint also alleges Security Paving breached the 07 subcontract by failing to pay Camrock's final invoice for the 07 Project dated February 3, 2013. The complaint seeks damages in the amount of $26,585 for the 07 Project.
Security Paving answered the complaint and asserted numerous affirmative defenses, including the statutes of limitations. Security Paving also filed a crosscomplaint for breach of contract, indemnity, and fraud. The cross-complaint alleges Camrock failed to perform as required by 06 and 07 subcontracts. The cross-complaint seeks damages in the amount of $610,110. Camrock answered the cross-complaint, asserting various affirmative defenses including unclean hands, estoppel, and the failure to do equity.
The matter was tried before the trial court over the course of several days beginning in October 2018 and continuing through March 2019. The parties' representatives testified substantially as described ante. An expert witness for Camrock additionally testified that a subcontractor called upon to replace existing wooden posts
along a state highway could reasonably assume they had been installed to the required depth of three and one-half feet, such that removing and replacing them would not require any significant excavation or drilling. The expert witness further opined that delays in Camrock's performance were the result of differing site conditions, which were beyond Camrock's control, and which Camrock timely brought to Security Paving's attention. The expert witness further opined that Security Paving had an obligation to submit and timely file Camrock's claim with Caltrans, and pursue the claim through arbitration, if necessary.
The trial court issued a tentative decision in Camrock's favor on May 31, 2019. Security Paving requested a statement of decision. The trial court issued a 24-page statement of decision on July 1, 2019. As relevant here, the trial court found: "The statute of limitations did not commence under the written contract until Security Paving and Caltrans concluded their arbitration and Security Paving received the final $144,000 payment from Caltrans. That date was October 14, 2014." The trial court found support for this determination in section 4 of the 06 subcontract, entitled "PAYMENT SCHEDULE." That section provides, in pertinent part: "CONTRACTOR agrees to pay SUBCONTRACTOR in monthly payments of 100% of labor and materials which have been placed in position and for which payment has been made by OWNER [Caltrans] to CONTRACTOR." The same language can be found in the unsigned 07 subcontract.
The trial court further found: "To the extent the Court's award of damages...
To continue reading
Request your trial