DCM Construction and Services, Inc. v. Mohammadian, No. A122725 (Cal. App. 4/29/2010)

Decision Date29 April 2010
Docket NumberNo. A122725.,A122725.
PartiesDCM CONSTRUCTION AND SERVICES, INC., Plaintiff and Respondent, v. MEHDI MOHAMMADIAN et al., Defendants and Appellants.
CourtCalifornia Court of Appeals Court of Appeals

Appeal from the Alameda County, Superior Court No. V-020566-5.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

SIMONS, J.

Defendants/appellants, husband and wife, Mehdi Mohammadian and Fereshteh Mohammadian1 appeal a judgment following court trial in favor of plaintiff/respondent DCM Construction and Services, Inc., by and through its assignee of judgment, Robert B. Jacobs,2 in respondent's action for breach of contract and foreclosure of mechanic's lien, and on appellants' cross-action for breach of contract, negligence, contractual indemnity, cancellation of instrument, misrepresentation and civil conspiracy.3 Appellants contend the court erred in concluding that respondent did not breach the parties' contract, awarding respondent a judgment of foreclosure and awarding respondent unreasonable attorney fees. We affirm.4

BACKGROUND5

Preliminarily, we note both parties' appellate briefs have violated California Rules of Court, rule 8.204(a)(1)(C).6 Appellants' briefs contain numerous misstatements, misrepresentations and/or omissions of the evidence presented at trial, and both parties' briefs contain numerous factual statements unsupported by any citation to the appellate record. Any facts which do not accurately cite to the record or for which there are no citations to the record will be disregarded.

Respondent is a licensed general engineering contractor, specializing in service station construction. Its president is Jeffrey Deakin. At trial, the court confirmed Deakin as an expert in the field of retrofit and underground construction relating to petroleum and petroleum products.

Appellants own a Cal Gas service station (hereafter, Cal Gas or the project) in San Lorenzo, which they purchased in 1990. Mehdi manages the service station. Mehdi, a licensed civil engineer and general contractor, has been involved in construction since 1964. However, except for work done at Cal Gas, he has not been involved in activities relating to service station construction.

Although Cal Gas was up to code, appellants decided to upgrade it by replacing its entire underground system, except for the three underground storage tanks.7 Robert Weston, senior hazardous material specialist for ACEHD, suggested to Mehdi that respondent could do the job. In early December 2000, respondent and Mehdi began negotiating a contract for the upgrade. As of trial, Deakin had done approximately 1,000 service station projects over the course of 27 years. Of those, more than 15 involved complete gas station retrofits, and several were very similar to the project.

The Contract

The contract went through several revisions prior to its execution. On January 30, 2001, respondent and Mehdi entered into a written contract drafted by respondent pursuant to which respondent was to retrofit three underground storage tanks, piping, and fuel islands at Cal Gas. The first two pages of the contract contained an "outline" of the "Scope of Work" which states, in part: "[Respondent] will assist with requirements of the Upgrade of the existing system and provide single-line drawings for client approval before submitting the plans to the required agencies and prior to the start of new construction." It also provided that respondent would "excavate the tank tops of the [underground storage tanks] at the pump end for installation of the new piping sumps" and, after the existing system was uncovered, inspected and found to meet the requirements for approval of an upgrade, respondent would "install all necessary components to meet the current requirements and provide a turn-key system" which included various specified items. It also excluded respondent from paying for permits.

The contract contained 19 provisions under the heading "Terms and Conditions." The "Scope of Work" provision provides, in part: "The scope of work (and related plans and specifications) may not be modified or amended, unless the changes are first agreed to in writing by [Mehdi] and respondent."

The "Site Conditions" provision specified that respondent would "not be responsible for unanticipated and/or unforeseen site conditions, including subsurface utilities, piping, and facilities. In the event additional costs are incurred as a result of such unanticipated and/or unforeseen site conditions, [appellants] shall pay all such costs."

The contract specified $48,669 as the "total upgrade cost," and noted that respondent had received a down payment of $10,000 on January 30, 2001.

The contract provided that work must commence within 30 days of execution of the contract. It also provided: "Upon receiving the approved plans paid for by others, [respondent] will start the project within [five] working days."8 A handwritten notation signed by Deakin and initialed by Mehdi stated, "Project to be completed in [four] weeks or [one] week after delivery of dispenser." Time was of the essence.

Respondent was to perform the work in accordance with industry standards and, if within 30 days after completion the parties determined there was substantial and material error in respondent's performance as a result of reasonable and customary professional practices not having been met, respondent would "take such corrective action as may reasonably be necessary, within the original scope of work, to substantially remedy the error."

The "Insurance" provision stated: "[Respondent] shall procure and maintain, at its expense, during the term of this Agreement, insurance, including policies covering: Worker's Compensation; Employer's Liability; Automobile Liability and Commercial General Liability. [Respondent] shall provide client with insurance certificates showing limits of insurance for coverage[s] listed above." A handwritten notation initialed by Deakin and Mehdi stated, "Client to be named as additional insured."

The "Independent Contractor" provision stated, in part: "[Respondent] is, and shall perform this Agreement as, an[] independent contractor and shall have and maintain complete control over its employees, agents and operations. Neither [respondent] nor anyone employed by [respondent] shall be, represent, act, purport to act, or be deemed to be the agent, representative, employee or servant of Client."

The "Litigation" provision stated: "If any legal action or any arbitration o[r] other proceeding is brought for the enforcement of this agreement, or because of an alleged dispute, breach, default or misrepresentation in connection with these terms and conditions o[f] the Agreement, the successful or prevailing party shall be entitled to recover reasonable attorney[] fees and other costs and expenses incurred in that action or proceeding."

Single-Line Drawings

On February 1, 2001, Deakin met with Weston and submitted to him an "Application for Underground Storage Tank Installation" regarding the Cal Gas retrofit. Attached to the application were two single-line drawings respondent prepared for the project. According to Deakin, the fire and health departments have always accepted his single-line drawings. Deakin explained that single-line drawings are common in the industry regarding service station retrofits, particularly for smaller independent service stations. According to Weston, it is not uncommon for ACEHD to receive a single-line drawing, such as that submitted by Deakin, in conjunction with a proposed service station retrofit. Weston explained that small, independent gas stations use single-line drawings as installation plans, rather than "engineer stamp" plans, to save money. Although ACEHD "expects" to receive single-line drawings in two views—a "plan view" and a side view—showing generally how the connections are being made and the system is being built, single-line drawings such as that submitted by Deakin are acceptable to ACEHD.9 Weston approved respondent's application subject to several conditions. Mehdi never received a copy of respondent's single-line drawings.

After respondent submitted an application for plan review, including the single-line drawings, to the Alameda County Fire Department (fire department), the fire department's deputy fire marshal, Robert Bohman, contacted Deakin. According to Bohman, the single-line drawings lacked some of the detail the fire department "liked to see." However, after Bohman and Deakin met and went over Deakin's submittal, Bohman had sufficient information and detail regarding the project to enable him to proceed based on the application and drawings Deakin had previously submitted. At that point Bohman felt confident that the work would be done correctly.

Respondent submitted an application to the Bay Area Air Quality Management District (BAAQMD) for installation of a new vapor recovery system and other equipment for the project. A single-line drawing was attached to the application.10 According to Scott Owen, BAAQMD's supervising engineer, many of the applications received by BAAQMD contain drawings "extremely similar" to Deakin's. On February 27, 2001, BAAQMD issued respondent a permit regarding the Cal Gas retrofit.

Slope

On February 5, 2001, respondent began work on the project. At the commencement of the upgrade, Cal Gas was fully functioning and up to code.

The petroleum industry standards established by the Petroleum Equipment Institute require that all underground pipes have at least a one-eighth inch slope downward in the direction of the tanks per lateral foot. Such a slope is almost flat. The requisite slope helps to prevent leakage and ensure early leak detection.

On February 27, 2001, BAAQMD issued respondent a permit regarding the Cal Gas retrofit. The permit required that all vapor recovery piping possess this minimum one-eighth inch downward slope.

On March 9, 2001, after visiting the project site,...

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