F.W. Spencer & Son, Inc. v. Harris Constr. Co.
| Decision Date | 26 February 2014 |
| Docket Number | Consolidated Case No. F064782,Consolidated Case No. F064793 |
| Court | California Court of Appeals |
| Parties | F.W. SPENCER & SON, INC., Plaintiff and Respondent, v. HARRIS CONSTRUCTION COMPANY, INC., Defendant and Appellant. |
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINIONAPPEAL from a judgment of the Superior Court of Stanislaus County. William A. Mayhew, Judge.
Lozoya & Lozoya and Frank J. Lozoya IV; Lax & Stevens and Paul A. Lax for Defendant and Appellant.
Flynn Williams Riley, Sloan C. Bailey and Gary Sloboda for Plaintiff and Respondent.
Harris Construction Company, Inc. (Harris) appeals a judgment awarding one million dollars to F.W. Spencer & Son, Inc. (Spencer) in this action to recover delay damages based on breach of contract and common counts. Harris contends the jury verdict in Spencer's favor resulted from the trial court's errors in (1) severing Spencer'sdamage claims for trial after Spencer completed its case-in-chief, (2) allowing jury instructions and a verdict form on legal theories not before the jury that served only to confuse the jurors, (3) excluding percipient testimony from Harris's witnesses on the ground it constituted expert testimony and allowing Spencer's experts to testify on the reasonableness of any delay, (4) exhibiting bias against Harris's trial counsel in front of the jury, and (5) denying Harris's new trial motion on the issue of excessive damages. Harris further contends the trial court erred in awarding Spencer prejudgment interest under Civil Code section 3287, subdivision (a)1 and in failing to reduce the amount of attorney fees awarded to Spencer.
We find no merit in Harris's arguments as to the jury's verdict and to the award of attorney fees. We do, however, find the trial court erred in awarding prejudgment interest under section 3287, subdivision (a). Since Harris conceded below that prejudgment interest was awardable under section 3287, subdivision (b), the alternative ground on which Spencer sought prejudgment interest, we will reduce the prejudgment interest accordingly. In all other respects, we affirm the judgment and post-judgment order awarding attorney fees.
In 2004, the Modesto City Schools entered into a $79,197,000 contract with Harris, a general contractor, for the construction of James C. Enochs High School (the Project). In June 2004, Harris entered into a subcontract with Spencer, a mechanical contractor, to perform the plumbing and HVAC work on the Project for $7,545,000. The scope of Spencer's work included furnishing and installing a wet chemical fire suppression system, plumbing, heating, ventilating and air conditioning, and a direct digital control and energy management system. The work was to be completed inaccordance with the "Harris Baseline Schedule[,]" which Spencer assumed gave it "reasonable time to install work in a reasonable manner with a reasonable flow."
The Project originally was scheduled to finish on April 24, 2006. As the Project progressed, the baseline schedule changed a number of times for a variety of reasons, including weather and design issues. In June 2005, Harris notified Spencer that the Project owner had granted a non-compensable time extension on the Project from April 2006 to June 24, 2006, as the "exceptionally bad" winter weather had a definite impact on the schedule progress. Spencer signed a change order agreeing to the time extension without additional compensation.
Spencer claimed Harris caused numerous problems on the site with supervision, coordination of the various trades, weatherization, and access issues. When Spencer agreed to accept the no cost change order in 2005, Spencer informed Harris of its concerns regarding Harris's management of the project and the financial impact to Spencer should the schedule continue to change. In response, Harris agreed to address financial impacts as they materialized. In February 2006, Spencer's president, Bruce Bonar, wrote Harris, expressing concerns that the schedule was continuing to slip.
In May 2006, Bonar wrote Harris with an estimated cost of the impact the delays were having on Spencer. Bonar estimated the project would be at least 120 days late and, on that basis, believed Spencer would incur additional costs of $626,847, which included extension costs for the project manager, assistant project manager and plumbing superintendant, and rental costs and home office overhead, as well as an efficiency factor due to the extension/delay. Bonar also advised Harris that Spencer had incurred costs due to lack of flow and efficiency factors which had not yet been quantified.
Most of the buildings in the Project were not substantially completed until December 2006. The entire Project was completed on April 20, 2007, with a notice of completion submitted on May 17, 2007.
On December 21, 2006, Bonar wrote Harris with an update of the additional costs Spencer incurred due to the delays in construction. At that time, Spencer still was working on the Project. Bonar estimated the delay and impact costs Spencer incurred totaled $870,969.20. Harris did not pay the claim.
Spencer filed this lawsuit against Harris in December 2007. The complaint alleged causes of action for breach of contract, common counts, quantum meruit and to collect on a payment bond. In its breach of contract cause of action, Spencer alleged Harris breached the subcontract by failing and refusing to pay Spencer the value of various items of work performed and materials Spencer supplied under the subcontract, or for changes to the work, including delays, impacts and constructive changes. Damages were alleged to include additional direct and indirect expenses, additional costs as a result of Harris's retention of funds, and amounts due under the subcontract, in a sum exceeding $850,000 plus interest and attorney fees. In its common counts cause of action, Spencer sought to recover the reasonable value of the labor, equipment, materials and services it provided on the project, which it alleged exceeded $850,000.
In a hearing held on September 24, 2010, the trial court granted Spencer's motion to exclude the expert opinion of any witness offered by Harris, as Harris did not disclose its expert witnesses after being served with a demand for exchange of expert witnesses. Also at that hearing, the trial court found that Harris's trial counsel, Deb C. Pedersdotter, had lied to and misled the court in every statement she had made about the disclosure of expert witnesses. Accordingly, the court decided to send a transcript of the hearing, as well as a transcript of the August 24, 2010 hearing at which the statements were made, to the State Bar for further investigation.2
A jury trial commenced on April 19, 2011.3 In pretrial proceedings, the trial court made several in limine rulings. Based on the trial court's earlier order precluding Harris from offering expert testimony, Spencer filed motion in limine number one to bar Harris from introducing testimony in support of its defenses that are matters only within the knowledge of experts. Harris filed a written opposition, asserting the motion should be denied and the trial court's prior order applied "as appropriate to the evidence in fact offered at trial." At the hearing, Pedersdotter explained that while she agreed Harris did not have a designated expert witness, percipient witnesses, such as Harris's president, should be able to testify, for example, regarding what was wrong with a claim from a contractor's perspective. The trial court explained its earlier ruling: Pedersdotter agreed that was "acceptable." The court warned that the ruling was "very broad" and she would be barred from having her witness testify about the matters she was just talking about.
Pedersdotter responded that the president would not be testifying as an expert; instead, he would be testifying regarding his evaluation of the claim as Harris's president. Pedersdotter explained: The court answered that it would not rule on "every little bit," but, "to makeit plain[,] [i]f I consider it as something you would have had to designate an expert on, they're not going to testify about it."
Spencer's motion in limine number three sought to exclude the testimony of any Harris personnel regarding the reasonableness of Spencer's bid estimate as Harris's person most knowledgeable was not qualified as an expert on the reasonableness of bid estimates and Harris was barred from introducing expert testimony. In opposing the motion, Pedersdotter argued that a blanket prohibition of any witness testimony concerning Spencer's bid would be improper and pointed out that should Spencer object to the qualifications of any witness Harris might offer, it must challenge those qualifications through the "appropriate process." In addressing this motion at the pretrial hearing, Pedersdotter told the court Harris was not talking about expert testimony, but about "percipient testimony as to what the bids were." The court responded that it had not found "a percipient testimony exception in the expert disclosure rules." The court stated that percipient witnesses can testify on...
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