Valerio v. Andrew Youngquist Constrution

• Decision Date: 27 November 2002
• Docket Number: No. A094096.,A094096.
• Parties: Bart VALERIO, Plaintiff and Respondent, v. ANDREW YOUNGQUIST CONSTRUTION, Defendant and Appellant.
• Court: California Court of Appeals Court of Appeals

127 Cal.Rptr.2d 436

103 Cal.App.4th 1264

Bart VALERIO, Plaintiff and Respondent, v. ANDREW YOUNGQUIST CONSTRUTION, Defendant and Appellant.

No. A094096.

Court of Appeal, First District, Division 3.

November 27, 2002.

As Modified December 3, 2002.

Willett & McKay, Louis James Willett, Fremont, for Respondent and Plaintiff.

Francis Thomas Donohue, Newport Beach, for Defendant and Appellant.

CORRIGAN, J.

Appellant challenges a judgment based on a finding that there was no contract between the parties and allowing quantum meruit recovery. Appellant claims the court erred in ignoring Respondent's judicial admissions that a contract existed. We reverse.

Factual and Procedural Background

Appellant, a general contractor, did business as Birtcher Construction Services (Birtcher). Birtcher solicited bids from subcontractors to build the Brenden Theater complex in Vacaville. Respondent Valerio was awarded the painting subcontract, knowing that he would be required to submit a performance bond. Birtcher sent Valerio two original agreements to be initialed on each page, signed and return to Birtcher. The letter informed Valerio that a "duly executed original will be returned to you for your files." Valerio was also told to submit his performance bond. Valerio returned the initialed and signed contract. Birtcher wrote Valerio that it had received the contracts, but still needed the performance bond "in order to process and execute." As Valerio understood Birtcher's letter, Birtcher had not executed the contract.

Heavy rains delayed construction progress. Valerio began working at the end of June or beginning of July, even though he had not received an executed contract. He received another letter from Birtcher on July 8, 1998, marked "second request," advising him that the performance bond was required. The letter stated that "[a]n incorrect insurance certificate will hold up execution of the contract and any payments." Valerio continued working on the project. On August 24, 1998, he received a fax transmittal from Birtcher advising him of two change orders "pending issuance due to an unexecuted contract (waiting for bonds, etc.)" and asking Valerio to follow up on outstanding contract requirements. On September 3, 1998, Birtcher informed Valerio that if he did not complete the exterior painting by September 4, Birtcher would bring in additional painters to supplement Valerio's crew. The contract Valerio signed entitled Birtcher to do so at Valerio's expense. On September 8, these workers were brought in to complete the job. On September 25, 1998, Valerio received a final fax transmittal from Glenn Reindahl, Birtcher's project engineer, referring to the other painting contractor hired to finish the project. The fax suggested that Valerio would be charged for that contractor's invoices and stated, "However, all this is irrelevant if you do not provide the required bond so we may execute your contract. Remember, NO BOND + NO CONTRACT=NO PAYMENT." During the entire time Valerio worked on the project, he did not provide the performance bond, receive an executed contract or get paid.

Valerio sued, alternatively alleging breach of express written contract and quantum meruit. Birtcher filed a compulsory cross-complaint, and Valerio answered. The matter was tried to the court which found there was no written agreement between the parties. The court denied Birtcher's motion for a new trial and awarded Valerio attorney's fees.

Birtcher claims the court's finding that no written contract existed is erroneous in that it ignores Valerio's express admissions to the contrary and relies on inadmissible evidence.

Discussion

Birtcher contends the court failed to give conclusive effect to Valerio's judicial admissions regarding the existence of a written contract. We agree.

A. Background

In Valerio's answer to Birtcher's crosscomplaint for breach of contract, Valerio admitted the following allegation: "Birtcher entered into a. written construction services trade contract with Bart Valerio, ... which was signed by Bart Valerio on March 4, 1998. The essential terms of the contract were that Valerio was to perform waterproofing, caulking, and painting work and to provide the related supplies for the construction project in a timely and workman like manner, and was to provide a performance bond."

Birtcher propounded requests for admissions pursuant to Code of Civil Procedure section 2033, and Valerio responded as follows: "The written contract between Bart Valerio ... and Birtcher Construction for painting services at Brenden Theaters project in Vacaville required Bart Valerio to provide a performance bond [Response: Admitted.]," and "The written contract between Bart Valerio ... and Birtcher Construction for painting services at Brenden Theaters project in Vacaville provide[d] that Birtcher retainfed] the right to supplement with other workers the work being done by plaintiff and to charge Bart Valerio the costs of the additional workers. [Response: Admitted, subject to further proviso that Valerio was not himself performing the work required under the contract.]"

Seven months before trial, Valerio stated in his February 10, 2000, trial management conference statement: "Only after having gathered together all of the documents and having digested the deposition testimony of Birtcher's Operations Manager did the actual status of the contract become clear. Birtcher intentionally never signed the contract. Since there was no contract Valerio's only claim is upon the second cause of action for work, labor, services and materials rendered on a quantum meruit basis." Valerio did not move to dismiss the breach of contract claim, nor did he amend his answer to the cross-complaint or his responses to Birtcher's request for admissions.

In its May 10, 2000, trial management conference statement, Birtcher stated: "The existence of the written contract is not in dispute. Valerio admitted to the existence of the written agreement in his complaint and in his answer to the cross-complaint, as well as in response to discovery demands." Birtcher argued that Valerio was bound by his judicial admissions and discovery answers. Additionally, Birtcher advised: "No motions in limine are expected. However, while not offered as a formal motion in limine, the court should be aware of the evidentiary dispute that will arise if Valerio attempts to offer any evidence at trial that the written subcontract between Valerio and Birtcher is unenforceable...." Birtcher pointed out that Valerio made judicial admissions in his cross-complaint and discovery responses. Accordingly, Birtcher argued that Valerio was bound by those admissions and prohibited from offering contrary evidence at trial. In his trial brief, filed on August 17, 2000, Birtcher again argued that Valerio was bound by his judicial admissions and "[a]s a matter of law, Valerio may not argue that there is no written contract between the parties concerning their respective duties and obligations on the Brenden Theater Project." Again, after receipt of Birtcher's conference statement and trial brief, Valerio did not amend his pleadings or discovery responses.

In closing argument, Valerio's counsel described the issue before the court as follows: "[W]as there an express written contract between these parties or should the plaintiff be held to the fiction that there was an express written contract due to alleged admissions by the plaintiff?" Counsel argued that "if there is an explanation as why testimony is later given to the contrary [to the admissions], ... the court can listen to that and the court is not bound." He explained that at the time of the admissions, the deposition of Birtcher employee Richard Youngquist had not yet been taken and Valerio was not fully aware of all the facts. Birtcher's counsel responded: "Requests for admissions are [binding.] That's what they're for, to preclude issues from coming up at trial. You can't—the only way out of them is to come in with a motion on good cause to be relieved of them before the trial, and that motion has never been made. I think he's bound to his admissions."

The court concluded there was no contract because there was no mutuality of assent. It based its ruling on the lack of signature by Birtcher and Birtcher's communications with Valerio repeatedly reminding him that no executed contract existed without submission of a performance bond. As to the judicial admissions, the court told Birtcher's counsel: "[Y]our position is that the admissions during the litigation, I guess, are the mutual assent, but I allowed some argument on that."

Birtcher requested a statement of decision, asking the court to address, among other things, whether there was "an enforceable contract as a matter of law" based on Valerio's admissions in his pleadings and responses to requests for admissions. As to the admissions under Code of Civil Procedure section 2033, the statement of decision provides: "The requests for admission propounded by Birtcher to Valerio, were couched in terms of `[t]he written contract between Valerio and Birtcher required that ...' and `provided that ...' The requests for admission did not ask whether the said contract was ever entered into but rather only what the contract `required' or `provided.' The requests were thus ambiguous and are not binding on Valerio on the critical question of whether the contract was entered into. The requests for admission were also answered on December 20, 1999, prior to Birtcher having produced documents to Valerio. [Citation.]" The statement of decision does not discuss Valerio's answer to Birtcher's cross-complaint.

In a motion for new trial, Birtcher again emphasized Valerio's answer to the cross-complaint, in which he admitted to the existence of written contract. Birtcher argued that this admission conclusively established the issue and that contrary evidence was inadmissible. As to the court's...