The firm represented a contractor against a defaulting subcontractor for breach of contract and indemnity relating to its work on a public work of improvement. During the project the contractor obtained the consent of the public agency to substitute its listed subcontractor with another subcontractor. At the end of the project the replacement subcontractor’s supplier sued the subcontractor and the contractor’s payment bond.
[expand title=”Read More” swaptitle=”Less”]In the action initiated by the firm against the subcontractor for breach of contract and express indemnity, the subcontractor moved for summary judgment arguing that its contract with the contractor was void because the public agency failed to give the original subcontractor notice of the substitution and an opportunity for a substitution hearing. The trial court granted the motion for summary judgment and the firm appealed the decision to the California Court of Appeal on petition for writ of mandate. The Court of Appeal agreed with the firm that the contract was valid because the failure to comply with the notice and hearing requirements of the Public Contract Code was not caused by the contractor who obtained public entity consent. Accordingly, it reversed the summary judgment order and allowed the contractor to proceed to trial on its breach of contract and express indemnity claims against the defaulting subcontractor.
Court of Appeal of the State of California, 2nd Dist. Case No. B215701
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Counsel: Jason R. Thornton and David W. Smiley