A168357
Cal. Ct. App.Jan 9, 2025Background
- CDC San Francisco, LLC (CDC) owns the InterContinental San Francisco Hotel, where Critchfield Mechanical Inc. (Critchfield) installed the HVAC system.
- CDC sued Critchfield for breach of contract and negligence after discovering extensive water leaks in the HVAC system that caused significant damage to hotel infrastructure.
- At trial, both parties presented divergent expert opinions about the necessary HVAC repairs and cost, with CDC proposing over $27 million in repairs and Critchfield suggesting remedies as low as $5 million.
- The jury awarded CDC $18,370,077 in total damages, later reduced to $17,370,077 after settlements.
- CDC then sought over $9 million in prejudgment interest under California Civil Code section 3287(a), arguing that damages were certain or capable of being made certain.
- The trial court denied prejudgment interest, finding the damages were not sufficiently certain due to factual disputes, and CDC appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Were CDC's damages "certain or capable of being made certain" as of the complaint date under section 3287(a)? | Critchfield could calculate damages from early documentation and as a seasoned contractor. | Damages were in serious factual dispute; scope and amount could not be determined early. | No; CDC failed to show damages were certain or ascertainable. |
| Does a dispute about the scope/cost of repairs preclude certainty? | Dispute was about repair scope, not about the ability to calculate the dollar amount. | The dispute was factual, over the nature and extent of necessary repairs and costs. | Yes; factual disputes about necessary repairs mean uncertainty. |
| Was CDC entitled to prejudgment interest from the date the complaint was filed? | Damages could have been calculated from information provided shortly after suit was filed. | Information and calculation capability did not exist as of complaint; expert estimates came much later. | No; information at complaint was insufficient for calculation. |
| Does a significant discrepancy between damages sought and awarded preclude certainty for prejudgment interest? | Only a minor difference between claim and award is relevant; the difference here is not dispositive. | A $16M+ difference between claim and award shows lack of certainty. | Yes; large discrepancy shows lack of certainty. |
Key Cases Cited
- Chesapeake Industries, Inc. v. Togova Enterprises, Inc., 149 Cal. App. 3d 901 (interprets "certainty" requirement for prejudgment interest)
- Leff v. Gunter, 33 Cal. 3d 508 (prejudgment interest requires damages to vest on a specific day)
- Collins v. City of Los Angeles, 205 Cal. App. 4th 140 (damages must be actually or reasonably ascertainable to the defendant)
- KGM Harvesting Co. v. Fresh Network, 36 Cal. App. 4th 376 (burden is on plaintiff to supply data to make damages ascertainable)
- Coleman Engineering Co. v. North American Aviation, Inc., 65 Cal. 2d 396 (minor differences between claimed and awarded damages don’t preclude interest, but large discrepancies do)