Mepco Services, Inc. v. Saddleback Valley Unified School District
117 Cal. Rptr. 3d 494
| Cal. Ct. App. | 2010Background
- Saddleback awarded Mepco a $1.64 million contract for a school modernization project; 90-day completion with a $1,000 daily liquidated damages provision.
- Mepco encountered unforeseen conditions and relied on Buzzsaw for change orders and communication; Saddleback’s architect and supervisors directed additional work.
- Disputes arose over payment for extra work, whether time extensions were available, and liability for delay damages; Mepco sued Saddleback and Saddleback cross-claimed against Mepco and Hartford.
- A jury found Saddleback breached the contract, awarding Mepco for withheld payments, additional work, and delay damages; the court entered substantial total judgment.
- Saddleback appealed, challenging evidentiary rulings, the scope of recoverable damages, and attorney fee awards.
- The trial court ultimately awarded attorney fees to Mepco under Civil Code §1717 and the performance bond; Saddleback challenges portions of the fee award on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admission of president's financial condition testimony | Mepco argues admission was harmless error. | Saddleback contends it biased the jury and prejudiced Saddleback. | No reversible prejudice; not outcome-determinative. |
| Damages without an express signed contract amendment | Mepco contends extra work authorized and payable under contract practice. | Saddleback argues no written board-signed agreement supports payment. | Saddleback liable for damages due to breach; extra work recoverable under course of dealing and change order process. |
| admissibility of settlement negotiations evidence | Mepco relies on settlement communications where applicable. | Saddleback challenges the use of such evidence. | Not reversible error; evidence did not alter result. |
| Number and scope of theories presented to jury; mitigation and offsets | Mepco contends theories advanced by Saddleback were adequately presented. | Saddleback asserts it was prevented from presenting all theories, including certain defenses. | No reversible error; jury verdict supported by extensive evidence of breach. |
| Attorney fees under Civil Code §1717 and the performance bond | Mepco/Hartford justified fees under §1717 and bond terms. | Saddleback challenges the scope and basis of the fee award. | Court affirmed award; §1717 reciprocal remedy applied; defense of bond claim allowed recovery of fees. |
Key Cases Cited
- Reynolds Metals Co. v. Alperson, 25 Cal.3d 124 (1979) (mutuality of attorney fees where contract provides fee shifting)
- Leatherby Insurance Co. v. City of Tustin, 76 Cal.App.3d 678 (1977) (bond attorney fee provision transformed for bond actions under 1717)
- Real Property Services Corp. v. City of Pasadena, 25 Cal.App.4th 375 (1994) (reciprocity of §1717 where nonsignatory seeks attorney fees)
- Carver v. Chevron U.S.A., Inc., 97 Cal.App.4th 132 (2002) (de novo review on contract-based attorney fee determinations when facts undisputed)
- Pacific Employers Ins. Co. v. City of Berkeley, 158 Cal.App.3d 145 (1984) (surety/contractual liability and related estoppel principles for surety bonds)