CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM vs DPR CONSTRUCTION, et al.

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

Tentative Ruling

***NOTICE: EFFECTIVE APRIL 13, 2026, THIS DEPARTMENT HAS MOVED TO THE TANI G. CANTIL-SAKAUYE COURTHOUSE LOCATED AT 500 G ST. SACRAMENTO, CA. ALL MOTIONS NOTICED FOR DEPARTMENT 22 WILL BE HEARD IN DEPARTMENT 8B OF THE NEW COURTHOUSE. ALL HEARINGS WILL TAKE PLACE AT THIS NEW LOCATION.***

*** If oral argument is requested, the Parties should be prepared to point to specific material facts and supporting evidence claimed to show the existence or non-existence of a triable issue of material fact. ***

Defendants Liberty Mutual Insurance Company, Continental Casualty Company, Fidelity and Deposit Company of Maryland, and Berkshire Hathaway Specialty Insurance Company (the “Sureties”) move for summary adjudication on the following issues: - Issue 1: Sureties are entitled to summary adjudication as to the fourth cause of action for breach of contract, because CalSTRS cannot establish one or more elements of that cause of action regarding the Performance Bond, based on the following grounds: 1. any claim regarding the form of the Performance Bond is barred by the applicable four-year statute of limitations set forth in Code of Civil Procedure section 337; 2. any claim regarding the form of the Performance Bond is barred because the Performance Bond is in conformance with, and is not barred by, any provisions in the Contract and/or the Public Contract Code Sections cited by CalSTRS in the Second Amended Complaint; and 3. CalSTRS’ claims and damages asserted by CalSTRS under the Performance Bond are barred by CalSTRS’ failure to satisfy all of the conditions for any performance by Sureties under the Performance Bond. - Issue 2: Sureties are entitled to summary adjudication regarding the sixth cause of action for declaratory relief, because CalSTRS cannot establish one or more elements of that cause of action regarding the Performance Bond, based on the following grounds: 1. this Court’s Order dated June 27, 2025, established that DPR was licensed throughout the entirety of the Project, and therefore CalSTRS’ claims and damages related to DPR’s licensure are barred; and 2. all claims and damages asserted by CalSTRS under the Performance Bond are barred by CalSTRS’ failure to satisfy all of the conditions for any

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

performance by Sureties under the Performance Bond.

(Notice.)

REQUEST FOR JUDICIAL NOTICE

In support of their motion, the Sureties ask the Court to take judicial notice of the following documents: - Exhibit 2:[1] CalSTRS’ Complaint filed on July 1, 2024; - Exhibit 3: CalSTRS’ Second Amended Complaint filed on April 28, 2025; - Exhibit 4: This Court’s Order dated June 27, 2025 regarding DPR’s and CalSTRS’ cross-motions for summary adjudication; - Exhibit 5: This Court’s Order dated July 25, 2025 regarding its Order on Sureties’ Demurrer and Motion to Strike; - Exhibits 6-11: various out-of-state authorities.

The Sureties’ request is GRANTED.

OBJECTIONS

The Sureties object to the evidence submitted by CalSTRS in support of its opposition and request the Court strike the objectionable and speculative evidence. (Objections.)

1. Exhibit 1 – OVERRULED 2. Exhibit 2 – SUSTAINED, relevance 3. Exhibit 3 – SUSTAINED, relevance 4. Exhibit 4 – SUSTAINED, relevance 5. Exhibit 5 – OVERRULED 6. Exhibit 6 – OVERRULED 7. Exhibit 7 – OVERRULED 8. Exhibit 8 – OVERRULED 9. Exhibit 10 – OVERRULED 10. Exhibit 11 – OVERRULED 11. Exhibit 12 – OVERRULED 12. Exhibit 13 – OVERRULED 13. Exhibit 15 – OVERRULED 14. Exhibit 16 – OVERRULED 15. Exhibit 17 – OVERRULED

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

16. Exhibit 18 – OVERRULED 17. Exhibit 19 – OVERRULED 18. Exhibit 20 – OVERRULED 19. Exhibit 21 (Exhibit 4 to deposition transcript) – OVERRULED 20. Exhibit 21 (deposition transcript) – OVERRULED 21. Exhibit 22 – SUSTAINED, relevance 22. Exhibit 24 (uncertified rough transcript) – SUSTAINED, relevance 23. Exhibit 25 – SUSTAINED, relevance; misleading and argumentative 24. Exhibit 29 – OVERRULED

BACKGROUND

CalSTRS initiated this action on July 1, 2024, alleging causes of action for disgorgement, fraud, civil conspiracy, breach of contract, and declaratory relief. (Complaint.) CalSTRS alleges that it entered into a written agreement (the “Contract”) with DPR GP effective as of February 22, 2018 for DPR GP to act as its general contractor for the Project, specifically to “provide construction management at risk services consisting of preconstruction, construction and post-construction services in connection with the new CalSTRS Headquarters Phase II” project. (Id. ¶ 30.)

As alleged, to “ensure and secure CONTRACTOR’s faithful performance of the CONSTRUCTION CONTRACT, SURETIES issued Bond No. 018224203/30071292/9283012/47-SUR-300122-01-005 (the “BOND”) in the Penal Sum of $248,039,376.00, naming CONTRACTOR as Principal, SURETIES as Surety, and CALSTRS as Obligee. SURETIES and CONTRACTOR therein agreed to “jointly and severally, bind themselves, their heirs, executors, administrators, successors and assigns to [CALSTRS] for the performance of the Construction Contract, which is incorporated [t]herein by reference.” (Id., ¶ 33.)

On November 1, 2024, the Court sustained the demurrer of Defendants FMB, Pat Baird Acoustics, Inc., and Rosendin Electric, Inc. on the basis that Plaintiff’s initial claims for fraud and civil conspiracy consisted of “conclusory allegations” that “failed[ed] to provide any real information about how the Demurring Defendants and other subcontractors are connected with the allegedly fraudulent information communicated by DPR [GP]” and “[b]y failing to allege sufficient facts demonstrating the underlying fraud as it relates to the Demurring Defendants, Plaintiff has also failed to allege sufficient facts demonstrating a civil conspiracy.” (11-1-24 Minute Order.) On December 16, 2024, Plaintiff filed a First Amended Complaint (“FAC”), adding additional allegations regarding the Subcontractor Defendants.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

On March 14, 2025, the Court sustained in part and overruled in part the Sureties’ demurrer to CalSTRS’s FAC and denied the Sureties’ motion to strike. (3-14-25 Minute Order.) Consistent with the rulings on the Subcontractors’ demurrer, the Court concluded that Plaintiff failed to plead its fraud and conspiracy causes of action with specificity. (Ibid.) On April 29, 2025, CalSTRS filed its SAC, adding additional allegations related to the Sureties. (SAC.)

On July 25, 2025, the Court sustained in part and overruled in part the Sureties’ demurrer to CalSTRS’s SAC and granted in part and denied in part the Sureties’ motion to strike. (7-25-25 Minute Order.)

The Sureties now move for summary adjudication.

LEGAL STANDARD

In evaluating a motion for summary judgment or summary adjudication, the Court engages in a three-step process. The Court first identifies the issues framed by the pleadings. The pleadings define and limit the scope of the issues on a motion for summary judgment or summary adjudication. (FPI Dev. Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-382; Lewis v. Chevron (2004) 119 Cal.App.4th 690, 694.) Therefore, all evidence submitted in support of or in opposition to the motion must address the claims and defenses raised in the pleadings. (Roth v. Rhodes (1994) 25 Cal.App.4th 530, 541.) The papers filed in response to a defendant's motion for summary judgment may not create issues outside the pleadings. (Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1342.)

Second, the Court is required to determine whether the moving party has met its burden. A defendant bears the burden of persuasion that “one or more elements of” the “cause of action” in question “cannot be established,” or that “there is a complete defense” thereto. (Aguilar, supra, 25 Cal.4th at p. 850; CCP § 437c, subd. (p)(2).) A defendant is not required to conclusively negate one or more elements of the plaintiff’s cause of action. (Saelzer v. Advanced Group 400 (2001) 25 Cal.4th 763, 780-781.) Rather, to meet its burden, the defendant is required only to show that the plaintiff cannot prove an element of its cause of action, i.e., that the plaintiff does not possess and cannot reasonably obtain evidence necessary to show this element. (Aguilar, supra, 25 Cal.4th at pp. 853-855.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

Finally, once the moving party has met its burden, the burden shifts to the opposing party to show that a material factual issue exists as to the cause of action alleged or a defense to it. (CCP, § 437c, subd. (p); Bush v. Parents Without Partners (1993) 17 Cal.App.4th 322, 326-327.) “There is a genuine issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar, supra, 25 Cal.4th at p. 845.)

In ruling on the motion, the court must consider the evidence and inferences reasonably drawn from the evidence in the light most favorable to the party opposing the motion. (Id., at p. 843.) “Where the essence of the opposition to a motion for summary judgment is that the opposing party draws a different legal conclusion than movant from the facts to which the parties agree, resolution of the matter may be held on summary judgment as a matter of law.” (Niederer v. Ferrerira (1987) 189 Cal.App.3d 1485, 1499.)

While a summary adjudication motion is treated largely the same as one for summary judgment, there are a few important differences. CRC Rule 3.1350(b) mandates that issues presented for summary adjudication be stated in the notice of motion and repeated verbatim in the separate statement. Also, summary adjudication cannot be granted unless it “completely disposes” of a cause of action, affirmative defense, claim for punitive damages, or question of duty. CCP section 437c(f)(1) states: “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if that party contends that the cause of action has no merit or that there is no affirmative defense thereto, or that there is no merit to an affirmative defense as to any cause of action, or both, or that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.

A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for [punitive] damages, or an issue of duty.”

ANALYSIS

Adjudication of Less Than an Entire Cause of Action

Pursuant to CCP section 437c(f)(1), a “motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” However, courts have recognized that, “[f]or summary adjudication purposes, separate wrongful acts may give rise to separate

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

causes of action. Whether they are pleaded in the same or single counts is not determinative.” (Weil & Brown, Cal. Practice Guide: Civ. Pro. Before Trial (The Rutter Group 2025) § 10:39.2 [emphasis original]; see Lilienthal & Fowler v. Superior Court (1993) 12 Cal.App.4th 1848, 1854-1855 [“we hold that under subdivision (f) of section 437c, a party may present a motion for summary adjudication challenging a separate and distinct wrongful act even though combined with other wrongful acts alleged in the same cause of action”].) “That is because each separate and distinct wrongful act is an invasion of a separate and distinct primary right, and each violation of a primary right is a separate and distinct ‘cause of action’ – regardless of how the claim is presented in the complaint.” (Blue Mountain Enterprises, LLC. v.

Owen (2022) 74 Cal.App.5th 537, 549 [citing Lilienthal, supra, 12 Cal.App.4th at p. 1853].) This reality is also reflected in CCP section 437(p)(2), which provides that a “defendant or cross-defendant has met that party’s burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action.” (CCP, § 437(p)(2) [emphasis added].)

Here, CalSTRS’s challenged causes of action allege separate and distinct contractual violations. CalSTRS’s breach of contract claim, for example, is premised on alleged violations of the Performance Bond, the Payment Bond and the Contract (CalSTRS also alleged violations of other bonds, but has since dismissed those claims). Though the breaches were pleaded together in a single cause of action, they involve allegations of separate and distinct wrongful acts and damages. CalSTRS’s arguments that the Sureties’ motion fails to adequately address the claims under the Payment Bond and/or the covenant of good faith and fair dealing, therefore, miss the mark.

Similarly, CalSTRS’s reliance on the criticism of Lilienthal in Bagley v. TRW, Inc. (1999) 73 Cal.App.4th 1092, 1094-1095, fn 2, is not persuasive. While the Court there questioned Lilienthal’s interpretation in light of the amendment of subdivision (f)(1), it emphasized the “extraordinary” nature of the motion at issue, which sought 130 separate summary adjudications. Bagley is distinguishable and later case law, like Blue Mountain, supports adjudicating questions as to the Performance Bond.

Therefore, the Sureties are entitled to present a motion for summary adjudication as it relates to the Performance Bond. (See Blue Mountain, supra, 74 Cal.App.5th at pp. 549-550.)

Purported Disputes of Fact

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

CalSTRS purports to dispute the following UMF Nos.: 5, 7, 12, 13, 14, 16, 17, 18, 19, 21, 22, 23, 28, 29, 30, 31, 32, 33, 34, 35, and 36. However, for the reasons set forth below, these are not true disputes and/or are unsupported by the evidence cited.

UMF No. 5 states that the “requirements in the Contract regarding the Performance Bond are set forth in the General Construction Terms and Conditions (‘General Conditions’), Sections 3.03 and 3.05, attached as Exhibit A to the Contract.” (UMF No. 5.) CalSTRS asserts that the requirements of the Bonds are set forth in various statutes and that the requirements of the Performance Bond include “‘all requirements of the Agreement and the Construction Documents’ and not only those set forth in Sections 3.03 and 3.05 of the General Conditions.” (CalSTRS’s Sep. Stmt, UMF No. 5.) But citing general statutes and quoting the language of Section 3.03 does not create a factual dispute. At best, it creates a dispute regarding the legal significance of the terms. CalSTRS’s additional material fact, which attempts to add the word only to the language of Section 3.03, does not move the needle.

UMF No. 7 provides that “[a]lthough Section 3.03 states that CalSTRS was to provide the form of the bond, it failed to do so.” (UMF No. 7.) In dispute, CalSTRS asserts that the “Sureties and DPR were provided with the form of Performance Bond by publication of Regulatory Action No. 2016-0328-05FP filed with the California Secretary of State on April 6, 2016” and thereby incorporated in “Title 11, Div. 1, Chapter 2, Article 3, Section 28.5 of the California Code of Regulations.” (CalSTRS’s Sep. Stmt, UMF No. 7.) Here, CalSTRS essentially argues that the Sureties should have known about the existence of the approved form. However, even if CalSTRS is correct, the existence of these approved forms does not refute Ms. Jones-Lee’s testimony that CalSTRS did not provide the form of the bond. (UMF No. 7; Appendix of Evid. (“AoE”), Exh. 12 [Jones- Lee Decl.], ¶¶ 9, 16.)

UMF No. 12 provides that on “On August 7, 2019, just a few days after the Bonds were issued (July 31, 2019), DPR hand-delivered both Bonds, including the Performance Bond, to Ridge.” (UMF No. 12.) CalSTRS disputes and asserts that the “Sureties have not presented an affidavit of service of a copy of the bond on the beneficiary at the time the Bonds were given as required by section 995.370 of the Code of Civil Procedure.” (CalSTRS’s Sep. Stmt, UMF No. 12.) But the alleged failure to comply with section 995.370 does not refute Ms. Jones-Lee’s testimony that she “hand delivered the originals of the Payment Bond and Performance Bond to Michelle Azevedo of Ridge” and confirmed Ridge’s receipt of the Bonds. (UMF No. 12; AoE, Exh. 12 [Jones-Lee Decl.], ¶¶ 21-23.) CalSTRS relies on these same paragraphs from Ms. Jones-Lee’s

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

declaration. (CalSTRS’s Sep. Stmt, UMF No. 12.)

UMF No. 13 provides that “CalSTRS and Ridge did not object to the form of the Performance Bond, or otherwise complain that the Performance Bond was not in compliance with the Contract or any statutes, within four years after the Performance Bond was issued. (July 31, 2019).” (UMF No. 13.) CalSTRS disputes that this fact is material because “CalSTRS may, notwithstanding prior objection or lack thereof, suggest the defect in the bond, or its giving or filing, in proceedings to enforce the liability on the bond” and because “any proceeding, legal or equitable, under the Performance Bond may be instituted within two years after the Sureties refused or failed to perform their obligations under the Performance Bond.” (CalSTRS’s Sep.

Stmt, UMF No. 13.) CalSTRS also disputes UMF No. 13, claiming that “CalSTRS on October 6, 2023 provided notice to the Sureties regarding the inapplicability of Sections 2 and 3 of the Performance Bond to the Sureties’ duties and obligations thereunder.” (Ibid.) In support, CalSTRS cites CCP sections 995.380 (defect in bond) and 995.430 (term of bond), and Section 11 of the Performance Bond. However, nothing therein refutes the UMF. Four years from the issuance of the bond was July 31, 2023. CalSTRS’s October 6, 2023 correspondence, whatever its effect, was sent approximately 3 months later.

Instead, CalSTRS’s dispute is really a legal one regarding the effect of the contractual language and the applicability of certain statutes. Those legal questions are addressed below.

Relatedly, UMF No. 14 provides that “[o]n July 1, 2024, nearly five years after the Performance Bond was issued (July 31, 2019), CalSTRS filed its Complaint and alleged claims related to the form of the Performance Bond.” (UMF No. 14.) CalSTRS asserts that “CalSTRS filed its Complaint fewer than two years after the Sureties were first called upon to perform their obligations under the Performance Bond”; “CalSTRS’s Complaint alleges claims related to the Sureties material breaches of the express terms and conditions of the Performance Bond”; and “CalSTRS’s Complaint alleges claims related to the Sureties material breaches of the covenant of good faith and fair dealing implied in the Performance Bond.” (CalSTRS’s Sep.

Stmt, UMF No. 14.) Here, CalSTRS relies on the complaint, the surety demand (Opp. Appendix of Evid. (“OAoE”), Exh. 5 [January 20, 2023 letter]), and Section 11 of the Performance Bond. (Ibid.) Again, this is not a dispute of fact. This is a legal dispute.

UMF No. 16 concerns the Court’s July 25, 2025 Order regarding the statute of limitations for CalSTRS’s fraud claim against the Sureties. (UMF No. 16.) CalSTRS’s purported dispute does little more than reframe the Sureties’ quotation of the Court’s

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

Order, which stands on its own. UMF No. 29 and CalSTRS’s purported dispute is similar. (See UMF No. 29 [quoting the Court’s July 25, 2025 Order].) CalSTRS’s conclusion that the Sureties “first” breached their obligations on October 11, 2023 is a legal question, not a dispute of fact, addressed below.

CalSTRS’s purported disputes with UMF No. 17, 30, 31, 32, 33, 34, 35, and 36 also fail to raise a dispute of material fact. Instead, CalSTRS raises legal arguments about the validity of the inclusion of certain terms and the applicability of certain statutes, which are legal questions addressed below.

UMF No. 18 provides that “CalSTRS never terminated the Contract.” (UMF No. 18.) CalSTRS disputes this fact asserting that the Contract terminated on its own terms on October 31, 2022 and that CalSTRS terminated the Contract in part effective October 20, 2023. (CalSTRS’s Sep. Stmt, UMF No. 18.) Similarly, UMF No. 19 provides that “CalSTRS never sent a notice of a termination of the Contract.” (UMF No. 19.) CalSTRS disputes, alleging that CalSTRS sent a notice of termination of the Contract on October 6, 2023 and a notice of contractor termination and surety default on October 13, 2023. (CalSTRS’s Sep. Stmt, UMF No. 19.) Rather than disputes of fact, these are disputes over the legal effect of CalSTRS’s communications.

UMF No. 21 provides that “[a]fter October 6, 2023, CalSTRS did not retain another contractor to complete the construction of the Project.” (UMF No. 21.) CalSTRS disputes, alleging that “CalSTRS retained the services of attorneys, third-party scheduling consultants, Ridge Capital, Inc., ZGF Architects, Montgomery Engineering, California FireStop, and others to complete the construction of the Project.” (CalSTRS’s Sep. Stmt, UMF No. 21.) However, the retention of these professionals does not refute that CalSTRS’s did not retain another contractor to complete the work. Nothing in the cited evidence suggests that these entities are contractors or that they were retained to complete the Project due to DPR GP’s default, as opposed to retained in the ordinary course of business.

UMF No. 22 provides that “[t]o Stephanie Jones-Lee’s knowledge, after October 6, 2023, CalSTRS never retained another contractor or anyone else to prepare a schedule under section 13.09(a)(2) of the General Conditions” citing Ms. Jones-Lee’s declaration. (UMF No. 22.) CalSTRS purports to dispute this fact, but even if CalSTRS paid Ridge and ZGF Architects, as well as the Subcontractors, to perform DPR GP’s schedulerelated services, it does not refute Ms. Jones-Lee’s understanding. Moreover, CalSTRS’s purported disputes are not supported by the evidence cited.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

UMF No. 23 provides that “[a]fter October 6, 2023, DPR continued to complete the construction of the Project; DPR continued to submit the schedules for the completion of the Project; DPR continued to submit Pay Applications to CalSTRS; CalSTRS continued to pay DPR’s Pay Applications.” (UMF No. 23.) CalSTRS argues that “DPR [GP] did not complete the construction of the Project as required by the Construction Contract”; “failed to administer and manage the performance of its work such that the Project was completed in the most expeditious and economical manner consistent with the interests of CalSTRS and as required and reasonably inferred by the Construction Contract”; “DPR [GP] did not after October 6, 2023 prepare recovery schedules for the timely completion of the Project as required by Section 13.05 of the Construction Contract”; and “DPR [GP] did not after October 6, 2023 faithfully perform all requirements of the Agreement and the Construction Documents.” (CalSTRS’s Sep.

Stmt, UMF No. 23.) However, CalSTRS’s disputes miss the mark. UMF No. 23 does not state that DPR GP perfectly performed all requirements under the Contract, it asserts that DPR GP continued to perform after October 6, 2023. Moreover, CalSTRS’s cited evidence does not support the purported disputes. Practically speaking, CalSTRS’s disputes make little sense where CalSTRS itself only purported to partially terminate the Agreement and its own documents indicate that DPR GP continued to work on the project.

This does not give rise to a true dispute of material fact.

UMF No. 28 provides that “DPR [GP] completed the work for the Project referenced in the Certificate of Occupancy, the Substantial Completion Letter, the Notice of Final Completion/Contractor’s Certificate of Completion, and the Certificate of Final Completion.” (UMF No. 28.) CalSTRS disputes, but references “each and every of the covenants, conditions, and requirements of the Construction Contract” or “a material term of the Construction Contact” and the “Sustainability documentation,” not these specific documents referenced in the UMF. (CalSTRS Sep.

Stmt, UMF No. 28.) Finally, CalSTRS’s disputes are undercut by the cited documentation. For example, Exhibit 17 is a Substantial Completion letter, which states that “Ridge finds the Work in accordance with the Construction Documents with all required approvals and certificates of occupancy from public agencies with jurisdiction ” and confirms that the Certificate of Occupancy was issued. (AoE, Exh. 17.) And nothing in the cited portions of Ms. Azevedo’s deposition supports the purported disputes. (OAoE, Exh. 21, pp. 151:11-16 and Exh. 4.)

Accordingly, the Court turns to the merits of the issues raised.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

Fourth Cause of Action for Breach of Contract

The Sureties argue that they are entitled to summary adjudication as to the Fourth Cause of Action for breach of contract because CalSTRS cannot establish one or more elements of that cause of action as it relates to the Performance Bond.

1. Ground One – Claims Regarding the Form of the Performance Bond Are Barred by the Statute of Limitations

First, the Sureties argue that any claims related to the form of the Performance Bond are barred by the statute of limitations because any alleged non-conformity with the terms of the Contract were clear on the face of the Performance Bond, which was issued in July 2019. The Sureties argue that the claims regarding the form of the bond are barred by the four-year statute of limitations set forth in CCP section 337. (Mot., pp. 7:12-8:13.) The Sureties’ arguments differentiate between CalSTRS’s claims related to the form of the bond (i.e. claims that the bond fails to conform with the terms of the Contract by imposing additional conditions) and CalSTRS’s claims arising under the bond (i.e. claims that the Sureties failed to perform pursuant to the bond).

CalSTRS maintains that, pursuant to Section 11 of the bond, CalSTRS’s claims are not barred by the statute of limitations. (Opp., pp. 5:4-6:15.) Section 11 states that “Any proceeding, legal or equitable, under this Bond may be instituted in any court of competent jurisdiction in the location in which the work or part of the work is located and shall be instituted within two years after a declaration of Contractor Default or within two years after the Contractor ceased working or within two years after the Surety refuses or fails to perform its obligations under this Bond, whichever occurs first.

If the provisions of this Paragraph are void or prohibited by law, the minimum period of limitation available to sureties as a defense in the jurisdiction of the suit shall be applicable.” (AoE, Exh. 14, § 11 [emphasis added].) CalSTRS also points to CCP section 995.380(b), which provides that the “beneficiary may, in proceedings to enforce the liability on the bond, suggest the defect in the bond, or its giving or filing, and enforce the liability against the principal and the persons who intended to become and were included as sureties on the bond.” (CCP, § 995.380(b).)

As a result, CalSTRS maintains that its claims related to the Performance Bond are timely because they were raised within two years of the Sureties’ alleged failure to perform.

The Sureties argue that “this Court determined that the limitations period regarding CalSTRS’ claims relating to the form of the Performance Bond commenced when the

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

Performance Bond was issued on July 31, 2019.” (Mot., p. 7:24-28.) The Sureties’ argument is premised, in part, on the Court’s reasoning in sustaining the Sureties’ demurrer to the fraud cause of action based on statute of limitations grounds. There, the Court concluded as follows:

Plaintiff alleges that the fraud occurred when Ms. Craddock sent her October 11th letter stating the Sureties’ position. However, her letter simply restated the terms of the 2019 Performance Bond and the Sureties’ intent to enforce the Bond as written. This is apparent from the face of these judicially noticeable materials and requires no interpretation of either document. Even if Plaintiff is correct that the conditions precedent in the Performance Bond violate the Sureties’ obligations in the construction contract and gives rise to fraud, Plaintiff was put on notice of that non- conformity when the Performance Bond was issued on July 31, 2019. (See SAC, ¶ 677.)

The statute of limitations for fraud is three years from the discovery by the aggrieved party of the facts constituting the fraud. (CCP, § 338(d).) Plaintiff initiated this action on July 1, 2024, almost five years after the Performance Bond was issued. Accordingly, Plaintiff’s claims for fraud related to the Performance Bond are time-barred and the Sureties’ motion to strike paragraph 678 is GRANTED. Because Plaintiff cannot cure this defect through amendment, leave to amend is DENIED.

(7-25-25 Minute Order.)

While this Court’s previous order Court concluded that the fraud claims were time barred because CalSTRS filed suit almost five years after the bond was issued and the alleged fraud was clear on the face of the bond, the Court finds the reasoning persuasive here as well. In pertinent part, and separate from any alleged failure to perform under the bond, CalSTRS alleges that the Performance Bond was issued with improper terms in “contravention” of the Contract and section 10224 of the Public Contract Code. (SAC, ¶¶ 676-681.) CalSTRS maintains that this conduct is a breach of the Performance Bond. (Id., ¶ 726.) CalSTRS’s assertion that it “was not nearly so

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

prescient” because it could not foresee that “the Sureties would disclaim their duties and obligations” under the bond at the time it was issued misunderstands the issue. This alleged non-conformity was apparent on the face of the bond when it was issued on July 31, 2019. As was true in the context of CalSTRS’s fraud claim, no future conduct or repudiation was required. Therefore, CalSTRS’s claim as it relates to the form of the bond accrued then when the bond was delivered with allegedly improper terms.

CalSTRS’s remaining arguments regarding claim accrual and the discovery rule remain unpersuasive. (See Opp., p. 6:3-15.) While the Sureties do not claim that they breached their obligations on the day the bond was delivered (see id., p. 6:11-12), CalSTRS, in effect, does. On summary adjudication, the issues are framed by the pleadings. CalSTRS’s cannot escape the impact of its own allegations.

CCP section 337 applies generally to any action based on a written instrument and is certainly broad enough to encompass an action on a surety bond. (See, e.g., CCP, § 996.450.) The Court agrees with the Sureties that CCP section 995.380(b) does not create a different statute of limitations for bond defect claims. But, perhaps more critically, it is not clear that section 995.380(b) even applies under the circumstances or that the inclusion of allegedly patently improper terms constitutes a “defect” that could be suggested in an enforcement action.

Instead, it appears focused on curing technical or procedural irregularities to ensure that sureties do not escape liability when a beneficiary seeks to enforce a bond. CalSTRS offers no authority beyond Section 11 of the Performance Bond[2] or section 995.380(b) to support its position. CalSTRS’s interpretation would permit a party to retroactively seek to reform a contract and invalidate substantive provisions – even where they have waited years and failed to raise the allegedly patent defects – when those same conditions are used to justify the non-performance that is also alleged to be a material breach of the parties’ agreement.

It results in a kind of circular argument that would give CalSTRS the perpetual upper hand. The Court declines to condone this disregard of section 337 or the ordinary accrual principles.

Having considered the Parties’ arguments, the Court is persuaded that CalSTRS’s claims as it relates to the form of the Performance Bond are barred by the statute of limitations. Accordingly, the Sureties’ motion for summary adjudication on this ground is GRANTED.

However, even if CalSTRS’s were correct that its claims were timely, CalSTRS’s claims as it relates to the Performance Bond would still be barred for the reasons set forth below.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

2. Ground Two - Claims Regarding the Form of the Performance Bond Are Barred Because the Performance Bond is in Conformity with the Contract and Statutes

Second, the Sureties argue that any claim related to the form of the Performance Bond is also barred because the Performance Bond is in conformance with the provisions of the Contract and the Public Code sections cited in the SAC. (Mot., pp. 8:14-11:6.)

CalSTRS maintains that the conditions precedent set forth in Section 3.02 of the Performance Bond (AoE, Exh. 14, § 3.02 [“If there is no Owner Default under the Construction Contract, the Surety's obligation under this Bond shall arise after the Owner declares a Contractor Default, terminates the Construction Contract and notifies the Surety”]) were “deemed deleted” pursuant to Section 13 of the Performance Bond (id., § 13 [“When this Bond has been furnished to comply with a statutory or other legal requirement in the location where the construction was to be performed, any provision in this Bond conflicting with said statutory or legal requirement shall be deemed deleted herefrom and provisions conforming to such statutory or other legal requirement shall be deemed incorporated herein. When so furnished, the intent is that this Bond shall be construed as a statutory bond and not as a common law bond.”]). (See Opp., pp. 7:7- 25, 8:16-9:5.)

The Court agrees with the Sureties. Nothing in Sections 3.03 or 3.05 of the Contract or the Public Contract Code sections cited in the SAC or CalSTRS’s opposition briefing prohibit the inclusion of conditions precedent. (See Mot., pp. 8:17-11:6.)

Sections 3.03 and 3.05 of the Contract provide as follows:

Section 3.03. Performance Bond. The Contractor shall submit a faithful Performance Bond on the form provided by CalSTRS, conditioned upon the faithful performance by the Contractor of all requirements of the Agreement and the Construction Documents. The amount of the bond shall be in a sum no less than one hundred percent (100%) of the Guaranteed Maximum Price.

***

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

Section 3.05. Additional Bonding Requirements. All bonds submitted shall include the following: 1. Full name and address of the Contractor, Surety, and CalSTRS 2. Effective Date of the Agreement 3. Guaranteed Maximum Price 4. Project name and address 5. Signature of the Contractor 6. Corporate Seal if Applicable 7. Signature of authorized Surety representative 8. Notarization of the Contractor and Surety 9. Power of Attorney 10. Local contact for Surety, with name, phone number, and address to which legal notices may be sent

(AoE, Exh. 13 [Contract], Exh. A, §§ 3.03, 3.05.)

Public Contract Code section 10221 requires that “[e]very contract shall provide for the filing of separate performance and payment bonds by the contractor.” Public Contract Code section 10224 requires that the “performance bond shall guarantee the faithful performance of the contract by the contractor.”

As exemplified in CalSTRS’s response to the Sureties’ Separate Statement, CalSTRS would have the Court read in an extra word into the requirements of Section 3.03: “The requirements of the Contract regarding the Performance Bond include that the Sureties’ obligations thereunder be conditioned only ‘upon the faithful performance by the Contractor of all requirements of the Agreement and the Construction Documents.’” (See, e.g., CalSTRS’s Sep. Stmt, AUMF No. 5.1 [emphasis original].) However, the word “only” does not appear in the Contract.

The Contract requires a Performance Bond “conditioned upon the faithful performance by the Contractor of all requirements of the Agreement and the Construction Documents.” (AoE, Exh. 13, Exh. A, § 3.03.) The Court declines to so narrowly construe the requirements of the Contract or read in an additional term not included by the Parties. Because there is no conflict with the Contract or statutory provisions, there is nothing to “deem deleted” pursuant to Section 13.

CalSTRS further argues that the only permissible form (and therefore condition) is set forth in Title 11, Division 1, Chapter 2, Article 3, Section 28.5 of the California Code of

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

Regulations.[3] That bond provides that “[i]f the said Principal shall well and truly perform the said work, and fulfill each and every of the covenants, conditions and requirements of the said contract in accordance with the plans and specifications, and in a timely manner, then the above obligation shall be void; otherwise it shall remain in full force and effect.” (OAoE, Exh. 1.) CalSTRS maintains that “[n]o other conditions, exclusions, exceptions, or other caveats to the Sureties’ performance are allowed” and that, as a statutory bond, “it requires no action on behalf of the Obligee.” (Opp., p. 8:9-15.)

Pursuant to the Agreement, CalSTRS was required to provide the form of the Performance Bond, but failed to do so. (UMF No. 7; AoE, Exh. 13, Exh. A, § 3.03 [“The Contractor shall submit a faithful Performance Bond on the form provided by CalSTRS, conditioned upon the faithful performance by the Contractor of all requirements of the Agreement and the Construction Documents.”].) When the form of the Performance Bond was not provided in the contract documents, DPR GP obtained and provided the form of the Performance Bond. (AoE, Exh. 12, ¶¶ 9-10.)

The Performance Bond at issue in this case conforms to American Institute of Architects Document A312, 2010 edition. (UMF No. 37.) This appears to be a recognized form in the industry. (See AoE, Exhs. 6-11.) Regardless of CalSTRS’s arguments about the existence and applicability of the DOJ-approved bond form, nothing in the record evidences that CalSTRS actually provided the form bond to DPR GP or the Sureties. Nor is it credible to assert that DPR GP and the Sureties were provided the DOJapproved bond through its April 2016 publication or should have known that CalSTRS approved that form of the bond. (See CalSTRS’s Sep.

Stmt, UMF No. 7.)

The Sureties essentially argue that the DOJ-approved bond form is irrelevant to the instant action. (Reply, pp. 5:13-6:25.) The Court agrees. Nothing in the Code of Regulations demonstrates that this approved form applies to the circumstances here. The approved form appears in the “Attorney General” section of the “Approved Surety Bond Forms.” (11 CCR, § 25.) And the form bond itself demonstrates that it applies where the Department of Justice is the owner/oblige. (OAoE, Exh. 1.) Nothing in Public Contracts Code sections 10221 or 10224 mandate the use of this approved form outside the context of a DOJ project. CalSTRS offers no authority to support its exclusive application here and the Court is not aware of any.

Accordingly, the Sureties’ motion for summary adjudication on this ground is GRANTED.

3. Ground Three – CalSTRS’s Conditions Precedent

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

Finally, the Sureties argue that CalSTRS’s claims and damages under the Performance Bond are barred by CalSTRS’s failure to satisfy all of the conditions precedent for any performance by the Sureties under the Performance Bond. (Mot., pp. 11:7-16:12.) Specifically, the Sureties maintain that they owe no obligation under the bond because CalSTRS failed to satisfy the conditions of Section 3.2, which states, “If there is no Owner Default under the Construction Contract, the Surety's obligation under this Bond shall arise after the Owner declares a Contractor Default, terminates the Construction Contract and notifies the Surety.” (AoE, Exh. 14, § 3.02.)

As a result, the Sureties argue that “CalSTRS is barred from pursuing any claims and damages against [the] Sureties for an alleged breach of the Performance Bond,” including any alleged breach of the implied covenant of good faith and fair dealing because the Sureties are entitled to rely on the terms of the bond. (Mot., pp. 13:17-14:11.)

“Deemed Deleted”

First, CalSTRS argues that Section 3.2 is “deemed deleted” per Section 13 because the conditions precedent conflict with the Contract, Public Contract Code sections 10221 and 10224, and the DOJ-approved bond form. (Opp., pp. 7:5-9:5.) For the reasons discussed above, the Court rejects CalSTRS’s argument and the Court declines to deem Section 3.2 deleted from the Performance Bond. CalSTRS has failed to demonstrate how these provisions conflict with any applicable requirements.

Liquidated Damages

Next, CalSTRS asserts that even if the Sureties could properly rely on Section 3.2 to excuse their performance, (1) termination is not a condition precedent to all of the Sureties obligations, citing the Contract’s liquidated damages provision (Opp., pp. 9:6- 10:5) and (2) the Sureties intentionally relinquished any such right when they began performance despite claiming that the conditions had not been met by CalSTRS (id., pp. 10:8-11:3).

The Sureties argue that their duty to pay liquidated damages never arose because of CalSTRS’s failure to comply with the terms of the Performance Bond. (Reply, p. 3:5-15.) The Contract provides that “the Contractor shall pay to CalSTRS as fixed and liquidated damages, and not as a penalty, the sum of $2,500.00 (Two Thousand Five Hundred Dollars and No Cents) for each calendar day of delay until the date by which CalSTRS can take occupancy of the full Project for its intended use, and that both the Contractor

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

and the Contractor’s surety shall be liable for the total amount thereof, provided that in no event shall the total amount of liquidated damages exceed 25% (Twenty-five percent) of the Contractor’s total fee approved by CalSTRS for the Project, including any increases to the fee approved by CalSTRS.” (AoE, Exh. 13, § 3.2.8 [emphasis original].) CalSTRS suggests that one cannot square this obligation to pay liquidated damages with the termination condition precedent because one cannot calculate liquidated damages until after the project is completed.

The Court is not persuaded. For example, the Performance Bond provides that when the Owner has satisfied the conditions precedent in Section 3, the Sureties have several options for completing the project, including arranging for the Contractor to complete the Contract, completing it themselves, or obtaining bids and arranging for a new contractor to complete the work. (AoE, Exh. 14, § 5.) Nothing in this provision requires CalSTRS to terminate after the Project is complete in order to recover liquidated damages. In fact, it is entirely conceivable that CalSTRS could terminate and then seek liquidated damages based on the completion date achieved through whichever option the Surety selects under Section 5.

Waiver

Regarding waiver, CalSTRS asserts that the Sureties “undertook to perform certain of DPR [GP]’s administrative obligations under the Construction Contract; advised CalSTRS that the Sureties were so doing; and told CalSTRS that replacing DPR [GP] at that juncture in the Project would be more detrimental to the Project than beneficial.” (Opp., p. 10:15-19.)[4] CalSTRS claims that in reliance on the Sureties’ promise to engage a scheduling consultant to assist DPR GP, “CalSTRS refrained from removing DPR [GP] from the Project and/or retaining a separate scheduling consultant to prepare a workable recovery schedule.” (Id., p. 10:19-22.)

As a threshold matter, CalSTRS seems to assume that the Sureties maintain that CalSTRS must “remove” DPR GP from the Project before the Sureties have any obligations under the Bond. (See id., p. 10:23- 27.) It is not that simple. Section 3.02 requires that CalSTRS declares a Contractor Default, terminates the Construction Contract, and notifies the Surety. (AoE, Exh. 14, § 3.02.) However, the Sureties could then arrange for DPR GP – with CalSTRS’s consent – to perform and complete the contract. (Id., § 5.1 [Section 5 provides that “the Surety shall promptly and at the Surety’s expense take one of the following actions” and sets forth a disjunctive list].)

Notably, the supporting evidence belies CalSTRS’s representations that the Sureties

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

waived through performance of DPR GP’s tasks. The cited correspondence establishes that the Sureties retained Andrew Borglum of TriLogix Consulting, LLC to assist in its investigation of CalSTRS’s October 6, 2023 partial termination. (OAoE, Exhs. 11, 13.) On October 11, 2023, Ms. Craddock sent Mr. Thiel a letter responding to his October 6th correspondence. (OAoE, Exh. 14.) In addition to explaining the Sureties’ position regarding CalSTRS’s failure to satisfy certain conditions precedent, Ms. Craddock clearly explained that “[s]pecifically reserving all rights and defenses with respect to the conditions precedent in paragraph 3 of the bond, in a good faith effort to investigate this notice of intent to terminate, the Co-Sureties have engaged the services of Trilogix Consulting, LLC, a scheduling consultant, to assist in the investigation” including “to assist in [the Sureties] in its investigation of this notice of intent to terminate.” (Ibid.)

Finally, CalSTRS points to a November 8, 2023 email from Ms. Craddock to individuals at DPR GP regarding facilitating regular calls between DPR GP and Mr. Borglum. (OAoE, Exh. 15.) Specifically, Ms. Craddock notes that “the Co-Sureties made a representation to CalSTRS that we had an independent scheduling expert reviewing the schedule in real time and we need to be true to our word.” (Ibid.) Nothing in these cited materials supports CalSTRS’s assertions above. Moreover, Mr. Thiel himself acknowledged that the Sureties retained TriLogix Consulting, LLC as “their consultant” “to assist the Co-Sureties in investigating.” (OAoE, Exh. 7.)

Partial Termination

On October 6, 2023, Mr. Thiel sent a “Notice of Partial Termination for Default and Surety Demand.” (AoE, Exh. 8.) This letter stated in pertinent part as follows:

As such, CalSTRS hereby provides notice under Section 3.1 of the Bond of its intent to terminate for default DPR [GP] with regard to only DPR [GP]’s obligation to [sic] “to submit a recovery schedule demonstrating its program and proposed plan to make up a lag in scheduled progress and to ensure completion of the Work within the Contract Time” under section 13.09(a)(2) of the General Conditions. All other provisions of the Contract will remain in full force and effect.

While the Owner will continue its twice-monthly conferences with Contractor and Surety to discuss the Contractor’s performance, the Owner nevertheless requires that (1) DPR

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

[GP] within five (5) days hereof provide a recovery schedule fully compliant with sections 13.09(B)(2) and 13.05 of the General Conditions; or (2) the Surety within that same period and at the Surety’s expense take one of the following actions: (a) Arrange for the Contractor, with the consent of the Owner, to perform and complete a fully-compliant recovery schedule; (b) Undertake to perform and complete the recovery schedule itself; or (c) Waive its right to perform and complete, arrange for completion, or obtain a new contractor to perform the Contractor’s scheduling responsibilities.

If Neither DPR [GP] nor the Surety proceed as requested with reasonable promptness, the Surety shall be deemed to be in default on its Bond seven (7) days after the five-day period noted above, and the Owner shall be entitled to enforce any remedy available to the Owner.

(OAoE, Exh. 8 [emphasis original].)

Mr. Thiel’s October 13, 2023 letter to Ms. Craddock also repeatedly asserts that “[a]ll other provisions of the Contract are and will remain in full force and effect.” (OAoE, Exh. 7.) Mr. Thiel asserted that “[s]hould the Co-Sureties thereafter fail to perform their duties and obligations under section 5 of the Bond, they will pursuant to section 6 be deemed in default on the Bond seven (7) days after receipt of this written notice from CalSTRS demanding that the Co-Sureties so perform, and CalSTRS shall be entitled to enforce any and all remedies available to it including, without limitation, the retention of a thirdparty scheduling consultant (at DPR’s and the Co-Sureties’ expense) to perform the defaulted General Conditions section 13.09(a)(2) obligations that DPR and the Co- Sureties failed and refused to perform.” (Ibid.)

CalSTRS asserts that the Contract was terminated prior to the Sureties being called on to perform because, in part,[5] CalSTRS terminated “a portion of DPR’s continuing performance under the Contract on October 20, 2023” and that partial termination is sufficient. (Opp., pp. 11:15-13:8.) In support, CalSTRS generally relies upon the legal concept of partial termination and maintains that the Performance Bond necessarily incorporates all of the terms of the Contract to provide “context” for the Sureties’ obligations. (Id., p. 12:7-17.) CalSTRS further asserts that the Sureties’ interpretation

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

requiring complete termination would render their promise to guarantee the faithful performance of all requirements of the Agreement and the Construction documents illusory. (Id., p. 12:18-22.)

The Sureties argue that a partial termination is insufficient based on the terms of the Performance Bond. Section 3.02 requires, in part, CalSTRS to “terminate the Construction Contract.” Within the terms of the bond, “Construction Contract” is expressly defined as the “agreement between the Owner and Contractor identified on the cover page, including all Contract Documents, and changes made to the agreement and the Contract Documents.” (AoE, Exh, 14, § 14.2.) “Contract Documents,” in turn, is defined as “[a]ll the documents that comprise the agreement between the Owner and Contractor.” (Id., § 14.5.)

This language unambiguously requires termination of “the Construction Contract” – not simply a portion thereof. CalSTRS’s own correspondence demonstrates it only partially terminated the contract. That is insufficient. And CalSTRS offers no persuasive authority in support of its assertions to the contrary.

Even CalSTRS recognizes the “unremarkable proposition” that “compliance with the conditions precedent is necessary in order to invoke the surety’s obligation under the performance bond.” (See Opp., p. 7:10-14.) Having rejected CalSTRS’s contention that the conditions precedent are “deemed deleted,” the Court agrees that compliance with conditions precedent are necessary to invoke the Sureties’ obligation under the performance bond. Accordingly, the Court finds the reasoning set forth in the out-ofstate cases relied upon by the Sureties, which consider bonds based on the same template used by the Parties, persuasive and adopts it here. (See Mot., pp. 14:12- 16:12.)

The undisputed material facts show that CalSTRS failed to satisfy the condition precent to terminate the Contract. That failure is a material breach of the Performance Bond that excuses the Sureties’ obligation. Accordingly, the Court GRANTS the Sureties’ motion for summary adjudication on this ground.

Covenant of Good Faith and Fair Dealing

Finally, the Sureties argue that CalSTRS’s failure to satisfy the conditions precedent also bars CalSTRS’s claim for breach of the implied covenant of good faith and fair dealing related to the Performance Bond, as stated in paragraph 731 of the SAC as part of CalSTRS’s breach of contract claim. (Mot., p. 13:21-28.) Citing Carma Developers v. Marathon Dev. California, Inc. (1992) 2 Cal.4th 342, 374, the Sureties argue that any

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

breach of implied warranty claim cannot be used to contradict the express terms of the contract or impose substantive terms and conditions beyond those to which the parties actually agreed. As such, the Sureties maintain that they are entitled to stand on the terms of the Performance Bond, including the conditions precedent to their performance. (Id., p. 14:1-9.)

CalSTRS opposes, arguing that the covenant supplements the express covenants and is not contradicted the Performance Bond. (Opp., pp. 13:11-14:6.)

The covenant of good faith and fair dealing “cannot be endowed with an existence independent of its contractual underpinnings” and it “cannot impose substantive duties or limits on the contracting parties beyond those incorporated in the specific terms of their agreement.” (Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 349-350 [internal quotations omitted].) Similar to a breach of contract claim, the satisfaction of conditions precedent to a defendant’s performance is an essential element of a breach of the implied covenant claim. (See CACI No. 325.)

Allowing CalSTRS’s breach of the implied covenant claim to proceed as to the Performance Bond would enable CalSTRS to avoid the express terms of the Performance Bond. Moreover, because CalSTRS failed to satisfy a condition precedent to the Sureties’ performance, CalSTRS cannot satisfy a necessary element of the claim. Accordingly, the Court GRANTS the Sureties’ motion on this ground.

Sixth Cause of Action for Declaratory Relief

The Sureties argue that they are entitled to summary adjudication regarding the Sixth Cause of Action for declaratory relief because CalSTRS cannot establish one or more elements of that cause of action as it relates to the Performance Bond. First, the Sureties argue that this Court’s June 27, 2025 Order established that DPR was licensed throughout the entirety of the Project, and, therefore, CalSTRS’s claims against the Sureties are barred. (Mot., p. 17:1-11.) Second, the Sureties argue that CalSTRS’s claims and damages under the Performance Bond are barred by CalSTRS’s failure to satisfy all of the conditions precedent for any performance by the Sureties under the Performance Bond for the same reasons discussed above. (Id., p. 17:12-18.)

The Court notes that Issue 2 is supported by the same UMF Nos. 1-38 relied on above, as well as UMF Nos. 39-41. (See Sureties’ Sep. Stmt, p. 47:16-19 [“Note”].) CalSTRS appears to raise the same purported disputes resolved above and does not dispute

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

UMF Nos. 39-41. (CalSTRS’s Sep. Stmt.)

CalSTRS opposition fails to address the Sureties’ arguments as to the Sixth Cause of Action at all. (See generally, Opp.; reply, p. 11:19-23.) The Court treats this as a concession. (See D.I. Chadbourne, Inc. v. Super. Ct. (1964) 60 Cal.2d 723, 728, fn. 4 [where nonmoving party fails to oppose a ground for a motion “it is assumed that [nonmoving party] concedes” that ground].)

Moreover, CalSTRS’s Sixth Cause of Action is essentially derivative of CalSTRS’s substantive claims under the Performance Bond. Accordingly, the Court GRANTS the Sureties’ motion on this issue.

DISPOSITION

For the reasons stated above, the Sureties’ motion for summary adjudication on Issues 1 and 2 is GRANTED.

This minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or other notice is required.

[1] Exhibit 1 is simply the Sureties’ request for judicial notice itself. [2] It is not even clear to the Court that Section 11’s two-year statute of limitations clause is

enforceable. (See CCP, § 996.450.) Pursuant to the bond’s savings clause, “[i]f the provisions of this Paragraph are void or prohibited by law, the minimum period of limitation available to sureties as a defense in the jurisdiction of the suit shall be applicable.” (AoE, Exh. 14 [Performance Bond], § 11.) The “minimum period” would be the four-years provided by section 337. However, the Court need not and does not address this issue because it was not argued by the Parties. [3] This form is not available through Westlaw or LexisNexis. CalSTRS provides a copy as

Exhibit 1 to the Opposition Appendix of Evidence. [4] In support of this assertion, CalSTRS cites its response to UMF No. 17; however, UMF No.

17 simply quotes the conditions contained in the Performance Bond. As discussed above, CalSTRS’s purported disputes concern legal arguments about the validity of those provisions. (See CalSTRS’s Sep. Stmt, UMF No. 17.) CalSTRS’s purported additional material facts simply restate its legal conclusions regarding what the bond contains. (Ibid.) [5] CalSTRS also argues that the Contract terminated by its own terms on October 31, 2022.

(Opp., p. 11:13-14.) CalSTRS cites Article 1 in support. (CalSTRS’s Sep. Stmt, UMF No. 18.) However, Article 1 simply states that “[t]his Agreement shall commence on February 22, 2018

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

and, unless terminated earlier, extend through October 31, 2022.” (AoE, Exh. 13, Art. 1.) As such, Article 1 sets forth the term of the Contract, but it does not follow that the Contract automatically terminated on that date. Of course, this interpretation is at odds CalSTRS’s assertion that a portion of the Contract was terminated on October 20, 2023 – almost a year later. Such an action would have been unnecessary if the Contract had already terminated by its own terms and CalSTRS’s assertion that all other terms remain in full force and effect would have no significance.

To request oral argument on this matter, you must call Department 8B at (916) 874- 5762 by 4:00 p.m., the court day before this hearing and notification of oral argument must be made to the opposing party/counsel. If no call is made, the tentative ruling becomes the order of the court. (Local Rule 1.06.)

Parties requesting services of a court reporter may arrange for private court reporter services at their own expense, pursuant to Government code §68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed in the Policy for Official Reporter Pro Tempore available on the Sacramento Superior Court website at https://www.saccourt.ca.gov/court-reporters/docs/crtrp-6a.pdf. The list of Court Approved Official Reporters Pro Tempore is available at https://www.saccourt.ca.gov/court-reporters/docs/crtrp-13.Pdf.

If you are not using a reporter from the Court’s Approved Official Reporter Pro Tempore list, a Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) must be signed by each party, the private court reporter, and the Judge. The signed form must be filed with the clerk prior to the hearing.

If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211). The form must be filed with the clerk at least 10 days prior to the hearing or at the time the hearing is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided.

If oral argument is requested, the Parties are encouraged to appear via Zoom with the links below:

To join by Zoom link - https://saccourt-ca-gov.zoomgov.com/j/16184738886

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV013090: CALIFORNIA STATE TEACHERS' RETIREMENT SYSTEM, A PART OF CALIFORNIA'S GOVERNMENT OPERATIONS AGENCY vs DPR CONSTRUCTION, A GENERAL PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP, et al. 06/05/2026 Hearing on Motion of Summary Judgment/Adjudication (Sureties) in Department 8B

To join by phone dial (833) 568-8864 ID 16184738886

Moving Counsel is directed to notice all parties of this order.

Please note that the Complex Civil Case Department now provides information to assist you in managing your complex case on the Court website at https://www.saccourt.ca.gov/civil/complex-civil-cases.aspx. The Court strongly encourages parties to review this website regularly to stay abreast of the most recent complex civil case procedures. Please refer to the website before directly contacting the Court Clerk for information.