University Casework Systems, Inc. v. Superior Court

California Court of Appeal Aug 22, 1974 No. Civ. 35185Published

Before: Christian

AI Brief

AI-generated · verify before citing

Holding. The court held that the "reasonable value" of labor and materials under Civil Code section 3123 is limited to a proportion of the contract price reflecting the progress made toward completion, rather than the total actual expenditures. Consequently, the court modified the bond reduction order to reflect the correct percentage of work completed.

Issues

Whether the "reasonable value" of labor and materials under Civil Code section 3123 is limited by the total subcontract price.
Whether a writ of review is an appropriate remedy for an order reducing a surety bond in a summary proceeding under Civil Code section 3203.

Disposition. modified

Quotations verified verbatim against the opinion

“The term “reasonable value” as used in Civil Code section 3123 is to be limited to a proportion of the contract price reflecting the amount of progress made toward the completion of the work.”

“A party to a contract who fully performs his obligation under the contract may recover the value agreed to in the contract; the party may not recover above the contract price.”

[265]

Opinion

CHRISTIAN, J.

A writ of review was issued upon the petition of University Casework Systems, Inc. to test the propriety of an order of respondent superior court reducing the amount of a surety bond posted by real party in interest, Jasper Construction, Inc., to obtain the release of funds payable to Jasper as the prime contractor on a public works project.

Having determined that there can be no appellate review of an order made under Civil Code section 3203 in a summary proceeding to decrease the amount of a bond posted by a prime contractor in order to obtain the release of funds sequestered under a stop notice, we concluded that a writ of review, as provided for by Code of Civil Procedure section 1067 et seq., is an appropriate remedy. (See 2 Witkin, Cal. Procedure (2d ed. 1970) Provisional Remedies, pp. 1604-1605.)

University Casework claimed in its stop notice that as Jasper’s subcontractor it had furnished labor and materials exceeding in value the entire subcontract price ($751,331.25), of which $271,230.58 remained owing and unpaid. Jasper filed with the Department of Public Works a bond assuring payment of 125 percent of the amount claimed in the stop notice, and the Department of Public Works released the money which had been withheld. (See Civ. Code, § 3196.) Jasper then pursued a “summary proceeding” in the superior court and obtained an order reducing the bond to 125 percent of $81,144.68. (See Civ. Code, §§ 3197, 3205.) That figure was derived by the court through the following computation: The amount received by Jasper up to January 18, 1972, for work performed by University Casework through November 30, 1971, was $623,605.94. The contract permitted Jasper to withhold 10 percent of sums received by it as progress payments for work done by subcontractors. Hence the court concluded that University Casework was entitled to receive $561,245.35 for its performance through November 30. Jasper had already made progress payments totaling $480,100.67, leaving a balance of $81,144.68.

Petitioner complains that the amount fixed by the court does not assure recovery of petitioner’s actual expenditures on the job which, although performance was never completed, totaled $882,812.13. Petitioner’s

University Casework Systems, Inc. v. Superior Court

AI Brief

CHRISTIAN, J.

More from California Court of Appeal

Related research

AI Brief