Santa Barbara Design & Build v. Pollack CA2/6

Filed 3/3/16 Santa Barbara Design & Build v. Pollack CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

SANTA BARBARA DESIGN & BUILD, 2d Civil No. B259076 (Super. Ct. No. 56-2012- Plaintiff and Respondent, 00425452-CU-BC-VTA) (Ventura County) v.

GARY POLLACK et al.,

Defendants and Appellants.

Appellants Gary Pollack and Claudia Davidovich and respondent Santa Barbara Design & Build (SBDB) became embroiled in a billing dispute regarding SBDB’s remodel of appellants’ beach home. The trial court ruled in favor of SBDB on all issues and entered a judgment of foreclosure on the property to satisfy SBDB’s mechanic’s lien. Appellants contend that no evidence supports the trial court’s finding that SBDB did not pad its labor rates. We need not reach this issue, however, because we interpret the contract differently than the trial court. We conclude that the contract required appellants to pay the labor rates set forth in the attachment.1 Accordingly, we affirm.

1 Following submission of this matter, the parties provided supplemental letter briefs on this issue at our request.

FACTS AND PROCEDURAL HISTORY Appellants hired SBDB to remodel and renovate their beach house in Ventura’s Pierpont neighborhood. The contract called for appellants to pay SBDB a $58,000 project management fee plus reimbursement for its “direct ‘cost of work,’” defined as “cost necessarily and reasonably incurred in the performance of the work and actually paid by the contractor . . . .” An attachment to the contract (attachment) contained a list of workers whom SBDB employed and their hourly rates. Appellants became concerned about the amounts they were being charged for labor after discovering a pay stub for one of the workers showing that he was being paid an hourly rate of $19 when SBDB was charging them an hourly rate of $29 for his work. SBDB performed the agreed-upon work and appellants paid all amounts billed by SBDB—approximately $500,000—except for the final $8,511.60 payment, which appellants withheld on the ground that they had been overcharged for labor. SBDB sued appellants to recover the amount of the final bill. Appellants counterclaimed, alleging among other things that SBDB inflated its labor rates above what it actually paid its workers. After a bench trial, the court ruled that SBDB was entitled to bill not only for the hourly wages it paid to its employees (the base rates), but also for “necessary other costs such as workers compensation, payroll taxes, safety training and the like.” The trial court found that SBDB’s “loaded rates”—the base rates plus an additional amount per hour to cover its other labor-related costs—were not padded. DISCUSSION Appellants contend that no evidence supports the trial court’s finding that the labor rates for which SBDB billed them did not exceed its actual costs. We review this factual finding for substantial evidence. (Schmeer v. County of Los Angeles (2013) 213 Cal.App.4th 1310, 1316.) The contractual interpretation upon which it rests, however, is an issue “to which we apply de