Ondraka v. Bochinski, Inc. CA4/1

CourtCalifornia Court of Appeal
DecidedFebruary 14, 2014
DocketD060970
StatusUnpublished

This text of Ondraka v. Bochinski, Inc. CA4/1 (Ondraka v. Bochinski, Inc. CA4/1) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ondraka v. Bochinski, Inc. CA4/1, (Cal. Ct. App. 2014).

Opinion

Filed 2/14/14 Ondraka v. Bochinski, Inc. CA4/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

JOSEPH ONDRAKA et al., D060970

Plaintiffs and Appellants,

v. (Super. Ct. No. GIN55193)

BOCHINSKI, INC., et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of San Diego County, William S.

Dato, Judge. Affirmed.

David A. Kay for Plaintiffs and Appellants.

No appearance for Defendants and Respondents.

INTRODUCTION

Joseph and Annette Ondraka appeal from a judgment awarding them a net amount

of $3,697 in their action against Bochinski, Inc. (corporation) and Stephen Bochinski (Bochinski) for breach of contract and other claims. They contend we must reverse the

judgment because the court: (1) did not allow them to establish the invalidity of the

corporation's contractor's license through alter ego evidence; (2) mistakenly determined

Business and Professions Code section 7159 1 did not apply; (3) mistakenly determined

the parties modified the change order procedures in their contract by their conduct; (4)

failed to interpret key contract provisions against the corporation as the contract drafter ;

(5) mistakenly found Bochinski's testimony credible; (6) awarded the corporation an

excessive amount on its cross-complaint; and (7) deprived them of due process of law.

We conclude each of these contentions lacks merit and affirm the judgment.

BACKGROUND

The Ondrakas contracted with the corporation, a general contracting firm run by

Bochinski, to build a main house on their property (project). The corporation had

previously built a guest house on the same property. Under the terms of the contract, the

corporation agreed to furnish all labor, materials, equipment and other facilities required

to complete the project according to certain plans prepared by the Ondrakas' architect.

The Ondrakas agreed to pay the corporation $730,487.13, "subject to adjustments for

[c]hanges in the work as may be agreed to by the [parties]" or required by the contract.

Exhibit 2 of the contract contained a cost breakdown specifying both the work covered by

the contract as well as the work outside the scope of the contract for which the Ondrakas

were solely responsible.

1 Further statutory references are also to the Business and Professions Code unless otherwise stated. 2 The contract identified November 1, 2005, as the approximate project completion

date. The Ondrakas negotiated for this completion date because of financing concerns if

the project was not completed within one year. The contract further provided that "[t]ime

is of the essence" and required the corporation to give the Ondrakas a progress and

completion schedule (schedule) and to conform to the schedule, including to any agreed

upon schedule changes, schedule changes otherwise allowed under the contract, or

schedule changes required by circumstances beyond the corporation's control.

Nonetheless, the contract excused the corporation for any delay in completing the project

caused by, among other occurrences, acts of the Ondrakas or their agents and unforeseen

contingencies beyond the corporation's control.

The contract permitted the Ondrakas to change the project's scope of work with

written notice to the corporation. If the Ondrakas' changes, plan errors, or circumstances

beyond the control of the corporation required an adjustment to the contract price or

schedule, the corporation was to submit an estimate of the adjustment to the Ondrakas.

Any price adjustments were to be generally consistent with the contract's pricing

structure. However, to the extent the contract's pricing structure was inapplicable, the

contract provided "the cost of the [c]hange and/or the adjustment to the [schedule] shall

be determined by time and materials on the basis of the cost to the [corporation] plus five

percent (5%) for overhead, and fifteen percent (15%) for supervision and profit." The

corporation was not required to perform a change until it and the Ondrakas agreed in

writing on the specifics of the change, the cost or credit for it, and the schedule

adjustment.

3 If the Ondrakas failed to make a payment required by the contract, the contract

permitted the corporation to suspend its work until paid. Similarly if the Ondrakas

disputed a change or payment for a change, the contract permitted the corporation to

suspend its work until the dispute was resolved.

The contract also permitted the Ondrakas to terminate the work at their

convenience with written notice to the corporation. If the Ondrakas terminated the work,

they had to pay the corporation its actual costs for the work performed up to the

termination date, as well as the actual costs incurred because of the termination, plus 20

percent for supervision and profit.

As the project progressed, the parties did not follow the contract's change order

procedures. Instead, Bochinski would verbally advise the Ondrakas when a change was

necessary, or the Ondrakas would verbally advise Bochinski about a change they desired.

Bochinski would give the Ondrakas a general price range for the change and the

corporation would bill for the change on a time and materials basis. There was rarely any

discussion or written statement regarding the effect of the change on the project's timing.

While the parties dispute the cause, they agreed there were substantial delays in

completing the project. The project was still being framed in November 2005, and in

December the Ondrakas had to obtain an extension of their construction loan. At that

point, the corporation estimated the project would take another six months to complete.

Further straining the parties' relationship, a billing dispute arose over the

application of the contract's overhead surcharge provision. The Ondrakas believed the

4 surcharge applied only to labor and materials. The corporation believed the surcharge

applied to labor, materials, supervision, and profit.

On June 13, 2006, Joseph sent the corporation a memo stating the Ondrakas would

no longer pay any supervision, profit or overhead surcharges until they received an

accounting for the overhead surcharges incurred to that point. The next day Bochinski

visited the Ondrakas to discuss the issue. After a heated exchange between Annette and

Bochinski, the corporation declined to continue working on the project, which was then

only 60 to 65 percent complete. A few days later, the Ondrakas notified the corporation

they were terminating the contract. The project was completed without further

involvement from the corporation.

Two months after terminating the contract, the Ondrakas sued the defendants.

Their operative second amended complaint included causes of action for breach of

contract, negligence, negligent misrepresentation, intentional misrepresentation, and

violation of multiple Business and Professions Code provisions. The complaint also

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