P&D Consultants, Inc. v. City of Carlsbad

190 Cal. App. 4th 1332, 119 Cal. Rptr. 3d 253, 2010 Cal. App. LEXIS 2117
CourtCalifornia Court of Appeal
DecidedDecember 16, 2010
DocketNo. D054810
StatusPublished
Cited by79 cases

This text of 190 Cal. App. 4th 1332 (P&D Consultants, Inc. v. City of Carlsbad) 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
P&D Consultants, Inc. v. City of Carlsbad, 190 Cal. App. 4th 1332, 119 Cal. Rptr. 3d 253, 2010 Cal. App. LEXIS 2117 (Cal. Ct. App. 2010).

Opinion

[1335]*1335Opinion

McCONNELL, P. J.

This breach of contract action arises from a written agreement between P&D Consultants, Inc. (P&D), and the City of Carlsbad (the City) for services pertaining to a redesign of the City’s municipal golf course. In its appeal, the City contends that as a matter of law, the jury’s award of $109,093.81 to P&D for extra work cannot stand because there was no written change order, in violation of provisions of the contract and public contract law (Gov. Code, § 40602). In conjunction with this contention, the City asserts the court erred by instructing the jury that the contract could be modified orally or through the parties’ conduct. Alternatively, the City challenges the sufficiency of the evidence to support the award.

We reverse the judgment on the first amended complaint (hereafter complaint) based on the contract’s requirement of a written change order. Unlike private contracts, public contracts requiring written change orders cannot be modified orally or through the parties’ conduct. Thus, even if P&D’s evidence pertaining to the oral authorizations of a city employee for extra work is fully credited, P&D cannot prevail. The court erred by submitting the matter to the jury; it should have granted the City’s motion for nonsuit. Because the contract issue resolves the matter, we need not address Government Code section 406021 or the sufficiency of the evidence.

Additionally, as to its cross-complaint against P&D for defective and incomplete work, the City contends the court erred by excluding certain testimony of a nonretained expert and of a retained expert. To any extent there was error, however, the City has not satisfied its burden of showing any miscarriage of justice to warrant reversal.

In its appeal, P&D concedes we should affirm the judgment of $6,614.69 against it on the City’s cross-complaint for defective or incomplete work. Insofar as P&D’s complaint is concerned, P&D contends the court erred by granting nonsuit on the complaint’s causes of action for quantum meruit and breach of implied contract, by granting a directed verdict on the cause of action for violation of prompt payment statutes, and by denying it leave to amend to allege causes of action for breach of the implied covenant of good faith and fair dealing and “breach of the duty to negotiate in good faith.” P&D asserts that if we reverse the judgment on the complaint, we must remand the matter to the trial court for a new trial to include these claims. We conclude remand on the complaint is not warranted under any theory.

[1336]*1336FACTUAL AND PROCEDURAL BACKGROUND

A. Contract Documents

On April 9, 2004, the parties entered into a written contract under which P&D was to provide civil engineering and other services for the redesign of the City’s municipal golf course project to satisfy numerous conditions the California Coastal Commission imposed. The contract defines the scope of work and specifies a contract price of $556,745. The contract also provides that no amendments, modifications, or waivers of contract terms will be allowed absent a written agreement signed by both parties. Further, the contract includes an integration clause that states the contract and any written amendments thereto embody the parties’ entire agreement.

At the City’s initiation, the parties entered into written “Amendment Nos. 1 through 4,” which increased the contract price by a total of $63,525.50 for extra work. In each instance, P&D submitted a proposed change order with a fixed price to the City’s project manager, John Cahill, and he provided the City with the information for its preparation of an amendment. The City typically took several weeks to execute an amendment, and Cahill frequently authorized P&D to begin extra work before it received an executed amendment.

Written “Amendment No. 5” arose from the parties’ negotiations. P&D’s project manager, Charles Moore, raised concerns about work he believed was beyond the scope of work delineated in the written contract documents. In early 2005, Cahill notified Moore that the City had “finally reached resolution on what we expect to be the final changes for the golf course per the Coastal Commission.” Cahill asked Moore to “prepare a complete and final projected scope of work and scope of cost to finish out all of the activities to complete the plans and specs.” P&D sought an additional $209,956, which included $69,073 for extra work already performed and $139,833 for the cost “to complete services for final plan submittal and City approval.”

Cahill objected to the proposal on the grounds the amount was excessive, it included charges for work already specified in the written contract documents, and it exceeded the maximum sum the City had set for completion of the project. In an e-mail to Moore, Cahill wrote: “[W]e have limits for both [1337]*1337our purchase order authority and this proposed Amendment No. 5. We are now at those limits. No further costs will be authorized nor should be to finish these design packages.” Cahill indicated to Moore that “the breakdown of costs still needs to get below $100k [($100,000)].”

As finally approved, Amendment No. 5 authorized work on a time and materials basis for a maximum of $99,810. As was customary, at Cahill’s direction P&D began the work several weeks before the City executed the amendment.

Amendments Nos. 1 through 5 included this language: “All other provisions of the Agreement, as may have been amended from time to time, will remain in full force and effect.” Additionally, Amendment No. 5 states: “It is the intent of the Parties that Amendment No. 5 shall provide all final and complete services by Contractor to City required to produce the final, approved, signed, and complete sets of plans, specifications, and estimates required by City to bid the Project. City will pay Contractor for all work associated with those services described in Exhibit ‘A’ on a time and material basis not-to-exceed . . . $99,810. Contractor will provide City, on a monthly basis, copies of invoices sufficiently detailed to include hours performed, hourly rates, and related activities and costs for approval by City. No additional compensation shall be requested by Contractor nor shall be approved by City related to this scope of work.”

B. Complaint and Cross-complaint

P&D sought yet more pay from the City, ostensibly for work not included in Amendment No. 5. When the City refused to pay, P&D sued it for breach of written contract, breach of implied contract, quantum memit and violation of prompt payment statutes (Pub. Contract Code, §§ 7107, 20104.50; Civ. Code, § 3320), seeking to recover an amount exceeding $109,093.31. The City cross-complained against P&D for breach of contract on the ground of deficient and incomplete work.

C. Trial

P&D’s trial theory was that the contract’s written change order requirement was modified by Cahill’s oral authorization of the extra work for which it sought payment, and by the parties’ conduct in handling Amendments Nos. 1 through 5. The material evidence on the procedure followed for the written amendments was not in conflict. Since we decide this case on a legal issue, we only summarize the conflicting evidence as to whether Cahill orally authorized the extra work at issue.

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Cite This Page — Counsel Stack

Bluebook (online)
190 Cal. App. 4th 1332, 119 Cal. Rptr. 3d 253, 2010 Cal. App. LEXIS 2117, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pd-consultants-inc-v-city-of-carlsbad-calctapp-2010.