Theisen v. County of Los Angeles

352 P.2d 529, 54 Cal. 2d 170, 5 Cal. Rptr. 161, 1960 Cal. LEXIS 157
CourtCalifornia Supreme Court
DecidedMay 20, 1960
DocketL. A. No. 25221
StatusPublished
Cited by48 cases

This text of 352 P.2d 529 (Theisen v. County of Los Angeles) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Theisen v. County of Los Angeles, 352 P.2d 529, 54 Cal. 2d 170, 5 Cal. Rptr. 161, 1960 Cal. LEXIS 157 (Cal. 1960).

Opinion

SCHAUER, J.

Plaintiffs-cross-defendants appeal from a judgment which is adverse to them in their action for declaratory relief and which awards defendant-cross-complainant, the county of Los Angeles, $648 in its cross-action on the obligation of a release bond. Plaintiffs-cross-defendants are the copartners in a firm (hereinafter sometimes called Theisen) which was the general contractor on a county construction job and Theisen’s surety on such bond. In reliance on the bond the county released to Theisen $648 which it had withheld pursuant to a stop notice. Defendants are the county, its auditor, and Durand, a materialman who filed the stop notice and thereafter recovered $648 from the county in a municipal court action (to which plaintiffs were not parties) on the claim which was the basis of his stop notice. Plaintiffs brought the present action for a declaration of the rights and obligations of the parties under the bond and the municipal court judgment and the county brought the cross-action on the obligation of the bond.

On evidence which is without material conflict the superior court found the facts, made conclusions of law which reject plaintiffs’ legal position in this controversy, and rendered the judgment from which plaintiffs have taken this appeal. We have concluded that the judgment should be affirmed.

The principal burden of plaintiffs’ argument is (a) that the municipal court judgment, for various asserted reasons, does not conclusively determine, so far as the obligation of plaintiffs-indemnitors is concerned, that their indemnitee, the county, was liable to Durand, and therefore plaintiffs can defend against the county’s cross-action on plaintiffs’ bond by showing that there was a good defense which could have been presented in the municipal court action, namely, that Durand, as the supplier of material to a materialman, was not entitled to avail himself of the stop notice provisions of the Code of Civil Procedure (§§ 1190.1-1192.1),1 and (b) even [173]*173if it is determined that plaintiffs are liable to the county on their bond, Durand should be required to pay such liability because he wrongfully used the stop notice procedure to cause the $648 to be withheld and paid to him pursuant to the municipal court judgment.

The material facts are as follows: The county let a contract to Theisen for the construction of a work of public improvement (a fire combat training center). In performing the contract Theisen contracted with Petterson Corporation (not a [174]*174party to this action) for Petterson to supply 64 custom made doors to conform to architect's specifications. .Petterson then contracted with defendant Durand for Durand to supply 20 of such doors for $1,148. Durand, obedient to the contract, fabricated and shipped the doors to Petterson and Petterson paid Durand $600 on account. (The unpaid balance of $548 occasions this litigation.) Theisen took delivery of the 64 doors at Petterson’s plant and paid Petterson in full without asking for proof of releases by Petterson’s suppliers. Theisen installed the doors. Neither Durand nor Petterson entered upon the job site.

Petterson defaulted in payment of the $548 due Durand. On June 13, 1955, Durand filed with the county a stop notice which designated Petterson as a “subcontractor” of Theisen and notified the county to withhold from any money due Theisen “a sum sufficient to satisfy this claim including 'the reasonable cost of any litigation thereunder, as provided in Section 1184 and Section 1184-e of the Code of Civil Procedure. ’2 On the basis of this notice the county withheld from Theisen $548 plus $100 to cover the cost of litigation.

■ On January 3, 1956; in the municipal court, Durand sued the county, its auditor, and Petterson to enforce Durand’s claim under the stop notice. Neither Theisen nor its surety was made a party to the municipal court action. However, Theisen, during the statutory period (specified in Code Civ. Proe., § 1197.1) for the filing of an action to enforce the claim of the stop notice, telephoned the office of the county auditor and learned that Durand had filed such an action, and a Theisen partner read the file of such action and spoke with Petterson’s attorney concerning it.

On. February 16, 1956, Theisen (principal) and its surety, with actual knowledge of such action, executed and delivered to the county (obligee) the “Bond to Kelease Money Withheld on Stop Notice.” The bond provides that Theisen and its surety are bound to the county in the sum of $685 and that “The Condition of the Above Obligation Is Such, That

“Whereas, the said Principal . . . entered into a written contract [for the construction of the public work] . . .

“Whereas, a certain stop-notice has been filed against pay[175]*175ments which are due the said Principal in connection with said contract, to wit: Durand Door Supply.

“Whereas, the said Principal disputes the correctness and validity of said claims so filed, and desires that the funds now due him under the provisions of said contract shall be delivered to him notwithstanding said stop-notice.

“Now, Therefore, if the . . . Principal shall fully protect the Obligee herein against any loss by reason of or arising out of the acceptance of this bond, or the release of said moneys, or the payment thereto [sic] to said Principal, and shall pay any sum which said claimants may recover on said claims, together with the costs of suit in said action [this is the only mention in the bond of an “action”], . . . then this obligation shall be void, otherwise it shall be and remain in full force and effect.

“This bond is given and accepted under . . . Section 1191.1 of the Code of Civil Procedure.”3 In reliance on the 2 (f)

bond the county paid Theisen the $648. It did not request Theisen or its surety to participate in the defense of Durand’s pending action.

A partner in the Theisen firm was present at the trial of Durand’s action and spoke to the judge as to the proposed judgment. Petterson failed to appear at the trial. On April 2, 1956, Durand, in such municipal court action, recovered a money judgment against the county and its auditor for $548 plus $100 on account of attorney fees, and a money judgment for $548 plus interest and costs against Petterson. Pursuant to such judgment the county paid Durand $648. The county then demanded and Theisen and its surety refused reimbursement of the county in the sum of $648. The present action followed.

As already indicated, plaintiffs urge that Durand’s municipal court judgment does not conclusively adjudicate the liability of the county (plaintiffs’ indemnitee) to Durand and that therefore they can present in the present cross-action of the county against them the defense that Durand was not entitled to avail himself of the stop notice procedure. Because we have concluded, for the reasons hereinafter stated, that Durand properly invoked the stop notice remedy, we do not pass upon and need not here set forth plaintiffs’ arguments [176]*176in support of their claim that the municipal court judgment is not conclusive as to them.

The trial court, rejecting plaintiffs’ contention that Durand was not one of the persons to whom the stop notice remedy is available, determined that Petterson under its agreement with general contractor Theisen was “a sub-contractor for all the purposes set forth in California Code of Civil Procedure section 1182,[

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Bluebook (online)
352 P.2d 529, 54 Cal. 2d 170, 5 Cal. Rptr. 161, 1960 Cal. LEXIS 157, Counsel Stack Legal Research, https://law.counselstack.com/opinion/theisen-v-county-of-los-angeles-cal-1960.