Petitioner developer filed an application for writ of mandate to order respondent Superior Court of Riverside County (California), to vacate its summary adjudication that petitioner’s damages against defendant engineer were limited to an amount stated in the contract between petitioner and defendant.

Overview

Petitioner developer hired defendant engineer to design a man made lake. The lake liner ruptured, casing extensive property damage, for which petitioner sued defendant. Respondent trial court entered a summary adjudication that petitioner’s recovery against defendant was limited to the fees it paid defendant, pursuant to a provision in a contract between the parties. Petitioner filed an application for writ of mandate. The court denied mandate. The court held that Cal. Civ. Code § 2782.5, permits parties to a construction contract to limit liability through negotiation and express agreement. The court held that a contract provision that limited liability was valid if it the parties had a fair opportunity to accept, reject or modify the provision. Expert witness designation included employment lawyer for all parties during pretrial discovery. The court noted that defendant had sent a draft of the contract to petitioner with a letter discussing the procedure if petitioner wished to change the contract. The court determined that there was no evidence that petitioner did not have the opportunity to accept, reject or modify the contract.

Outcome

The court denied mandate, and held that the parties were bound the contract provisions, because there was no evidence that petitioner had not had an adequate opportunity to accept, reject or modify the liability limitation provision of the contract.

Procedural Posture

Plaintiff financial companies appealed the order of the Superior Court of Alameda County (California) that granted summary judgment in favor of defendant city in an action seeking payment for money due on a contract.

Overview

A contractor furnished services to defendant city. Plaintiff financing company purchased invoices from the contractor representing amounts due for those services. The contractor assigned its rights to collect from defendant to plaintiff. Plaintiff filed a lawsuit against defendant seeking payment of the money due on the invoices. The trial court granted summary judgment in favor of defendant. On appeal, the court reversed. The court held that plaintiff presented notice to defendant prior to filing suit as required Cal. Gov’t Code § 905 and Cal. Gov’t Code 945.4. The court recognized that a letter sent plaintiff’s attorney to defendant gave defendant notice of a compensable claim and plaintiff’s intent to pursue litigation if necessary. The court held that the letter meet the requirements of Cal. Gov’t Code § 910.8 and was a “claim as presented.

Outcome

The court reversed the judgment of the trial court in favor of defendant city because a letter sent plaintiff financing company’s attorney prior to suit being filed gave defendant notice of a compensable claim and plaintiff’s intent to litigate.