Facts

L.A. Builders Inc. sued the county of Los Angeles, based on a contract dispute.

PLAINTIFF'S CONTENTIONS:
The parties allegedly entered into a contract in December 2010, in which plaintiff was to serve as general contractor for the county for the Stephen Sorensen County Park, Gymnasium and Community Center. The county allegedly agreed to pay plaintiff for work performed on the project. After performing all its obligations, the county, however, failed to make timely monthly progress payments and retention to plaintiff.

Plaintiff asserted causes of action for breach of contract and sought statutory penalties.

DEFENDANT'S CONTENTIONS:
The county denied the allegations and asserted various affirmative defenses. The county also filed a cross-complaint alleging breach of contract. During the course of construction, the plaintiff failed to pay certain of its subcontractors and as a result, there were 36 stop payment notices filed against the project. Under Civil Code section 9358, the county is required to withhold sufficient funds to cover the total amount of stop payment notices filed by subcontractors. The State Labor Commissioner also notified the county to withhold payment to L.A. Builders for plaintiff's underpayment, by $92,824.03, of laborers in violation of the Labor Code and to cover a $28,675 penalty assessed against plaintiff for the violation. At the time, the lawsuit was filed the contract funds remaining were $214,793, which the county withheld to cover the stop notices and plaintiff's labor violations.

Damages

L.A. Builders sought $350,000 for breach of contract and unspecified statutory penalties for the county's alleged failure to comply with prompt payment statutes.

Result

The parties reached a $254,793 settlement. According to the defense, the settlement was $40,000 more than the amount of remaining contract funds the county retained under Civil Code section 9358 and the Labor Code. The plaintiff also agreed not to bid on county contracts for a period of four years.

Other Information

FILING DATE: June 27, 2014.