Facts

Plaintiff Progressive Environmental Industries Inc. (PEI), owned by Arturo Gonzalez, provides estate-landscaping services. In August 2006, PEI began rendering its services on a 200-acre horse ranch, El Capitan Ranch, owned by Jon Peters. In April 2007, after PEI had expended approximately $880,000 in goods and services, it sought payment of past invoices. At this time, Peters told Gonzalez he wanted a discount, and Gonzalez agreed to reduce the payment owed by $45,000, though no discount had been agreed upon.

Gonzalez then informed Peters that he would not continue his service if Peters was going to continue demanding discounts after work was performed. Peters and Gonzalez then discussed the terms of services in the presence of Brian Gardner, the Ranch general manager. Peters agreed that PEI would be paid on a time and materials basis, pursuant to a rate sheet, and that no additional discounts would be given.

PEI billed Peters for approximately $2.6 million in goods and services, pursuant to the agreement. In December 2007, when the outstanding balance was around $500,000, Peters demanded a discount based on the volume of work, which Gonzalez refused to provide. In January 2008, PEI ceased providing services because of nonpayment and threatened litigation by Peters.

When Gonzalez retained counsel, Peters offered a document he claimed was an agreement, signed by Gonzalez on Jan. 20, 2008. The document stipulated Gonzalez had agreed to give Peters a 10 percent discount, and other concessions which effectively discharged most of the remaining balance due.

PLAINTIFF'S CONTENTIONS:
PEI contended that all its work was done professionally and properly. Further, it alleged that during its last inspection, only 12-15 of the olive trees needed special care, and the cost to replace the trees was less than $60,000. Additionally, PEI claimed that Peters ordered it to construct the rock retaining walls without formal plans or permits.

Gonzalez contended he never signed, or saw, the agreement Peters offered. Further, two experts for the plaintiff confirmed, with a high degree of certainty, that Gonzalez had not signed the document.

DEFENDANT'S CONTENTIONS:
Peters claimed extensive damages due to PEI's landscaping services. Peters alleged that most of the 200 olive trees planted on his property were dead and dying and needed replacement. Peters claimed damages of $250,000 for bedding plants that needed replacement. He also claimed $1 million related to rock retaining walls constructed by PEI around the Ranch, which he alleged PEI failed to obtain building permits for.

Peters and Kim Goto, the Ranch manager, claimed that Gonzalez had signed the document in their presence.

Settlement Discussions

In October 2008, PEI served a statutory offer to settle for $400,000. At a mandatory settlement conference, PEI demanded $1 million, and Peters demanded $1.5 million on their cross-complaint. Neither party made offers to settle the cross-complaint.

Result

The jury, in the initial damages phase of trial, awarded PEI $502,949 in damages, and $60,000 to cross-complainants. The jury also rendered a verdict for PEI on its false promise claim, and the punitive damages phase was initiated. PEI was awarded $1 million in punitive damages. Post-verdict, the court awarded PEI prejudgment interest of approximately $86,000. Pursuant to motion, the court also awarded $225,000 in attorney fees to PEI, for defendants' failure to admit various requests for admission. Costs of approximately $48,000 were also awarded to PEI. The net total recovery by PEI was approximately $1.82 million. The judgment has been satisfied.