Gallegos v. Chalmers
Published: Dec. 17, 2002 | Result Date: Jun. 12, 2002 | Filing Date: Jan. 1, 1900 |Case number: BC258483 Bench Decision – $0
Facts
Plaintiff Ronald Gallegos, a grading contractor, conducted business under the fictitious name of Native
Contracting Co. Defendant Chalmers Corp., a general contractor and builder of commercial and industrial
buildings, conducted business under the fictitious name of C.E.G. Construction. Chalmers hired Native,
pursuant to three separate contracts, to provide grading services at three different sites (24th Street, Hill Street,
and Bandini).
Native reviewed the grading plans for each project and then executed the contract for each project. Native
completed the 24th Street and Hill Street projects, but during the course of grading to both 24th Street and Hill
Street, Native took excess soils that were generated from each project and hauled them over to the Bandini site
to bring up the subgrade. Native believed that he needed excess soil at Bandini.
Later, at the Bandini site, Native realized that there was now excess soil on Bandini. Chalmers asked Native to
export the excess soil but Native refused. Chalmers terminated Native and hired another contractor to complete
the Bandini job.
NativeÆs primary contractual responsibility was to grade each siteÆs building pad and parking lot. NativeÆs
termination on the Bandini project was because he refused to export the excess soil.
Defendant Chalmers asserted this was a risk that Native undertook when he submitted the low bid on the
project. Chalmers first demanded that Native proceed with the job, and then Chalmers hired Pena Grading to
finish the project, claiming to pay Pena more than the balance due Native on all three projects.
At trial, the court found that Native breached the Bandini contract with the net result that Chalmers did not
owe any money to Native, but Native owed Chalmers $5,000. Native had filed and recorded mechanicÆs liens
against each of the properties, which Native refused to release. Chalmers bonded around each lien.
Native filed suit against Chalmers, MFP, RAN and American Contractors Indemnity,
alleging breach of contract, reasonable value of work, labor and service furnished, foreclosure of
mechanicÆs liens and enforcement of surety bond.
Result
The court found for the defense on all causes of action. The court found that Native breached the contract by failing to perform as required at Bandini. Accordingly, Native was liable to Chalmers for the monies expended by Chalmers to complete the contract.
Other Information
The court considered ChalmerÆs expert testimony as to industry practice. According to the testimony, in grading industry, the grader is responsible for reviewing all the site plans, especially the grading plans, prior to making his bid, and that if there is excess soil on the project which needs to be exported, it is the graderÆs responsibility. The court apparently found that since Native brought in the dirt, Native was required to remove it.
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