Opinion
NOT TO BE PUBLISHED
Super. Ct. No. 05CV051
DUARTE, J.
Case Pacific Company (Case), a subcontractor, appeals from the judgment entered in favor of the general contractor and its surety (Shasta Constructors, Inc., and Travelers Casualty & Surety Company [collectively “Shasta”]) and against Case on the referee’s statement of decision that resolved the mutual cross-complaints of the parties. The actions stemmed from a dispute surrounding the delayed supply of and payment for the special-mix concrete used for the pilings on a bridge construction project. (The original plaintiff in this matter, concrete supplier Concrete Aggregate Products, Inc. (“CAP”), settled with the remaining parties and dismissed its complaint against them.) The Trinity County Superior Court ordered Case to pay Shasta damages resulting from Case’s delays, interest, and attorney fees totaling $375,274.22.
Case asserts that we must reverse the judgment because Shasta did not produce a verified certificate of licensure (“license”) from the Contractors’ State License Board and therefore failed to establish its capacity to sue. (Bus. & Prof. Code, § 7031.) Case also argues the referee erred when 1) interpreting the subcontract’s effective date; 2) incorporating a unilateral performance schedule; and 3) admitting expert testimony over objection.
As we will explain, there was no error. Shasta requests an award of legal fees pursuant to the subcontract if it prevails on appeal. We affirm the judgment and remand for the calculation of Shasta’s legal fees on appeal.
FACTS
The parties do not dispute the accuracy of the statement of facts in the referee’s decision, but instead rely on that statement of facts in their briefs. A summary of the referee’s factual account and decisionmaking follows.
This is a construction dispute between Shasta and Case (its pilings subcontractor) in the course of a Caltrans bridge project spanning Hayfork Creek in Trinity County, which was a remote and environmentally sensitive jobsite. Both entities are highly skilled and experienced in their respective fields.
To build the bridge, Shasta necessarily needed to begin with the placement of drilled and poured concrete pilings. Caltrans required its written preapproval of the specifications for the special mix of concrete (“special-mix concrete”) needed for construction of these pilings. The jobsite was subject to significant seasonable runoff, during which any silt, sand, or other construction debris left in the streambed area would have negative environmental effects. Caltrans therefore included a prohibition in the project contract on any work in the streambed between mid-October 2004 and mid-May 2005 (the “rainy season”). This resulted in significant time pressure on Shasta to have its piling subcontractor complete the necessary streambed work before the rainy season, in order to allow work on the elevated portion to continue during the rainy season, which in turn was necessary to allow the completion of the project within the time limitation of 300 working days specified in the project description.
Shasta submitted a bid to Caltrans, listing Case as the piling subcontractor. Case submitted its proposal to Shasta on May 25, 2004, the same date on which Caltrans accepted Shasta’s bid as the lowest. Shasta notified its subcontractors of the imminent formal acceptance of its bid in a letter dated June 4, 2004; Case did not respond. Shasta then sent Case a letter of intent dated June 14, 2004, stating that it would be promptly sending a subcontract and advising Case that it should plan on beginning work within three to four weeks. Shasta sent a draft of the form subcontract to Case on June 22, 2004, after receiving the formal project contract from Caltrans. The draft, however, contained new terms not previously communicated to Case, and was inconsistent in other respects with the Case proposal as well.
Case sent a counterproposal to Shasta on July 2, 2004. Shasta then sent Case an amended form subcontract on July 6, 2004 which bore a July 1 effective date. Case executed it on July 15, 2004, after amending it. Shasta executed the subcontract as amended on July 19, 2004.
Among its express responsibilities under the subcontract, Case was expected to furnish the concrete. However, Case had failed to obtain a fixed bid for the special-mix concrete before it submitted its proposal to Shasta, simply making a guess at the price. After the acceptance of the bid, Case contacted the original plaintiff in this matter, concrete supplier CAP, and asked whether it was interested in the job of supplying the special-mix concrete.
CAP indicated it was familiar with the type of special mix that Caltrans required for bridge pilings, but did not express interest in that particular job (based on the distance of the jobsite, the demanding nature of the Caltrans specifications, and the tricky nature of the special-mix concrete). CAP mentioned its base price for concrete of $134 per cubic yard to Case, although the base price bore only a “scant relationship” to the cost of providing the special-mix concrete to a location 90 minutes away from its facilities. Case’s vice-president then called Shasta to seek advice on a source for the special-mix concrete, because Shasta as general contractor would be making use of a great amount of concrete on the project as a whole. Shasta responded that it had not yet made a decision on the source of its concrete, but intended to contact CAP because it was closest to the vicinity. Shasta reiterated this to Case a “few weeks” later.
Based on these brief communications with Shasta, Case did not make any other efforts to find a supplier of the special-mix concrete. Case simply assumed that Shasta--as a major concrete customer for the project as a whole--would be able to induce CAP to supply the special-mix concrete at a reasonable price. Case made no effort to confirm this belief, even though this duty fell upon Case under the subcontract. Nor did Case offer to deduct the estimated price of the concrete from the subcontract with Shasta.
Case also failed to undertake its duty under the subcontract of developing a “mix design” for the special-mix concrete. Ultimately, Shasta had to ask CAP to develop a mix design (which it submitted to Caltrans in late July for approval) in order to keep the project going and avoid additional delay. Shasta also obtained a commitment from CAP to supply the special-mix concrete at $242 per yard. Caltrans did not give its approval of the mix design, authorizing Case to pour the piling concrete, until August 26, 2004.
As the referee found, while Case was aware from the June 14 letter that Shasta wanted it to commence work in mid-July, Case did not have any legal duty to proceed until after it signed the subcontract. Case’s principal testified that Case had a “policy of not paying for anything before [it] has a signed contract.” However, even after the execution of the subcontract, Case still did not do anything before boring its initial holes at the jobsite on August 30, 2004, even though the site had been ready for Case since July 30, 2004.
This was far later than Shasta had anticipated in its original planning for the overall job schedule. Case and Shasta had never expressly agreed to a performance schedule (which was an option under the terms of the subcontract). However, the subcontract also included a “time of the essence” clause and required Case to work diligently as soon as the opportunity arose. Moreover, Case knew of the temporal urgency connected with the project, conveyed in the Caltrans project description, the June 14 letter regarding the starting date, and the designation of a July 1 effective date in the form subcontract. Case was also aware that completing its piling work before the start of the rainy season was crucial for Shasta to continue the work outside of the streambed.
After Case bored the initial holes for the pilings, CAP delivered the special-mix concrete at the invoiced price of $242 per yard. Case agreed to accept the initial load, but told CAP it would seek an alternative supplier for the remainder due to the higher than expected price. When Case failed to find an alternative, it took further deliveries from CAP, but paid only $134 per cubic yard. This nonpayment led to delays in CAP supplying concrete for the project as a whole, bringing the project briefly to a stop.
Case was also responsible under the subcontract for deciding whether the “tool casing and slurry” method was needed to prevent the soil from sloughing into the concrete mix and contaminating it during the pouring process. Case elected not to use this method in the first phase of its work and, whether or not this was the cause, the initial pilings did not pass Caltrans’ inspection. (The referee noted that there were only minimal defects in the second phase of Case’s work when Case did use this method.) This gave rise to a duty on Case’s part to remediate the flaws. However, Case did not obtain a mitigation plan from its consultant until October 1, 2004. After performing some of the repair work, Case left the jobsite from October 8 to November 15, 2004, when it returned and completed the repairs in three days. Fortunately, Caltrans had agreed to delay the rainy-season shutdown for streambed work as a result of favorable weather conditions. The project ultimately was completed successfully without any disputes about its quality.
At trial, Shasta’s expert calculated a commencement delay of 21 work days, computed from the July 30 “ready” date of the jobsite through August 30, 2004. Case’s delay expert asserted that Case did not have any obligation to begin the process of seeking approval for its mix design before it had signed the subcontract, which meant work could not have begun much before the August 26, 2004 Caltrans approval of the design. Shasta’s piling expert testified, however, that he never would have awaited the signing of a subcontract before he undertook the process of obtaining approval of a mix design from Caltrans and identifying a special-mix concrete supply for a remote area such as in this case. For reasons of wanting to maintain control over quality, he never would have allowed the general contractor to undertake either task.
The referee found Case’s start “took nearly three times the 3-4 weeks Shasta requested in the Notice to Proceed dated June 14, 2004, and more than twice the requested time counting that period from the July 1, 2004, subcontract[] effective date. The delay in providing the mix design could have been mitigated by submitting the request during subcontract negotiations.” He concluded Case consequently caused a net delay in the project of 14 days (giving Case a five-day credit for its expeditious completion of the second phase of pile work after the rainy season).
DISCUSSION
I
Proving Licensure
As Case admits, the principal of Shasta testified at trial that he held three types of contractor licenses, including the “class A” that Caltrans required for the project. Case did not challenge this testimony in any fashion. After the referee filed his statement of decision, Case requested 56 “clarifications, ” none of which made any reference to Shasta’s possession of a license. Case now claims on appeal that its general denial in its answer controverted Shasta’s allegation that it was a “duly licensed contractor, ” which in and of itself required Shasta to produce a verified copy of its license at trial, and therefore Case may challenge this absence of proof without raising the issue initially in the trial court. Case purports to derive support for this argument from Advantec Group, Inc. v. Edwin’s Plumbing Co., Inc. (2007) 153 Cal.App.4th 621 (Advantec) and Buzgheia v. Leasco Sierra Grove (1997) 60 Cal.App.4th 374 (Buzgheia).
We note also that the principal’s license number appears on the project contract.
Advantec indeed holds that a general denial in an answer “controverts” an allegation of licensed status, which requires the contractor to produce a verified copy of the license at trial under the statute. (Advantec, supra, 153 Cal.App.4th at p. 624 [citing Bus. & Prof. Code, § 7031, subd. (d)].) However, Advantec objected at trial to proof of the license through the testimony of its holder. (Id. at p. 625.) Advantec thus discusses an issue initially raised at trial, not an issue initially raised on appeal. Similarly, in Buzgheia we noted that “[a] critical issue was whether Buzgheia acted under a valid license” (Buzgheia, supra, 60 Cal.App.4th at p. 380), and proceeded to discuss objections raised and rulings made regarding that issue at trial. We then analyzed issues not pertinent to the present appeal (holding that an opposing party may “go behind the fact of licensure” to prove “defective exercise of the license” (id. at pp. 385, 389)), and that the burden of proof as to licensing does not shift from the contractor seeking compensation (id. at p. 393). Since neither case includes analysis of Case’s proposition as an express part of its holding, and the forfeiture question is not even addressed, these cases are not authority for Case’s argument. (See In re Randy J. (1994) 22 Cal.App.4th 1497, 1503 & fn. 7.)
Simply controverting the licensing allegation, in the sense of formally putting it at issue by a general denial rather than admitting it, did not absolve Case of the responsibility for actively litigating the issue. Case’s failure to raise the issue in the trial court deprived Shasta of any opportunity to rebut the allegation by providing further proof of a valid license.
The rule of forfeiture applies generally to all proceedings (Keener v. Jeld-Wen, Inc. (2009) 46 Cal.4th 247, 264-265 & fn. 22) except where issues of fundamental jurisdiction are involved (2 Witkin, Cal. Procedure (5th ed. 2008), Appeal, § 406, p. 464). Since we find that Case has forfeited this issue, we do not need to reach Shasta’s argument that it did not need to prove its licensed status in the context of the present dispute. We also deny as unnecessary Shasta’s motion for judicial notice of various interrogatory responses from Case and a verified copy of Shasta’s license.
II
The Referee’s Interpretation of the Subcontract
Case’s next argument first asserts that the referee incorrectly interpreted the subcontract as having an effective date of July 1, 2004, the date recited in the form subcontract. Case then asserts that the referee erred in treating Shasta’s June 14, 2004 request to commence work at the jobsite within three to four weeks as “tantamount to a ‘mutually agreed’ performance schedule” even though the parties otherwise had never explicitly agreed to a performance schedule. Case then concludes that we should deduct all of the damages related to the 14 days of delay, apparently arguing that it did not have any obligation under the subcontract to commence its work before it did. It claims this is an issue of contractual interpretation that we should review de novo because the facts are not disputed. (See, e.g., 9 Witkin, Cal. Procedure, supra, Appeal, § 323, p. 371.)
Case did not address the evidence regarding the reasonableness of its performance in its opening brief. In its reply brief, Case for the first time asserts a claim that the evidence is insufficient to support a finding that its performance was unreasonable. By failing to raise it earlier, Case has forfeited this issue. (Bean v. Paulsen (1993) 21 Cal.App.4th 89, 93, fn. 4 (Bean).) Further, Case cites only evidence favorable to its own argument and does not even attempt to fairly summarize the facts in the light favorable to the judgment, as required to avoid a waiver of evidentiary claims. (Western Aggregates, Inc. v. County of Yuba (2002) 101 Cal.App.4th 278, 290-291.)
First, the subcontractual effective date, interpreted by the referee to be July 1, 2004, is immaterial. Nothing in the referee’s decision indicates that its computation of damages ran from the subcontract’s effective date. Indeed, the referee explicitly found that Case did not have any legal obligation to begin work before the date that Case had executed the subcontract --July 15, 2004. Thus, we do not need to consider whether it was correct to interpret July 1, 2004 as the effective date.
Second, the claim that the referee improperly incorporated Shasta’s June 14, 2004 letter into the subcontract as a unilaterally imposed performance schedule is also without merit. Even without a performance schedule, Case had agreed to a clause reciting that time was of the essence and an obligation to “prosecute the Work in a prompt and diligent manner whenever the Work or any part of it becomes available.” These terms are sufficient as a matter of law to give rise to Case’s liability for delay damages. (Cates Construction, Inc. v. Talbot Partners (1999) 21 Cal.4th 28, 39-41 [surety liable on bond for delay damages because bond incorporated principal’s contract making time of essence, and stated it would become null and void only upon prompt and faithful performance of contract].) Further, it appears the referee essentially adopted the jobsite ready date that Shasta’s expert had selected, July 30, 2004 as the point at which a reasonable subcontractor would have begun work, which does not have any connection with either the mid-July start requested in the June 14, 2004 letter or the time period it contemplated for start of work.
Finally, although we are not obligated to consider a claim raised first in Case’s reply brief (Bean, supra, 21 Cal.App.4th at p. 93, fn. 4), Case contends the referee improperly considered custom and practice in the industry in contravention of express subcontractual language (citing Civ. Code, § 1655). Case does not identify any specific instance of custom or practice on which the referee relied or an express subcontractual provision that it contravened. As we have stated above, the subcontract included a requirement of timely performance, and thus the referee could properly look to any custom and practice that would give meaning to timely performance. “Parties are presumed to contract pursuant to a fixed and established usage and custom of the trade industry.” (Southern Pac. Trans. Co. v. Santa Fe Pac. Pipelines (1999) 74 Cal.App.4th 1232, 1244.)
III
Expert Testimony
Lastly, Case argues that the referee improperly overruled its objections to the qualifications of Shasta’s expert on the best practices for piling subcontractors. Case does not identify any particular prejudice flowing from the admission of this testimony in its opening brief, asserting only in its reply brief that admission “did prejudice [Case] whether or not Referee Brown directly cited to [the expert]’s testimony in his statement of decision.” In the alternative, Case “respectfully requests this Court to exclude... the testimony under Evidence Code section 352, ” but does not indicate that it ever made a motion to exclude on this basis in the trial court. Case ignores Shasta’s assertion that the latter argument is forfeited on appeal. As Shasta is correct (Evid. Code, § 353; People v. Kirkpatrick (1994) 7 Cal.4th 998, 1014-1015), any claim based on improper admission under Evidence Code section 352 is forfeited.
Regarding Case’s first argument, review of the record reveals that Case questioned Shasta’s expert during voir dire about the recent suspension of his contractor’s license, which the expert had asserted was unrelated to his company’s performance on any project. The expert testified that the suspension was based on a tax levy and three judgments involving a supplier, a landlord, and a union trust fund. The expert also acknowledged that Caltrans had once removed his company from a project for poor performance, which was the subject of litigation on appeal at the time of his testimony. Finally, the expert admitted that his company had been involved in litigation about 57 times. Case’s counsel then moved to disqualify the witness as an expert. The referee did not believe these matters went to the question of the expertise of the witness in performing the substantive piling work, and instead involved the unrelated subject of management of his business. It therefore overruled the objection.
As we have noted, our duty to review on appeal arises only where an appellant has fulfilled the duty of tendering a proper prejudice argument that spells out the manner in which an error is prejudicial in the particular context of the case. (Paterno v. State of California (1999) 74 Cal.App.4th 68, 106.) Case having failed to do so, we may properly deem the argument forfeited. Regardless, the argument lacks merit. Whether a witness qualifies as an expert is a determination within the discretion of the trial court. (People v. Ramos (1997) 15 Cal.4th 1133, 1175.) Case does not identify any authority that the lack (or loss) of a license renders a witness unqualified as a matter of law. Case’s entire argument on the question of whether the referee abused his discretion otherwise is that his rationale was “not correct. [The expert]’s failure to maintain [a] license and comply with California licensing laws directly speaks to [a] lack [of] credibility on the matters at issue as an expert and the value of his testimony.” This argument does not establish an abuse of discretion in admitting the evidence. Rather, this claim addresses elements of the weighing process applied to the expert’s testimony. We thus reject the argument.
IV
Legal Fees
The statement of decision reserved the issue of Shasta’s entitlement to reimbursement of its legal fees. The referee subsequently filed an order (that the trial court adopted) in which it found that a Case-generated provision unilaterally entitling Case to reimbursement of legal fees as a prevailing party must be given reciprocal effect (Civ. Code, § 1717), which was consistent with other Shasta-generated provisions regarding mutual entitlement to legal fees for a prevailing party. Shasta requests that we award reimbursement of its appellate legal fees and remand the matter to the trial court for calculation of the amount. (Milman v. Shukhat (1994) 22 Cal.App.4th 538, 546.)
Case argues in response to Shasta’s authority for an award of legal fees that “appellate [legal] fees may be recoverable if provided for specifically in a statute. (Morcos [v. Board of Retirement (1990)] 51 Cal.3d [924, ] 929-930.) Morcos does not address an award of appellate attorneys’ fees based on a contractual provision. Therefore, Shasta..., were it to qualify as a prevailing party on appeal, would not be entitled to an award of [legal] fees.” While this may accurately characterize the holding in Morcos, Case completely disregards the black-letter principle that legal fees on appeal “are recoverable when authorized by statute, contract, or law.” (9 Witkin, supra, Appeal, § 979, p. 1026 [emphasis added].) We shall grant Shasta’s request for an award of its appellate legal fees and remand for their calculation.
DISPOSITION
Shasta’s motion for judicial notice is denied as unnecessary. The judgment is affirmed. Shasta shall recover its costs on appeal, including its legal fees. (Cal. Rules of Court, rule 8.278(a)(1).) The matter is remanded to the trial court for calculation of Shasta’s appellate legal fees.
We concur: RAYE, P. J., ROBIE, J.