Opinion
NOT TO BE PUBLISHED
Super. Ct. No. CV02 1427, consolidated with Nos. CV03 1081 & CV04 2002
BUTZ, J.
In this contract dispute arising from the construction of a public school, defendant general contractor Allen L. Bender, Inc. (Bender) and its surety obtained a summary judgment against plaintiff electrical subcontractor Harold E. Nutter & Son, Inc. (Nutter). Nutter sought additional costs of approximately $362,000 allegedly caused by Bender’s delays, mismanagement, and change in the scope of Nutter’s work.
In granting Bender and the surety summary judgment, the trial court found that Nutter failed to raise a triable issue of material fact that it had performed or was excused from performing subcontract provisions calling for it to provide a construction schedule and project coordination information.
We disagree with the trial court. We conclude there are triable issues of material fact that Bender impliedly waived these subcontract provisions or that Nutter substantially performed them. We also conclude there are triable issues on three additional grounds for summary judgment, which involve the notice of the additional costs and the contractual basis for seeking them, that the trial court did not have to reach in light of its ruling. We shall reverse the judgment and the postjudgment order for attorney fees, but direct the trial court to summarily adjudicate Nutter’s third cause of action for common count (quantum meruit).
FACTUAL AND PROCEDURAL BACKGROUND
To avoid unnecessary repetition of alleged facts, we will sketch the facts here and save the more detailed facts for our discussion of the summary judgment issues.
On November 8, 2001, Bender was awarded the prime contract to build the Bridgeway Elementary School in West Sacramento (the Project). Bender’s bid incorporated Nutter’s bid of approximately $804,000 for the electrical portion of the Project.
Although Nutter executed its subcontract with Bender (the Subcontract) on February 28, 2002, Nutter actually began work on the Project over two months before (with Bender’s knowledge). In early December 2001, Nutter provided Bender, at Bender’s request, with a “Schedule of Values.” This schedule identified 29 categories of electrical work, the costs of each, and the order in which they would be done.
References to “Section,” “Paragraph,” and “Exhibit” are to the Subcontract.
Nutter maintained that it incurred substantial additional costs for its portion of the Project based on delays, Bender’s mismanagement of the project scheduling, and Bender’s changes in the scope of Nutter’s work, as well as the poor performance of the company that Bender had hired to install the modular buildings.
Nutter sued Bender to recover these additional costs, which totaled approximately $362,000. Nutter alleged three causes of action: breach of contract against Bender; foreclosure on the construction performance bond against Bender and its surety, National Fire Insurance Company of Hartford (National Fire Insurance or surety); and quantum meruit against Bender (contract implied by law to prevent unjust enrichment).
Bender and National Fire Insurance moved successfully for summary judgment against Nutter. As to the first cause of action for breach of contract, the trial court ruled that Nutter failed to raise a triable issue of fact that it had performed or was excused from performing the Subcontract, thus precluding Nutter from obtaining contractual relief. Specifically, the trial court determined that Nutter indisputably failed to provide Bender with a construction schedule and a list of project coordination concerns as required by the Subcontract. And Bender could not have impliedly waived these subcontract requirements, the trial court found, because the conduct that Nutter relied on to establish waiver occurred before the Subcontract was executed. This ruling also foreclosed Nutter’s derivative second cause of action for payment from Bender’s construction performance bond with National Fire Insurance. The third cause of action for quantum meruit/implied contract was foreclosed as well given that an express contract, the Subcontract, governed the issues between Bender and Nutter.
On appeal, Nutter concedes that the trial court correctly ruled regarding the third cause of action for quantum meruit. The legal rights and duties of the parties in this case are governed by the written subcontract. “[E]quitable entitlement to a quantum meruit payment is not implied where the parties have actual contract terms covering payment.... [¶] When parties have an actual contract covering a subject, a court cannot not even under the guise of equity jurisprudence substitute the court’s own concepts of fairness regarding that subject in place of the parties’ own contract.” (Hedging Concepts, Inc. v. First Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 1420.)
On appeal, Nutter maintains there are triable issues of material fact that it complied with the Subcontract’s schedule/coordination requirements or, in the alternative, that Bender waived compliance with those requirements. Also, because on appeal we review summary judgments independent of the trial court (Jambazian v. Borden (1994) 25 Cal.App.4th 836, 844), we consider the three additional grounds for summary judgment that Bender raised below but that the trial court did not reach in light of its dispositive ruling on the Subcontract’s scheduling requirements. Those three grounds are: (1) Nutter cannot maintain its contract cause of action because it failed to provide timely written notice of the alleged construction delays underlying part of its claim for additional costs; (2) Nutter cannot maintain its contract cause of action because it failed to present its claim for additional costs before completion of the Project; and (3) the Subcontract provision on which Nutter relies for its claim of delay-based additional costs is ambiguous and inconsistent with the rest of the Subcontract. We now turn to our discussion of the four grounds for summary judgment.
Nutter also appeals from a postjudgment award of attorney fees to Bender and National Fire Insurance (C059342). The two appeals have been consolidated.
DISCUSSION
Standard of review
A summary judgment is to be upheld if all the evidentiary papers submitted which we review independently show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. We do not resolve factual issues but ascertain whether there are any to resolve. (Code Civ. Proc., § 437c, subd. (c); Colores v. Board of Trustees (2003) 105 Cal.App.4th 1293, 1305 (Colores); Flait v. North American Watch Corp. (1992) 3 Cal.App.4th 467, 474-475.)
Because a summary judgment denies the losing party its day in court, we liberally construe the evidence in support of that party and resolve doubts concerning the evidence in that party’s favor. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142; Colores, supra, 105 Cal.App.4th at p. 1305.)
I. There Are Triable Issues of Material Fact Whether Bender Impliedly Waived the Subcontract Requirements That Nutter Provide Construction Schedule/Project Coordination Information or That Nutter Substantially Performed Those Requirements
This ground for summary judgment is based on the second of the following four elements that comprise a cause of action for breach of contract: (1) the contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach; and (4) damage to plaintiff. (4 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 515, p. 648.) In moving for summary judgment, Bender and its surety submitted a declaration from Bender’s president stating that Nutter failed to provide Bender with a construction schedule and project coordination information as required by the Subcontract.
The Subcontract between Bender and Nutter consists of Bender’s standard form subcontract plus three Exhibits: Exhibits A, B and C. Bender drafted the standard form portion and Exhibits A and B. Nutter drafted Exhibit C.
Three provisions of the Subcontract specify Nutter’s duties to provide a construction schedule and coordination information to Bender: Section 5; Paragraph 5 of Exhibit A; and Paragraph 12 of Exhibit C.
Section 5 states in pertinent part:
“Time is of the essence of this Agreement. Subcontractor shall provide Contractor with scheduling information and a proposed schedule for performance of his work in a form acceptable to Contractor. Subcontractor shall conform to Contractor’s progress schedule and all revisions or changes made thereto.”
Paragraph 5 of Exhibit A adds as pertinent:
“Subcontractor shall provide schedule and schedule of values information within ten (10) days of receipt of this contract. Information will include material/fabrication lead times and installation durations/sequences. Any special coordination issues/concerns of subcontractor shall be provided along with this schedule information.”
And Paragraph 12 of Exhibit C provides as relevant:
“The initial construction schedule for this project will be... mutually agreed upon by the parties. It is understood that the schedule may need to be revised f[rom] time-to-time [sic].” Paragraph 1 of Exhibit C adds that the “terms and conditions of this proposal [i.e., Exhibit C] shall supersede any conflicting terms in the balance of the subcontract.” (Also, Paragraph 12b of Exhibit C provides that Nutter is entitled “to equitable adjustment in the subcontract amount for additional costs caused by unanticipated project delays or accelerations” not attributable to it.)
The first question is whether there is a triable issue of material fact that Bender impliedly waived the Subcontract provisions calling for Nutter to provide a construction schedule and project coordination information. Unlike the trial court, we conclude there is.
The trial court reached its conclusion by noting that the conduct Nutter had submitted to show Bender’s implied waiver occurred before the Subcontract was executedon February 28, 2002. The court reasoned that Bender could not have “waived” the schedule/coordination requirements (i.e., could not have relinquished known rights) until the Subcontract was executed and those known rights came into existence.
We disagree. As we explain, the summary judgment evidence of implied waiver conduct showed such conduct occurred before and after the Subcontract was executed. Furthermore, the “before” conduct may be used as evidence to support a triable issue of material fact that Bender impliedly waived the subcontract requirements on providing schedule/coordination information, because the parties already had in place an acceptable method for providing that information at the time the Subcontract was executed.
Before getting to the summary judgment evidence on waiver, we must first consider Bender’s point that Nutter contravened a general rule of pleading by failing to specifically plead the facts of waiver in its complaint. (4 Witkin, Cal. Procedure, supra, Pleading, § 533, p. 663.) In its complaint, Nutter pleaded waiver in conclusory terms. However, Nutter and Bender specifically argued the issue of waiver in the summary judgment proceedings. The trial court fully considered this issue on its merits. Even had the trial court concluded that the issue of waiver had not been properly pleaded, the proper course would have been to allow Nutter to amend its complaint rather than to grant Bender summary judgment on this basis. (See College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 719, fn. 5.)
That brings us to the summary judgment evidence on implied waiver, which showed the following. With Bender’s knowledge, Nutter began working on the Project in December 2001, months before the Subcontract was executed at the end of February 2002. In early December 2001, Nutter provided Bender with a Schedule of Values, which itemized the electrical tasks to be performed, as well as their costs and sequencing. (Paragraph 5 of Exhibit A of the Subcontract required Nutter to provide such a schedule.)
On February 27, 2002, Bender provided Nutter with a baseline (master) construction schedule. The next day, which was also the day that Nutter executed the Subcontract, Nutter wrote to Bender explaining that this baseline schedule was already out of date given weather-related and other delays that had occurred. Nutter requested that Bender provide a corrected baseline schedule or a time-recovery schedule. This request fell on deaf ears.
Meanwhile, throughout its work on the Project which ran from December 2001 through October 2002 Nutter provided Bender on a weekly basis with Nutter’s “Daily Reports.” The record contains over 200 pages of the Daily Reports, from December 10, 2001, through October 23, 2002. Each of the reports discussed three subjects: whether the Project was ahead of or behind the current schedule and why; the work in progress that day; and whether the Project was or was not currently delayed and why. Furthermore, after the Subcontract was executed on February 28, 2002, project superintendents and managers from Nutter and Bender had “ongoing verbal communications” about project scheduling and coordination.
Finally, there is no evidence that Bender ever inquired or complained about Nutter’s failure to provide scheduling/ coordination information.
In light of the foregoing summary judgment evidence, we conclude there is a triable issue of material fact that Bender impliedly waived the Subcontract requirements that Nutter provide Bender with a construction schedule and project coordination information. The present case, in this respect, is similar to the waiver situation found in Pacific Allied v. Century Steel Products, Inc. (1958)162 Cal.App.2d 70 (Pacific Allied). There, the contract called for the first party to provide an “itemized cost breakdown.” (Id. at p. 78.) That party instead provided a more general “Statement of Cost” that the second party impliedly accepted. The Pacific Allied court concluded that substantial evidence supported the trial court’s finding that the second party had waived strict compliance with the itemized cost breakdown requirement. (Id. at pp. 78-79.)
Nutter additionally argues that the same summary judgment evidence showing that Bender impliedly waived Nutter’s performance of the Subcontract’s schedule/coordination requirements also shows that Nutter actually performed these requirements pursuant to a “practical interpretation” of the Subcontract by the parties’ “course of performance” under it. (Employers Reinsurance Co. v. Superior Court (2008) 161 Cal.App.4th 906, 920-921.) To be sure, there are some mental gymnastics involved in ultimately concluding that the evidence, showing that Nutter is excused from performing these Subcontract requirements, also shows that Nutter actually performed these requirements. But Nutter itself trips upon the ironies of this argument by conceding as part of the argument that “[t]he Subcontract plainly required Nutter to furnish the specified scheduling information within 10 days of its receipt of the Contract.” (Italics added.) Nutter received the executed Subcontract on March 7, 2002. The summary judgment evidence, primarily in the form of the undisputed declaration from Bender’s president, does not show that Nutter furnished the specified scheduling information within this deadline.
However, the summary judgment evidence, as explained above, does show that Nutter furnished Bender with some sort of project schedule/coordination information. Nutter notes that this summary judgment evidence also raises a triable issue of material fact that Nutter “substantially performed” the Subcontract requirements on furnishing the schedule/coordination information, and therefore Nutter can still obtain its additional costs less any reduction for its incomplete performance.
Nutter’s point is well taken. The doctrine of substantial performance was explained in Murray’s Iron Works, Inc. v. Boyce (2008) 158 Cal.App.4th 1279, as follows: “‘At common law, recovery under a contract for work done was dependent upon complete performance, although hardship might be avoided by permitting recovery in quantum meruit. The prevailing doctrine today, which finds its application chiefly in building contracts, is that substantial performance is sufficient, and justifies an action on the contract, although the other party is entitled to a reduction in the amount called for by the contract, to compensate for the defects. What constitutes substantial performance is a question of fact, but it is essential that there be no wilful departure from the terms of the contract, and that the defects be such as may be easily remedied or compensated, so that the promisee may get practically what the contract calls for.’” (Id. at p. 1291, quoting 1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, § 818, p. 908, last italics added; see also Thomas Haverty Co. v. Jones (1921) 185 Cal. 285, 287-289; Pacific Allied, supra, 162 Cal.App.2d at pp. 76-77.) Paragraph 12b of the Subcontract provides that “[Nutter] shall be entitled to equitable adjustment in the subcontract amount for additional costs caused by unanticipated project delays or accelerations caused by others whose acts are not [Nutter’s] responsibility....”
At oral argument, Bender’s counsel emphasized that Nutter had not explicitly argued in the trial court the concept of substantial performance and was therefore precluded from doing so on appeal. We are not persuaded. Bender’s summary judgment motion basically alleged that Nutter did not perform and was not excused from performing the subcontract provisions requiring it to provide project schedule/coordination information. Consequently, the summary judgment evidence and litigation below focused on Nutter’s provision of this information, which, as we have explained, showed that Nutter furnished Bender “with some sort of project schedule/coordination information.” Furthermore, the concept of substantial performance finds its application chiefly in building contracts, which is the type of contract at issue here. In short, then, the concept of substantial performance was litigated in the summary judgment proceedings in the trial court in all but name only. And Bender is not prejudiced by our determination. Bender is still free to show in the trial court that Nutter did not actually perform substantially, or willfully departed from the Subcontract, or that the defects are not easily remedied or compensated.
We conclude there is a triable issue of material fact as to whether Bender impliedly waived the Subcontract requirements that Nutter provide Bender with a construction schedule and project coordination information. There is also a triable issue of material fact whether Nutter substantially performed these requirements. Consequently, Nutter may proceed with its breach of contract cause of action notwithstanding its failure to perform completely these requirements.
II. Three Additional Grounds Bender Asserted for Summary Judgment
In their summary judgment motion, Bender and its surety alleged three additional grounds that foreclose Nutter from proceeding on its breach of contract cause of action: (1) Nutter failed to provide timely written notice of alleged construction delays underlying part of its claim for additional costs; (2) Nutter failed to present its claim for additional costs before completion of the Project; and (3) the Subcontract provision on which Nutter relies for its claim of delay-based additional costs is ambiguous and inconsistent with the rest of the Subcontract.
Because we independently review summary judgments, we may affirm a summary judgment on any correct legal theory as long as the parties had an adequate opportunity to address the theory in the trial court. (California School of Culinary Arts v. Lujan (2003) 112 Cal.App.4th 16, 22.) The trial court did not reach any of these three grounds because it concluded that Bender was entitled to summary judgment on the project schedule/ coordination ground discussed above. We conclude there are triable issues of material fact regarding each of these three grounds.
A. Failure to Give Timely Written Notice of Alleged Construction Delays Underlying Part of Claim for Additional Costs
For this ground, Bender relies on Paragraph 15 of Exhibit C of the Subcontract, which provides:
“Subcontractor shall notify Contractor within four (4) days of Subcontractor’s Project Manager’s first knowledge of any event leading to claim(s) for any damages or time extension. Contractor’s constructive knowledge of said event shall relieve Subcontractor of all notice requirements.” Bender argues that, on April 4, 2003, long after completion of the Project, Nutter submitted to Bender its certified claim for the delay damages.
The first problem with Bender’s argument is that the certified claim on which it relies was a claim made to the Project’s owner (the school district), not Bender. That is not the only problem. The written Daily Reports discussed above, that Nutter continuously provided to Bender throughout its work on the Project, noted whether the Project was currently on schedule or not and explained why, and noted whether the Project was currently delayed or not and explained why. This summary judgment evidence raises triable issues of material fact as to whether Nutter failed to provide timely written notice of alleged construction delays underlying part of Nutter’s claim for additional costs, and also whether Bender had constructive knowledge of these events.
B. Failure to Submit Claim for Additional Costs Before Project Completion
Pursuant to Paragraph 12b of Exhibit C of the Subcontract, Nutter was to submit its “claim” for additional costs caused by project delays “prior to the completion of the project.”
Bender contends that Nutter failed to meet this requirement. Bender argues that the Project’s owner the school district specified that the Project was completed on December 12, 2002, but Nutter did not submit its certified claim for additional costs until April 4, 2003. Again, though, the certified claim to which Bender refers is the claim to the school district, not to Bender. And Paragraph 12b of Exhibit C of the Subcontract requires only a “claim,” not a certified claim.
As noted by Nutter, Bender ignores summary judgment evidence that Nutter notified Bender in August 2002, pursuant to a written “Notice of Claim,” that it was making a “Request for Equitable Adjustment” for additional costs in the aggregate sum of approximately $500,000. Bender acknowledged receipt of Nutter’s claim and forwarded notice of it to the school district’s project manager (Pacific Program Management, Inc.) on August 20, 2002. Pursuant to Bender’s initial response to this claim, Nutter furnished additional information about some of the costs involved. Nutter also submitted a detailed “Request for an Equitable Subcontract Adjustment” to Bender in late December 2002, which included a summary of damages (against Bender) effective November 5, 2002 (in the amount asked for in Nutter’s complaint). This evidence raises triable issues of material fact whether Nutter complied with the Subcontract’s requirement set forth in Paragraph 12b of Exhibit C to “submit its claim for [additional costs due to project delays] prior to the completion of the project.”
C. The Alleged Ambiguity and Inconsistency of the Subcontract Provision on Which Nutter Relies for Additional Costs Due to Project Delays
Finally, Bender contends that the Subcontract provision on which Nutter bases its contract cause of action for additional costs due to project delays, Paragraph 12b of Exhibit C, is (1) ambiguous and must be construed against its drafter, Nutter, and (2) is inconsistent with the rest of the Subcontract.
Paragraph 12b of Exhibit C of the Subcontract specifies in its entirety: “Subcontractor shall be entitled to equitable adjustment in the subcontract amount for additional costs caused by unanticipated project delays or accelerations caused by others whose acts are not the Subcontractor’s responsibility and to time extensions for unavoidable delays. Subcontractor will submit its claim for these costs prior to the completion of the project. Time extensions will be billed at N/A per working day to compensate for field and office overhead. All other cost items will be billed according to proof.”
As for ambiguity, Bender argues that this Subcontract provision, on the one hand, suggests that Nutter is entitled to recover costs for time extensions, but, on the other hand, does not provide any way to calculate such costs with its “N/A” (not applicable) sentence. As Nutter notes, however, the “N/A” reference concerns only field and office overhead; the very next sentence in Paragraph 12b unambiguously permits Nutter to recover “[a]ll other cost items [i.e., non-overhead expenses such as labor and materials costs due to unanticipated delays]... according to proof.”
As for inconsistency, Bender argues that Paragraph 12b is “entirely inconsistent” with the second paragraph of Section 5 of the Subcontract, which states as pertinent: “No claims for additional compensation or damages for delays, whether caused in whole or in part by any conduct on the part of Contractor, including, but not limited to, conduct amounting to a breach of this Agreement, or delays by other subcontractors or Owner, shall be recoverable from Contractor, and... extension of time for completion shall be the sole remedy of Subcontractor....”
There are two problems with Bender’s argument on inconsistency.
First, Paragraph 12b, on which Nutter relies, is part of Exhibit C to the Subcontract. Paragraph 1 of Exhibit C states in part that “[t]he terms and conditions of [Exhibit C] shall supersede any conflicting terms in the balance of the subcontract.”
Second, Public Contract Code section 7102 states in part: “Contract provisions in construction contracts of public agencies and subcontracts thereunder which limit the contractee’s liability to an extension of time for delay for which the contractee is responsible and which delay is unreasonable under the circumstances involved, and not within the contemplation of the parties, shall not be construed to preclude the recovery of damages by the contractor or subcontractor.” Assuming for purposes of this summary judgment motion that this statute applies here, it presents triable issues of material fact as to which delays Bender was responsible for, and whether those delays were unreasonable under the circumstances and not within the contemplation of the parties. (Ibid.; see Howard Contracting, Inc. v. G. A. MacDonald Construction Co. (1998) 71 Cal.App.4th 38, 49-50.)
We conclude there are triable issues of material fact on the four grounds for summary judgment discussed above concerning Nutter’s first cause of action for breach of contract. Because that cause of action survives this motion for summary judgment, so too does Nutter’s derivative second cause of action that seeks payment from Bender’s construction performance bond issued by defendant National Fire Insurance. We previously explained why Nutter’s third cause of action for quantum meruit is subject to summary adjudication. (See fn. 2, ante.)
DISPOSITION
The judgment and the postjudgment order awarding attorney fees to Bender and National Fire Insurance are reversed. The trial court is directed to enter an order of summary adjudication on Nutter Electric’s third cause of action for common count (quantum meruit). Bender’s request for attorney fees on appeal is denied. Nutter Electric is awarded its costs for both appeals. (Cal. Rules of Court, rule 8.278(a)(1), (2).)
We concur: BLEASE Acting P. J., SIMS, J.