P&D CONSULTANTS, INC. v. CITY OF CARLSBAD
P&D CONSULTANTS, INC., Plaintiff, Cross-defendant and Appellant,
v.
CITY OF CARLSBAD, Defendant, Cross-complainant and Appellant.
No. D054810.
Court of Appeals of California, Fourth District, Division One.
Filed November 19, 2010.
NOT TO BE PUBLISHED IN OFFICIAL REPORTSMcCONNELL, P. J.
This breach of contract action arises from a written agreement between P&D Consultants, Inc. (P&D) and the City of Carlsbad (the City) for services pertaining to a redesign of the City's municipal golf course. In its appeal, the City contends that as a matter of law, the jury's award of $109,093.81 to P&D for extra work cannot stand because there was no written change order, in violation of provisions of the contract and public contract law (Gov. Code, § 40602). In conjunction with this contention, the City asserts the court erred by instructing the jury that the contract could be modified orally or through the parties' conduct. Alternatively, the City challenges the sufficiency of the evidence to support the award.
We reverse the judgment on the first amended complaint (hereafter complaint) based on the contract's requirement of a written change order. Unlike private contracts, public contracts requiring written change orders cannot be modified orally or through the parties' conduct. Thus, even if P&D's evidence pertaining to the oral authorizations of a city employee for extra work are fully credited, P&D cannot prevail. The court erred by submitting the matter to the jury; it should have granted the City's motion for nonsuit. Because the contract issue resolves the matter, we need not address Government Code section 406021 or the sufficiency of the evidence. In its appeal, P&D concedes we should affirm the judgment of $6,614.69 against it on the City's cross-complaint for defective or incomplete work. Insofar as P&D's complaint is concerned, it contends the court erred by granting nonsuit on the causes of action for quantum meruit and breach of implied contract, by granting a directed verdict on the cause of action for violation of prompt payment statutes, and by denying it leave to amend to allege causes of action for breach of the implied covenant of good faith and fair dealing and "breach of the duty to negotiate in good faith." P&D asserts that if we reverse the judgment on the complaint, we must remand the matter to the trial court for a new trial to include these claims. We conclude remand is not warranted under any theory.
FACTUAL AND PROCEDURAL BACKGROUNDA. Contract Documents
1. Government Code section 40602 requires that the mayor or another officer designated by ordinance sign "[a]ll written contracts and conveyances made or entered into by the city." (Gov. Code, § 40602, subds. (b) & (c).) The parties differ on whether the statute applies to change orders and it appears there is no published opinion on the issue.
2. In addition to appealing the judgment, the City purports to appeal the order denying its motion for JNOV. That order, however, is subsumed in the judgment.
3. We deny the City's request, which P&D opposes, that we take judicial notice of the appellant's briefing in the Katsura case.
4. In Amelco, the court held that as a matter of law the abandonment theory of contract liability does not apply against a public agency. The court explained: "In California, the Courts of Appeal have concluded that private parties may impliedly abandon a contract when they fail to follow change order procedures and when the final product differs substantially from the original." (Amelco, supra, 27 Cal.4th at p. 235.) The court concluded the theory does not apply in the public contract context because it "is fundamentally inconsistent with the purpose of the competitive bidding statutes." (Id. at pp. 238-239.) The court commented, "It is difficult . . . to ascertain how the general public benefits by allowing a contractor to claim abandonment of the public works contract following completion of the work, and recover for the reasonable value of its work; indeed, just the opposite seems true. Permitting such recovery would appear to unduly punish the tax-paying public." (Id. at pp. 239-240.)
5. The City's request that we take judicial notice of the City's Municipal Code is moot.