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Eggers Industries v. Flintco

December 5, 2011

EGGERS INDUSTRIES, PLAINTIFF AND RESPONDENT,
v.
FLINTCO, INC. ET AL., DEFENDANTS AND APPELLANTS.



APPEAL from a judgment of the Superior Court of Sacramento County, Steven H. Rodda, Judge. Affirmed. (Super. Ct. No. 34200900033002CUCLGDS)

The opinion of the court was delivered by: Robie , J.

CERTIFIED FOR PARTIAL PUBLICATION*fn1

Defendant Flintco, Inc. (Flintco), the general contractor on a public works project, contracted with Architectural Security Products (ASP) to provide custom doors for the project. ASP, in turn, contracted with plaintiff Eggers Industries (Eggers) to manufacture the doors. When ASP failed to pay Eggers fully for its services, Eggers sought to recover under the public works payment bond Flintco had obtained for the project, suing Flintco and the two bond sureties, defendants Fidelity and Deposit Company of Maryland and Federal Insurance Company.*fn2

On Eggers's motion for summary judgment, the primary issue was whether ASP was a subcontractor or a materialman, as that issue was dispositive of whether Eggers was entitled to recover under the bond pursuant to Civil Code section 3248, subdivision (c). Eggers contended ASP was a subcontractor because "a material supplier charged with furnishing a significant amount of custom products in accord with the project plans and specifications is deemed to be a subcontractor" and "[a]s a material supplier to a subcontractor on a public works project, Eggers [wa]s entitled to recovery on the Bond." Defendants argued that because ASP did not install any of the materials it supplied for the project, ASP was a materialman, not a subcontractor, and "a material supplier to a material[man] does not have a claim against a public works payment bond."

The trial court agreed with Eggers and granted Eggers's motion for summary judgment. On defendants' appeal, we conclude the trial court was correct. To be a subcontractor rather than a materialman for purposes of recovery under a public works payment bond, one need not actually construct any part of the project, whether on or off site. Instead, it is sufficient that the person or company "agrees with the prime contractor to perform a substantial specified portion of the work of construction which is the subject of the general contract in accord with the plans and specifications by which the prime contractor is bound." (Theisen v. County of Los Angeles (1960) 54 Cal.2d 170, 183, italics added (Theisen).) The fact that the subcontractor in turn contracts with someone else for that person or company to actually perform the portion of the work the subcontractor has agreed with the general contractor to perform does not turn the subcontractor into a materialman. The subcontractor's status as a subcontractor must be determined based on what the subcontractor agrees to do, not what it actually ends up doing.

Because we agree that ASP was a subcontractor and not a materialman, and because we reject defendants' other challenges to the trial court's ruling as well, we will affirm.

FACTUAL AND PROCEDURAL BACKGROUND*fn3

The Regents of the University of California sought bids for a public works construction project known as the Robert Mondavi Institute for Wine & Food Science. Thereafter, Regents awarded the contract for the project to Flintco, making Flintco the original (or general) contractor on the project. (See Civ. Code, § 3095 ["any contractor who has a direct contractual relationship with the owner" of a project is an "'[o]riginal contractor'"].) In turn, Flintco entered into a contract with ASP under which ASP was to furnish two types of doors -- (1) flush wood doors and (2) stile and rail wood doors -- and door hardware for the project according to the plans and descriptions prepared by the project architects. ASP was not responsible for installing the doors and hardware but was to deliver the goods to the job site.

ASP subsequently contracted with Eggers, a manufacturer of custom architectural wood products, to manufacture the doors. Ultimately, Eggers manufactured a total of 285 flush doors, 10 stile and rail doors, 177 trim pieces, 29 door jambs, and 101 frames for side lites and borrowed lites and shipped the products to the job site. Eggers billed ASP a total of $219,478.64 for the manufacture and delivery of the products, but ASP paid Eggers only $51,697.03 of that amount.

To secure the payment of claims of "laborers, mechanics, material suppliers, and other persons as provided by law," Flintco had obtained a public works payment bond from the sureties. When ASP failed to pay Eggers the total amount due for the products Eggers manufactured for the project, Eggers served the sureties with a claim on the bond for the amount that remained due ($167,781.61). Thereafter, Eggers filed a complaint against ASP, Flintco, and the sureties. As relevant here, Eggers asserted a cause of action against Flintco and the sureties for payment under the bond of the principal amount owed plus interest and attorney fees.*fn4

Ultimately, Eggers moved for summary judgment, arguing that ASP was a subcontractor on the project because "a material supplier charged with furnishing a significant amount of custom products in accord with the project plans and specifications is deemed to be a subcontractor," and "[a]s a material supplier to a subcontractor on a public works project, Eggers [wa]s entitled to recovery on the Bond." In support of its argument, Eggers relied primarily on the California Supreme Court's decision in Theisen.

In opposing the motion, defendants argued that because ASP did not install any of the materials it supplied for the project, ASP was a material supplier, not a subcontractor, and "[a] material supplier to a material supplier does not have a claim against a public works payment bond." Defendants argued that Theisen was obsolete because of statutory changes that occurred since the case was decided in 1960 and, in any event, Eggers had failed to establish the elements of its cause of action with admissible evidence, and Eggers had failed to provide admissible evidence to prove its complaint was timely filed. As part of their opposition to the summary judgment motion, defendants submitted 86 written objections to Eggers' evidence. Overall, defendants' approach to the motion was not to raise a triable issue of fact with contrary evidence but instead to show that Eggers had not carried its initial burden of establishing its entitlement to summary judgment.

As part of its reply, Eggers offered 185 pages of additional evidence, consisting of two additional declarations with attachments. The purpose of this additional evidence was to cure any deficiencies the court might find in Eggers's original evidentiary showing as a result of defendants' evidentiary objections.

Defendants filed an objection to Eggers's additional evidence, asserting that the court should disregard it or continue the hearing on the summary judgment motion for at least two weeks to allow them to file a written response and any additional evidence they deemed necessary. The parties subsequently stipulated to continue the hearing, and the court set it on the earliest date to which the parties had agreed. Despite this continuance, defendants did not file any response to the additional evidence or any further evidence themselves.

The trial court overruled all of defendants' evidentiary objections and concluded that Eggers had provided sufficient admissible evidence to prove all of the elements of its cause of action for recovery on the public works payment bond. The court also concluded that Theisen was still good law and that under Theisen ASP was a subcontractor, ...


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