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City and County of San Francisco v. Cobra Solutions, Inc.

California Court of Appeals, First District, Fifth Division

December 15, 2014

CITY AND COUNTY OF SAN FRANCISCO, Plaintiff and Respondent,
v.
COBRA SOLUTIONS, INC., et al., Defendants and Appellants.

[CERTIFIED FOR PARTIAL PUBLICATION[*]]

Superior Court of the City and County of San Francisco, Super. Ct. No. CGC-03-417218, Hon. James J. McBride, Judge.

Page 469

COUNSEL

Gonzalez & Leigh, Law Offices of Whitney Leigh and G. Whitney Leigh, for Defendants and Appellants.

Cotchett, Pitre & McCarthy, Nancy L. Fineman and Aron K. Liang, for Plaintiff and Respondent.

OPINION

SIMONS, J.

In City & County of San Francisco v. Cobra Solutions, Inc. (2006) 38 Cal.4th 839 [43 Cal.Rptr.3d 771, 135 P.3d 20] (Cobra I), our Supreme Court held the entire city attorney's office (City Attorney’s Office) was vicariously disqualified from representing the City and County of San Francisco (City) in this lawsuit against a City contractor, Cobra Solutions,

Page 470

Inc., and a related entity, Telecon L.T.D., Inc.[1] Following remand to the trial court, the City retained substitute counsel and the case proceeded to trial on the City’s suit for breach of contract and related claims and Cobra’s counterclaims. The jury denied any relief to Cobra and awarded the City approximately $24, 000. In the published portion of this opinion, we discuss Cobra’s motion in limine seeking to preclude the City from using at trial any evidence procured with the participation of the City Attorney’s Office. We hold Cobra waived this issue by failing to timely raise it. We address Cobra’s remaining claims in the unpublished portion of the opinion.

FACTUAL AND PROCEDURAL BACKGROUND[2]

In 1998, the City entered into a contract with a joint venture comprised of Cobra and other entities; during the periods relevant here, only Cobra remained a party to the joint venture. Under the contract (the master contract), Cobra was one of a number of prequalified vendors of information technology goods and services to the City as part of the City’s “Computer Store.” This prequalification program had been established through the City's committee on information technology (Technology Committee) to expedite the procurement of information technology goods and services for City agencies. Use of Computer Store vendors was not mandatory. City departments could choose to get information technology goods and services through a Computer Store vendor or by submitting a request for proposals and soliciting bids from other vendors. A little less than half of the City’s information technology purchases were made through Computer Store vendors.

In 1999 and 2000, Cobra submitted five invoices to the City based on invoices submitted to Cobra from one of its subcontractors, Monarch Enterprises (Monarch). Monarch had not performed the work identified in the invoices. Instead, Monarch was a sham corporation run by Marcus Armstrong, the then-manager of information technology for a City agency. There was evidence at trial Cobra had done nothing to verify that Monarch had in fact performed the work for which Cobra was billing the City. The City paid Cobra the full amount of the invoices: the amount Cobra owed Monarch for the purportedly performed work plus an additional profit markup for Cobra.

In February 2003, after the City discovered a separate scheme involving Armstrong and a different Computer Store ...


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