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Regency Midland Construction, Inc. v. Legendary Structures Inc.

California Court of Appeals, Second District, Eighth Division

November 7, 2019

REGENCY MIDLAND CONSTRUCTION, INC., Plaintiff and Respondent,
v.
LEGENDARY STRUCTURES INC., Defendant and Appellant.

          As Modified on Denial of Rehearing 11/26/2019

         [254 Cal.Rptr.3d 625] APPEAL from a judgment of the Superior Court of Los Angeles County, Howard Halm, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC629322)

Page 995

         COUNSEL

         The Soni Law Firm, M. Danton Richardson, Pasadena, Leo E. Lundberg, Michael A. Long, for Defendant and Appellant.

         Law Office of Parham Hendifar, Parham Hendifar, Los Angeles, Michael Diaz, for Plaintiff and Respondent.

         OPINION

         WILEY, J.

         [254 Cal.Rptr.3d 626] A general contractor named Regency Midland Construction, Inc. hired subcontractor Legendary Structures, Inc. to do the concrete work for a new apartment building. Legendary quit halfway through. Regency and

Page 996

Legendary sued each other. Their dispute turns on the "retention" clause in the contract. The trial court properly granted summary judgment for Regency and dismissed Legendary’s cross-claims. We affirm.

          First is background. The deal was for about $2 million of concrete work for a new 71-unit apartment building. After Legendary quit, Regency got ANM Construction to finish the concrete job. Regency and Legendary fell to feuding about who owed whom what.

          The fight was about retention. Regency withheld money from Legendary, citing the retention clause. Before Legendary quit, Regency had paid Legendary about $1 million for its work. That sum was 90% of Legendary’s billings because the contract allowed Regency to withhold 10% of the amount due Legendary as security to ensure Legendary properly completed the job. Regency withheld from Legendary about $125,000, which we call the retention sum. Regency insisted on keeping that sum. Legendary demanded it. That is the main dispute.

          The trial court granted Regency’s motion for summary judgment, thus allowing Regency to keep the retention sum. Legendary appeals, saying the contract language entitles it to the sum.

         Our review of this summary judgment ruling is independent. (Conroy v. Regents of University of California (2009) 45 Cal.4th 1244, 1249, 91 Cal.Rptr.3d 532, 203 P.3d 1127.) Summary judgment is not disfavored, but rather a good way to test the merits without the burdens of trial. (Perry v. Bakewell Hawthorne, LLC (2017) 2 Cal.5th 536, 542, 213 Cal.Rptr.3d 764, 389 P.3d 1.) The usual rules governing this procedure apply. (See, e.g., Code Civ. Proc., § 437c, subds. (c) & (p)(2).)

          This summary judgment appeal is purely a duel over contract interpretation, with no disputed issues of fact. The key sentence in the contract between Regency and Legendary specified "Ten percent (10%) of Subcontractor’s contract amount shall be withheld and will be released 35 days after ...


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