California Court of Appeals, Second District, Eighth Division
from a judgment of the Superior Court of Los Angeles County,
No. BC629322 Howard Halm, Judge. Affirmed.
Soni Law Firm, M. Danton Richardson, Leo E. Lundberg, Michael
A. Long for Defendant and Appellant.
Office of Parham Hendifar, Parham Hendifar, Michael Diaz for
Plaintiff and Respondent.
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 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
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
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
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.
review of this summary judgment ruling is independent.
(Conroy v. Regents of University of California
(2009) 45 Cal.4th 1244, 1249.) 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.) The usual rules
governing this procedure apply. (See, e.g., Code Civ. Proc.,
§ 437c, subds. (c) & (p)(2).)
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 completion of subcontractors work.” This 10%
withholding created the retention sum.
Frankfurter reputedly said the three rules of statutory
interpretation are to read the statute, read the statute, and
read the statute. The same wise counsel applies to
interpreting every text. So we read read read the contract,
which we now describe.
contract is two pages, with a two page attachment. It begins
by listing the date as “AUGUST/13/2015.” (The
oddity of this usage will later assume significance.) The
contract lists the lending bank and other preliminary
information for the construction project. It then announces
the agreement is between Regency “hereafter called
‘CONTRACTOR'” and Legendary “hereafter
called ‘SUBCONTRACTOR'....” It specifies the
concrete work for Legendary to perform. Next it states the
total sum of $2, 165, 000 for the whole project is “TO
BE PAID EACH MOTH [sic] ACCORDING TO THE PROGRESS OF
THE WORK ACCORDING TO THE BANKS [sic]
pause to emphasize that these preliminary lines of text
contain odd stylistic usages and spelling and punctuation
errors, some of which we have just noted. There also is a
varying and apparently random pattern of capitalization, with
some words in all capitals, some words with initial capitals,
and some words with no capital letters. These points too
later become significant.
comes the vital sentence: the retention clause. This clause
is one of the primary recitals of the contract. It is one
sentence long. It includes strikeout wording, a typed
substitute insertion that replaces the strikeout words, and
two sets of ...