The California Court of Appeal recently entered a decision reinforcing the importance of a contractor’s compliance with the applicable code provisions when filing claims and bringing causes of action against public entities in public works projects.
In Westcon Construction Corporation v. County of Sacramento, (2007) 152 Cal. App. 4th 183, the County of Sacramento awarded Westcon a contract to construct a security fence in August of 2000. During construction, the parties encountered problems and Westcon requested extensions on the completion date and additional compensation. A notice of completion was recorded in September 2001 and the parties later met to discuss Westcon’s claim that it had performed over $300,000 in extra work. A month after receiving final payment for the project in March 2002, Westcon sent a packet of information supporting its claim for additional compensation to the County’s engineer in charge of the project. The County issued a final acceptance of the project in July of 2003, and did not acknowledge that it received the materials sent to the engineer. Westcon resubmitted the claim over a year later in June of 2003. The County rejected the claim as untimely. After subsequently submitting a Government Claims Act claim, which was also ultimately rejected by the County, Westcon filed suit in March 2004. At trial, the court granted the County’s motion for summary judgment, finding that the Government Claims Act claim was untimely. It rejected Westcon’s arguments that 1) the period for filing a claim had been tolled during negotiations to resolve its claim under the Public Contract Code, and 2) that the claim submitted in June 2003 was timely and substantially complied with the Government Claims Act. Westcon appealed.
On appeal, the court affirmed. It held that Westcon’s tolling argument under the Public Contract Code was not valid because the County’s final payment on the project in March of 2002 operated as a denial of all outstanding claims, including Westcon’s Public Contract Code claim, under the terms of the construction contract. Westcon’s argument that the County waived the untimeliness of its Government Claims Act claim by failing to give notice of rejection of the claim in the proper form were also rejected. Finally, the court found that Westcon did not substantially comply with the Government Claims Act claim-filing requirement. Sending the claim documents to the County’s engineer in charge of the project did not constitute substantial compliance, as the engineer was not an officer that was authorized to receive claims, and Westcon was not able to show that the County otherwise had actual notice. Thus, the claim was deficient because it was not sent to the proper authority. In response to Westcon’s claim that it was not fair that they were "trapped" by the deadlines imposed by the Government Claims Act, the Court of Appeal replied that "those who do business with public entities must know the ground rules and are charged with the knowledge of the provisions of their own contract." (Id. at p. 203.)