Tag: California

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Court of Appeals Confirms One-Year Statute of Limitations for Disgorgement Claims That Is Not Subject to the Discovery Rule
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California Construction Risk Management Update: In Khosh v. Staples Construction Co., Court Further Defines Rule that Contractor Not Responsible for Sub’s Worksite Injury
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Harris v. West Bay Builders: Award of Attorney’s Fees Not Mandatory Under California Prompt Payment Statutes

Court of Appeals Confirms One-Year Statute of Limitations for Disgorgement Claims That Is Not Subject to the Discovery Rule

Authors: Timothy L. Pierce, Hector H. Espinosa, and Samira F. Torshizi

In a recently published case dealing with issues of first impression, the California Court of Appeal Second Appellate District in Los Angeles held that the disgorgement penalty under Business and Profession Code § 7031(b) must be made within one year of completion or cessation of the performance of the project, and that time is not extended by the discovery rule.  Eisenberg Village of the Los Angeles Jewish Home for the Aging v. Suffolk Construction Company, Inc., 2020 WL 5035826 (Cal. Ct. App., Aug. 26, 2020).  BPC § 7031(b) permits a party who uses the services of an unlicensed contractor to recover any and all money paid to the contractor for its work—regardless of the quality of the work (indeed, even if the construction was flawless).  The purpose of this harsh forfeiture provision is to deter unlicensed contractors from performing construction.

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California Construction Risk Management Update: In Khosh v. Staples Construction Co., Court Further Defines Rule that Contractor Not Responsible for Sub’s Worksite Injury

By Timothy L. Pierce, Hector H. Espinosa, and Eric M. Khodadian, K&L Gates, Los Angeles

The Court’s decision in Khosh v. Staples Const. Co., Inc., Case No. 56-2014-00447304-CU-PO-VTA (Oct. 26, 2016) helps to further define the boundaries for whether a general contractor may be found responsible for worksite injuries suffered by an independent subcontractor’s employee.

In Khosh, the California Court of Appeal upheld the trial court’s decision that general contractor Staples Construction Company, Inc. (“Staples”) was not responsible for injuries sustained by an electrical subcontractor’s employee, who was severely electrocuted on the jobsite.

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Harris v. West Bay Builders: Award of Attorney’s Fees Not Mandatory Under California Prompt Payment Statutes

By Timothy L. Pierce and Hector H. Espinosa, K&L Gates, Los Angeles

California’s prompt payment statutes, found at Business and Professions Code section 7108.5 and Public Contract Code sections 7107 and 10262.5, each contain a fee-shifting provision, stating that the prevailing party “shall” be entitled to his or her attorney’s fees and costs. In James L. Harris Painting & Decorating, Inc. v. West Bay Builders, Inc. (No. C072169), the California Court of Appeals confirmed that a trial court can, in its discretion, choose not to award either party attorney’s fees under the prompt payment statutes if the trial court determines that neither party “prevailed.”

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