Procedural Posture

Plaintiffs, owners and subdividers, appealed from a judgment of the Superior Court of Los Angeles County (California) in favor of defendant contractor on a cross-complaint for damages for breach of an excavation and grading contract.

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Overview

Plaintiffs entered into a contract with defendant for certain excavation and grading work on lots and streets, together with street improvement work, in a subdivision. After defendant performed 98 percent of the work, a dispute arose regarding payment for additional work, and defendant ceased performance. Plaintiffs immediately employed others to do street improvement work called for by the contract and thereafter sued defendant and his bonding company for breach of contract. The trial court determined that plaintiffs were entitled to nothing against defendant and his bonding company and allowed defendant recovery on his cross-complaint. The court affirmed. The contract between the parties was divisible and the doctrine of substantial performance was thus applicable. Under the circumstances, the fact that defendant did not perform the second phase of the contract did not prevent his recovering for work done under the first phase. Plaintiffs were not entitled to a setoff representing a payment by them to others after defendant ceased performance under the contract because there was substantial evidence to support the finding that defendant completed all the grading required.

Outcome

The judgment allowing defendant recovery on his cross-complaint was affirmed. Plaintiffs were ordered to pay to defendant additional attorney’s fees on this appeal in an amount to be determined by the trial court.