COSTA MESA, Calif., July 16, 2010 – Attorneys at Rutan & Tucker, LLP, acting as amicus curiae (Friend of the Court) counsel on behalf of the Construction Employers Association in the case of Los Angeles Unified School District vs. Great American Insurance Company and Hayward Construction Company won a major victory before the California Supreme Court this week. Rutan & Tucker attorneys, William Eliopoulos, John Antracoli and Kaveh Badiei, on behalf of CEA, which is composed of over 100 contractors, submitted an appellate brief supporting the contractor’s side in the case, which involved issues arising from the School District’s plans to build an elementary school in Los Angeles in 1996. All three attorneys are based in the firm’s Palo Alto office and are members of its statewide Construction Law Group and Trial Department. William Eliopoulos, one of the preeminent public works litigators in the state noted, “The case involves application of an established federal legal doctrine, known as the ‘Spearin Doctrine,’ to California public works projects. Under the Spearin Doctrine, public entities impliedly warrant the correctness and completeness of their plans and specifications provided to contractors to bid. Previous California appellate court decisions were conflicting as to the application of the Spearin Doctrine to California public works projects. This decision clarifies California law for both public entities and contractors.” At trial, the School District was granted summary adjudication based on the trial court’s finding that the School District had not affirmatively misrepresented the construction work on the plans and specifications provided to the contractor for its bid. The Court of Appeal then reversed that decision, holding that the trial court had applied the wrong legal standard. Resolving this issue of statewide importance, the California Supreme Court upholds the federal Spearin Doctrine’s applicability in California and rejects California case law requiring the contractor to prove the public agency’s affirmative misrepresentation in the bid documents in order to recover its extra construction costs. The California Supreme Court’s opinion in LAUSD v. Great American establishes the circumstances under which a public entity will be held liable to a contractor for additional compensation when the public entity fails to adequately disclose in the design bid documents circumstances not readily apparent or discoverable with reasonable efforts and which would materially impact the contractor’s bid. “We are very pleased that our firm played a role in this case on behalf of our clients and congratulate our attorneys for their outstanding work,” said Mark B. Frazier, head of the firm’s Trial Department. “While it is an important school district case, the decision is also applicable to all public agency construction projects in California.”
