Golden State v. Eastern Municipal Water Dist.

Filed 7/23/14
See Dissenting Opinion

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

GOLDEN STATE BORING & PIPE
JACKING, INC.,
E054618
Plaintiff, Cross-defendant and
Appellant, (Super.Ct.No. RIC502935)

v. OPINION

EASTERN MUNICIPAL WATER
DISTRICT,

Defendant and Cross-complainant;

SAFECO INSURANCE COMPANY,

Defendant, Cross-defendant and
Respondent.

APPEAL from the Superior Court of Riverside County. Gloria Connor Trask,

Judge. Affirmed.

Law Offices of Timothy P. Creyaufmiller and Timothy P. Creyaufmiller for

Plaintiff, Cross-defendant and Appellant.

1
 Sedgwick, Jonathan J. Dunn, Andrew C. Harris, Bryan K. Lang and Hall R.

Marston for Defendant, Cross-defendant and Respondent.

No appearance for Defendant and Cross-complainant.

The Eastern Municipal Water District (EMWD) hired general contractor S.J. and

Burkhardt, Inc. (SJB) for a public works construction project in 2006. Safeco Insurance

Company (Safeco) executed performance and payment bonds for the project. Plaintiff

Golden State Boring & Pipe Jacking, Inc. (GSB) was a subcontractor for the project,

completing its work by September 2006, but it did not receive payment of $577,038.37,

owed.

In March 2008, SJB sent a voluntary default letter to Safeco. In July 2008, GSB

sued SJB, EMWD, and Safeco for the unpaid amounts under the contract, separately

seeking payment from Safeco under its payment bond. EMWD filed a cross-complaint to

interplead retained sums. Safeco made a motion for summary judgment on the cause of

action for payment under the bond on the ground that GSB’s claim was untimely. The

trial court granted the motion as to that cause of action, finding that there had been three

cessations of labor that triggered GSB’s duty to file a stop notice in order to secure

payment under Safeco’s payment bond. At a subsequent court trial on the contract

claims, GSB was awarded judgment against SJB, and Safeco was awarded judgment on

the interpleader action.

2
 GSB appeals the summary judgment ruling claiming (a) the trial court erroneously

overruled its objections to evidentiary matters presented in support of Safeco’s summary

judgment, and (b) the court erred in finding the action was untimely. We affirm.

BACKGROUND

From the pleadings we discern the following facts:

EMWD hired SJB as general contractor on “Specification No. 934W, Nuevo

Road/I-215 Water Transmission Pipeline Project, Perris California” (the Project). On

April 26, 2006, SJB entered into a subcontract agreement with GSB to perform the

tunneling portion of the project. For these services, SJB originally agreed to pay GSB

$565,150. After GSB agreed to provide additional services, SJB agreed to pay an

additional $27,912.20, for a total project price of $593,062.20 On April 18, 2006,

Safeco executed a payment bond for the Project. GSB completed its portion of the work

on the Project in September 2006.

Prior to completion of the Project, there were three cessations of labor which

exceeded 30 days: the first occurred between November 11, 2006, and December 17,

2006; the second occurred between April 4, 2007 and May 20, 2007, and the third

occurred between May 20, 2007, and October 4, 2007. The overall Project was

completed in 2008. GSB alleged that it filed a stop notice with EMWD on January 2,

2008, in the amount of $577,038.37.1 On March 24, 2008, SJB informed Safeco by letter

1
The exhibits included in the record pertaining to the summary judgment motion
do not include a stop notice filed by GSB. However, in the Joint Statement of Stipulated
Facts and Evidence submitted after the summary judgment motion in connection with the
3
that it could not meet its obligations. Safeco sent a letter to EMWD on March 27, 2008,

regarding SJB’s default.

In July 2008, GSB filed suit against SJB for nonpayment under the contract, as

well as in common counts. The fourth cause of action included EMWD as a defendant

for Enforcement of Stop Notice, and the fifth cause of action named Safeco in a claim on

the Stop Notice Release Bond and Payment Bond. In October 2008, EMWD recorded a

Notice of Acceptance signifying completion of the Project.

On August 27, 2008, EMWD answered the complaint and filed a cross-complaint

in interpleader. EMWD tendered the amount of $86,444.59, which it had withheld from

SJB pursuant to the stop notice. EMWD was subsequently dismissed from the action.

SJB’s default was entered June 8, 2009.2

On December 22, 2010, Safeco filed a motion for summary judgment as to the

fifth cause of action relating to the payment bond. In support of its motion, Safeco

submitted a declaration of one of its counsel, Brian Lang, as well as a declaration

regarding the summary of voluminous documents received during discovery from

pending court trial, the parties stipulated that “[o]n or about January 2, 2008, GSB filed a
stop notice with EMWD in the amount of $577,038.37 in connection with the Project.”
2
The record contains EMWD’s request to enter SJB’s default as to the cross-
complaint, however the Register of Actions reflects that GSB requested entry of SJB’s
default on the original complaint on that date. On August 10, 2011, following a prove-up
hearing on SJB’s default, judgment was entered in GSB’s favor in the amount of
$1,467,734.48. Since SJB never made a general appearance in the action, and no one
disputed that a default was entered as to SJB by plaintiff during the default prove up, we
assume that SJB’s default on GSB’s original complaint was duly entered. (Evid. Code, §
664.)
4
EMWD. Those documents related to the daily performance and non-performance of

work on the Project, including certified payroll reports, inspector’s reports, EMWD

safety inspection reports, and statement of non-performance. The motion was also based

on GSB’s responses to interrogatories propounded by Safeco, and EMWD’s response to

Safeco’s Request for Production of Documents.

In response to the motion, GSB generally objected to both declarations, citing

hearsay, lack of personal knowledge, opinion, speculation, and that the declarant was not

an expert. However, GSB did not dispute that there were cessations of labor, arguing

instead that the issue of cessation of labor is not relevant unless there has been no notice

of completion. Nor did GSB object to EMWD’s responses to the Request for Production

of Documents, by which Safeco obtained the documents summarized by Lang.

The trial court overruled GSB’s objections and granted Safeco’s motion for

summary judgment. Notice of Entry of the Order and Judgment on the Fifth Cause of

Action was filed on August 2, 2011. GSB filed notice of appeal from that order on

September 19, 2011.

The matter proceeded to court trial on the remaining causes of action based on

various stipulated facts and evidence. On the first three causes of action against SJB, the

court awarded GSB $577,038.37 under the contract, plus penalties pursuant to Business

and Professions Code section 7108.5 in the amount of $590,016.60, plus interest on

progress payments in the amount of $242, 981.62, plus penalties pursuant to Business and

Professions Code section 7107 in the amount of $50,863.50, plus interest on that sum in

5
the amount of $6,834.39, for a grand total of $1,467,734.38. On the fourth cause of

action for the right to the funds submitted by way of the interpleader, the court ruled that

Safeco was entitled to the interpleaded funds.

GSB appealed from the judgment in favor of Safeco on the Fourth Cause of

Action on January 6, 2012.

DISCUSSION

Although GSB filed notices of appeal from both the ruling on the summary

judgment motion and from the judgment on the Fourth Cause of Action in favor of

Safeco, the focus of its brief relates solely to the order granting summary judgment on the

Fifth Cause of Action. Because GSB has not provided any assignment of error or

authority to support a claim of error respecting the Fourth Cause of Action, we deem such

claims to have been abandoned. (Wall Street Network, Ltd. v. New York Times Co.

(2008) 164 Cal.App.4th 1171, 1177 [appellants forfeit or abandon contentions of error by

failing to raise or address the contentions in their briefs on appeal].)

1. The Court Did Not Abuse Its Discretion in Overruling GSB’s Evidentiary Objections

in Connection With the Summary Judgment Motion.

GSB argues that the trial court erred in overruling its objections to the declarations

of Bryan Lang, one of Safeco’s counsel, and the exhibits attached thereto. GSB argues

that the declarations and exhibits were inadmissible hearsay and unauthenticated,

requiring reversal of the summary judgment. We disagree.

6
 During summary judgment proceedings, GSB objected to the declarations of

Safeco’s counsel, Bryan Lang on the grounds of “Hearsay (Evid. Code Section 1200),

Lack of Personal Knowledge (Evid. Code Section 702), Opinion (Evid. Code Section

803), Speculation (Evid. Code Section 800), Irrelevant (Evid. Code sections 210, 350-

351); Not an Expert (Evid. Code Section 720).”3 The declarations, however, were

provided to summarize the exhibits and the document summary attached thereto.

The same rules of evidence that apply at trial also apply to the declarations

submitted in support of and in opposition to motions for summary judgment. (Bozzi v.

Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 761.) Declarations must show the

declarant’s personal knowledge and competency to testify, state facts and not just

conclusions, and not include inadmissible hearsay or opinion. (Ibid.)

We review the trial court’s evidentiary rulings on summary judgment for abuse of

discretion. (Park v. First American Title Co. (2011) 201 Cal.App.4th 1418, 1427, citing

Carnes v. Superior Court (2005) 126 Cal.App.4th 688, 694; see also DiCola v. White

Brothers Performance Products, Inc. (2008) 158 Cal.App.4th 666, 679.) As the party

challenging the court’s decision, it is plaintiff’s burden to establish such an abuse, which

we will find only if the trial court’s order exceeds the bounds of reason. (DiCola v. White

Brothers Performance Products, Inc., supra, 158 Cal.App.4th at p. 679.) On review, we

view the evidence in the light most favorable to plaintiff as the losing party and liberally

3
Of the 14 objections to Lang’s Declaration accompanying his Summary of
Voluminous EMWD Documents, No. 2-14 were identical in wording citing the grounds
set out in the text. Objection No. 1 was based only on Hearsay (Evid. Code, § 1200) and
Lack of Personal Knowledge. (Evid. Code, § 702.)
7
construe plaintiff’s evidentiary submissions while strictly scrutinizing defendant’s

evidence, in order to resolve any evidentiary doubts in plaintiff’s favor. (McDonald v.

Antelope Valley Community College Dist. (2008) 45 Cal.4th 88, 96-97.)

Code of Civil Procedure, section 437c, subdivision (b)(1), expressly provides that

a motion for summary judgment shall be supported by “affidavits, declarations,

admissions, answers to interrogatories, depositions, and matters of which judicial notice

shall or may be taken.” It further provides that the supporting papers shall include a

separate statement setting forth plainly and concisely all material facts which the moving

party contends are undisputed and that each of the material facts shall be followed by a

reference to the supporting evidence.

Code of Civil Procedure, section 437c, subdivision (b)(2), provides for an

opposition to the motion, which, where appropriate, shall consist of affidavits,

declarations, admission, answers to interrogatories, depositions, and matters of which

judicial notice shall or may be taken. Supporting and opposing affidavits or declarations

shall be made by any person on personal knowledge, shall set forth admissible evidence,

and shall show affirmatively that the affiant is competent to testify to the matters stated in

the affidavits or declarations. (Code Civ. Proc., § 437c, subd. (d).)

Ordinarily, declarations are considered “‘hearsay and are inadmissible at trial,

subject to specific statutory exceptions unless the parties stipulate to the admission of the

declarations or fail to enter a hearsay objection. [Citation.]’ [Citation.]” (Oiye v. Fox

(2012) 211 Cal.App.4th 1036, 1050.) By requiring parties to use affidavits and

8
declarations in connection with summary judgment motions, Code of Civil Procedure

section 437c, subdivision (b)(1), is a statutory exception to the hearsay rule.

Evidence Code section 1521 expressly permits the admission of secondary

evidence to prove the content of a writing except when a “genuine dispute exists

concerning material terms of the writing.” Section 1523, subdivision (d), of the Evidence

Code expressly permits oral testimony of the content of a writing if “the writing consists

of numerous accounts for other writings that cannot be examined in court without great

loss of time, and the evidence sought from them is only the general result of the whole.”

(See Heaps v. Heaps (2004) 124 Cal.App.4th 286, 294.) The declaration of counsel was

properly considered by the court where the summary motion procedure authorizes the

trial court to rely upon declarations. (Code Civ. Proc. § 437c, subd. (b)(1).)

The statutory provisions adequately address the hearsay objections to Lang’s

declarations. The objection based on Lang’s personal knowledge was properly overruled

because the declaration states that Lang had personal knowledge of the matters that had

been produced in response to Safeco’s discovery requests. GSB’s contention that Lang

was not present when EMWD turned over the documents is not well taken, where Lang’s

declaration did not represent he was present, and where GSB’s own counsel indicated

that he was present at the time of the document production. None of the objections claim

the exhibits were not the same exhibits turned over during the production of documents,

or that they were not properly authenticated.

9
 As to the documentary evidence attached to Lang’s declaration, Safeco included a

copy of its Request for Production of Documents, which was propounded to EMWD, and

EMWD’s Responses to Demand for Documents. EMWD’s Responses established the

foundation for the documents, including the contract, subcontract, payment bond,

certified payroll records, documents relating to cessations of labor, and the Notice of

Acceptance.

Although it objected to Lang’s declarations, GSB did not object to the EMWD’s

responses, the exhibits themselves, and it did not dispute the material terms of the

writings attached as exhibits. They were properly considered by the court in ruling on the

motion.4 In fact, in its opposing papers, and at the hearing on the motion, GSB did not

even dispute that there had been cessations of labor. It did not present declarations,

affidavits, depositions, or other evidence to contradict the assertion that there had been

three separate cessations of labor. Nor did GSB provide evidentiary support for its

assertion at the hearing on the motion that the cessations related to normal project

planning and execution. GSB’s hearsay objections were thus properly overruled.

Even if we were to find that the court improperly overruled GSB’s objections,

GSB has failed to establish prejudice. The party challenging the ruling must establish

prejudice. (Truong v. Glasser (2009) 181 Cal.App.4th 102, 119.) In this case, GSB

failed to produce any evidence to support its position on the existence of a material issue

4
At oral argument, GSB argued that it did object to the exhibits themselves, but a
careful review of the objections reveals a line-by-line challenge to the declarant’s
statements, and did not dispute the content of the exhibits themselves.
10
of fact for which a trial was required. Code of Civil Procedure, section 437c, subdivision

(b)(3), provides, “The opposition papers shall include a separate statement that responds

to each of the material facts contended by the moving party to be undisputed, indicating

whether the opposing party agrees or disagrees that those facts are undisputed. The

statement also shall set forth plainly and concisely any other material facts that the

opposing party contends are disputed. Each material fact contended by the opposing

party to be disputed shall be followed by a reference to the supporting evidence. Failure

to comply with this requirement of a separate statement may constitute a sufficient

ground, in the court’s discretion, for granting the motion.” [Italics added.]

GSB provided no reference to supporting evidence as to each material fact it

contended was disputed. Nor did it submit evidence to contradict the showing of Safeco,

or to support the existence of a factual dispute as to whether there were three separate

cessations of labor. Thus, a favorable ruling on the evidentiary objections would not

have changed the outcome; GSB did not show by “specific facts” that the requisite triable

issue of material fact was present. (Tibor v. Superior Court (1997) 52 Cal.App.4th 1359,

1368, 1369.) Instead, it merely provided a different legal interpretation of what triggered

the duty to file its stop notice, an issue of law. (See Twaite v. Allstate Ins. Co. (1989) 216

Cal.App.3d 239, 254 [where plaintiff concluded counter-affidavits were unnecessary, the

issue was a matter of law].)

Notwithstanding GSB’s objections, there was no dispute as to whether there had

been cessations of labor, so there was no triable issue as to that material fact; there was

11
only a question of law as to whether GSB’s stop notice was timely. The purpose of the

law of summary judgment is to provide courts with a mechanism to cut through the

parties’ pleadings in order to determine whether, despite their allegations, trial is in fact

necessary to resolve their dispute. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th

826, 843.)

In the absence of a triable issue on this factual issue, summary judgment was

proper. (Bartholomew v. SeaRiver Maritime, Inc., (2011) 193 Cal.App.4th 699, 716; see

also, Johnson v. United Cerebral Palsy/Spastic Children’s Foundation of Los Angeles

and Ventura Counties (2009) 173 Cal.App.4th 740, 754, citing Western Mutual Ins. Co.

v. Yamamoto (1994) 29 Cal.App.4th 1474, 1481 [where there is no genuine issue of

material fact, the appellate court should affirm the judgment of the trial court if it is

correct on any theory of law applicable to the case].)

2. The Court Correctly Determined that GSB’s Action on the Payment Bond Was

Untimely.

GSB argues its action on the payment bond was timely because the limitations

period began to run from the date the Notice of Acceptance was record pursuant to

former Civil Code sections 3249 and 3184, subdivision (a). We disagree.

Former Civil Code section 3249 (now Civil Code section 9558), provided that a

suit against a surety on a payment bond may be “brought at any time after the claimant

has furnished the last of the labor or materials, or both, but must be commenced before

the expiration of six months after the period in which stop notices may be filed as

12
provided in Section 3184. Former Civil Code section 3184,5 in turn, provided that, “To

be effective, any stop notice . . . must be filed before the expiration of: [¶] (a) Thirty

days after the recording of a notice of completion (sometimes referred to in public works

as a notice of acceptance) or notice of cessation, if such notice is recorded. [¶] (b) If no

notice of completion or notice of cessation is recorded, 90 days after completion or

cessation.” [Italics added.]

We have italicized the word “after” in quoting the statutory provision because in

an unbroken, albeit older line of cases dealing with similar claims, it has been held that a

claim of lien filed before the notice of completion (or acceptance) has been recorded is

premature and ineffectual. (Davis v. MacDonough (1895) 109 Cal. 547, 550 [claim of

lien filed before completion of building provided no right of recovery]; Gross v.

Hazeltine (1930) 107 Cal.App. 446, 455; F.E. McCreary v. Toronto Midway Oil Co., Ltd.

(1918) 38 Cal.App. 17, 20 [premature claim of lien conferred no rights].)

These cases are instructive because the language of the claim-of-lien statutes at

issue used the same language as the statutory scheme governing stop notices, requiring

the claims of lien to be filed after the completion of the improvement. The only case we

have found involving a premature stop notice did not address these authorities, and

ignored the plain language of the statute. (See Central Industrial Engineering Co., Inc. v.

5
Civil Code sections 3249 and 3184 were repealed by Senate Bill 189 (Stats.
2010, ch. 697, §16). The provisions governing the effectiveness of a stop payment notice
are currently found in Civil Code, § 9356, while the time for commencing an action to
enforce the liability on a payment bond are currently found in Civil Code, section 9558.

13
Strauss Construction Co., Inc. (1979) 98 Cal.App.3d 460, 464-465.) This authority has

never been cited in subsequent decisions, and was not cited by GSB, which made no

argument addressing premature notices. According to the plain language of the statute,

the stop notice in this case was premature, so we must determine when the work of

improvement was “completed.”

“Completion,” as that term is used for works of improvement, was defined by

former Civil Code section 3086.6 With respect to works of improvement subject to

acceptance by any public entity, former Civil Code section 3086 provided that “the

completion of such work of improvement shall be deemed to be the date of such

acceptance; provided, however, that, except as to contracts awarded under the State

Contract Act, Chapter 3 (commencing with Section 14250), Part 5, Division 3, Title 2 of

the Government Code,[7] a cessation of labor on any public work for a continuous period

of 30 days shall be a completion thereof.”

Completion of work on the contract is not the “cessation of labor” referred to in

section 3086. (W.F. Hayward v. Transamerica Ins. Co. (1993) 16 Cal.App.4th 1101,

1109 (Hayward), citing Krueger Brothers Builders, Inc. v. San Francisco Housing

Authority (1988) 198 Cal.App.3d 1, 7.) A “cessation” is “a complete work stoppage” in

which “work by all trades has ceased on the project.” (Hayward, at p. 1110.) Where no

notice of completion is filed, the cessation of labor for more than 30 days triggers the

6
Currently, Civil Code section 8180 defines when a work of improvement is
completed.
7
That section was also repealed. See Public Contract Code, § 10100.
14
duty to file a stop notice. (Former Civ. Code, § 3184, subd. (b).) A notice of completion

(or acceptance), tardily filed, is not the equivalent of completion within the meaning of

the statute. (C.Ganahl Lumber Co. v. Thompson (1928) 205 Cal.354, 356-357.)

GSB observes that in a public works context, completion occurs upon acceptance

of the project by the awarding body. (Former Civ. Code, § 3086; Dept. of Indus.

Relations v. Fid. Roof Co. (1997) 60 Cal.App.4th 411, 418.) If so, GSB failed to file a

timely stop notice within 30 days after the notice of acceptance. However, if there was a

30-day cessation of labor within the meaning of former sections 3086, then that work

stoppage was a “completion” pursuant to sections 3086 and 3184, and commenced the

running of the stop notice period. (Hayward, supra, 16 Cal.App.4th at p. 1108, 1110.)

This construction of the statutory language is of longstanding. (See Robison v. Mitchel

(1911) 159 Cal. 581, 590-591 [where there was cessation from labor upon an unfinished

contract, even though labor on the building continued, there was a constructive

completion which required the filing of lien claims after 30 days].)

GSB also argues that subdivision (a) of former Civil Code section 3184 provides

that the recordation of the Notice of Acceptance triggers the time limit, and that EMWD

recorded a Notice of Acceptance respecting the project after GSB had filed its lawsuit.

The dissent agrees with this reasoning. However, this argument fails to take into account

the plain language of section 3184 requiring that the stop notice be filed after the Notice

of Acceptance has been recorded. As we have pointed out, the stop notice in the present

case was premature and thus ineffectual. If the Notice of Acceptance triggered the

15
commencement of the time limit for filing the stop notice, no stop notice was filed after

that event.

Finally, GSB argues that to find that the cessation of labor constituted a

completion would require subcontractors and suppliers to monitor work almost daily and

that it ignores the realities of phased construction work, which are frequently halted while

plans are changed, easements are perfected, or permits are obtained. Unfortunately, GSB

failed to present any competent evidence (declarations, exhibits, etc.) supporting an

assertion that the cessations of labor were excused in this manner. Further, GSB’s

responses to interrogatories acknowledged that its last day of work on the project

“Sometime in late September of 2006; believed to be the beginning of the week of the

25th.”

In order to defeat the summary judgment motion, it was incumbent upon GSB to

establish either that the recording of the Notice of Acceptance was the sole triggering

event, or that there had been no cessation of labor. Otherwise, the cessations of labor

constituted “completion” pursuant to the definition in former Civil Code section 3086 and

commenced the period for filing stop notices regarding public works (Hayward, supra,

16 Cal.App.4th at p.1110), and the tardily recorded Notice of Acceptance did not re-

commence it.

Additionally, we doubt that former Civil Code section 3184 is susceptible to an

interpretation that a Notice of Acceptance recorded after GSB filed its stop notice—and

its lawsuit—extends the limitation period. The terms of former Civil Code section 3184

16
require a stop notice to be filed 30 days after the recording of a notice of completion (or

acceptance), unless no such notice is recorded. By its own argument, no Notice of

Acceptance had been filed before GSB filed its stop notice or the lawsuit, so GSB did not

comply with former Civil Code section 3184 by filing the stop notice within 30 days after

the Notice of Acceptance. Additionally, GSB never established it had actually filed a

stop notice, so any argument relating to its compliance with former Civil Code section

3184 is purely academic, and does not create a triable issue of material fact.8

The exhibits submitted in support of the summary judgment motion established

three separate and distinct periods in which all work stopped on the Project. These

periods occurred between 2006 (after GSB completed its portion of the work) and 2007.

GSB did not provide any counter-evidence to show that work had not stopped, so there

was no triable issue of material fact as to whether a cessation of labor had occurred. For

this reason, the trial court concluded it had to accept the timeline presented in Safeco’s

papers, and found the action was time barred.

Notwithstanding GSB’s objections, it was undisputed that three separate

cessations of labor, for more than 30 days each, occurred after GSB had completed its

portion of the work, and more than a year before the Notice of Acceptance was accepted.

In this respect, the present case is governed by the holding of Hayward, supra, 16

Cal.App.4th 1101, on which the trial court relied. The cessations constituted

“completion” under the statute triggering GSB’s time limit within which to file a stop

8
Although the complaint alleges—on information and belief—that a preliminary
twenty-day notice was filed by GSB, it never presented evidence of a stop notice.
17
notice or bring its lawsuit. The fact that EMWD “tardily” filed a Notice of Acceptance

did not extend the limitations period.

DISPOSITION

The judgment is affirmed. Safeco is entitled to costs on appeal.

CERTIFIED FOR PUBLICATION
RAMIREZ
P. J.

I concur:

CODRINGTON
J.

18
[Golden State Boring & Pipe Jacking, Inc. v. Eastern Municipal Water District,

E054618]

King, J., Dissenting.

I disagree with the majority on two accounts. First, I believe the action was filed

in a timely manner under Civil Code section 3184, subdivision (a).1 Second, even if I

was to conclude that the relevant inquiry as to the beginning of the limitations period was

the “cessation of work for 30 or more days,” I would find that defendant, Eastern

Municipal Water District (EMWD), on this issue failed to submit admissible evidence so

as to meet its initial burden of production.

A. The Action Was Timely Filed

A simple reading of the relevant statutes shows that the present matter was timely

filed and that the beginning of the limitations period was the date of the recordation of the

notice of completion, which was October 9, 2008. The pertinent statutes provide:

Section 3294

“Suit against the surety or sureties on the payment bond may be brought by any

claimant, or his assigns, at any time after the claimant has furnished the last of the labor

or materials, or both, but must be commenced before the expiration of six months after

the period in which stop notices may be filed as provided in Section 3184.”

1
All further statutory references are to the Civil Code unless otherwise indicated.
1
 Section 3184

“To be effective, any stop notice pursuant to this chapter must be served before the

expiration of:

“(a) Thirty days after the recording of a notice of completion (sometimes referred

to in public works as a notice of acceptance) or notice of cessation, if such notice is

recorded.

“(b) If no notice of completion or notice of cessation is recorded, 90 days after

completion or cessation.”

Section 3086

“Completion” means, in the case of any work of improvement other than a public

work, actual completion of the work of improvement. Any of the following shall be

deemed equivalent to a completion:

“(a) The occupation or use of a work of improvement by the owner, or his agent,

accompanied by cessation of labor thereon.

“(b) The acceptance by the owner, or his agent, of the work of improvement.

“(c) After the commencement of a work of improvement, a cessation of labor

thereon for a continuous period of 60 days, or a cessation of labor thereon for a

continuous period of 30 days or more if the owner files for record a notice of cessation.

“If the work of improvement is subject to acceptance by any public entity, the

completion of such work of improvement shall be deemed to be the date of such

acceptance; provided, however, that, except as to contracts awarded under the State

2
Contract Act . . . a cessation of labor on any public work for a continuous period of 30

days shall be a completion thereof.”

In viewing the statutes together, a suit against a surety must be filed within six

months of the time for the filing of a stop notice. Under section 3184, the stop notice

must be filed within 30 days of the recordation of the notice of completion or notice of

cessation. In a case in which neither a notice of completion or notice of cessation is

recorded, the stop notice must be filed within 90 days of the actual cessation or

completion of the work. In the absence of a recording of either of these notices, a public

work of improvement is deemed completed when there has been a cessation of labor for a

continuous period of 30 days.

Here, the notice of completion was recorded on October 9, 2008. Plaintiff, Golden

State Boring & Pipe Jacking, Inc. (GSB), had until May 9, 2009, in which to file its

action. The action was filed on July 3, 2008, more than 10 months before the running of

the limitations period. Thus, it was timely filed under section 3184, subdivision (a). As

such, we never get to the issue of whether there was a “cessation of labor” for a period of

30 days or more.2

Both EMWD and the majority rely almost exclusively on W. F. Hayward Co. v.

Transamerica Ins. Co. (1993) 16 Cal.App.4th 1101 for the proposition that GSB did not

timely file its action after there had been a cessation of work longer than 30 days. Both

2
Section 3184 does not say that the limitations period starts at the filing of the
notice of completion or 90 days after a cessation of labor, “whichever occurs first.” The
statute plainly states that we are concerned with a cessation of labor only when there has
been no recordation of a notice of completion or notice of cessation.
3
EMWD and the majority ignore, however, the facts and the basic premise upon which the

decision was based.

In W. F. Hayward Co. v. Transamerica Ins. Co., supra, 16 Cal.App.4th 1101,

Cates Construction, Inc. (Cates) contracted with the County of Los Angeles (the County)

to construct the Lost Hills sheriff’s station. The plaintiff contracted with Cates to provide

certain labor and materials for the job. A dispute arose between Cates and the County;

the County notified Cates that it was suspended from the job. Thereafter Cates and the

County entered into an agreement titled “Termination for Convenience Agreement and

Mutual Release,” wherein Cates was relieved from performing the job and the County

released Cates from any liability. Pursuant to the agreement, all of the contracts entered

into between Cates and its subcontractors were assigned to the County. Thereafter, the

plaintiff contacted the County seeking to enter into a new contract to perform work. The

County refused, indicating that it had been assigned the original contract. The job was

eventually finished using the original subcontractors, including the plaintiff. Four

months later, the plaintiff sued the County, Cates, and Cates’s surety, Transamerica

Insurance Co. The County moved for summary judgment based on the fact that Cates

was suspended from the job on June 5 and that there was a cessation of work from that

date to August 3 (a period of almost 60 days). (Id. at pp. 1104-1105.) Based on the

termination of the contract with Cates and the cessation of work, the County argued that

the last day in which the plaintiff could file its lawsuit was April 5, 1991, thus making the

July 17, 1991, filing untimely. (Id. at pp. 1108-1109.) The appellate court agreed,

4
finding that there was a cessation of work for a continuous 30-day period and, as such, it

constituted “completion” under section 3086. (Id. at p. 1110.)

Of importance to that case, however, was that there was no notice of completion

recorded. As pointed out by the court at the beginning of its discussion, “the issue here is

whether the complaint was filed within six months after the period in which appellant

could file stop notices. The parties’ dispute centers on what constitutes the period for

filing stop notices. [¶] Section 3184, referenced in section 3249, provides that any stop

notice ‘must be served before the expiration of: [¶] (a) Thirty days after the recording of

a notice of completion (sometimes referred to in public works as a notice of acceptance)

or notice of cessation, if such notice is recorded. [¶] (b) If no notice of completion or

notice of cessation is recorded, 90 days after completion or cessation.’ With regard to

Cates’s work on the project, the parties do not dispute that neither a notice of completion

nor a notice of cessation was filed or recorded. Subdivision (b) is therefore the

applicable portion of section 3184. Application of this provision presents the question:

When was there a ‘completion or cessation.’? [¶] Because it provides a definition of

‘completion,’ section 3086 comes into play.” (W. F. Hayward Co. v. Transamerica Ins.

Co., supra, 16 Cal.App.4th at p. 1106, fns. omitted, italics added.)

As is evident from this discussion in W. F. Hayward Co., section 3086 and the

cessation of work concept comes into play only when there has been no recordation of a

notice of completion or notice of cessation. Here, a notice of completion was recorded;

5
we need go no further. GSB’s action was timely filed based on the recordation of the

notice of completion.

B. EMWD Failed to Submit Admissible Evidence Relative to There Being a Continuous

30-day Cessation of Labor

EMWD’s entitlement to summary judgment was premised on the notion that

GSB’s filing of its complaint was untimely. EMWD’s argument is based on the “fact”

that there were three cessations of work for 30 days or more, each of which it contends,

commenced the limitations period. To this end, EMWD submitted the following

undisputed facts and supporting evidence:

“5. There was a continuous 30-day cessation of labor on the Project between the

dates of November 11, 2006 and December 17, 2006. [¶] Summary of Voluminous

EMWD Records at ¶8, supporting documents attached as Exhibits 10 and 11[.]

“6. There was a continuous 30-day cessation of labor on the Project between the

dates of April 4, 2007 and May 20, 2007. [¶] Summary of Voluminous EMWD

Records at ¶9, supporting documents attached as Exhibits 10 and 12[.]

“7. There was a continuous 30-day cessation of labor on the Project between the

dates of May 20, 2007 and October 4, 2007. [¶] Summary of Voluminous EMWD

Records at ¶10, supporting documents attached as Exhibits 10 and 13[.]”

The “Summary of Voluminous EMWD Records . . .” was prepared by Bryan

Lang, an attorney representing the moving party. In his one and one-half page

declaration, he avers that he has “personal knowledge of the foregoing, except as to those

6
matters stated on information and belief . . . .” He indicates that he reviewed the

documents produced by EMWD to defendant, Safeco Insurance Company’s (Safeco),

request to produce documents and, based on that review, compiled an excel spreadsheet

which tracked the dates of work on the project.3 GSB objected to this declaration and

summary of records on the grounds of hearsay, lack of personal knowledge, improper

opinion evidence, and speculation.

GSB’s objections were meritorious and should have been sustained.4 If the

objections had been properly sustained, EMWD would have had no evidence as to

undisputed facts Nos. 5, 6, and 7. As such, EMWD would not have met its initial burden

of production as to the three cessations of work; its motion therefore would have been

denied.

On a motion for summary judgment “[t]he moving party must ‘support[]’ the

‘motion’ with evidence including ‘affidavits, declarations, admissions, answers to

interrogatories, depositions, and matters of which judicial notice’. . . may ‘be taken.’

[Citation.]” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) “Supporting

and opposing affidavits or declarations shall be made by any person on personal

knowledge, shall set forth admissible evidence, and shall show affirmatively that the

3
“Declarations based on information and belief are insufficient to satisfy the
burden of . . . the moving . . . party on a motion for summary judgment . . . .” (Lopez v.
University Partners (1997) 54 Cal.App.4th 1117, 1124.)
4
Whether employing an abuse of discretion standard or a de novo standard, the
trial court erred in overruling GSB’s objections to EMWD’s evidence. (See Howard
Entertainment, Inc. v. Kudrow (2012) 208 Cal.App.4th 1102, 1114.)
7
affiant is competent to testify to the matters stated in the affidavits or declarations. . . .”

(Code Civ. Proc., § 437c, subd. (d), italics added; Regents of University of California v.

Superior Court (1996) 41 Cal.App.4th 1040, 1044.) “The affidavits must cite evidentiary

facts, not legal conclusions or ‘ultimate’ facts. [Citation.] [¶] Matters which would be

excluded under the rules of evidence if proffered by a witness in a trial as hearsay,

conclusions or impermissible opinions, must be disregarded in supporting affidavits.”

(Hayman v. Block (1986) 176 Cal.App.3d 629, 639.)

Here, both EMWD and the majority rely on Evidence Code section 1523,

subdivision (d), for the proposition that the trial court could consider Lang’s summary of

EMWD’s records, along with its attachments, as substantive evidence of cessations of

work during the project.5

As provided by Evidence Code section 1523, subdivision (d): “Oral testimony of

the content of a writing is not made inadmissible by subdivision (a) if the writing consists

of numerous accounts or other writings that cannot be examined in court without great

loss of time, and the evidence sought from them is only the general result of the whole.”

Evidence Code section 1523 is a best evidence rule allowing secondary evidence to prove

the content of a writing. “Secondary evidence, of course, must comply with the rules

5
As stated by the majority: “Section 1523, subdivision (d), of the Evidence Code
expressly permits oral testimony of the content of a writing if ‘the writing consists of
numerous accounts for other writings that cannot be examined in court without great loss
of time, and the evidence sought from them is only the general result of the whole.’
[Citation.] The declaration of counsel was properly considered by the court where the
summary motion procedure authorizes the trial court to rely upon declarations.” (Maj.
opn. ante, at p. 9.)
8
governing the admissibility of evidence generally, including relevance [citation] and the

hearsay rule [citation].” (Dart Industries, Inc. v. Commercial Union Ins. Co. (2002) 28

Cal.4th 1059, 1070, fn. 2.)

Here, there was no showing that the documents reviewed for purposes of putting

together the Evidence Code section 1523 record summary were otherwise admissible.

The content of the documents reviewed was submitted for the truth of the information

contained therein (days in which there was a cessation of work on the project) and, as

such, were inadmissible hearsay. There was no foundation that the records reviewed

were business records of EMWD or official records. (See Evid. Code, §§ 1271, 1280;

see also Evid. Code, §§ 1560, 1561.)

Specifically, the documents reviewed for purposes of the summary were produced

by EMWD to Safeco, pursuant to a request to produce documents. The 24 requests

sought “[a]ny and all” documents in the possession of EMWD, which were responsive to

the individual requests. The requests were not limited to “business records” of EMWD.

Further, the request to produce documents did not ask that any custodian of records

submit a verification coinciding with the foundational requirements of Evidence Code

section 1271 or 1280. The request merely sought “a verification executed under penalty

of perjury that the copies provided are adequate and true and complete copies of the

materials in question.”

In looking to the documents in our record which were reviewed and attached to

Lang’s summary, it is evident that very few of the documents reviewed could be

9
characterized as “business records” of EMWD. Of the 80 pages that are attached to the

declaration and spreadsheet, 18 pages would appear to be EMWD documents. The

remaining 62 pages are documents of SJ Burkhardt, Inc., SJ & B Group, Inc., and Cozad

& Fox, Inc. In the absence of foundation, none of these documents can properly serve as

the basis for Lang’s summary of records.

In discussing Evidence Code section 1509, the predecessor to Evidence Code

section 1523, the court in Vanguard Recording Society, Inc. v. Fantasy Records, Inc.

(1972) 24 Cal.App.3d 410, 418-419, stated: “Pursuant to Evidence Code, section 1509, a

summary of business records consisting of numerous accounts or other writings that

cannot be examined in court without great loss of time, is admissible in evidence upon a

showing that the actual business records are entitled to admission in evidence . . . .” “A

person who directs or supervises the preparation of business records may testify to their

contents.” (Kirby v. Alcoholic Bev. etc. Appeals Bd. (1970) 8 Cal.App.3d 1009, 1017.)

Pajaro Valley Water Management Agency v. McGrath (2005) 128 Cal.App.4th

1093 is perhaps most instructive. There, the plaintiff sued the defendant for unpaid

charges for water extracted from the defendant’s well. On its motion for summary

judgment, the plaintiff submitted a declaration of its general manager which averred that

the general manager had reviewed the various bills sent to the defendant over a three-year

period of time and that the defendant owed $33,277.18. In the declaration, the general

manager indicated that “‘[t]he computation is attached as Exhibit B.’ . . . Exhibit B

consist[ed] of a table summarizing the [plaintiff’s] claimed damages . . . .” (Id. at p.

10
1106.) The defendant objected to the declaration and exhibit on numerous grounds,

including lack of foundation in personal knowledge, hearsay, and lack of authentication.

The trial court overruled the objections, stating that the plaintiff is entitled “‘to provide a

summary calculation of damages to simplify the presentation.’” (Id. at p. 1107.)

The appellate court disagreed. “[T]he McNiesh declaration explicitly describes

the ‘amount owed’ (i.e., the matter asserted) as being derived from yet a third level of

documentary hearsay, the ‘bills’ containing the ‘amounts’ that were ‘reflected in’ the

final figure. The original bills might be admissible over a hearsy objection as business

records (Evid. Code, § 1271) or perhaps official records (Evid. Code, § 1280), but to

establish either exception would require a showing of the time and circumstances of the

documents’ creation. (Evid. Code, §§ 1271, 1280.) No such showing was attempted. . . .

[¶] In overruling [the defendant’s] objections, the trial court cited Evidence Code section

1521 . . . while alluding to unspecified hearsay exceptions. [Evidence Code s]ection

1521 permits the introduction of ‘otherwise admissible secondary evidence’ to prove the

contents of a writing. It does not excuse the proponent from complying with other rules

of evidence, most notably, the hearsay rule. [Citation.] As applicable here, [Evidence

Code] section 1521 means only that the [plaintiff] could introduce secondary evidence to

establish the contents of bills if (1) the contents themselves were admissible, and (2) the

secondary evidence was ‘otherwise admissible.’ [Citation.] Here the contents of the bills

were hearsay. In the absence of a showing that they came within an exception, secondary

evidence of their contents was no more admissible than the bills themselves, which is to

11
say, not at all. [¶] . . . If [the summary] is offered to prove the actual values on which a

party’s damages calculation rests, the summary is hearsay and must, on proper objection,

be brought within an exception or excluded from evidence. Since the [plaintiff] failed to

do this here, [the defendant’s] hearsay objection should have been sustained.” (Parajo

Valley Water Management Agency v. McGrath, supra, 128 Cal.App.4th at pp. 1107-

1108; see also Prato-Morrison v. Doe (2002) 103 Cal.App.4th 222, 229-230.)

Here, just as in Pajaro Valley Water Management Agency v. McGrath, the

documents relied upon by Lang were hearsay for which no foundation was laid. As a

result, his record summary was inadmissible.

In the absence of Lang’s summary there was no evidence to support the “fact” that

there were cessations in work. Because of this, EMWD failed to meet its initial burden of

production and the motion should have been denied.

KING
J.

12