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By: Owen T. Rooney
In Ponte v. County of Calaveras, 2017 Cal. App. Lexis 710 the Court of Appeal held the plaintiff’s complaint for breach of a verbal contract was not brought in subjective and objective good faith under CCP sect. 1038. After a land failure, plaintiff (an unlicensed contractor) alleged “it was agreed” with a County engineer that he could undertake the repairs since his equipment was already on site. The trial court granted the County’s summary judgment and then awarded the County $65,000 in attorney’s fees under CCP sect. 1038.
First, the Court noted that the public bidding statutes are to eliminate oral contracts and are for the benefit of the public and not to enrich bidders. Plaintiff tried to argue there was an “emergency” for him to undertake his work, but ultimately conceded that he could not cite a statute or ordinance covering emergency repair work. Thus, the Court rejected plaintiff’s promissory estoppel argument.
CCP sect. 1038 allows the recovery of attorney’s fees if an action against a public entity is not brought “with reasonable care and in the good faith belief that there was a justifiable controversy.” Thus, this section is akin to a statutory remedy for malicious prosecution. Case law has extended the application of sect. 1038 to actions not only filed, but also maintained in bad faith. Here, plaintiff simply argued that he wanted to “get paid.” Such a subjective desire did not meet the objective standard of reasonableness. The alleged contract did not contain any fixed terms nor was it submitted for County approval. Plaintiff could not cite any legal authority to support his claim of an emergency or that a member of the public can declare an emergency, which he argued would constitute an exception to the statutory bidding rules. Thus, “no reasonable attorney would believe there was a tenable basis for this lawsuit.” The Court affirmed and then awarded, as icing on the cake, the County’s fees on appeal.
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