Plaintiff corporation appealed from the decision

Plaintiff corporation appealed from the decision of the Superior Court of Monterey County Superior Court (California), which granted summary judgment in favor of defendant construction company in plaintiff’s breach of contract action.

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Overview

Plaintiff corporation filed suit to recover the amounts defendant construction company deducted from its final payment for the charges it incurred to repair the steel supplied by plaintiff, which had been damaged by the fire at the construction site. Defendant filed a motion for summary judgment, arguing that the agreement required plaintiff to bear the risk of loss for damages during the course of construction not the fault of defendant. The trial court granted defendant’s motion for summary judgment. On appeal, the court reversed. The court held that the agreement only indemnified the owner of the property upon which the building was being constructed for claims by third parties. Defendant’s declaration failed to support its contention that defendant would offset payments related to the fire damage against the contract price. The court held that the risk of loss provision of Cal. U.C.C. § 2509(3) did not apply to the material delivered to defendant to construct the building. Defendant was not entitled to attorney’s fees under Cal. Civ. Code § 1717 because there had not been any recovery or final judgment.

Outcome

The court reversed the order of the trial court granting summary judgment in favor of defendant construction company and remanded because the contracts did not provide that plaintiff corporation should indemnify defendant, defendant did not establish that plaintiff assumed liability for the repairs, the California Uniform Commercial Code was not applicable, and defendant was not entitled to attorney’s fees on appeal.