Homeowners association fails to pay on construction contract: Breach of contract: Fraud: Lost fees: Verdict: Punitive damages

Law Reporter, Apr 2003

ECC Constr. Inc. v. Oak Park Calabasas Homeowners Ass'n, Cal., Los Angeles County Super. Ct., No. LC 032986, May 31, 2002.

ECC Construction Inc. (ECC) contracted with the Oak Park Calabasas Homeowners Association (Oak Park) to perform repair work on sections of the condominium complex that had been damaged in an earthquake. Initially, ECC and Oak Park agreed that ECC would perform the work for $4 million. The agreement was subsequently amended to add an assignment of insurance proceeds and payment for additional work not related to earthquake damage, for an additional $2 million.

After ECC had worked for several months, Oak Park ceased making payments, claiming that ECC was submitting inadequate invoices. ECC continued to perform the work and finished the work a few months later.

ECC filed suit against Oak Park for breach of contract and fraud. Plaintiff alleged that defendant had never intended to honor the assignment of insurance proceeds. Defendant counterclaimed, alleging construction defects and fraudulent business practices.

A jury awarded about $7.1 million, including $268,000 in punitive damages. Defendant has filed an appeal.

Plaintiffs experts were Seb Ficcadenti, structural engineering, Irvine, Cal., and Farhat Siddiqi, soils engineering, Santa Ana, Cal.

Defendant's experts were James Howard, construction billing practices, Newport Beach, Cal.; Rodney Spears, structural engineering, Pasadena, Cal.; John Opsal, cost estimating, San Diego, Cal.; John McClung, standard of care, Valencia, Cal.; and Janet Hickenbottom, homeowners association procedures, Los Angeles, Cal.

Plaintiff's Counsel

*David R- Lira,

*Keith D. Griffin, and

Aaron B. Booth, all of Los Angeles, Cal.