Judge: Daniel S. Murphy, Case: 23STCV06015, Date: 2025-03-14 Tentative Ruling

Case Number: 23STCV06015    Hearing Date: March 14, 2025    Dept: 32

BACKGROUND

            On March 17, 2023, Plaintiff Accucon Corporation filed this action against Defendants P.T. Enterprises, LLC and Autobuilders General Contracting Services, Inc., asserting causes of action for (1) breach of contract, (2) good sold and delivered, (3) open book account, (4) account stated, (5) foreclosure of mechanics lien, and (6) recovery of statutory penalties. Plaintiff filed the operative First Amended Complaint on June 29, 2023.

            Defendant Autobuilders was the contractor on a certain project owned by Defendant P.T. Enterprises. Plaintiff contracted with Autobuilders to be the subcontractor on the project. This lawsuit arises from an alleged unpaid balance of over $500,000 owed to Plaintiff.

            On October 10, 2024, Defendant P.T. Enterprises filed the instant motion for summary judgment. Plaintiff filed its opposition on February 14, 2025. Defendant filed its reply on February 24, 2025.

LEGAL STANDARD

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Code of Civil Procedure section 437c, subdivision (c) “requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.” (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal. App. 3d 367, 381-382.)

As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

REQUEST FOR JUDICIAL NOTICE

            Defendant’s request for judicial notice of Exhibits 1-4 is granted.  

EVIDENTIARY OBJECTIONS

Plaintiff’s Objections

• Plaintiff’s objections are overruled.

Defendant’s Objections

• Objection Nos. 18-19 are sustained.
• Objection Nos. 1-17 are overruled.

DISCUSSION

I. Statutory Framework

Defendant P.T. Enterprises moves for summary judgment on the sole cause of action asserted against it—the fifth cause of action for foreclosure of mechanics lien. Specifically, Defendant argues that Plaintiff failed to timely record the mechanics lien.

The governing statute provides as follows:

“A claimant other than a direct contractor may not enforce a lien unless the claimant records a claim of lien within the following times:

(a) After the claimant ceases to provide work.

(b) Before the earlier of the following times:

(1) Ninety days after completion of the work of improvement.

(2) Thirty days after the owner records a notice of completion or cessation.”

(Civ. Code, § 8414.)

“Completion of a work of improvement” is defined as any one of the following:

(1) Actual completion of the work of improvement.

(2) Occupation or use by the owner accompanied by cessation of labor.

(3) Cessation of labor for a continuous period of 60 days.

(4) Recordation of a notice of cessation after cessation of labor for a continuous period of 30 days.

(Civ. Code, § 8180(a).)

Alternatively, “[n]otwithstanding subdivision (a), if a work of improvement is subject to acceptance by a public entity, completion occurs on acceptance.” (Civ. Code, § 8180(b).) 

II. Acceptance by a Public Entity  

Here, the City of Industry executed a Certificate of Completion, recorded on February 7, 2022, attesting that “the construction of the Improvements on the Project Site has been satisfactorily performed and completed.” (Def.’s RJN, Ex. 1.) By its own terms, the Certificate of Completion is “a conclusive determination of satisfactory completion of the construction of Improvements required with respect to the Project Site.” (Ibid.)

Defendant argues that this constitutes “acceptance by a public entity,” which in turn constitutes completion under Civil Code section 8180(b). Thus, according to Defendant, completion occurred on February 7, 2022. The mechanics lien attached to the complaint shows that it was recorded on December 15, 2022, more than ninety days past the purported date of completion. (See FAC, Ex. B; Civ. Code, § 8414(b)(1).) Therefore, Defendant argues that the claim is untimely as a matter of law.

However, Civil Code section 8180(b) only applies “if a work of improvement is subject to acceptance by a public entity.” According to Defendant’s cited authority, “the phrase ‘subject to acceptance’ . . . must find its base in some legislative enactment by the public authority.” (Sundt Corp. v. Dynamic Finance Corp. (In re El Dorado Improvement Corp.) (9th Cir. 2003) 335 F.3d 835, 839, quoting Howard A. Deason & Co. v. Costa Tierra, Ltd. (1969) 2 Cal.App.3d 742, 751.) This is “applicable only to a limited class of projects,” such as “public works, i.e., those built under contract with a public entity” or “civic improvements such as roads, sidewalks, gutters or sewers built under private contract in connection with otherwise private construction projects.” (Id. at p. 838.) Additionally, “the existence of some civic elements does not make the work of improvement as a whole subject to acceptance.” (Id. at p. 842, emphasis in original.) “State cases applying the public acceptance requirement have typically involved subdivision developments where the entire work of improvement was subject to public acceptance, not merely some portion of it.” (Ibid.)  

Here, the Certificate of Completion concerns “certain improvements defined [in the lease] as the Improvements on the Project Site.” (Def.’s RJN, Ex. 1, § C.) The term “Improvements” is not defined in the Certificate itself, and Defendant provides no other evidence of its meaning, such as the lease. There is no evidence that “the Improvements” referenced in the Certificate fall within the “limited class of projects” subject to acceptance by a public agency. (See Sundt Corp., supra, 335 F.3d at p. 838.) The mere fact that the City issued the Certificate is not sufficient, as a certificate of completion was also issued in Sundt Corp., yet the court concluded the “work of improvement was not subject to public acceptance.” (Id. at pp. 842-43.) There is also no evidence that “the Improvements” refers to the entire project or includes work that Plaintiff performed. 

As a result, the Certificate does not indisputably establish that completion occurred on February 7, 2022. This leaves open a triable issue that work on the project continued to a later date, possibly within 90 days of the mechanics lien.  

III. Evidence of Continued Work within 90 Days of Plaintiff’s Lien

            Defendant cites to certain inspection approvals and certificates of occupancy to show that work on the project stopped more than 90 days before the lien. (See Schlager Decl., Ex. 5-10.) While this evidence supports an inference that the work was completed, it does not preclude a triable issue.

Plaintiff’s opposing evidence suggests that work on the project continued past the dates of the inspection cards and certificates of occupancy. For example, Plaintiff “was called back to the Project site on February 25, 2022 to perform concrete work on the light pole foundation,” which is a type of work normally performed “early in construction.” (Karimi Decl. ¶¶ 7-8.) Plaintiff further avers that work on a project can proceed despite a certificate of occupancy and final inspection. (Id., ¶ 10.) Plaintiff denies ever being informed by Autobuilders (the general contractor) that work on the project had been completed. (Id., ¶ 12.) In fact, as recently as March 2023, Plaintiff received a notice from Autobuilders listing certain work that remained incomplete on the project. (Id., ¶ 14, Ex. 3.)

When interpreted in the light most favorable to Plaintiff, the evidence supports a triable issue that work on the project has not been completed, or was not completed until sometime within 90 days before Plaintiff recorded the mechanics lien. Therefore, it cannot be determined as a matter of law that the fifth cause of action is time-barred.

CONCLUSION