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Bay Cities Paving & Grading, Inc. v. Hensel Phelps Construction Co.
Citations: 56 Cal. App. 3d 361; 128 Cal. Rptr. 632; 1976 Cal. App. LEXIS 1359Docket: Civ. 36921
Court: California Court of Appeal; March 19, 1976; California; State Appellate Court
Bay Cities Paving and Grading, Inc. appealed a judgment against Hensel Phelps Construction Company, following their bid submissions for excavation and asphalt paving subcontracts for a BART station. After being informed that its excavation bid was too high, Bay Cities reduced its paving bid and was designated as the subcontractor for paving. Hensel Phelps submitted its bid to BART, listing both itself and Bay Cities as subcontractors for the respective work. Upon award of the contract, Bay Cities claimed it was the designated subcontractor for both tasks and sought a new agreement for excavation at a different price. Hensel Phelps maintained it was responsible for excavation and declined Bay Cities' offer, subsequently hiring another company for that work. Bay Cities refused a written subcontract for paving and, without opposition, allowed BART to substitute another subcontractor for paving. Bay Cities subsequently sued for breach of contract and alleged violations of the Subletting and Subcontracting Fair Practices Act (the Act), arguing that Hensel Phelps improperly listed subcontractors without specifying individual responsibilities. The Act aims to prevent bid shopping and requires prime contractors to clearly designate subcontractors for specific work portions. It prohibits substitutions post-award without the contracting agency's consent, designed to protect the original subcontractor from being replaced. The court ultimately found that Hensel Phelps did not violate the Act's provisions regarding subcontractor designation. Respondent's designation of both itself and appellant on the same line in the subcontractors' listing undermined the act's intent, which aims to prevent unfair practices in bidding. Consequently, the trial court's finding that respondent did not violate the act was incorrect. Appellant argued that the trial court erred in ruling that it lacked a private right of action under the act, which does not explicitly provide for such rights. However, violations of statutes promoting public policy can be actionable by any affected party. The act's purpose is to protect the public and subcontractors from unfair bidding practices, and recognizing a cause of action for damages supports this goal. While prior cases established that violations like substituting subcontractors without proper permission can lead to recovery, in this instance, appellant was not barred from performing its subcontract. Appellant was designated for paving but refused to proceed without also being awarded excavation work, thus failing to demonstrate any loss of benefit. Moreover, appellant lacked standing to contest the subcontracting of excavation work since it was not designated to perform it. The court affirmed the judgment in favor of the respondent.