Monday, April 11, 2011
Panel Declines to Revive Suit Over Queen Mary Improvement Project
By a MetNews Staff Writer
This district’s Court of Appeal has declined to revive a lawsuit against the city of Long Beach by a contractor seeking to recover for the cost of installing a fire protection sprinkler system on the Queen Mary.
In an unpublished decision Thursday, Div. Three concluded that Instant A & A Fire Protection Inc.’s claims, based on a contract the company had with the now-bankrupt lessor of the Queen Mary, were time-barred.
Instant entered into an agreement with RMS Foundation Inc., which leased the Queen Mary from the city, install a fire protection sprinkler system onboard the historic ship, now in use as a hotel. Work was performed pursuant to this agreement over the course of several months starting in 2007, but RMS never paid Instant any part of the $114,948.21 billed for these services.
In January 2008, shortly after work on the fire sprinkler system was completed, RMS filed for bankruptcy and listed Instant as a creditor, claiming the work performed was a leasehold improvement. Instant’s attorney later sent a letter to the city requesting payment and disputing that its services on the Queen Mary constituted a leasehold improvement. In this letter, Instant asserted that RMS was in breach the agreement as of Jan. 21, 2008.
Instant presented a government claim to the city for damages arising from a breach of the agreement in March 2009. On May 1, 2009, the city informed Instant that its claim was “rejected by operation of law” and the company had six months in which to file suit.
The company then filed a complaint alleging the city was a third-party beneficiary of the agreement with RMS and was liable to pay for Instant’s services. In the alternative, Instant sought to recover from the city under common counts arising from the performance of the agreement.
Los Angeles Superior Court Judge Terry A. Green sustained the city’s demurrer to the complaint without leave to amend and dismissed the case.
Writing for the appellate court, Justice Richard D. Aldrich explained that Instant had to present a timely written claim for damages to the city as a condition precedent to maintaining its action. Under Government Code Sec. 911.2, he said, Instant had one year after its causes of action accrued in which to bring suit.
Since Instant contended the agreement was breached on Jan. 21, 2008 but did not present its damage claim to the city until March 2009, Aldrich said it was plainly untimely.
He rejected Instant’s contention that the one-year claims period had been tolled until May 1, 2009, while the company and city attempted to resolve the dispute as to whether the fire protection sprinkler system was a leasehold improvement, since this argument was inconsistent with the exhibits attached to the complaint.
Aldrich further noted that Instant had presented its claim to the city in March 2009, “almost two months before the Company now alleges its claim against the City accrued.”
The justice similarly brushed off Instant’s argument that the city should be estopped from asserting the statute of limitations as a defense due to the absence of any allegation the city misled Instant about the need for, or advisability of, a claim.
He also expressed doubt that the city could be held liable under the alleged common counts since no statute imposes liability on a public entity for debts incurred by a lessee for improving property owned by and leased from the public entity.
Even if the causes of action based on common counts were viable theories of recovery, Aldrich reasoned they would be untimely since accrual of a cause of action for services arises upon performance.
As the complaint alleged the work on the fire protection sprinkler system was completed on Oct. 25, 2007, accrual of the common counts occurred on that date, and the claim submitted was not timely filed within one year, he said.
Presiding Justice Joan D. Klein and Justice Patti S. Kitching joined Aldrich in his decision.
The attorneys on the case, Instant A&A Fire Protection, Inc. v. City of Long Beach, B224796, were Encino practitioner Lin M. Meyer and Deputy City Attorney Cristyl Meyers.
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