Stanislaus Pump, MacHinery & Construction Corp. v. City of Modesto

Respondent, Stanislaus Pump, Machinery & Construction Corporation (contractor), filed a complaint seeking damages for breach of contract against appellant, City of Modesto (City), arising out of a work of public improvement relating to a municipal sewer system. In its answer to the complaint, the City included as an affirmative defense that it had withheld sums from contractor representing the cost of the traffic pavement markers which it had deleted from the contract, and the amount paid to S & H Insurance Company (Surety), the surety on the payment and performance bond furnished by contractor to City. The City also filed a cross-complaint seeking recovery from contractor for an item not at issue in this appeal and indemnity from Surety pursuant to a hold harmless agreement between them. The cross-complaint was bifurcated to the extent it sought relief against Surety and is not an issue in this appeal.

Following a court trial, it was ordered that contractor recover judgment against City in the amount of $59,524.39, plus interest. Pursuant to the City’s request, a statement of decision was proposed and, after a hearing on City’s objections, was adopted as modified.…