Washington International Insurance v. Superior Court

Washington International Insurance Company, Inc. (Washington) seeks review of an order denying its motion to strike portions of the first amended complaint of G. K. Backlund, Inc. (Backlund), a subcontractor. The purpose of its motion to strike was to delete Backlund’s claim that Washington, as the surety on a public works payment bond, was liable for certain sums which Green Coast, the contractor, had failed to pay to Backlund. These sums represented a statutory “interest penalty,” imposed pursuant to Public Contract Code section 10262.5, which Green Coast was required to pay to Backlund because of Green Coast’s failure to make timely payments on the subcontract.

Factual and Procedural Background

Ezra Levi, a construction contractor, did business as Green Coast. Backlund is a licensed engineering, excavation and grading contractor. Levi entered into a contract with California Department of Transportation (Cal-trans) for work on Highway 150 (the work of improvement). On August 30, 1995, Levi executed into a subcontract with Backlund, whereby Backlund was to perform clearing, grubbing, excavation and grading services on the work of improvement for the sum of $269,650.…