Scott Co. v. United States Fidelity & Guaranty Insurance

This is the second appeal arising from a subcontractor’s effort to recover damages for cost overruns in a public works project. After succeeding at trial against the general contractor, plaintiff Scott Co. of California (Scott) sought damages and attorney fees against the contractor’s sureties on the payment bond. The trial judge denied the sureties’ summary judgment motion, but a different judge granted the sureties’ motion to reconsider and then granted their summary judgment motion. In this appeal Scott contends that the court lacked jurisdiction to grant reconsideration and erred in finding the sureties to be entitled to judgment as a matter of law. We find merit in the second argument with regard to Scott’s attorney fees and must therefore reverse the judgment.

Background

This action arose in December 1990, when Scott, a mechanical subcontractor, sought damages it had incurred during the construction of the San Jose Convention Center. Among the named defendants in Scott’s lawsuit were the general contractor, Blount, Inc. (Blount); the owner of the property, the Redevelopment Agency of the City of San Jose (RDA); and three sureties that had issued a “Labor and…