Thompson Pacific Construction Inc. v. City of Sunnyvale

Thompson Pacific Construction, Inc. (Thompson), entered into a contract with the City of Sunnyvale (City) for construction of a public building. Disputes arose leading to this lawsuit in which the parties sued each other for breach of contract and various statutory violations. A jury rendered a verdict in favor of City, awarding damages for breach of the covenant of good faith and fair dealing and statutory penalties under the Subletting and Subcontracting Fair Practices Act (Pub. Contract Code, § 4100 et seq.) (FPA) and California’s False Claims Act (Gov. Code, § 12651) (CFCA). Thompson appeals.

We conclude that the trial court did not have jurisdiction to impose penalties under the FPA. We also conclude that the evidence was insufficient to support the amount of damages the jury awarded for breach of the covenant of good faith but since the trial court subtracted the full amount of those damages from the judgment the error does not warrant reversal. We reject Thompson’s remaining claims, modify the judgment to strike the FPA penalties, and as modified, affirm.

I. Factual and Procedural Background

A. Introduction

On April 5, 2002, Thompson and City entered into a…