Pittsburg Unified School District v. S.J. Amoroso Construction Co.

This case involves a dispute between a contractor (S.J. Amoroso Construction Co, Inc. (Amoroso)) and school district (the District) about a construction project the contractor did not complete. The parties disagree as to whether Amoroso defaulted on the contract, and that issue is not before us. Rather, this appeal concerns the District’s withdrawal of funds from an escrow account in which it had deposited “retention,” meaning a percentage of the installment payments made to Amoroso. The purpose of retaining a percentage of the funds otherwise due the contractor until completion of the contract work is to encourage the contractor to complete the work in a timely and competent manner and to protect the owner against the risk of having to pay a replacement contractor to repair or complete defective or unfinished work. The District here attempted, after hiring a replacement contractor to complete the work and while its litigation with Amoroso was pending, to withdraw retention funds from the escrow account. Amoroso sought a preliminary injunction to prevent that withdrawal, arguing the District could not withdraw retention funds until a court determined Amoroso had…