FTR Internat., Inc. v. Rio School Dist.

FACTS

FTR has constructed buildings for public entities, including schools, courthouses and libraries for 15 years. In 1999, FTR submitted the winning bid in the amount of $7.345 million to construct a school for District. During construction, FTR submitted approximately 150 proposed change orders (PCO). FTR claimed some of the PCOs were necessary because the plans provided by District were inadequate or misleading. District denied most of the PCOs on the grounds that the work was covered under the basic contract, the amounts claimed were excessive or that a PCO was not timely under the contract. The construction was completed in June 2001. District filed a notice of completion on August 7, 2001. The school has been occupied since May 2001.

1 All statutory references are to the Government Code unless stated otherwise.

2 Pursuant to the contract, District retained 10 percent of each progress payment. At the completion of the work, District held a reserve of $676,436.49. That amount, however, was subject to stop notices filed by FTR's subcontractors. The last of the stop notices was released on September 28, 2004. District refused to pay the balance due under the contract,…