California Paving & Grading Co. v. Lincoln General Insurance

Plaintiff and appellant California Paving & Grading Co., Inc. (hereafter, Paving or plaintiff), a subcontractor, appeals a judgment of dismissal following the sustaining without leave of a demurrer interposed by *38 defendant and respondent Lincoln General Insurance Company (Lincoln) to Paving’s second amended complaint seeking recovery on a payment bond.

The essential issue presented is whether the instant contract was for public work or for private work. The proper characterization of the nature of the contract determines whether this action is governed by Civil Code section 3097 (preliminary 20-day notice for private work) 1 or by section 3098 (preliminary 20-day notice for public work). The nature of the contract also determines whether Paving’s lawsuit is governed by the limitations period applicable to an action on a public works payment bond (§ 3249), or by a longer limitations period.

We conclude the instant subdivision improvement work constituted a “work of improvement contracted for by a public entity” and therefore amounted to a public work within the meaning of section 3100.

Paving failed to allege it served a preliminary notice in compliance with the…