Strategic Concepts, LLC v. Beverly Hills Unified Sch. Dist.

*581 *165 A school district employee persuaded the district to convert her position from employee to independent contractor. She formed a limited liability company (LLC). The result: she was no longer an employee to whom the district paid $113,000 per year; she was now the sole owner of an LLC to which the district paid more than $1.3 million a year. Later she persuaded the district to award her LLC a $16 million no-bid contract. The district later declared the contracts void in violation of Government Code section 1090, 1 prohibiting conflicts of interest in the making of public contracts, and section 4525 et seq., requiring competitive bidding for certain public contracts.

The LLC sued the district for breach of contract and the district cross-complained to recover money paid under the alleged void contracts.

The trial court instructed the jury that the LLC's contracts did not violate section 1090 on the theory the statute does not apply to independent contractors. The court did not instruct on the competitive bidding statutes. It also concluded that a "termination for convenience" clause in the contract did not limit damages. The jury awarded millions in damages to the…