Clark Bros., Inc. v. North Edwards Water District

Discussion. Drinking water provided by North Edwards Water District (North Edwards) to its customers contains three times the legal limit of arsenic, a carcinogen. Using funds earmarked for safe drinking water, the State of California (State) agreed to pay for North Edwards to construct a water treatment facility (the Project) to address this issue. In December 2013, Clark Bros., Inc. (Clark), a general contractor, was awarded the $6.2 million contract (Contract). But almost from inception, disputes arose between Clark and North Edwards. Ultimately in October 2014, while Clark still had three months to perform, North Edwards terminated the Contract. To date, the Project has not been completed. Clark sued North Edwards for breach of contract (and related claims); North Edwards cross-complained against Clark alleging similar theories. After a six week trial, a jury unanimously found North Edwards breached the Contract and awarded Clark over $3 million in damages. Clark also prevailed on North Edwards’s cross-complaint.

Under Public Contracts Code1 section 20104.50, subdivision (b), a local agency that fails to pay progress payments within 30 days “shall pay interest” on the late…