PG&E Corporation v. AECOM Technical Services, Inc..

Background

JH Kelly asked for permission to file a motion asking the court to reconsider its earlier order granting AECOM’s motion for partial summary judgment. That earlier order held that JH Kelly had waived its claims for labor and materials furnished through September 12, 2018 by signing a Conditional Partial Lien Waiver. The waiver stated that it would release and relinquish, to the stated extent, “any and all claims and lien rights” connected with the project for labor and materials supplied through the specified date.

Under Civil Local Rule 7-9(b)(3), reconsideration may be sought when the court manifestly failed to consider material facts or dispositive legal arguments. The court said JH Kelly largely disagreed with the court’s prior legal analysis rather than showing such a failure.

Court’s Analysis

The court rejected JH Kelly’s argument that the prior order failed to consider the waiver’s title, “Conditional Partial Lien Waiver,” or its use of the term “Lien Waiver.” The court said it had considered those features and reiterated that a document labeled a lien waiver can, under the cited authority, release claims beyond lien claims.

The court also rejected the argument that it had failed to consider evidence of the parties’ intent. It explained that the waiver’s clear and plain language controlled under California’s objective approach to contract interpretation. The court stated that the parties’ undisclosed intent or understanding was irrelevant. It also said JH Kelly had not identified other extrinsic evidence that it had previously presented and that a reconsideration motion was not the proper time to offer new evidence or arguments.

The court found that JH Kelly’s argument concerning the phrase “pro tanto” did not show an error. It explained that the phrase means “only to that extent” or “as far as it goes,” and said the relevant question was what limited the waiver’s scope. The court maintained that the waivers’ plain terms limited their scope by the effective date, not by the amount of the corresponding payment. It also rejected reliance on an unpublished, nonbinding decision from another district court as a basis for reconsideration.

The court further explained that JH Kelly had mischaracterized the prior order’s treatment of AECOM’s payment. Although the court corrected its calculation of the payment’s lateness, it said the difference did not affect its reasoning. The court had considered the late payment and found it decisive that neither the waivers nor the subcontract stated that late payment made the waivers unenforceable.

Limited Quantum-Meruit and Abandonment Issue

JH Kelly argued that it was unclear whether the prior ruling applied to its quantum-meruit and abandonment claim, which it described as an equitable claim seeking the reasonable value of its services and avoidance of AECOM’s unjust enrichment. AECOM argued that JH Kelly had not previously made the specific argument that the waiver could not bar that claim.

The court agreed that the specific argument had not been clearly raised in the original briefing. However, it found that a broader argument and a footnote in JH Kelly’s earlier filing arguably preserved the distinction between JH Kelly’s legal claims and its quantum-meruit claims. The court said the prior order had not addressed that issue. It declined to decide the issue for the first time in the request for permission to seek reconsideration.

Disposition

The court denied JH Kelly’s request except as to the limited question whether the Conditional Partial Lien Waiver also released JH Kelly’s quantum-meruit and abandonment claim. The court directed both parties to file simultaneous supplemental briefs of no more than five pages addressing only that question and accepting the court’s prior analysis of the waiver. The court stated that JH Kelly’s other arguments were preserved for appeal but had been rejected.

Result

The order is a procedural ruling on a request to seek reconsideration; it does not itself resolve the merits of the limited quantum-meruit and abandonment issue.