UNITED RIGGERS & ERECTORS, INC., Plaintiff and Appellant, v. COAST IRON & STEEL CO., Defendant and Respondent., 4 Cal. 5th 1082

Summary

HOLDINGS: [1]-A direct contractor was not permitted to use a subcontractor's demand for $1.85 million to justify keeping all retention monies in excess of $1.35 million; [2]-The dispute exception provision in Civ. Code, § 8814, subd. (c), excuses payment to a subcontractor only when a good faith dispute exists over a statutory or contractual precondition to that payment, such as the adequacy of the construction work for which the payment is consideration; [3]-There was never any good faith argument over the direct contractor's underlying obligation to pay over the additional $150,000, which it eventually did, but the intervening delay granted the direct contractor a no-interest loan and punished the subcontractor for seeking additional compensation, in contravention of the legislature's purposes to end such loans and reduce payors' abuse of their superior leverage.