Local Government Agency enters a contract with Builder.  The contract contains a claims procedure with which Builder complies.  Is Builder required to follow the requirements set forth in Gov. Code, §§ 905, 910 before he can file suit?  Yes and no. Read on.

On August 25, 2008, in Arntz Builders v. City of Berkeley (Slip No. A116078), the Court of Appeal held that if a claim is governed by a claims procedure contained in the parties’ contract, the presentation of an additional statutory claim pursuant to §§ 905 and 910 is not required prior to filing a lawsuit unless it is expressly mandated by the contract.

In Arntz, the court reviewed the legislative intent behind the claims statute and determined that there was no intent nor any practical need to require presentation of a statutory claim after a claimant has complied with a local entity’s contractual claims procedure.  However, in a sneaky footnote, the court provided a mechanism by which public entities can protect themselves.

Specifically, the court noted that nothing prevents a local entity from limiting the contractual claims procedure to specific types of claims identified in the contract.  Thus, if a Local Government Entity determines that all disputes associated with materials will be controlled by the contract claims procedure but all disputes related to third party injuries must be submitted pursuant to statute, such can be clarified in the contract.

Using this framework, different types of claims arising out of the same contract can be treated differently, with some remaining subject to the statutory procedure.  Careful drafting can clarify for all parties what is expected and will ensure that Local Governmental Agencies know when they will be put on notice of a claim via the traditional statutory procedure.

Bonus Material – Timely Reminder

Do not forget that pursuant to Government Code § 945.6, “any suit brought against a public entity on a cause of action for which a claim is required to be presented … must be commenced … within two years from the accrual of the cause of action.” (Assuming no formal rejection is provided, in which case the claimant has 6 months to file his/her complaint)

If you represent a public entity and a claimant has not followed the code’s requirements, a demurrer is a quick and cost effective method of disposing of the matter.

 
***

Dawn Ceizler specializes in personal injury and products liability defense.  She can be contacted directly at (925) 932-8225.

Return to Home Page