Saddleback Valley Unified Loses Appeal of $1.4 Million Judgment Against the School District

Former Weekling Spencer Kornhaber wrote last year about “The Curious Case of Saddleback Unified's $1.4 Million Lawsuit Loss.”

Mission Viejo-based Saddleback Valley Unified School District appealed that trial court decision in favor of Mepco Services, Inc.–and the Downey-based contractor essentially won this week when the appellate judge affirmed the trial court judgment.
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At the center of the case was the $1.6 million renovation of Esperanza Special Education School. In 2006, Mepco owner and licensed contractor Elie Abinader
was awarded a bid for the project, which was to
be completed during summer break.

The district's hired architect routinely issued major bulletins altering the plans for the project, which
Abinader said were insufficient to begin with, as key components like sewer and water for portable classrooms had been left out.

Each
bulletin required Adinader to expand his original scope of work, and
each bulletin delayed the process by requiring more time not only for
construction but also for engineering and planning. The entire
process required Adinader to submit more than 50 change orders, but Abinader never saw any money for the extra work. So, Mepco walked off the job and sued the
district in June 2007.

The district, countering that Mepco ignored
its contract and filed frivolous or exaggerated change orders, filed a cross-complaint seeking $1.2 million from
the contractor. Saddleback Valley was aided by what Mepco considered a one-sided Orange County Register story that essentially reported the company performed
shoddy work, delayed a three-month job to become a
more-than-eight-month job, and then walked away without finishing.

• The Curious Case of Saddleback Unified's $1.4 Million Lawsuit Loss

 
Like the trial judge, the appeal judge obviously did not see it that way.

Here is the news release from Carno N Carlton, LLP, the construction business, real estate and litigation law firm that represented Mepco in the appeal.
 

Court of Appeal Affirms Trial Court Decision in Mepco Services, Inc. v. Saddleback Valley Unified School District

Laguna Hills, California – November 5, 2010 – On Tuesday, November 2, 2010 the California Court of Appeal, Fourth Appellate District Division One affirmed a 2009 jury trial court decision for Mepco Services, Inc. (Mepco), a general contractor, against the Saddleback Valley School District (Saddleback).

In April, 2009, Mepco, represented by the law firm Carno N Carlton, LLP, won a $1.4 million dollar judgment against Saddleback with respect to work performed on Esperanza Special Education School in Mission Viejo.  Saddleback appealed the judgment entered in favor of Mepco Services, Inc. and Hartford Fire Insurance.

Mepco  v. Saddleback
Mepco contracted with the Saddleback in June of 2006 to remodel the Esperanza Special Education School in Mission Viejo, California.  The District had planned to complete the project during the summer of 2006, in order to minimize disruption for the school's students.  

The project took many months longer than planned and resulted in nearly forty change orders.  Though the district had actually approved all but a handful of the change orders during the project, when the project was completed the District refused to pay Mepco for any of its change order work, and further refused to pay Mepco its final contract payments.  Mepco ultimately filed for breach of contract against Saddleback and prevailed in the San Diego trial court.

Then, Saddleback appealed, basing its appeal on, among other points, that Mepco's lawyers wrongfully elicited the sympathies of the jury by asking Mepco's president about Mepco's financial condition, and that settlement negotiations were improperly included by the trial court. The court of appeal said that “It is not reasonably probable that if this evidence had not been admitted, the jury would have returned a verdict more favorable to Saddleback since the record is replete with direct evidence – much of it from Saddleback's own witnesses – that Saddleback breached its contract with Mepco, and that is was liable for the damages that Mepco claimed.”

As to the multiple other reasons Saddleback argued on appeal, the court of appeal said: “We find no merit as to Saddleback's other claims of error, and therefore affirm the judgment of the trial court.”

“Instead of paying Mepco for work it had already conceded was not included in the original plans, Saddleback's representative, Stephen McMahon, assistant superintendent for business services, chose to pay the Los Angeles law firm of Bergman N Dacey hundreds of thousands of dollars to take the case to trial and lose,” said lead trial attorney Andrew Carlton of the law firm of Carno N Carlton, LLP. “Then, instead of accepting the decision at the trial court level, Saddleback's appeal incurred further costs in legal fees, as well as tens of thousands of dollars it now owes Mepco in interest.”

Mepco had offered to settle this case, before it ever went to trial, for $400,000, which sum comprised change order work that Saddleback had already agreed to pay Mepco.

“It's a shame that the district just didn't pay Mepco for work that it had already acknowledged was due and owed to Mepco,” according to Anna Carno of the law firm Carno N Carlton, LLP.  “All of these delays and added taxpayer expenses could have and should have been avoided.  Let's hope Mr. McMahon and his Los Angeles law firm are done spending our taxpayers' money on this case, and that they go ahead and pay Mepco the money it is owed.”