Procedural Posture

Defendant city appealed a judgment from the Superior Court of Los Angeles County (California) in favor of plaintiff bus company in an action for breach of contract. Defendant claimed that plaintiff’s action was barred by its failure to comply with the claims presentation requirements of the government claims statutes, Cal. Gov’t. Code § 900 et seq., prior to filing suit to collect unpaid invoices.

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Overview

A judgment in favor of plaintiff bus company in a breach of contract action against defendant city seeking to collect unpaid invoices was reversed and the case was remanded. Defendant claimed that plaintiff’s action was barred by its failure to comply with the claims presentation requirements of the Tort Claims Act (Act), Cal. Gov’t. Code, § 900 et seq., prior to filing suit. The appellate court held that the claims presentation requirements of the Act applied to contract claims, such as plaintiff’s, as well as tort claims. Before plaintiff could sue defendant for failure to pay for services rendered, plaintiff had to comply with the claims presentation requirements. According to the appellate court, there was a great deal of confusion regarding the applicability of the claims statutes to contract claims, with much of the confusion stemming from the statutes’ popular name. The statutory scheme, however, made it clear that contract claims were included. On remand the trial court was directed to consider issues it had not previously reached, including whether plaintiff in fact complied with the claims requirements and whether estoppel or equitable tolling were applicable.

Outcome

Judgment for plaintiff bus company in a breach of contract action seeking to collect unpaid invoices was reversed and the case was remanded where the claims presentation requirements of the Tort Claims Act applied to contract claims against public entities as well as tort claims. On remand the trial court was directed to consider whether plaintiff complied with the claims requirements and whether estoppel or equitable tolling were applicable.