by Sam Abdulaziz, Attorney At Law
This case is a dispute between a licensed contractor, Diaa Yassin (Yassin), and homeowners Vincico and Sonia Solis (Solis). Yassin sued Solis for money he claimed was owed to him upon completion of his work. Solis filed a cross-complaint for breach of contract (among other things) on the work performed and asked for attorneys fees partially based on Civil Code section 3260(g).
During trial it was proven that Yassin did substandard work and Solis needed to hire another licensed contractor to fix Yassin's shoddy work. Therefore, the trial court awarded $50,000 in damages to Solis. In addition, based on Civil Code section 3260(g), which deals with penalties and attorneys fees for wrongfully withheld retention payments, the trial court awarded approximately $36,205 in attorneys fees.
Yassin appealed the trial court's decision. In his appeal he claimed that the last payment that was due upon completion of the work did not involve retention under the definition in Civil Code section 3260. The terms of the contract stated that the sum of the contract would be paid as follows: "$7,500 downpayment on the signing of this Agreement; $22,500 Foundation placement; $22,500 Rough Framing Inspection; $15,000 Final Inspection; $7,500 Certificate of Occupancy... The final payment shall be made upon completion of the work and before occupancy..." Yassin demanded his final payment. Solis stated that since Yassin performed deficient work and violated the Contractors' State License Law by using unlicensed subcontractors, they had to hire another contractor to complete the work. Yassin argued in the appeal that there was no withholding of progress payments or retention of monies due under the contract but that he had not been paid the final payment. Therefore Civil Code section 3260(g) did not apply. The Court of Appeal agreed with Yassin since the withholding of a final payment is not considered retention. The attorneys fees portion of the trial courts ruling was reversed and Solis only received the $50,000 for damages.
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