Plaintiff contractor filed suit against defendant state to recover for lost profits allegedly due to the state’s breach of contract. The state filed a cross-action to recover damages for the contractor’s failure to perform. A jury awarded the contractor the full amount requested. The Superior Court (California) denied the state’s motion for a new trial conditioned on the contractor’s remission of $ 95,000. The state appealed.
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The contractor and state entered into a written contract in which the contractor agreed to construct a building and the state agreed to rent it for a 30 month term. Time was of the essence in performance of the contract. The contractor alleged the state made modifications in the working drawings that resulted in a delay in the start of construction. The contractor alleged the state refused to extend the date of completion for a period equal to the time the contractor was delayed. The contractor never began construction. On review, the court held the cause of action was sufficiently pleaded to withstand general demurrer. The court held that there was no default by the state which prevented the contractor from performance of the contract. The court held the contractor failed to show but for the delay due to the modifications he was ready, willing, and able to perform all his obligations under the contract. The court found the contractor, who was insolvent when he bid for the contract, never did have a binding commitment from any lending agency for a loan. The court held the evidence did not permit a finding the contractor was entitled to the extension demanded.
The court reversed the judgment for the contractor and remanded with directions to enter judgment in favor of the state with costs. The court affirmed the denial of the state’s cross-complaint for damages where the state presented no evidence of actual damages. Even though it was not necessary, the court addressed the state’s complaint of the contractor’s counsel’s misconduct, finding that the misconduct resulted in a verdict tainted by bias.