In Katsura v. City of San Buenaventura, __ Cal. App. 4th __, No. B190630 (August 15, 2007), the Second Appellate District of the Court of Appeal held that a contractor who fails to follow the procedures specified in a public works contract for obtaining authorization for extra work may not recover the costs of such work, even if the work was requested and authorized by city officials.
Facts
Plaintiff entered into an engineering contract with the City of Ventura (“City”). Under the contract, the maximum amount that the City would pay was $18,485. The contract required that any modifications required the mutual written consent of the parties. The contract was signed by the Public Works Director.
Under the City charter, all contracts must in writing, approved by the City Attorney as to form, approved by the City Council and signed by an officer designated by the Council. The City Manager had authority to sign services agreements up to $25,000. The City Manager delegated his authority to sign contracts to each department head of the City, including the Public Works Director, who signed the contract with Plaintiff on behalf of the City.
The contract authorized the Public Works Director to make payments up to $1,850 for special work, after a written notice to proceed signed by the City Engineer. Prior to the notice to proceed, a written scope of work, an agreed-on additional fee, and a schedule for completion were required.
Ten months after completion of the project, Plaintiff submitted a final invoice for $23,700. The City refused to pay the invoice because it was beyond the maximum contract price and also included work not authorized by the contract.
The trial court awarded Plaintiff only $3,000, the remaining amount owed Plaintiff under the contract.
Decision
The court held that a contractor who fails to follow the procedures in a public works contract for obtaining authorization for extra work may not recover the costs of such work, even if the work was requested and authorized by city officials. Here, the fact that an Associate City Engineer and the City’s outside project manager requested Plaintiff to perform extra work did not amount to a modification of the contract. The court explained that a city may not act in conflict with its charter. An act in conflict with the charter is void.
The court stated that persons dealing with a public agency are presumed to know the extent of the agency’s contracting authority. Here, there was no provision in the City’s charter for oral contracts by employees without the requisite authority. The oral statements by the Associate City Engineer and the outside project manager did not bind the City.
Plaintiff was not the victim of an innocent mistake, the Court observed. He knew that the extra work was outside the scope of the contract. He also knew how to obtain authorization for extra work.
Finally, the court rejected Plaintiff’s attempt to sue the City under various "alternative" or equitable theories of relief.