Filed 6/22/01
CERTIFIED FOR PARTIAL PUBLICATION *
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
LEWIS C. NELSON & SONS, INC.
Plaintiff and Respondent,
F032493 & F033135
(Super. Ct. No. 135915) v.
CLOVIS UNIFIED SCHOOL DISTRICT,
Defendant and Appellant.
O P I N I O N
APPEAL from a judgment of the Superior Court of Merced County. Michael S.
Hider, Judge.
Bolling, Walter & Gawthrop, Marjorie E. Manning and Kevin W. Reager and
Eldridge, Anderson & Shapazian and William D. Anderson for Defendant and Appellant.
McInerney & Dillon, Robert L. Leslie and Alexander Bannon for Plaintiff and
Respondent.
-ooOoo-
* Pursuant to California Rules of Court, rules 976(b) and 976.1, only parts II.B.1 to
B.4 are published.

In the published portion of this opinion we hold that Civil Code section 3289, subdivision (b), applies to public entities.
SUMMARY OF THE FACTS AND PROCEEDINGS BELOW*
In 1992, after a competitive bidding process, appellant Clovis Unified School
District (District) awarded a 32 million dollar contract to respondent Lewis C. Nelson &
Sons for the construction of Floyd Buchanan High School in Clovis. Building commenced in April 1992. As a result of poor weather in late 1992 and early 1993, the planned construction schedule was interrupted and it become clear that, without acceleration of the work, the school would not be ready for the beginning of the 1993-
1994 school year. In May 1993, at the District’s request, Nelson estimated it would cost approximately $350,000 to accelerate the project and complete it by September 1993.
The District did not have the funds to cover these estimated increased costs and asked that Nelson focus on completing the academic buildings and making them ready for use by early September 1993.
On August 1993, the District gave Nelson an order to accelerate, pursuant to
Article V of the contract, so as to complete certain buildings by the beginning of the school year; the District agreed to pay Nelson the additional costs resulting from the acceleration order. The identified buildings were completed by the date specified, at increased expense to Nelson. The remainder of the project was completed and occupied by April 1994. Nelson remained on the site doing punch list work for several additional months.
A dispute arose between Nelson and the District concerning the costs attributable to the acceleration. Payment from the District to Nelson was slow, and the District rejected some of Nelson’s claims altogether. In the meantime, several of Nelson’s
* See footnote, ante , page 1.
2.

subcontractors, which had also incurred additional costs as a result of the acceleration order, were unpaid. One of these subcontractors, TSV Painting, ultimately sued Nelson for uncompensated acceleration costs. Another subcontractor filed bankruptcy.
On July 21, 1995, Nelson filed with the District a “claim for damages” pursuant to the Government Claims Act (“Claims Act”).
1 The claim read in pertinent part as follows:
“On or about May 12, 1993 Clovis Unified School District urged and directed Lewis C. Nelson & Sons, Inc. to accelerate its work on the Project so that there would be early completion of certain buildings and sitework.
Throughout the Project from April 12, 1992 to April 15, 1994, the District requested Nelson to perform various additional work not included in the original scope of work and for which Nelson was only paid direct costs.
The District also damaged Nelson by failing to timely respond to 433
Requests For Information submitted by Nelson which were necessary to clarify ambiguities, omissions and design errors. On September 22, 1994
TSV Painting, Inc., a subcontractor on the Project, served on Nelson a lawsuit for actions arising out of the Project. The District is obligated to indemnify Nelson for claims advanced by TSV Painting, Inc.”
The claim generally identified the damage incurred by Nelson as “costs and damages and to be sued by TSV Painting Inc.”
On August 11, 1995, the District asked Nelson for clarification of its claim; the
District expressed uncertainty about whether the claim included anything other than the
TSV lawsuit. On September 7, 1995, Nelson responded with the statement of its position that, if the District’s August 11 letter was intended to be a notice of insufficiency pursuant to Government Code section 910.8, 2 it was untimely and that, because the statutory time limit of 45 days had elapsed, the claim had been denied by operation of law. Nelson also informed the District that Nelson had filed a lawsuit in Fresno County
1 Government Code section 900, et seq., added by Stats. 1963, ch. 1715, p. 3372.
2 All statutory references are to the Government Code unless otherwise indicated.
3.

Superior Court for damages against the District and represented that service of process would follow.
Nelson’s action was filed on September 7, 1995. The original complaint contained only an indemnity cause of action. A first amended complaint was filed on September
25, 1995; it alleged two separate causes of action, one for breach of contract and one for indemnity.
3 The breach of contract count alleged that the District had defaulted on its obligations under its contract with Nelson by the following acts:
1) making numerous design changes during construction;
2) failing to respond to Nelson’s requests for information;
3) delaying approved change orders;
4) requiring work not specified in the contract;
5) refusing to grant time extensions for delays caused by the District;
6) failing to compensate Nelson for the added costs of the District’s breaches;
7) failing to make timely payments or pay interest on delayed payments;
8) failing to resolve the claims submitted by Nelson; and
9) requiring Nelson to finance the project.
The indemnity count alleged that Nelson had been sued by TSV for nonpayment of added costs which resulted from the District’s deficient coordination of the work and from the District’s acceleration order.
The District filed its answer on January 19, 1996, in which it alleged, as an affirmative defense, Nelson’s noncompliance with the Claims Act. Specifically, the
District asserted that Nelson’s claim was untimely and insufficient, and that any ground
3 We will hereafter refer to Nelson’s first amended complaint as the “complaint,” unless otherwise noted.
4.

of recovery set forth in the complaint which exceeded the scope of Nelson’s July 21,
1995, government claim was barred.
Trial commenced on September 17, 1998. Prior to opening statements, the
District filed a motion for a separate trial of its special defenses under the Claims Act or, in the alternative, for an order in limine excluding all evidence relating to the grounds for recovery not disclosed in Nelson’s governmental claim. After argument, the trial court denied the District’s motion for a separate trial. The court did not rule then or at any later time on the District’s alternate motion for a limiting evidentiary order, and the evidence covered by the District’s motion was admitted during trial without objection.
Nelson, on its part, filed a motion in limine to exclude all evidence that its governmental claim was insufficient or untimely, on the ground that the District’s failure to provide Nelson with a notice of insufficiency under section 911 waived these defenses.
The trial court granted Nelson’s motion in part, directing that all evidence concerning the alleged insufficiency of the claim would not be admitted. The court did not rule, however, on the admissibility of evidence relating to the timeliness of Nelson’s claim.
In addition to its pretrial motions, the District brought two separate motions for directed verdict. The first was an unsuccessful oral motion made after Nelson rested its case. The District argued the court was obligated to direct a verdict in its favor as to all grounds of recovery which exceeded the scope of Nelson’s July 21, 1995, governmental claim. Nelson responded with the assertion that the District had failed to prove its compliance with section 53051. The second was a written motion filed just prior to submission of the case to the jury. The District argued that Nelson’s governmental claim was untimely. This motion was later withdrawn by the District; no ruling on it appears in the record.
At the close of evidence both parties made motions to conform their respective pleadings to the proofs, which the trial court granted in each case.
5.

The jury was instructed that Nelson sought damages against the District for several breaches of contract by the District, as follows:
(1) the District failed to make timely payments as required by the contract;
(2) the District’s plans and specifications were not full, complete and accurate and, as a result, Nelson was compelled to perform extra electrical work;
(3) the District failed to fully compensate Nelson for overhead costs and a reasonable profit with respect to the costs of acceleration resulting from the District’s acceleration order; and
(4) the District prevented and hindered Nelson from performing under the contract by occupying buildings before construction was complete.
In addition, the jury was directed to decide Nelson’s cause of action for indemnity with respect to the TSV lawsuit and to decide the timeliness of Nelson’s governmental claim. As to the latter issue, the factual questions posed to the jury were (1) whether the project had been substantially completed before April 15, 1994, and (2) whether the
District had denied, before July 20, 1994, Nelson’s demand for acceleration overhead and profit.
After 19 days of trial, the jury returned a verdict in favor of Nelson on both causes of action, in the amount of $1,026,723.91. The jury found, in a special interrogatory, that no damages were refused because Nelson’s governmental claim was late.
Nelson successfully moved for an award of prejudgment interest on the verdict, in the amount of $323,683.35. The trial court found that Civil Code section 3287, subsection (b), allowed the assessment of prejudgment interest on unliquidated claims against public entities.
On October 26, 1998, the District paid Nelson $1,026,723.91 in partial satisfaction of the judgment. Judgment was entered Nunc Pro Tunc November 19, 1998. Notice of
Entry of Judgment was filed on November 23, 1998. The District timely appealed from the judgment.
6.

Nelson filed its motion for attorneys fees and its memorandum of costs on
December 11, 1998. It based its fee claim on certain language in the bid bond it presented as a part of its bid for the project. On April 5, 1999, the trial court granted
Nelson’s motion for fees, overruled the District’s objections to the amount requested, and awarded Nelson attorneys fees and costs in the total sum of $622,194.85. The District filed a timely appeal from this order. The District’s two appeals were consolidated by order of this court dated October 8, 1999.
4
DISCUSSION
I. Compliance with Claims Act*
The District contends the judgment must be reversed because Nelson failed to comply with the Claims Act. Specifically, the District maintains that (1) the grounds relied upon at trial by Nelson to establish its breach of contract cause of action exceeded the scope of the facts presented in Nelson’s July 1995 governmental claim; and (2) the governmental claim was untimely under sections 911.2 and 901. With respect to the scope of Nelson’s claim, the District maintains the jury’s verdict is not supported by substantial evidence because Nelson failed to prove it complied with the Claims Act.
According to the District, Nelson’s governmental claim asked for nothing more than indemnity based on the TSV lawsuit, despite the mention of other circumstances such as acceleration and the payment of only direct costs. Nelson counters that the District waived all Claims Act defenses and, in any event, Nelson’s claim was timely and sufficient in content to put in issue all the grounds of recovery relied upon by Nelson at trial.
4 Prior to entry of the consolidation order, this court granted the District’s request in
F033135 for judicial notice of the file in F032493 and the District’s Request in F032493 for judicial notice of Plaintiff’s Exhibit 76 in F033135.
* See footnote, ante , page 1.
7.

A. Section 946.4*
We begin of necessity with Nelson’s contention the District waived all its Claims
Act defenses because the District did not prove it had complied with the public agency filing requirements of the Act.
Section 946.4 provides as follows:
“(a) Where provision is made by or pursuant to law that no suit may be brought against a public agency as defined in Section 53050 unless and until a claim is presented to the agency, the failure to present a claim does not constitute a bar or defense to the maintenance of a suit against such public agency if, during the 70 days immediately following the accrual of the cause of action:
“(1) No statement pertaining to the public agency is on file, or is placed on file, in the Roster of Public Agencies in the office of the Secretary of State and of the county clerk of each county in which the public agency then maintains an office, as required by Section 53051; or
“(2) A statement or amended statement pertaining to the public agency is on file, or is placed on file, in the Roster of Public Agencies in the office of the Secretary of State and of the county clerk of each county in which the public agency then maintains an office, but the information contained therein is so inaccurate or incomplete that it does not substantially conform to the requirements of Section 53051.
“(b) On any question of fact arising within the scope of paragraphs (1) and
(2) of subdivision (a), the burden of proof is upon the public agency.
“(c) This section is inapplicable where the presentation of a claim is required by a claims procedure established by agreement made pursuant to
Section 930.2 unless the procedure so prescribed requires that the claim be presented to the governing body of the public agency or to a person listed in
Section 53051.”
Section 53051, referred to in section 946.4, specifies the information required to be disclosed by a public agency and the obligation of the Secretary of State to maintain a
* See footnote, ante , page 1.
8.

roster of all such information filed by qualifying public agencies. Section 53051 provides a means by which public agencies and their designated officers may be identified by persons seeking to comply with the Claims Act. ( Tubbs v. Southern Cal. Rapid Transit
Dist.
(1967) 67 Cal.2d 671, 676 ( Tubbs ).)
There was no waiver by the District, for two reasons. First, compliance with the
Claims Act was an element of Nelson’s cause of action; it was not an affirmative defense for which the District bore any initial burden of proof. (See Wood v. Riverside General
Hospital (1994) 25 Cal.App.4th 1113, 1119; Briggs v. Lawrence (1991) 230 Cal.App.3d
605, 613; C.A. Magistretti Co. v. Merced Irrigation Dist.
(1972) 27 Cal.App.3d 270, 274-
275; Tietz v. Los Angeles Unified Sch. Dist.
(1965) 238 Cal.App.2d 905, 911.) This means that Nelson was obligated to either plead and prove compliance or plead and prove that its failure to comply was excused because the District did not satisfy section 53051.
(See Wilson v. San Francisco Redevelopment Agency (1977) 19 Cal.3d 555, 561
( Wilson ); see also C.A. Magistretti Co. v. Merced Irrigation Dist., supra, 27 Cal.App.3d at pp. 274-275.) The District’s express statutory burden to prove it satisfied section
53051 would have been operative only if Nelson had alleged, in the trial court and perhaps in this court, that the District had not timely or properly made the required filing.
5 Nelson took no such position, in the trial court or in this court; it has simply asserted a lack of proof of compliance by the District. But there is nothing in the statutory language, or in any court decision, practice guide, or other primary or secondary
5 On April 17, 2000, the District asked this court to take judicial notice of a series of documents showing it was registered as a public agency at all relevant times. Nelson opposed the request, arguing the evidence was untimely and not properly submitted to an appellate court. By order dated May 9, 2000, we deferred ruling on the request until consideration of the merits of the appeal. Although it appears from the public documents that the District did indeed meet the requirements of section 53051, we nonetheless deny as moot the request for judicial notice.
9.

authority that we have discovered, which places any obligation on a public agency to establish section 53051 compliance as a condition precedent to the agency’s ability to raise a viable Claims Act defense.
Second, given that one of the primary goals of section 53051 is to ensure that potential claimants have adequate information about the identity and location of public agencies so that required claims may be correctly presented, a claimant is not prejudiced by an agency’s lack of compliance with the statute where the claimant in fact has succeeded in filing a claim with the public entity proper to receive it. (See Tubbs , supra,
67 Cal.2d at p. 676; see also Rogers v. Board of Education (1968) 261 Cal.App.2d 355,
359.) 6 In Tubbs, the plaintiff filed a timely claim with the proper public agency but failed to file her lawsuit within the statutory time limit. The plaintiff argued she was excused from filing a claim, and a fortiori, from the limitations period applicable to her subsequent action, because the defendant agency had not complied with section 53051.
The Supreme Court rejected the plaintiff’s argument, noting that “a claimant who has actually presented a claim with the proper public entity may not invoke those sections
([§]945.5, the predecessor to [§]946.4, and [§]53051) to excuse compliance with the claims statutes and circumvent the special six-month statute of limitations.” ( Tubbs, supra, 67 Cal.2d at p. 76.) The holding in Tubbs was reconsidered in Wilson, supra, 19
Cal.3d at p. 561. The Wilson court reaffirmed Tubbs but found it distinguishable because, in Wilson , the plaintiff had not filed a timely claim with the defendant agency and the evidence suggested the agency’s noncompliance with section 53051 might have contributed to the plaintiff’s default. The plaintiff in
Wilson was therefore entitled to invoke the protection afforded by sections 946.4 and 53051.
6 We acknowledge that the statute has multiple purposes. However, the principal aim is as we have stated it . (See Wilson, supra , 19 Cal.3d at p. 561.)
10.

Here, the situation is akin to that in Tubbs rather than that in Wilson . There is no evidence any information found in or missing from the public roster in any way hindered
Nelson’s ability to comply with the claims statute. In addition, Nelson filed its claim with the proper agency and at the proper address, and we will later decide the issue of timeliness in favor of Nelson.
B. Objection at Trial*
Nelson asserts the District’s (1) failure to secure a ruling on its motion in limine, and (2) premature and possibly procedurally defective motion for directed verdict operated to waive all issues concerning the scope of Nelson’s governmental claim.
Again, there was no waiver. We agree with the District that the question whether the judgment is supported by sufficient evidence is a matter of substantive law, implicating the fundamental concepts of the “cause of action” and of relevant and irrelevant evidence, which cannot be subordinated to the procedural rules found in the
Evidence Code. (See Tahoe National Bank v. Phillips (1971) 4 Cal.3d 11, 23 ( Tahoe ).)
A complaint which alleges liability not fairly reflected by the facts set out in the plaintiff’s prior governmental claim does not state a cause of action, and such an action cannot be maintained. (See Watson v . State of California (1993) 21 Cal.App.4th 836,
844; Shoemaker v.
Myers (1992) 2 Cal.App.4th 1407, 1426; Donohue v.
State of
California (1986) 178 Cal.App.3d 795, 802-803; see Parker v . Bowron (1953) 40 Cal.2d
344, 351 [“The right to relief ... goes to the existence of a cause of action”].) An objection that a complaint does not state a cause of action is never waived, and may be raised at any time, even on appeal. (5 Witkin, Cal. Procedure (4th ed. 1996) Pleading,
§ 911, pp. 370-371.) These rules do not change when a complaint alleges both a ground of liability fairly stated in the plaintiff’s governmental claim and a ground of liability not
* See footnote, ante , page 1.
11.

fairly stated in the plaintiff’s governmental claim. Although a general demurrer may not lie in this composite situation because the complaint states a valid cause of action on some ground ( Financial Corp. of America v.
Wilburn (1987) 189 Cal.App.3d 764, 778), the invalid allegations are not thereby made good; they are still not enough to support recovery and may be eliminated during the pleading stage by a motion to strike ( PH II,
Inc. v . Superior Court (1995) 33 Cal.App.4th 1680, 1682-1683).
These basic principles underlying the pleading rules pertaining to the statement of a cause of action are reflected equally in the rules relating to the proof of a cause of action at trial. Thus, admitted evidence probative of allegations insufficient to state a cause of action is irrelevant evidence which, by definition, is not transformed into, and cannot constitute, relevant evidence by virtue of the absence of an objection to its introduction. (See Tahoe, supra, 4 Cal.3d at p. 23; see also Kitchel v . Acree (1963) 216
Cal.App.2d 119, 124.) In Tahoe , the court held that, although a party who has not objected to the introduction of irrelevant or otherwise inadmissible evidence may not complain it was considered by the trier of fact, such evidence must be disregarded for purposes of deciding whether the verdict is supported by substantial evidence because
“[i]rrelevant evidence cannot support a judgment.” (
Tahoe, supra, 4 Cal.3d at p. 23 .
)
Thus, for example, evidence of an alleged oral agreement to sell a parcel of real property, admitted in the absence of objection that the agreement is subject to the statute of frauds, is relevant and therefore may be relied upon to sustain a verdict for the plaintiff in an action for breach of that oral real estate sales contract. On the other hand, evidence of an alleged oral agreement to sell $10,000 worth of personal property, admitted in the same action in the absence of objection that the agreement is subject to the statute of frauds, is irrelevant and therefore cannot be relied upon to sustain a verdict for the plaintiff in the action to recover under the alleged oral real estate sale contract.
In this case, then, those allegations of Nelson’s complaint, as amended to conform to proof, not fairly reflected in the facts presented in Nelson’s governmental claim do not
12.

state a cause of action in favor of Nelson; consequently, the admission of evidence probative of these allegations cannot validate the judgment in favor of Nelson, even though the District did not object to the introduction of any such irrelevant evidence.
There is no question the District’s contention the judgment is not supported by sufficient evidence, an issue of law, is properly raised on appeal from the judgment, notwithstanding the failure of the appellant to bring the point before the trial court in some fashion. ( Tupman v . Haberkern (1929) 208 Cal. 256, Tahoe , supra , 4 Cal.3d at p. 23; 9 Witkin, Cal. Procedure (4th ed. 1996) Appeal, § 361, p. 412, and § 398, p. 450.)
Nelson’s contention the District’s purported premature motion for a directed verdict requires this court to presume the motion was denied on procedural grounds is moot, given our finding that the District’s failure to object to what it asserts was irrelevant evidence did not waive the District’s right to raise any substantive deficiency in
Nelson’s proof. In any event, we reject Nelson’s argument. The trial court exercised its discretion in allowing the motion at the close of Nelson’s case, heard argument on the merits, and clearly ruled on the merits, finding the essential purpose of the claims statute had been met. (See 7 Witkin, Cal. Procedure (4th ed. 1996) Trial, § 435, p. 495.)
C. Merits*
We agree, but only in part, with the District’s contention that the “laundry list of vaguely defined breaches of express and implied promises under the Prime Contract” which Nelson attempted to plead and prove at trial were not disclosed in Nelson’s claim and therefore did not provide a lawful basis for the judgment in favor of Nelson.
A claim under the Claims Act plays a critical role in both the agency’s internal decisional process and a rejected claimant’s ensuing lawsuit. In addition to basic specifics such as the name and address of the claimant, pertinent dates and places, etc, a
* See footnote, ante , page 1.
13.

claim must include “[a] general description of the indebtedness, obligation, injury, damage or loss incurred so far as it may be known at the time of presentation of the claim.” (§ 910.) The requirement that the basis of the claim be described with some detail is not perfunctory; it is integral to the purpose of the Claims Act to provide the public entity with information sufficient for adequate investigation and, when appropriate, settlement without the expense of litigation. ( Phillips v. Desert Hospital
Dist.
(1989) 49 Cal.3d 699, 705 ( Phillips ); Schaefer Dixon Associates v. Santa Ana
Watershed Project Authority (1996) 48 Cal.App.4th 524, 534; Green v. State Center
Community College Dist.
(1995) 34 Cal.App.4th 1348, 1354-1355.) Although the claim need not conform to pleading standards, it must be informative enough to facilitate meaningful consideration by the agency about the damages claimed and about the worth of a resolution short of litigation. ( Eaton v. Ventura Port Dist.
(1975) 45 Cal.App.3d
862, 867.)
To the extent the claim is disallowed, the descriptive information in the claim determines the issues to be tried in any lawsuit filed by a dissatisfied claimant, because the facts which constitute each cause of action alleged by the plaintiff must substantially correspond to a circumstance identified in the claim as a basis for the injury or loss for which compensation is sought. ( Shoemaker v. Myers, supra, 2 Cal.App.4th at p. 1426;
Loehr v. Ventura County Community College Dist.
(1983) 147 Cal.App.3d 1071, 1082-
1083; Nelson v. State of California (1982) 139 Cal.App.3d 72, 79.) Thus, if the plaintiff relies on more than one theory of recovery against the governmental agency, each theory must be reflected in the facts described in the claim. ( Fall River Joint Unified School
Dist. v. Superior Court (1988) 206 Cal.App.3d 431, 434 [The factual circumstances set forth in the written claim must correspond with the facts alleged in the complaint and ultimately submitted to the jury].) It is not enough that the claim generally mentions a particular factual relationship or occurrence; rather, the claim must provide an adequate indication that the fact or occurrence resulted in the harm for which the claimant seeks
14.

redress from the agency so as to point the public agency in the right direction for investigation and evaluation. ( Schaefer Dixon Associates v. Santa Ana Watershed
Project Authority, supra, 48 Cal.App.4th at p. 534.)
A fair reading of Nelson’s July 21, 1995, government claim discloses three separate factual statements giving rise to some alleged harm to Nelson, to wit:
(1) that from April 12, 1992, to April 15, 1994, Nelson was asked to perform additional work not included in the original scope of the work for which Nelson was paid only its direct costs;
(2) that the District “damaged” Nelson by failing to respond timely to 433 requests for information necessary to Nelson to clarify ambiguities, omissions and design errors; and
(3) that Nelson was sued by TSV, generating a claim for indemnity by Nelson against the District.
7
Each of these statements expressly or implicitly asserts a right in Nelson to recover some form of compensation from the District. The use and placement of the word “only” in the first statement implies that the District owes Nelson some additional money in addition to the paid direct costs. The second alleges damages directly. The third asserts a claim for indemnity, which is subject to the Claims Act. ( Gehman v.
Superior Court (1979) 96 Cal.App.3d 257, 261, disapproved on other grounds People ex rel. Dept of Transportation v. Superior Court (1980) 26 Cal.3d 744, 759.) These “costs,”
“damages,” and “indemnity” were carried forward in the portion of the claim which identified the nature of the harm Nelson said it suffered.
7 Our evaluation of the language of the claim presents another question of law.
“‘The interpretation of a written instrument, even though it involves what might properly be called questions of fact [citation], is essentially a judicial function....’ (
Parsons v.
Bristol Development Co.
(1965) 62 Cal.2d 861, 865.)” ( Harustak v. Wilkins (2000) 84
Cal.App.4th 208, 214-215.)
15.

Some of Nelson’s theories of liability submitted to the jury are in fact supported by the contents of Nelson’s governmental claim.
8 The jury was called upon to decide whether the District breached its contract with Nelson, to Nelson’s damage, in one or more of the following ways:
1) failing to make timely payments as required by the contract;
2) providing incomplete and inaccurate plans and specifications which required
Nelson to perform extra electrical work;
3) ordering Nelson to accelerate construction as set forth in Construction Change
Directive No. 8 and then failing to compensate Nelson for additional costs resulting from the directive and failing to pay Nelson a reasonable allowance for overhead and profit; and
4) preventing and hindering Nelson from performing under the contract by occupying buildings before the contract was complete.
The jury was also called upon to decide Nelson’s cause of action for indemnity based upon the TSV lawsuit against Nelson.
In our view, the facts underlying the second and third of these theories are found in Nelson’s governmental claim.
9 The third theory (acceleration costs, and overhead and profit) is fairly included in the statement that the District asked Nelson to perform additional work for which Nelson was paid only its direct costs. Though the prior sentence referring to the acceleration order of May 12, 1993, does not assert that Nelson was harmed to any extent as a result of the acceleration, this proposition can be
8 We ignore the complaint and its predecessor, because the trial court granted
Nelson’s motion to conform to proof at the close of the evidence.
9 The District concedes that the indemnity count, the fifth theory presented to the jury, is covered by the claim presented; indeed, as we said, the District maintains this is the only theory comprehended by the claim.
16.

legitimately inferred when the two sentences are read together. The second theory
(inaccurate plans) is reasonably manifested by the statement that Nelson suffered damage because the District failed to respond to requests for information about design problems.
It is a legitimate deduction that the provision of incomplete, inaccurate or otherwise deficient plans and specifications, which the District failed to explain or correct when asked to do so by Nelson, made it necessary for Nelson to perform electrical work not covered by the original contract price.
Several decisions support our conclusion. In Perry v. City of San Diego (1947) 80
Cal.App.2d 166, the plaintiff filed a claim alleging damage as a result of the unexplained collapse of a picnic shelter but did not state that its theory of liability was negligence and design defect. The court found the factual allegations presented in the claim included by implication the legal theories presented by the plaintiff at trial. ( Id . at p. 169.) In Blair v.
Superior Court (1990) 218 Cal.App.3d 221, the plaintiff filed a claim for damages caused by negligent maintenance and construction of a highway and the failure to sand and care for the highway in icy conditions. The court allowed a cause of action based on allegations there were defects in the placement of guard rails, the slope of the road and the presence of hazards and inadequate warning signs, even though these allegations did not appear in the original claim, because the factual basis for these theories were present there. ( Id.
at pp. 223-225) Finally, in Stevenson v. San Francisco Housing Authority
(1994) 24 Cal.App.4th 269, the claim initially filed with the public entity alleged damages resulting from the death of an individual when parts of a building fell during an earthquake. The complaint alleged design and construction defects. The court found these theories were not based on different facts but were fairly included within the facts included in the claim. ( Id . at p. 278.)
As was the case in these opinions, Nelson’s July 21, 1995, governmental claim provided the District with the essential factual basis underlying Nelson’s second, third and fifth theories of liability submitted to the jury, notwithstanding that Nelson’s claim
17.

did not specifically articulate, or assign specific facts to each of, these theories. Any variances between Nelson’s governmental claim and its theories of liability presented to the jury are not fatal because they can be rationally connected to a fact or facts found in the claim. (See White v. Superior Court (1990) 225 Cal.App.3d 1505, 1510.)
The same, however, cannot be said about the first and fourth theories of contract breach submitted to the jury. Nothing in Nelson’s claim says anything, directly or indirectly, about any harm to Nelson as a consequence of untimely or delayed payments under the terms of the contract or as a consequence of any premature occupation of any building under construction. The contents of the claim therefore would not have prompted the District to investigate or evaluate whether it in fact failed to meet the time constraints of any payment provisions set by the contract documents or whether it impeded Nelson’s work by using any building before Nelson’s crews finished it.
There is support in the case law for these conclusions. In Lopez v. Martin Luther
King, Jr. Hospital (C.D. Cal. 1983) 97 F.R.D. 24, the claim submitted to the hospital was for injuries suffered by a child resulting from alleged medical malpractice. At trial, the plaintiff raised additional theories, including injuries to the mother of the child and lack of consent for the medical procedures. The court refused to allow trial on these new theories because the necessary factual support could not be found in the claim filed by the plaintiff. ( Id . at p. 34.) In Connelly v. State (1970) 3 Cal.App.3d 744, the claim submitted was for damages resulting from the giving of erroneous information concerning water levels of a river. At trial, the cause of action was for damages resulting from negligent release of water from a state owned dam. Because there had been no mention of negligence in the operation of the dam in the claim, the cause of action was not sustainable. ( Id . at p. 753; see also Watson v. State, supra, 21 Cal.App.4th 836
[refusal to provide medical care different factually from a claim of medical malpractice];
Turner v. State (1991) 232 Cal.App.3d 883, 888-891 [failure to warn or take precautions
18.

against gang violence different factually from claim of failure to provide adequate lighting].)
The nature of the shortcomings in Nelson’s claim are not of a type to invoke the
District’s affirmative obligation to notify Nelson that its claim was unclear or failed to provide information sufficient to indicate to the District the directions its investigation should take. (§§ 910.8, 915.4) Generally, the failure of an agency to give a timely notice of the insufficiency of a claim results in a waiver and bars a contention that the claim is deficient. (§ 911;
Phillips, supra, 49 Cal.3d at p. 701; Green v. State Center
Community College Dist., supra, 34 Cal.App.4th at pp. 1354-1355.) However, this rule does not apply where, as here, the contents of the claim do not provide factual support for a theory of recovery plead or sought to be proved at trial. ( Lopez v. Martin Luther King,
Jr. Hospital, supra, 97 F.R.D. at p. 34.) This makes eminent sense, because if the particular basic facts are absent from the claim, the public entity cannot know about the variance, and therefore cannot give the required notice, until it is served with the complaint or until the evidence is offered at trial. (Donohue v. State of California, supra,
178 Cal.App.3d 795.) In this case, the second and fourth theories were not disclosed to the District until Nelson filed its complaint. They were then almost immediately challenged by the District as impermissibly deviating from Nelson’s earlier claim. No waiver occurred.
10
10 The District at various times in its briefs complains about Nelson’s evidence at trial relating to alleged losses by some of Nelson’s subcontractors, such as Warrick
Electric and Allred Plastering, and seems to suggest Nelson was not entitled to recover for these losses because Nelson did not prove it was itself harmed as a consequence of the difficulties of the subcontractors. However, the District neither makes such a contention expressly nor provides authority or reasoned argument to support it. The point is therefore waived for purposes of this appeal. ( In re Marriage of Fink (1979) 25 Cal.3d
877; Berger v. Godden (1985) 163 Cal.App.3d 1113, 1119-1120.)
19.

We disagree with Nelson that the doctrine of substantial compliance excuses any failure on its part to include in its claim facts sufficient to support one or more of the grounds of recovery proved at trial. Though “substantial compliance” will under certain circumstances excuse technical deficiencies in the presentation of a claim (See Dillard v.
County of Kern (1943) 23 Cal.2d 271; City of San Jose v. Superior Court (1974) 12
Cal.3d 447), the rule does not excuse the failure of a claim to state the facts supporting recovery on which a later cause of action is based ( Watson v. State, supra, 21
Cal.App.4th at p. 845; Fall River Joint Unified School Dist. v. Superior Court, supra, 206
Cal.App.3d at pp. 435-436).
The appropriate disposition in the circumstances here is outright reversal of the judgment because the jury returned a general verdict and we cannot be certain to what extent it rests on a positive finding in whole or part as to either or both the first or the fourth of Nelson’s theories of breach of contract. A general verdict cannot stand if the jury was given two instructions on the same issue, one proper and one improper, or if the verdict could have been based either on a theory supported by evidence or on a theory unsupported by the evidence; in these situations, the appellate court must reverse the judgment entirely. ( Henderson v. Harnischfeger Corp.
, (1974) 12 Cal.3d 663, 673
[correct and incorrect jury instructions]; Cobbs v. Grant (1972) 8 Cal.3d 229, 238
[permissible and impermissible theories of liability]; Eisenberg, Horvitz & Wiener, Cal.
Practice Guide: Civil Appeals and Writs (The Rutter Group 1998) ¶ 8.146.1, pp. 8-72 to
8-73.) These rules are equally applicable here, where the jury was permitted to decide, by general verdict, theories of breach of contract and indemnity fairly grounded in the facts of Nelson’s governmental claim and theories of breach of contract not so fairly grounded.
20.

II. Other Issues
We will address a number of issues which raise independent challenges to the judgment and which will not disappear on remand.
A. Timeliness of Claim*
The District contends the trial court erred in denying the District’s written motion for directed verdict, filed at the close of the evidence, because Nelson’s July 21, 1995, governmental claim (1) was not presented within one year from the date Nelson’s causes of action accrued (§ 911.2), and (2) was untimely under the terms of the contract provision which set the date of accrual for causes of action arising out of the contract.
11
* See footnote, ante , page 1.
11 The contract provision cited by the District is section 13.6 which reads as follows:
“13.6 COMMENCEMENT OF STATUTORY LIMITATIONS PERIOD
“13.6.1 As between the Owner and Contractor:
“.1 Before Substantial Completion. Has to acts or failures to act occurring prior to the relevant date of Substantial Completion, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than such date of
Substantial Completion.”
Nelson cites to subparagraph .2 as the relevant portion of the contract which reads as follows:
“.2 Between Substantial Completion and Final Certification for Payment.
As to acts or failures to act occurring subsequent to the relevant date of
Substantial Completion and prior to issuance of the final Certificate for
Payment, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than the date of issuance of the Final Certificate for payment; ...”
21.

There is no such judicial error by the trial court to review on this appeal.
12 The written motion was never ruled on by the trial court and the record reflects it was ultimately withdrawn.
13 The only other avenue open to the District to challenge the timeliness of Nelson’s claim is the argument the jury’s implicit finding, reflected in the special interrogatory, that Nelson’s claim was timely is not supported by substantial evidence, but no such contention is advanced by the District.
14
Nevertheless, we will address the issue notwithstanding the District’s failure to raise it because it may resurface on remand. In our view, the record evidence proves as a matter of law that the District waived any right to dispute the timeliness of Nelson’s claim because the District did not provide Nelson with statutory notice the District
12 The District does not clearly identify in its opening brief the ruling on these issues by the trial court the District believes was erroneous. In its reply brief, Nelson characterizes the District’s position as either that (1) the trial court erred in denying the
District’s motion for directed verdict or (2) the jury’s implied finding in the special interrogatory on the subject was not supported by substantial evidence. The District, in its reply brief, specifies that it is challenging the trial court’s denial of the motion for directed verdict only.
13 In its opening brief, the District states that “rather than ruling on the motion, the court presented the issue to the jury.” In Nelson’s brief and the District’s reply brief, the parties represent that the motion was denied. The following exchange found at page 2090 on the Reporter’s Transcript establishes the motion was actually withdrawn. “Court: I have Mr. Leslie’s motion for directed verdict. I have his memorandum in front of me ... ”
[¶] “Mr. Leslie: Your Honor, I don’t think I have a written motion for directed verdict.
That was my opposition to defendant’s.” [¶] … [¶] “Court: ... I apologize. I read the opposition to the motion that was withdrawn . You were going to make an oral motion....”
14 The matter was submitted to the jury for a factual determination pursuant to a special instruction and interrogatory proposed by the District. The jury was instructed that Nelson was required to prove it had filed a timely government claim and that, if the jurors found the project had been substantially completed on April 15, 1994, and the
District had denied Nelson’s demand for payment of extra cost prior to July 20, 1994,
Nelson could not prevail. The jury answered the special interrogatory in the negative.
22.

considered the claim to be late.
15 As we have previously explained, when a public entity is faced with a written claim for monetary damages, the entity must notify the claimant of certain defects, and the failure to do so waives all defenses to the sufficiency of the claim which otherwise would have been available to the entity. (§§ 910.8 and 911;
Phillips , supra, 49 Cal.3d at pp. 705-708, 711; Tyus v. City of Los Angeles (1977) 74 Cal.App.3d
667, 672.)
“If the notice is untimely or lacks any of the information required by sections 910 and 910.2, the public entity may require the claimant to justify the delay or supply the missing data. If the public entity fails to require the claimant to cure such defects, then it waives certain defenses which are otherwise available to challenge a lawsuit based upon the claim. This possibility of waiver encourages public entities to investigate claims promptly, and to make and notify claimants of their determinations, thus enabling the claimants to perfect their claims. The overall result is an incentive to public entities to manage and control the claims made against them.” (
Phillips, supra , 49 Cal.3d at p. 706.)
The Phillips court further stated:
“[T]he notice and defense-waiver provisions (§§ 910.8, 911, 911.3), while falling short of placing an affirmative duty on public entities to obtain the information deemed necessary to investigate incidents and to determine whether settlement is appropriate, nevertheless furnish a strong incentive to do so by sanctioning a public entity that fails to ask the claimant for such
15 Nelson raised the point in limine , and sought exclusion of all evidence or argument the claim was insufficient or late because the District had not notified Nelson pursuant to sections 910.8 and 911. The court apparently did not rule on this motion, evidence on the subject was presented on the issue, and it did go to the jury. Neither Nelson nor the
District presented the point on this appeal, and it was raised by this court on its own motion with a request for supplemental briefing. (§ 68081; see, e.g.,
Canaan v.
Abdelnour (1985) 40 Cal.3d 703, 722, fn. 17 [an appellate court has discretion to raise and consider controlling questions of law, especially where all due process considerations have been satisfied]; Cabrera v.
Plager (1987) 195 Cal.App.3d 606, 611 [same];
Noguera v.
North Monterey County Unified Sch. Dist. (1980) 106 Cal.App.3d 64, 72, fn.
5 [“We are at liberty to consider, and even to decide, a case upon any points that its proper disposition may seem to require, whether taken by counsel or not.”].)
23.

information. Thus, if a public entity receives a document that alerts it to the existence of a claim and the possibility of a lawsuit but fails to comply substantially with sections 910 and 910.2, the purposes of the act are best served by requiring the public entity to notify the claimant of the nature of the claim's insufficiencies or lack of timeliness or else waive, by operation of sections 911 and 911.3, its defenses based on those deficiencies.”
( Phillips, supra, 49 Cal.3d at p. 711.)
Phillips involved a tort claim, which must be filed within six months of the accrual of the cause of action. (§ 911.2.) In such cases, the agency’s neglect to notify the claimant that his or her claim did not meet the six-month deadline and that an application for permission to submit a late claim was required precludes the agency from relying upon the six-month limitations period as a defense to liability in the claimant’s lawsuit.
(§ 911.3.)
No statute with provisions comparable to section 911.3 exists with respect to a claim, such as the one for breach of contract and indemnity presented by Nelson to the
District, which must be filed within one year of accrual under section 911.2. However, the principles behind section 911.3, articulated in Phillips , have been judicially extended to such claims. ( Ocean Services Corp v. Ventura Port Dist.
(1993) 15 Cal.App.4th 1762,
1775-1776.) In Ocean Services Corp
, the public entity argued the plaintiff’s breach of contract cause of action was barred because the plaintiff had not filed its claim within the one-year period prescribed in section 911.2. The court, citing Phillips
, found the entity’s failure to notify the plaintiff its claim was tardy worked a waiver of the defense. ( Ocean
Services Corp. v. Ventura Port Dist., supra , 15 Cal.App.4th at pp. 1775-1776; see also
Martinez v. County of Los Angeles (1978) 78 Cal.App.3d 242, 245.) Section 911, which provides generally that a failure to notify the claimant of a defect in the claim waives all defenses based on the defect, is obviously consistent with the application of Phillips by
Ocean Services Corp.
to one-year claims.
The District, in effect, takes issue with Ocean Services Corp.
and maintains, in its supplemental brief, that section 911 does not apply to the timeliness of a one-year claim because section 911.3 expressly mentions timeliness and section 911 does not, thereby
24.

reflecting a legislative intent that the notice and waiver provisions of section 911 not apply to one-year claims. This is not an unreasonable position, but we decline to adopt it and instead elect to follow Ocean Services Corp. v. Ventura Port Dist., supra , 15
Cal.App.4th at pp. 1775-1776, for several reasons. First, there is nothing in section 911 which suggests that untimeliness is not a deficiency within the purview of the statute.
Second, there is an independent purpose for the specificity of section 911.3; in addition to its express provisions regarding waiver, it establishes a procedure by which a claimant may apply for late claim relief, an alternative not available with respect to one-year claims. Third, the Claims Act is aimed at promoting the investigation and disposition of claims short of legal action if possible. Notification to a claimant by the agency that the former’s claim is considered tardy by the agency is a reasonable means of advancing this goal by making known to the claimant before he or she resorts to a lawsuit that the claim may in fact be subject to an absolute defense.
Because the District did not give Nelson notice under section 911 that the District considered Nelson’s claim untimely, the District is foreclosed from raising the issue as a defense to Nelson’s lawsuit. This bar applies to the District’s contention the claim was not filed within one year of the date of accrual of the cause of action, whether such date is determined under general principles of California law or under the provisions of the contract cited by the District. Section 911.2 does not purport to identify when any particular cause of action accrues, the date of accrual under section 911.2 is the date on which the cause of action would be deemed to have accrued within the meaning of the relevant statute of limitations (§ 901), and we know of no authority, and the District has cited none, which prevents parties to a contract from agreeing, as the District and Nelson did here, upon the circumstances that will bring about the accrual of a cause of action arising under the contract. (See 3 Witkin, Cal. Procedure (4th ed. 1996) Actions, § 437, p. 549 [parties may by contract shorten the period of limitations if the shortened time is reasonable].)
25.

B. Prejudgment Interest
The trial court awarded respondent Lewis C. Nelson & Sons (Nelson) prejudgment interest on the jury verdict in its favor from the date Nelson’s complaint against appellant
Clovis Unified School District (District) was filed. The District contends that, because
Nelson’s damages were unliquidated, this award violates the spirit of the Government
Claims Act (Government Code section 900, et seq., added by Stats. 1963, ch. 1715, p.
3372) (“Claims Act”) and was not authorized by law. Nelson counters that subsection (b) of Civil Code section 3287 provides for prejudgment interest on unliquidated claims and the award was necessary to make Nelson whole. The District replies that subsection (b) of Civil Code section 3287 does not apply to public entities.
1. Civil Code Section 3287
When enacted in 1872, Civil Code section 3287 read:
“Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor, from paying the debt.”
In 1955, after a series of cases had held that prejudgment interest was not recoverable against public entities without express statutory authority (e.g., Los Angeles
Dredging Co. v. Long Beach (1930) 210 Cal. 348, 362), the section was amended to add the phrase “[t]his section is applicable to recovery of damages and interest from any such debtor, including any political subdivision of the state.” (Stats. 1955, ch. 1477, § 1, p. 2689; Mass v. Board of Education (1964) 61 Cal.2d 612, 624-627.) In 1959, the words
“political subdivision,” which had been construed narrowly by the courts (see, e.g.,
Blum v. City & County of San Francisco (1962) 200 Cal.App.2d 639, 644), was legislatively defined to mean
“ the state or any county, city, city and county, municipal corporation, public district, public agency or political subdivision of the state.” (Stats. 1959, ch. 1735,
§ 1, p. 4186.) These 1955 and 1959 amendments thus provided a clear statutory
26.

“exception to the general rule [that prejudgment interest was not recoverable against public entities], and this exception has been consistently recognized by this court as imposing liability for interest on such entities. [Citations.]” ( Tripp v. Swoap (1976) 17
Cal.3d 671, 683-684, overruled on other grounds in Frink v. Prod (1982) 31 Cal.3d 166,
171.) After the 1955 and 1959 amendments, courts routinely found public entities, as any other debtor, liable for interest from the day an obligation became due, so long as the amount owed was liquidated -- that is, the amount of the obligation was or could be made certain. (See Benson v. City of Los Angeles (1963) 60 Cal.2d 355; Todd Shipyards Corp. v. City of Los Angeles (1982) 130 Cal.App.3d 222, 226; City of Pasadena v. County of
L.A. (1965) 235 Cal.App.2d 153, 160.)
In 1967, Civil Code section 3287 was again amended to add to it subdivision (b), and the statute now reads as follows:
“(a) Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day, except during such time as the debtor is prevented by law, or by the act of the creditor from paying the debt. This section is applicable to recovery of damages and interest from any such debtor, including the state or any county, city, city and county, municipal corporation, public district, public agency, or any political subdivision of the state.
“(b) Every person who is entitled under any judgment to receive damages based upon a cause of action in contract where the claim was unliquidated, may also recover interest thereon from a date prior to the entry of judgment as the court may, in its discretion, fix, but in no event earlier than the date the action was filed.” (Civ. Code § 3287 as amended. (Stats.1967, c. 1230,
§ 1, p. 2997.) 16
The addition of subsection (b) created a limited exception to the prevailing general rule that prejudgment interest is not allowed on unliquidated obligations. (See
16 The statute has not been touched by the Legislature since 1967.
27.

Chesapeake Industries v. Togova Enterprises (1983) 149 Cal.App.3d 901, 906-907.) The usual prohibition against such interest is based upon the rationale that it is unreasonable to expect a defendant to pay a debt before he or she becomes aware of it or is able to compute its amount. ( Ibid ., see also Stein v. Southern Cal. Edison Co.
(1992) 7
Cal.App.4th 565; 571-572.) By allowing an award of prejudgment interest, but only for a limited time period and only if the trial court finds it reasonable in light of the factual circumstances of a particular case, Civil Code section 3287, subsection (b), seeks to balance the concern for fairness to the debtor against the concern for full compensation to the wronged party. (See Wisper Corp. v. California Commerce Bank (1996) 49
Cal.App.4th 948, 960; Chesapeake Industries v. Togova Enterprises , supra , 149
Cal.App.3d at pp. 906-907.) An award of prejudgment interest is not automatic. ( North
Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 829.)
2. Principles of Interpretation
Whether subsection (b) of Civil Code section 3287 stands independent from subsection (a), such that the last sentence of subsection (a) is not applicable to unliquidated contract damages, is an issue of statutory interpretation, a question of law subject to de novo review on appeal. ( Hansen Mechanical, Inc. v.
Superior Court (1995)
40 Cal.App.4th 722, 727; Jefferson v.
Compton Unified School Dist. (1993) 14
Cal.App.4th 32, 38.) The relevant principles that guide our decision are well known.
“‘Our function is to ascertain the intent of the Legislature so as to effectuate the purpose of the law. [Citation.] To ascertain such intent, courts turn first to the words of the statute itself [citation], and seek to give the words employed by the Legislature their usual and ordinary meaning.
[Citation.] When interpreting statutory language, we may neither insert language which has been omitted nor ignore language which has been inserted. (Code Civ .
Proc., § 1858.) The language must be construed in the context of the statutory framework as a whole, keeping in mind the policies and purposes of the statute [citation], and where possible the language should be read so as to conform to the spirit of the enactment. [Citation.]’”
( People v.
Amwest Surety Ins. Co . (1997) 56 Cal.App.4th 915, 919-920; see also Kobzoff v.
Los Angeles County Harbor/UCLA Medical Center (1998)
28.

19 Cal.4th 851, 861; County of Fresno v.
Shelton (1998) 66 Cal.App.4th
996, 1010.)
We also must endeavor to harmonize, both internally and with each other, separate statutory provisions relating to the same subject. ( Barajas v. Oren Realty & Development
Co.
(1997) 57 Cal.App.4th 209, 216-217.)
3. Decisional Law
Neither party has identified, and we have not found in our independent research, any case which has decided whether subsection (b) of Civil Code section 3287 applies to public entities. Nelson adverts to Municipal Court v. Bloodgood (1982) 137 Cal.App.3d
29 ( Bloodgood ), where the court, citing Civil Code section 3287, subsection (b), awarded prejudgment interest on an unliquidated claim in favor of the municipal court judges of
Los Angeles County and against the County. However, the court did not analyze the subsection or the statute, and the issue of whether subsection (b) applied to the County as a public entity was never raised. ( Bloodgood, supra , 137 Cal.App.3d at p. 47; see Trope v. Katz (1995) 11 Cal.4th 274, 284 [cases do not support propositions never considered or decided].) Therefore, although Bloodgood is no doubt an opinion in which subsection (b) was relied upon to support an award of interest against a public entity on an unliquidated debt, the decision provides no reasoned guidance on the subject. As the District correctly notes, we are not bound by Bloodgood . (9 Witkin, California Procedure (4th ed. 1997)
Appeal § 934, p. 971 and cases cited therein.)
No more helpful are the authorities cited by the District, Sanders v. City of Los
Angeles (1970) 3 Cal.3d 252, 262-263, and Santa Clara County Environmental Health
Assn. v. County of Santa Clara (1985) 173 Cal.App.3d 74, 84-85. In the District’s view, the courts in these cases strained to find the damages liquidated and thus recoverable against public agencies under subsection (a), an effort that would have been unnecessary had the courts believed prejudgment interest was awardable against the public entities under subsection (b). However, there is a significant difference between prejudgment
29.

interest awarded as a matter of right under subsection (a) and prejudgment interest awarded as a matter of discretion under subsection (b), as Nelson points out. (See North
Oakland Medical Clinic v. Rogers, supra, 65 Cal.App.4th at pp. 829-830; Rifkin v.
Achermann (1996) 43 Cal.App.4th 391, 398.) In any event, the issue raised here was not raised in either Sanders or Santa Clara.
( Trope v.
Katz, supra, 11 Cal.4th at p. 284.)
4. Analysis
We think, consistent with traditional principles of statutory construction, that subsection (a) and subsection (b) of Civil Code section 3287 must be read together as a unified whole. As we see it, the distinction between the two subparts has to do with the nature of the damages -- liquidated and unliquidated -- for which interest may be awarded, not the identity of the defendant against whom interest may be awarded. The minimal available legislative history confirms the limited purpose of subdivision (b), which is to establish an exception to the general rule prohibiting prejudgment interest when the damages in issue are not capable of being made certain when due. (See August
3, 1967 letter to Governor Reagan from authoring Senator Gordon Cologne.
17 )
Admittedly, the Legislature made somewhat of a hash of the technical aspects of the modification, using the markers (a) and (b) to differentiate between the existing statute and the new addition without making clear whether the public entity liability imposed in the first subdivision was intended to carry over into the second. This ambiguity is in our estimation nothing more than a product of draftsmanship, and we do not find in it, given
17 The Senator’s letter states in relevant part: “All the bill says is that in these contract cases a judge may add interest where he thinks it is proper from a time prior to granting judgment but in no event prior to the time of filing the suit. In this way, if the parties have a legitimate dispute over how much is due, when the court enters judgment it may also add interest from the appropriate date because the debt was due then. [¶] The bill only attempts to do equity and may encourage settlement prior to the trial of issues in court.”
30.

the legislative history of the amendment, an intent to exempt public entities from liability for interest on unliquidated claims. Moreover, if there is anything in Civil Code section
3287 that manifests a legislative direction, it is that the word “section” was retained in subdivision (a), which supports the view that that public agencies were intended to be liable for interest under Civil Code “section” 3287, subdivision (b). Regardless of the statutory and dictionary definitions of the word “section” proposed by the parties, none of which we find dispositive, the Legislature knows how to use the word “subdivision” or a similar term when it wants to confine the effect of a statutory sub-part. (See, e.g., Code
Civ. Proc. § 437c, subd. (q) [summary judgments]; Welfare & Institutions Code § 366.26
[dependency hearings].)
Furthermore, we are unable to identify any policy reason which justifies reading the statute in the manner advocated by the District. “The purpose of prejudgment interest is to compensate plaintiff for loss of use of his or her property. [Citation.]” (
Segura v.
McBride (1992) 5 Cal.App.4th 1028, 1041.) The 1955 and 1959 amendments extended this protection to plaintiffs with liquidated claims against public agencies.
18 If fairness demands that plaintiffs with liquidated claims against public agencies should have protection against the loss of use of money, fairness equally demands that plaintiffs with unliquidated claims against public agencies should have some of the same protection.
The category of the defendant, as a private citizen or organization or as a public agency, provides no principled difference between the rationale supporting interest on a sum capable of calculation when due and the rationale supporting interest on a sum capable of calculation at a later time. In each case, the interests of the creditor and the interests of the debtor are accommodated in a manner consistent with the nature and circumstances of
18 We must assume the Legislature was aware of existing, related laws when it enacted Civil Code section 3287. (
Scott Co. v. Workers’ Comp. Appeals Bd
. (1983) 139
Cal.App.3d 98, 105.)
31.

the obligation in dispute. The particular capacity of the debtor is irrelevant to these equations.
Moreover, applying subsection (b) to public entities does not subvert the policies behind the Claims Act by making presuit evaluation of claims impossible. The “purpose of the [statutory requirements for presenting claims against the state or a local public entity] is to facilitate early investigation of disputes and settlement without trial if appropriate, as well as to enable the public entity to engage in fiscal planning for potential liabilities and to avoid similar liabilities in the future.” (
Baines Pickwick Ltd. v.
City of Los Angeles (1999) 72 Cal.App.4th 298, 303.) We fail to see how an award of interest on an unliquidated debt undermines these goals. If the uncertainty of interest under subdivision (b) works against prompt settlement, the uncertainty of the underlying unliquidated damages themselves works against prompt settlement to a much greater extent. Furthermore, subsection (b) only allows an award of prejudgment interest from a date no earlier than the filing of the lawsuit. If the claim is settled at the administrative stage, interest will never become an issue of agency concern.
The fact that subsection (a), unlike subdivision (b), expressly states it applies to public entities is no reason to conclude the Legislature did not intend to allow prejudgment interest on unliquidated claims against public entities. It is true that, if the
Legislature fails to change the law in a particular respect when it passes an amendment, it is presumed the Legislature wanted to leave the law as it stands . (State of California ex rel. Dept. of Transportation v. Superior Court (1984) 159 Cal.App.3d 331, 338.)
However, when the Legislature enacted subsection (b), the term “every person” in subsection (a) had been expressly expanded to include public entities, a fact the
Legislature obviously knew. Thus here, “to leave the law as it stands” means to leave public entities after enactment of subdivision (b) liable in the same manner as all other defendants. We think it therefore more reasonable to conclude that, if the Legislature had desired to exclude public agencies from liability under subdivision (b), it would have
32.

expressly said so. If the Legislature is unhappy with our construction of Civil Code section 3287, there is nothing to prevent it from amending the statute to suit its pleasure.
We therefore hold that Civil Code section 3287, subsection (b) is applicable to the public entities described in Civil Code section 3287, subsection (a). In this case, the trial court exercised its discretion and awarded prejudgment interest. Other than the lack of statutory authority, the District has not argued on appeal that the trial court erred in rendering the award.
5.
Section 926.10*
Section 926.10 reads to the extent relevant as follows:
“Any public entity as defined by Section 811.2 having a liquidated claim against any other public entity based on contract or statute of the
State of California, or any person having such a claim against a public agency, shall be entitled to interest commencing the 61st day after such public entity or person files a liquidated claim known or agreed to be valid when filed pursuant to such statute or contract, and such claim is due and payable. Interest shall be 6 percent per annum.”
The District makes a half-hearted argument that this statute forbids an award of unliquidated damages against a public entity. Whatever the District’s reasoning -- which is not explained in this portion of the District’s brief -- the District’s obvious lack of enthusiasm for the contention is warranted. Section 926.10 says nothing about interest on unliquidated claims. It applies only to interest on liquidated claims which are “based on contract or statute of the State of California” and which are “known or agreed to be valid when filed pursuant to such statute or contract.” Nelson’s claim fit none of these criteria.
19
* See footnote, ante , page 1.
19 The District’s excerpt of the statute in its opening brief omits the phrase “of the
State of California.” We will assume, in the absence of contrary evidence, that this was not an intentional attempt to mislead this court.
33.

C. Attorney’s Fees*
The trial court awarded attorneys fees to Nelson, finding that the bid bond included in Nelson’s bid package, along with the District’s instructions about bid bonds, contained an applicable attorney fees provision which activated the mutuality effect of
Civil Code section 1717. The District contends the award of fees was erroneous.
The District’s Project Manual, one of the documents which made up the contract between the parties, included a segment entitled “Bidding Requirements.” The “Bidding
Requirements” instructed potential bidders that all bids must be accompanied by a bidder’s bond, cashier’s check or certified check representing at least 10 percent of the amount of the bidder’s base bid and also included a form for the required bid bond (No.
00-430). The bid bond form contained the following paragraphs:
“If said bid shall be accepted and the Principal shall execute and deliver a contract in the form of agreement attached hereto and shall execute and deliver Performance and Payment Bonds in the forms attached hereto (all properly completed in accordance with said bid), and shall in all other respects perform the agreement created by the acceptance of said bid; [¶]
Then this obligation shall be void, otherwise the same shall remain in force and effect, it being expressly understood and agreed that the liability of the
Surety for any and all default of the Principal hereunder shall be the amount of this obligation as herein stated. [¶] ... [¶] In the event suit is brought upon this bond by the Owner and judgment is recovered the Surety shall pay all costs incurred by the Owner in such suit, including a reasonable attorney’s fee to be fixed by the court.”
The bid bond obtained by Nelson was issued by St. Paul Fire & Marine Insurance
Company on December 23, 1991, contained the same paragraph found in the form provided by the District. Under the terms of the bid bond, it expired when Nelson entered into the prime contract with the District on February 5, 1992.
* See footnote, ante , page 1.
34.

The prime contract states in part that the Notice to Contractors and all the proposed forms and instructions to potential bidders are to be considered part of the contract. No other part of the contract documents between the District and Nelson, including the later payment and performance bonds furnished by Nelson, contains any provision relating to attorney fees, as the parties concede.
Our review of issues relating to the legal basis of an award of attorney fees is de novo, for it is a question of law. ( Snyder v. Marcus & Millichap (1996) 46 Cal.App.4th
1099; Honey Baked Hams, Inc. v. Dickens (1995) 37 Cal.App.4th 421, 424, disapproved on other grounds in Santisas v. Goodin (1998) 17 Cal.4th 599, 614, fn. 8.) Under the
American rule, attorney fees are not recoverable as costs unless expressly authorized by a statute or contract. ( Trope v. Katz, supra, 11 Cal. 4th at p. 278; Selma Auto Mall II v.
Appellate Department (1996) 44 Cal.App.4th 1672, 1682; Real Property Services Corp. v. City of Pasadena (1994) 25 Cal.App.4th 375, 379.) Ordinarily, attorney fees can be awarded in a contract action only if the lawsuit involves a claim covered by a contractual clause and the lawsuit is between the parties to the contract. ( Super 7 Motel Associates v.
Wang (1993) 16 Cal.App.4th 541, 544.)
We agree with the District the award of fees was improper. Section 1717 reads as follows:
“In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs. [¶] ... [¶]
Reasonable attorney’s fees shall be fixed by the court, and shall be an element of the costs of suit.” (§ 1717, subd. (a).)
This statute comes into play only where a contract specifically provides for attorney’s fees. “‘The primary purpose of [Civil Code ] section 1717 is to ensure mutuality of remedy for attorney fee claims under contractual attorney fee provisions.’
( Santisas v. Goodin, supra , 17 Cal.4th at p. 610.) It cannot be bootstrapped to provide for
35.

attorney fees for breach of a contract that has no attorney fees provision.” (
Khajavi v.
Feather River Anesthesia Medical Group (2000) 84 Cal.App.4th 32, 63, fn. 16.) Section
1717 thus turns a unilateral fee obligation for the benefit of one contracting party into a bilateral fee obligation for the benefit of both contracting parties ( Sears v. Baccaglio
(1998) 60 Cal.App.4th 1136, 1150-1151), but it does not create a right to fees in any party where none independently exists as a matter of contract. (See, e.g., Meininger v .
Larwin-Northern California, Inc. (1976) 63 Cal.App.3d 82, 85 [no fees awarded plaintiff subcontractor against prime contractor in suit for breach of contract where the only attorney fee provision applied to subcontractor’s duty to indemnify contractor from loss or damage in any tort action by a third party] Myers Building Industries, Ltd. v . Interface
Technology, Inc. (1993) 13 Cal.App.4th 949, 968 [same]; Tanner v . Tanner (1997) 57
Cal.App.4th 419, 424 [provision in marital agreement applicable to fees incurred in connection with “dissolution” did not apply to post-dissolution action challenging agreement].)
The bid bond ultimately obtained by Nelson did not create any unilateral obligation on Nelson’s part to pay fees incurred by the District in this action. The bid bond (and the included fee provision) ceased to have further legal effect when Nelson executed the prime contract and delivered the payment and performance bonds, and, though incorporated into that contract, the bid bond was an expired corollary agreement
(see Boliver v. Surety Co.
(1977) 72 Cal.App.3d Supp. 22, 28-29) at that time. When a contract specifies the period of its duration, it terminates on the expiration of such period and the duties of the parties to it are discharged. ( Tollefson v. Roman Catholic Bishop
(1990) 219 Cal.App.3d 843, 854, citing Beatty Safway Scaffold v. Skrable (1960) 180
Cal.App.2d 650, 654; see also 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts,
§ 867, p. 780.)
Nelson correctly points out that sometimes a party is precluded from limiting the application of an attorney fee provision to one part of the contract and that in some
36.

instances a nonsignatory party may invoke a fee provision contained in a contract between the signatory parties. (See Sessions Payroll Management, Inc. v. Noble
Construction Co.
(2000) 84 Cal.App.4th 671, 678; Building Maintenance Service Co. v.
AIL Systems, Inc.
(1997) 55 Cal.App.4th 1014, 1029; Milman v. Shukhat (1994) 22
Cal.App.4th 538, 543; Myers Building Industries, Ltd. v. Interface Technology, Inc ., supra, 13 Cal.App.4th at p. 972.) Nelson is also correct that the interpretation of a multidocument agreement requires consideration of all the incorporated documents as a single unit. ( Republic Bank v. Marine Nat. Bank (1996) 45 Cal.App.4th 919, 923.) However, neither these rules or the supporting cases are of effect here. Even if we were to find that the District, as a nonsignatory, was entitled to enforce the fee provision in the bid bond had it been compelled to sue on the bid bond, this would not change the fact that the bid bond had no legal effect after the contract between Nelson and the District was entered into and the District thereafter had no maintainable cause of action against Nelson or the surety on that bond. (Civ. Code, § 2810; see
A & A Electric, Inc. v . City of King (1976)
54 Cal.App.3d 457, 466 [liability of surety and principal on bid bond limited to hazard specified in bond and to penal amount of the bond]; see also Lawrence Tractor Co. v.
Carlisle Ins. Co. (1988) 202 Cal.App.3d 949, 953-954 [unless bond specifies to the contrary, surety’s liability for the total sum of the loss plus any contractual attorney fees cannot exceed penal sum of bond].) Because the bond expired and lost all legal effect when the agreement was signed, its only succeeding purpose was to establish that the condition precedent -- the furnishing of the bond itself -- had been met. This purpose did not create a unilateral obligation on the part of Nelson to the District, so there is nothing on which Civil Code section 1717 can work a transformation.
We disagree with Nelson that the bid bond applied to the entire project covered by the contract. According to Nelson, the bond stood behind Nelson’s performance of all aspects of the construction project because the bond stated in part that if the “Principal ...
37.

shall in all other respects perform the agreement created by the acceptance of said bid;
Then this obligation shall be void.”
This argument blithely ignores the legal and contractual nature of a bid bond, generically and with respect to the express and implied terms of the agreement between
Nelson and the District. As a general proposition, the purpose of a bid bond ensures that if the lowest bid is accepted, the successful low bidding contractor will thereafter execute the agreement and furnish both a performance bond and a payment bond; the bond in substance provides damages payable to the owner to cover the difference between the defaulting bidder’s bid and the amount which the owner is required to expend to have the work performed by another bidder, usually the next higher bidder. (See Acret, California
Construction Contracts and Disputes, Cal. Cont. Ed. of the Bar, (2d ed., 2000), § 4.29, p. 309; see also Conners, California Surety and Fidelity Bond Practice, Cal. Cont. Ed. of the Bar (1969), § 6.1, pp. 45-46.)
This purpose is manifest in the provisions of both the statutes applicable to bid bonds for public works such as the one involved here and the documents which formed the contract between Nelson and the District. Under the relevant portions of the Public
Contract Code, the security provided by the bid bond “shall be forfeited to the state” if the “successful bidder fails to execute the contract” (Pub. Contract Code, § 10181) and
“[t]he failure of the successful bidder to furnish any bond required of him by law, within the time fixed for his execution of the contract, constitutes a failure to execute the contract” (Pub. Contract Code, § 10183).
20 Under the Notice to Contractors issued by the District, the bid bond is to be given “as a guarantee that [Nelson] will enter into a contract if awarded the work and will be declared forfeited, paid to, or retained by [the
20 The laws applicable to a contract at the time it is entered into become a part of the contract by implication. ( Swenson v. File (1970) 3 Cal.3d 389, 393; 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, § 692, pp. 625-626.)
38.

District] as liquidated damages if the bidder refuses or neglects to enter into the contract provided by [the District] after being requested to do so.” 21
Essentially, Nelson wants the benefit of the inclusion of the bid bond in the contract documents without the burdens of the inclusion of the Notice and the law relating to the bid bond in the contract documents. We will not go along. We instead construe the phrase “shall in all other respects perform the agreement created by the acceptance of said bid” consistent with the law and the expressed intention of the parties as to the function and effect of the bid bond, and hold that the bond was intended to and did guarantee only Nelson’s “agreement” to execute the prime contract and deliver conforming payment and performance bonds and did not serve, and was not intended to serve, as a second performance bond applicable to Nelson’s obligations to the District to perform the actual work of construction covered by the contract documents in the manner required by the contract documents.
22 (Civ. Code, § 1636 [Contract interpreted to give effect to parties’ mutual intention]; cf.,
U.S. ex rel. Empire Plastics Corp. v. Western Cas.
& Sur. Co. (10th Cir. 1970) 429 F.2d 905, 906-907 [Bid bond surety liable to material supplier, a third party beneficiary of bid bond, where no labor and materials payment bond furnished by contractor].) To the extent the language of the phrase may be inconsistent with the purpose of the bond as expressed in the law and the intentions of the parties, we disregard any inconsistency. (Civ. Code, § 1653 [“Words in a contract which
21 Because the Notice and the pertinent statute (Pub. Contract Code, § 20107) each provide that bid security may be represented by a bond executed by a surety, by a certified check, by a cashier’s check or by cash, the Notice properly uses the words
“forfeited, paid to, or retained” to cover whatever form of security may be supplied by the bidder.
22 Despite Nelson’s protestations to the contrary, we are as certain as we can be that the bid bond surety, were it required to weigh in on the issue, would take a materially different position about the nature of the bid bond than has Nelson in this case.
39.

are wholly inconsistent with its nature, or with the main intention of the parties, are to be rejected”]; see also Civ. Code, § 1652 [If possible, repugnancies must be given some effect subordinate to general intent and purpose of the whole contract].)
Transdyn/Cresco JV v. City and County of San Francisco (1999) 72 Cal.App.4th
746, cited by Nelson, is not helpful to Nelson. The case holds that an enforceable public works contract is formed when the award is made to the successful bidder by the public agency, rather than at the time the formal documents are executed by the agency, and that the successful bidder is entitled to a writ of mandate compelling the responsible agency to execute the formal document. ( Id . at p. 758.) The fact that the contract in this case may have been created with the award to Nelson is irrelevant to the issue of the bid bond’s purpose and effect, which involves consideration of Nelson’s, not the District’s, obligation to execute the formal documents and of Nelson’s obligation to carry out certain specified terms (i.e., furnish a performance and a payment bond) of the agreement formed at the time Nelson’s bid was accepted. As we have explained, the bid bond, under the circumstances disclosed by the record here, served to guarantee nothing more than Nelson’s performance of these obligations.
The form bid bond in the District’s instructions to bidders also did not create a liability for fees. Although the form bid was incorporated into the contract between the
District and Nelson, it never had any legal effect. It was never executed by any surety or by Nelson and was not intended to have legal effect. Its incorporation into the prime contract as a precursor document may allow ease of reference, be evidence of the parties’ intent, and serve other useful purposes, but it does not change the character of, or give independent life to, the document incorporated. The bid bond “form” was included by reference in the contract documents as just that, a “form” specifying what was to be contained in the bid bond to be furnished by each bidder, and nothing more. The same instructions clearly contemplated that a separate bid bond would be furnished by a qualified surety.
40.

We are also unpersuaded by Nelson’s argument that the District admitted it would be entitled to attorney fees had it prevailed. In response to an interrogatory propounded by Nelson during discovery, asking whether the District contended it was entitled to fees, the District responded “yes.” In response to a follow up interrogatory from Nelson asking the District to identify which contract provisions supported this contention, the
District replied as follows:
“Defendant contends if there exists in the contract as between CUSD and
Nelson a specific provision for attorney fees, such provision pursuant to
Civil Code section 1717 is a mutual right to recover attorneys fees and attorneys fees shall be awarded to the prevailing party . Defendant does not agree with [Nelson’s] position that the contract provides for attorney fees in the circumstances of the subject case.
If [Nelson’s] position is correct and there is an applicable provision for attorneys fees in the contract, then defendant asserts its right to recover attorneys fees on the contract language by which [Nelson] contends the contract provides for attorneys fees. If alternatively the contract relationship between [Nelson] and defendant gives rise to an implied right to attorneys fees pursuant to Code of Civil
Procedure section 1021, then defendant asserts the legal basis set out in
Code of Civil Procedure section 1021 in support of its claim for attorneys fees. [Italics in original omitted, Italics added.]
It is apparent that the admission Nelson maintains the District made does not in reality exist. Nelson’s position that the District “admitted that it interpreted the contract just as Nelson did, that the prevailing party was entitled to its attorneys fees,” misrepresents the record.
23 The District’s response in the answers to Nelson’s interrogatories, and the District’s oral argument at trial, made clear that the District did not agree the contract provided for any award of attorney fees as costs. In any event, entitlement to attorney fees under a contractual provision or section 1717 is a question of law for judicial determination. ( Snyder v. Marcus & Millichap (1996) 46 Cal.App.4th
1099, 1102.)
23 We assume this was inadvertent.
41.

The trial court erroneously awarded attorney fees to Nelson .
D. Expert Witness Fees as Costs*
The District’s final contention is that the trial court erred in awarding Nelson expert witness fees as costs. Recovery of expert witness fees is generally the responsibility of the party who hired the expert, unless expressly authorized by statute or contractual provision. (Code Civ. Proc., § 1033.5, subds. (a)(8) & (b)(1); Davis v. KGO-
T.V., Inc.
(1998) 17 Cal.4th 436, 447; Robert L. Cloud & Associates, Inc. v. Mikesell
(1999) 69 Cal.App.4th 1141, 1153; Ripley v. Pappadopoulos (1994) 23 Cal.App.4th
1616, 1624-1625.)
Nelson appears to concede that the only basis for recovery of these costs is the expansive language of the purported attorney fee provision in the bid bond, which the trial court made bilateral under Civil Code section 1717. We have determined the trial court erred in enforcing the fee provision in the bid bond. Given this holding, the award of expert witness fees was likewise unauthorized.
DISPOSITION
The judgment is reversed. The matter is remanded for proceedings not inconsistent with this opinion. Each party shall bear its own costs on appeal.
_________________________________
Dibiaso, J.
WE CONCUR:
__________________________________
Ardaiz, P.J.
__________________________________
Buckley, J.
* See footnote, ante , page 1.
42.