SAN FRANCISCO – A state appellate court has upheld a ruling granting attorneys' fees in a claim a lower court called a "junk claim."
The Court of Appeal of the State of California, 1st Appellate District upheld a jury verdict that awarded John Russo Industrial Sheetmetal Inc., which does business as JRI Inc., reimbursement of its attorney’s fees in a claim filed against it by winning party city of Los Angeles Department of Airports, agreeing with a lower court that one of the claims was “frivolous and harassing,” according to an opinion filed on Nov. 26 by Justice Terence L. Bruiniers.
The court said the Lost Angeles Department of Airports, which is also known as Los Angeles World Airports (LAWA), agreed to purchase specialized fire trucks from JRI.
Judge Terence Bruiniers
JRI and LAWA both subsequently filed complaints against the other over allegations of breach of the purchase contract. In its breach lawsuit, LAWA sought the return of the $2 million it paid for the specialized trucks. LAWA also alleged that JRI was in violation of the California False Claims Act (CFCA).
Although LAWA was successful in the contract dispute, with the jury awarding it $1 in damages and the other claims were thrown out by the jury, the court said the jury agreed that JRI’s attorney fees should be paid because LAWA’s CFCA claim should not have been filed.
According to the Appeals Court ruling, LAWA alleged that JRI had violated the CFCA because it “(1) fraudulently induced LAWA to enter into the contract, making all the subsequent claims for payments violative of the CFCA and (2) JRI impliedly and falsely certified compliance with applicable contract requirements when it requested progress and final payments.”
San Mateo Superior Court called the CFCA violation claim a “junk claim all along,” the ruling said the Superior Court found that LAWA was well aware that one of the trucks provided by JRI “was not built exactly as contract terms,” but LAWA took delivery of the truck following an inspection because it needed it “to avoid a federal shut-down.”
The appeals court agreed with the jury’s finding about the CFCA claim.
“By failing to discuss all relevant evidence, LAWA failed to meet its burden on appeal to show trial court erred in finding the claim was frivolous and harassing,” Bruiniers said.