Time Extensions Now Both Defensive and Offensive

Ever since the California Supreme Court handed down its decision in Peter Kiewit Sons' Co. v. Pasadena City Junior College Dist. (1963) 59 Cal.2d 241, California has maintained a strange dichotomy regarding time extension requests and liquidated damages that made some practical sense, and was a boon to contractors everywhere. The dichotomy provided: if a contractor wants a time extension, it must adhere to the contract's procedures and timely and properly submit one. However, an owner may not assess liquidated damages against a contractor for delays that are actually the owner's fault, REGARDLESS of whether or not the contractor ever submitted a timely and proper time extension request for these delays. The dichotomy made sense by depriving a careless contractor of affirmative claims for time when the contract's provisions are not followed, but not awarding the owner a windfall (LDs for delays that are actually the owner's fault) simply because the contractor neglected to timely file a time extension request.

That dichotomy came to an abrupt end this week, with the California Court of Appeal's decision in Greg Opinski Construction, Inc. v. City of Oakdale. The Opinski court acknowledged the rule established in Kiewit, but concluded that a 1965 amendment to California's Civil Code overturned the holding in that case. This conclusion came as a surprise to the many trial and appellate courts that have followed the Kiewit doctrine in the last forty-seven years---apparently, no one but this panel of the Court of Appeal realized that Kiewit had been superceded two generations ago.

Opinski makes more sense when viewed in the context of the overall approach of California courts to contractor's claims. In California, as in the Federal Court of Claims, contractors built a favorable body of caselaw from the 1960s through the early 1980s on topics ranging from weighing the propriety of termination to waiver of contractual change order procedures. Many of these cases are relied on to this day by contractors' attorneys. But starting in the mid-1990s, in both California and the Federal Court of Claims, the worm started to turn. Courts have insisted on more rigorous (occasionally, strict) adherence to contractual change provisions, and have shown greater willingness to strip a contractor of otherwise valid claims based solely on procedural defects. Contractors still win the occasional victory (Dillingham-Ray Wilson v. City of Los Angeles comes to mind), but the tide has clearly turned.