Denver D. Darling, Inc. v. Controlled Environments Construction, Inc

Denver D. Darling, Inc. v. Controlled Environments Construction, Inc. (2001) 89 Cal.App.4th 1221, involved a number of issues under section 3260, none of which addressed whether only the 2 percent charge under section 3260, subdivision (g) is a "penalty" within the meaning of section 3260.1, subdivision (b). The court concluded that attorney fees are not available under section 3260 where there is a bona fide dispute over withheld retention payments. (Denver D. Darling, at p. 1241.) The appellate court also held that the owner withheld more than 150 percent of retention payments in violation of section 3260. It remanded the matter to the trial court for a determination of the contractor's entitlement to attorney fees under section 3260, subdivision (g) as prevailing party. (Denver D. Darling, Inc., at p. 1242.)