Structural Steel Fabricators, Inc. v. City of Orange

In Structural Steel Fabricators, Inc. v. City of Orange (1995) 40 Cal.App.4th 459, the plaintiff, a subcontractor, entered into a contract with a general contractor to perform work for the City of Orange. The general contractor paid plaintiff only part of what it was owed, and the plaintiff sued and obtained a default judgment. When the general contractor filed for bankruptcy, plaintiff sued the city. Plaintiff admitted that the statute of limitations had expired several months earlier, but asserted that the statute had been equitably tolled while it pursued a remedy against the general contractor. (Id. at pp. 462-463.) The Court of Appeal agreed. With regard to the issue of notice, the court held that the city had been timely notified of plaintiff's potential claim against it through a letter from the plaintiff that stated in part as follows: "'We recently filed a subcontractor's construction collection action against I.D.C. and your surety (Contractor's Surety Bonding Co.). We hear now that your surety was not a proper surety and that they may be unable to protect the job. Is there another surety? We had a stop notice and need to know for sure who we should be suing. If your surety was not a properly registered surety with the insurance authorities, it might also create liability back upon the city (although we haven't researched this yet). Please respond as soon as possible.'" (Id. at p. 466.) Through this letter, the court said, the city "clearly" had notice sufficient to meet the first element of equitable tolling. (Ibid.)