Pittsburg Unified Sch. Dist. v. S.J. Amoroso Constr. Co., Inc.
Annotate this CaseThe School District entered into a construction contract with Amoroso. Pursuant to Public Contract Code 22300, Amoroso elected to have the retention held in an escrow account in the form of securities. The escrow agreement stated that “District shall have the right to draw upon the securities and/or withdraw amounts from the Escrow Account in event of default by Contractor as determined solely by District.” The District gave written notice of material breach on March 30, 2011, based on Amoroso’s failure to complete, timely or at all, any of the three project phases and requested that Amoroso cure by April 4. Amoroso contested the assertions of material breach by letter dated April 1. The District sent notice of termination on April 18 and filed suit. On April 28, the parties entered into an “Exit and Demobilization Agreement,” “in lieu of any final termination or statement of default under the Contract.” The District sent a letter requesting withdrawal of $3.5 million from the escrow account, attaching its attorney’s memorandum as to why withdrawal was permissible. Amoroso unsuccessfully sought an injunction. The court of appeal affirmed, rejecting Amoroso’s claim that a public project owner must await judicial resolution of the underlying contract dispute before it can withdraw retention funds.
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