Cal-Pac. Materials Co. v. Redondo Beach City Sch. Dist.

Opinion

THOMPSON, J.

In this appeal, we consider the narrow issue of the extent of protection afforded a public entity by the filing of a surety bond by a general contractor pursuant to Civil Code section 3196 in order to secure the release of funds withheld from the contractor by reason of a dispute over a stop notice filed with the entity by a subcontractor. We conclude that a public entity which honors the section 3196 bond by releasing withheld funds to the general contractor is relieved of any liability resulting from the stop notice. Accordingly, we reverse a trial court judgment holding…