Date: 11-28-2019

Case Style: California Taxpayers Action Network v. Taber Construction, Inc.

Case Number: A155803

Judge: Miller, J.

Court: California Court of Appeals First Appellate District, Division Two on appeal from the Superior Court, County of Contra Costa

Plaintiff's Attorney: Kevin Robert Carlin

Defendant's Attorney: Jason R. Thornton and Glenn Gould

Description: After Mount Diablo Unified School District (School District) hired Taber
Construction, Inc. (Taber) to complete a construction project involving modernization of
eight school campuses, plaintiff California Taxpayers Action Network sued the School
District and Taber generally challenging the School District’s use of a lease-leaseback
agreement for the construction project. (California Taxpayers Action Network v. Taber
Construction, Inc. (2017) 12 Cal.App.5th 115, 122 (California Taxpayers).) Following
successful demurrers, we affirmed the dismissal of most of plaintiff’s claims, but we
concluded plaintiff’s allegations were sufficient to state a single claim against Taber of
conflict of interest. (Ibid.)
In the surviving claim, plaintiff alleged Taber provided preconstruction services to
the School District regarding the project, and a conflict of interest arose when the School
District subsequently awarded the contract for the construction project to Taber. Taber
moved for summary judgment, the trial court granted the motion, and judgment was
entered in Taber’s favor. Plaintiff appeals, and we affirm.
2
FACTUAL AND PROCEDURAL BACKGROUND
The underlying construction project in this case involved heating, ventilation, and
air conditioning (HVAC) modernization of five elementary schools and three middle
schools owned by the School District. We refer to this construction project as the
“HVAC project.”
On October 4, 2013, the School District published two requests for qualifications
and proposals (RFQ/P’s) for its proposed HVAC project.1 The RFQ/P’s “invite[d]
responses from qualified firms . . . to enter into agreements with the District for the
HVAC Modernization” at the school campuses identified.
The RFQ/P’s explained that the School District intended to select a firm (or firms)
to complete the modernization project, but the process would involve two contracts
entered into at different times. First, the RFQ/P’s provided, “[t]he District intends to . . .
enter into a PSA [preconstruction services agreement] with the successful firm(s) to
partner with the District’s staff, Program Manager and Architect to provide
preconstruction services that will lead to the Firm providing to the District a Guaranteed
Maximum Price (GMP) for the project. The scope of Preconstruction Services will
generally consist of reviewing existing documents and site conditions, scheduling,
estimating, constructability review, subcontractor bidding, and development of the GMP,
as described fully in the Preconstruction services agreement (Attachment B/Exhibit H).”
Second, the RFQ/P’s provided that the “District intends to then enter into the
lease-leaseback agreement with the successful Firm.” Blank lease-leaseback agreements
were attached to the RFQ/P’s, and the RFQ/P’s stated that the successful contractor “shall
be required to comply with the terms of these forms.”2

1 RFQ/P MDUSD 1659 covered HVAC modernization at two middle schools and
two elementary schools. RFQ/P MDUSD 1660 covered another group of schools (three
elementary schools and one middle school). The RFQ/P’s appear to contain identical
language on general information, submittal requirements, and the School District’s
evaluation and selection process.
2 Education Code section 17406 authorizes school districts to use lease-leaseback
agreements in contracting for construction or improvement of school facilities. For a
3
Taber submitted responses for both RFQ/P’s, and a School District representative
later called Bret Taber, the chief executive officer of Taber, and told him Taber had been
selected for the HVAC project.
In November 2013, the School District and Taber entered into the PSA’s for the
HVAC project. The PSA’s included the following introductory language: “WHEREAS,
District and Developer intend to enter into a lease-leaseback arrangement for the
development of the Project . . . after Developer’s performance of its duties as set forth in
the Agreement and pending both the approval of the Plans and Specifications by the
California Division of State Architect (‘DSA’) and approval by the District and
Developer of the Lease Agreements.”
In March 2014, the School District and Taber entered into the lease-leaseback
agreement for the HVAC project. The lease-leaseback agreement was made up of a
“Master Site Lease” and a “Master Facilities Lease.”
Conflict of Interest Claim
In the operative complaint, plaintiff alleged the lease-leaseback agreement
between the School District and Taber for Taber to complete the HVAC project was
illegal because Taber “was legally precluded from being awarded those contracts due to
conflicts of interest that arose from [Taber]’s prior contract(s) with the [School District]
related thereto.”
The “prior contract(s)” plaintiff referred to were the PSA’s. Plaintiff alleged,
“Under the [PSA’s] and other similar other [sic] contracts [Taber] was expected and
legally required to give its undivided loyalty, honest services and professional advice to
[the School District] concerning, inter alia, the scoping, planning, budgeting, design and
construction methods/materials to be utilized for the completion of the Projects [i.e., the
HVAC project]. Such preconstruction services included, but were not limited to,
budgeting, site evaluation, plan review and constructability services, design review, value
discussion of lease-leaseback agreements generally, see California Taxpayers, supra, 12
Cal.App.5th at pages 122–123, 126–127.
4
engineering, CPM scheduling, construction estimating, staging (project phasing) and
assistance in the development of plans and specifications for various [School District]
projects including, but not limited to, the Projects.”
According to plaintiff, “[i]n performing its duties under the [PSA] . . . [Taber]
performed the functions and filled the roles and positions of officers, employees and
agents of [the School District] who would ordinarily perform and provide the foregoing
professional, design, and financial functions and advise the [School District] relative to
same.”
Plaintiff stated its theory for the conflict of interest claim generally as follows:
“Based on [Taber]’s provision of professional preconstruction services and advice to [the
School District] under the [PSA] relative to the Projects and other similar contracts[,]
conflicts of interest arose between [Taber] and [the School District] under the common
law conflict of interest doctrine applicable to [the District’s] contracts, Government
Code, Section 1090 et seq., and/or other applicable conflict of interest laws when [Taber]
was subsequently awarded the Lease-Leaseback Contracts [i.e., the Master Site Lease and
Master Facilities Lease] for the Projects and/or other similar other contracts.”
Plaintiff further alleged that the PSA’s “created the opportunity for [Taber] to use
its position as [the School District’s] professional preconstruction service provider under
the prior contracts to further . . . its own interests rather than the interests of the [District]
under the later contracts.”
Motion for Summary Judgment
Taber filed a motion for summary judgment arguing (1) completion of the HVAC
project rendered plaintiff’s claim moot, (2) plaintiff could not prove Taber had actual
knowledge of a conflict of interest, (3) there was no conflict of interest because the PSA’s
and construction contract were essentially formed as one transaction, and (4) Taber was
not subject to Government Code section 1090 because it was not a school board member
or oversight committee member.
5
As to the third argument,3 Taber maintained there was no conflicted contract
between itself and the School District because the School District contemplated “one
fluid transaction in which one contractor would carry out the entirety of the work, but in
different phases.” In other words, the School District’s intent when it published the
RFQ/P’s was to select “one contractor [to] perform preconstruction services and then
perform a lease-leaseback contract with the District.”
Relying on the language of the RFQ/P’s and PSA’s, Taber argued: “The District
awarded the PSAs and the Lease-Leaseback Contract to Taber at the same time after
analyzing the RFQ/Ps. [Citation.] The work was split into two phases, preconstruction
services and construction services, but the District intended to award Taber both phases
when the parties entered the PSAs on November 1, 2013. [Citation.] By entering the
PSAs with Taber, the District indicated Taber would be awarded the Lease-Leaseback
Contract. [Citation.] Thus, while performing the preconstruction services, Taber was
already the intended lease-leaseback contractor. . . . [¶] Taber and the District entered into
the PSAs and the Lease-Leaseback Contract as part of one transaction. Thus, Taber had
no ability to influence the award of the Lease-Leaseback Contract to itself, as it was
already selected.” (Fn. omitted.)
Taber explained in a footnote that the School District structured the contracts for
the HVAC project in two “phases because the Lease-Leaseback Contract could not be
entered into until the plans were approved by the [DSA] . . . . However, the
preconstruction services are useful to obtain DSA approval.” (See Ed. Code, §§ 17297
[“before letting any contract for any construction or alteration of any school building, the
written approval of the plans, as to safety of design and construction, by the Department
of General Services, shall be first had and obtained”], 17402 [“Before the governing
board of a school district enters into a lease or agreement pursuant to this article, . . . it
3 We describe only the third argument because it is the only argument at issue on
appeal.
6
shall have prepared and shall have adopted plans and specifications for the building that
have been approved . . . .”].)
Taber submitted evidence that this two-phase arrangement was commonly used for
school construction projects.4
Taber also noted, “Effective 2017, the statute was
amended to avoid the catch-22. The current operative statute now allows a leaseleaseback
contract to specifically include preconstruction services.” (See Ed. Code,
§ 17406, subd. (b)(1), as amended by Stats. 2106, ch. 521, § 2 [“Notwithstanding
Sections 17297 and 17402, for purposes of utilizing preconstruction services, a school
district may enter into an instrument created pursuant to paragraph (1) of subdivision (a)
[i.e., a lease-leaseback agreement] before written approval by the Department of General
Services’ Division of the State Architect only if the instrument provides that no work for
which a contractor is required to be licensed . . . for which Division of the State Architect
approval is required can be performed before receipt of the required Division of the State
Architect approval”].)
Plaintiff opposed Taber’s “one transaction” argument by pointing out that the
RFQ/P’s did “not create a binding contract or a duty to contract in the future.” Plaintiff
argued the PSA’s (entered into in November 2013) and the lease-leaseback agreement
(entered into in March 2014) could not be viewed as “one transaction” because the
School District was not bound to enter the lease-leaseback agreement until its Board
approved it on March 26, 2014.
4
In his declaration in support of the motion for summary judgment, Bret Taber
stated he had overseen California school construction projects for over 10 years, and it
was “quite common” for the same contractor to perform preconstruction and other
preliminary services and then provide the construction services under a lease-leaseback
agreement. He declared, based on his experience in the construction industry, “it is very
common in many school districts for a lease-leaseback contractor to perform
preconstruction or other preliminary services related to a school that later becomes the
subject of a lease-leaseback agreement,” and this had occurred in the majority of the
lease-leaseback agreements he had been involved with. Plaintiff did not dispute these
statements by Bret Taber. We also note that plaintiff did not submit any evidence of its
own to support its opposition to Taber’s motion for summary judgment and instead relied
solely on the evidence submitted by Taber.
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Trial Court Ruling
The trial court granted the motion for summary judgment based on Taber’s third
argument only. (The court found its other arguments lacked merit.) The court agreed
with Taber that “there can be no conflict of interest because the intent of the process was
‘one fluid transaction’ whereby the District would engage preconstruction services with a
contractor and then perform lease/leaseback services with that same contractor. Thus,
Taber’s rendering of preconstruction services was not a conflict but the precise intent of
the District.”
The court reasoned: “[Plaintiff’s] theory necessarily rests on the assumption that
Taber’s consultant role under the PSAs was meaningfully separate from Taber’s role as
contractor under the lease/leaseback agreements. As Taber argues, if both were really
part of what it calls ‘one fluid transaction,’ then it is no conflict of interest for the
contractor—already selected for the whole project—to perform the first phase of the
project first. Consider a school district that wants a new computer system. It needs a
consultant to design the right system; and then it needs a contractor to build and install
the system. If the district first hires the consultant with the intention of hiring the
contractor later, then the consultant may well be in violation of [Government Code]
§ 1090 if it effectively recommends itself as the contractor and obtains the second
contract. But if the district signs a single contract under which a single firm is to first
design the system, and then build and install it, the contractor is not in violation of § 1090
by carrying out the design phase. By hypothesis, the choice of that contractor for the
build phase has already been made (when the contract was entered), before the contractor
began serving as a consultant; the consultant cannot be said to have used its consultant
‘insider’ position to influence the choice of itself as the builder-contractor.
“Taber argues that that is what happened here, in realistic terms. It argues that the
District always intended to select a single firm for both the PSAs and the lease/leaseback
transaction. . . . The District issued RFQ/Ps to solicit proposals so that it could select a
contractor; but once it had selected Taber as the contractor, Taber was selected for the
whole project.
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“Why not just proceed by a single contract, then, if the decision to hire Taber had
already been made by November 1, 2013? The answer, as we have seen, is that this
project, unlike the computer hypothetical above, was a lease/leaseback. And under state
law at the time, it was not lawful to sign a single lease/leaseback contract for design and
construction.”
The court continued: “The Court views this issue from a viewpoint of common
sense and economic reality. It is true that § 1090 is a prophylactic statute, intended to
prevent even a temptation of undue influence and self-dealing. Thus, it would not be a
defense if Taber could show that while it was wearing its PSA consultant hat, it
scrupulously avoided any hint of trying to influence the District to pick Taber for the
lease/leaseback agreement. But Taber’s argument goes an important level deeper than
that: During the time that Taber was allegedly acting as an ‘employee’ of the District (as
a consultant under the PSAs), it categorically could not have influenced the District to
choose Taber for the lease/leaseback agreement. That’s because Taber had already been
chosen. The District had decided as of the time of the RFQ/Ps (1) that it was going to do
a lease/leaseback deal for its HVAC modernization project; and (2) that it was going to
choose a single contractor to do both the preconstruction services part of the project and
the actual construction part of the project.”
The court addressed plaintiff’s argument that the School District was not bound to
enter the lease-leaseback agreement before the Board approved it: “It is clearly true that
the District still retained an ‘out’ from entering into a lease/leaseback arrangement with
Taber, until it actually signed the lease/leaseback agreements. If Taber had gone
bankrupt, or been indicted, or just botched the design work, no doubt the District could
have decided not to do a lease/leaseback agreement with Taber. And presumably it could
then have proceeded to pick someone else for the lease/leaseback agreement. . . . But that
is really no different from a unitary contract containing various ‘outs’ for the District if
the need should arise, or simply making the contract terminatable at the District’s
convenience. And more germanely to the purpose of § 1090, none of that was an open
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topic for decision on which Taber could have improperly influenced the District through
its PSA consulting work . . . .”
Judgment in favor of Taber and against plaintiff was entered on October 22, 2018.
DISCUSSION
A. Standard of Review
Summary judgment is proper “if all the papers submitted show that there is no
triable issue as to any material fact and that the moving party is entitled to a judgment as
a matter of law.” (Code Civ. Proc., § 437c, subd. (c).) The moving party has the burden
of persuasion that there is no triable issue of material fact and that the party is entitled to
judgment as a matter of law. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826,
850.) In ruling on the motion, the court must draw all reasonable inferences from the
evidence in the light most favorable to the opposing party. (Id. at p. 843.) We review an
order granting summary judgment de novo. (Id. at p. 860.)
B. Applicable Law
Government Code5
section 1090, subdivision (a), provides in relevant part,
“Members of the Legislature, state, county, district, judicial district, and city officers or
employees shall not be financially interested in any contract made by them in their
official capacity, or by any body or board of which they are members.” “Every contract
made in violation of any of the provisions of Section 1090 may be avoided at the instance
of any party except the officer interested therein.” (§ 1092, subd. (a).)
Section 1090 “codifies the long-standing common law rule that barred public
officials from being personally financially interested in the contracts they formed in their
official capacities.” (Lexin v. Superior Court (2010) 47 Cal.4th 1050, 1072.) “The
common law rule and section 1090 recognize ‘[t]he truism that a person cannot serve two
masters simultaneously . . . .’ ” (Id. at p. 1073.)
“[T]he object of [section 1090] is to remove or limit the possibility of any personal
influence, either directly or indirectly which might bear on an official’s decision, as well
5 Further undesignated statutory references are to the Government Code.
10
as to void contracts which are actually obtained through fraud or dishonest conduct.”
(Stigall v. City of Taft (1962) 58 Cal.2d 565, 569 (Stigall).) “Officials make contracts in
their official capacities within the meaning of section 1090 if their positions afford them
‘the opportunity to . . . influence execution [of the contracts] directly or indirectly to
promote [their] personal interests’ and they exploit those opportunities.” (People v.
Superior Court (Sahlolbei) (2017) 3 Cal.5th 230, 246 (Sahlolbei).)
Although section 1090 refers to “officers or employees” of government entities, in
Sahlolbei, supra, our Supreme Court has recognized “the Legislature did not intend to
categorically exclude independent contractors from the scope of section 1090.” (3
Cal.5th at p. 238.) Not all independent contractors to government entities are covered by
section 1090, of course. Rather, “section 1090 liability extends only to independent
contractors who can be said to have been entrusted with ‘ “transact[ing] on behalf of the
Government.” ’ ” (Id. at p. 240, italics added, quoting Stigall, supra, 58 Cal.2d at p.
570.)
The Sahlolbei court explained, “So, for example, a stationery supplier that sells
paper to a public entity would ordinarily not be liable under section 1090 if it advised the
entity to buy pens from its subsidiary because there is no sense in which the supplier, in
advising on the purchase of pens, was transacting on behalf of the government.”
(Sahlolbei, supra, 3 Cal.5th at p. 240.)
“In the ordinary case, a contractor who has been retained or appointed by a public
entity and whose actual duties include engaging in or advising on public contracting is
charged with acting on the government’s behalf. Such a person would therefore be
expected to subordinate his or her personal financial interests to those of the public in the
same manner as a permanent officer or common law employee tasked with the same
duties. [Citation.] Thus, for instance, a person who was initially hired as an officer or
employee with responsibilities for contracting and then rehired as an independent
contractor to perform the same duties and functions would be expected to continue to
serve the public faithfully. Such a contractor would be subject to section 1090.”
(Sahlolbei, supra, 3 Cal.5th at p. 240.) What matters is whether a person is “in a position
11
to influence how a public entity spends the public’s money.” (Id. at p. 241.) “As an
historical matter, it is likely that only ‘officers’ occupied such a position; today, with the
expansion of government and public contracting, regular employees and even consultants
can have control over the public purse.” (Ibid.)
C. Analysis
On appeal, plaintiff contends the trial court misunderstood the basis of its conflict
of interest claim. Plaintiff argues Taber’s provision of preconstruction services under the
PSA’s constituted “participating in the making of” the subsequent lease-leaseback
agreement, including “the Master Facilities Lease,” and therefore “Taber was prohibited
from receiving an award of the Master Facilities Lease under Government Code § 1090
and California’s common law conflict of interest prohibitions.”
Initially, we note that we agree with the trial court’s thoughtful and thorough
analysis. There was no evidence Taber could have used its preconstruction consulting
work to improperly influence the School District to enter into the lease-leaseback
agreement with Taber because, as the court described, Taber was “already selected for
the whole project” by the time Taber began providing preconstruction consulting services
under the PSA’s. Indeed, plaintiff implicitly concedes Taber did not improperly
influence the School District to select Taber for the HVAC project when it insists the
conflict of interest arose “out of [Taber’s] participation in the making of the Master
Facilities Lease rather than any influence on [the School] District’s decision of who to
award that contract to.” (Italics added.)
Instead, plaintiff’s position is that once Taber provided preconstruction services on
the HVAC project pursuant to the PSA’s, Taber was precluded from entering into the
lease-leaseback agreement for construction of the same project because to do so would be
a conflict of interest. For its position, plaintiff cites Stigall, supra, 58 Cal.2d 565.
Section 1090 prohibits officers and employees from having a financial interest “in any
contract made by them in their official capacity.” (Italics added.) Plaintiff relies on
Stigall’s holding that the word “made” in section 1090 “encompass[es] the planning,
preliminary discussions, compromises, drawing of plans and specifications . . . .”
12
(Stigall, supra, 58 Cal.2d at p. 571.) Plaintiff argues Taber’s provision of preconstruction
services under the PSA’s constituted “making” the subsequent lease-leaseback agreement
because its services included planning, compromises, and drawing of plans and
specifications for the HVAC project.
But section 1090 only prohibits a contract made by a financially-interested party
when that party makes the contract in an “official capacity.” Where, as here, the
financially-interested party is an independent contractor, section 1090 applies only if the
independent contractor “can be said to have been entrusted with ‘ “transact[ing] on behalf
of the Government.” ’ ” (Sahlolbei, supra, 3 Cal.5th at p. 240, italics added.) This would
be the case if, for example, the independent contractor has been hired to engage in or
advise on public contracting. (Ibid.)
In this case, however, it cannot reasonably be said that Taber was hired to engage
in or advise on public contracting on behalf of the School District. The School District
did not contract with Taber in the PSA’s for Taber to select a firm to complete the HVAC
project. Rather, the School District contracted with Taber for Taber to provide
preconstruction services in anticipation of Taber itself completing the HVAC project.
Taber provided those services (including planning and setting specifications) in its
capacity as the intended provider of construction services to the School District, not in a
capacity as a de facto official of the School District.
An examination of Stigall shows plaintiff’s reliance on the case is misplaced. In
Stigall, the owner of Taft Plumbing Company, Glenn Black, was also a member of the
Taft city council and was in charge of the city council’s building committee for several
years. (Stigall, supra, 58 Cal.2d at pp. 566–567.) The building committee “supervised
the drawing of plans and specifications and the call for bids for the construction of a civic
center.” (Id. at p. 567.) When the bids came in, Taft Plumbing Company was the low
bidder for the plumbing work. After objections were raised that Black was a council
member and building committee member, the council readvertised for bids, and Taft
Plumbing Company was again the low bidder for the plumbing work. Three days after
the bids were received, a special meeting of the city council was called for the purpose of
13
awarding the contract for the civic center building. At the meeting, Black resigned as a
member of the city council, and then the council voted to award the plumbing work to
Taft Plumbing Company. (Ibid.)
The plaintiff in Stigall sued the City of Taft and the Taft Plumbing Company,
seeking a declaration that the contract for the plumbing work was void because Black
was an official of the city and “a conflict of interest existed which, under statutory law,
prohibited the making of a valid contract as between him or his plumbing company and
the city.” (Stigall, supra, 58 Cal.2d at pp. 567–568.) Even though Black was no longer a
council member when the city awarded the plumbing work to his company, our high
court held the plaintiff stated a claim. (Id. at p. 571.)
The issue presented in Stigall “relate[d] to the timing of Black’s resignation with
respect to the ‘making’ of the contract.” (Stigall, supra, 58 Cal.2d at p. 568.) The
defendants argued there could be no conflict of interest because Black resigned from the
city council before the contract was “made” under section 1090. The court agreed “that
Black was no longer a city official at the time the city accepted the offer of Black’s
company for the performance of plumbing work.” (Id. at p. 569.) And, although “neither
the city nor the plumbing company was bound to the conditions and covenants of the
proposal submitted by the company until after Black’s resignation,” the court reasoned,
“if we were to hold that the purpose sought to be accomplished by the enactment of the
statutory provisions could, by such strict construction, be so easily frustrated, we would
necessarily close our eyes to the clear legislative intent.” (Ibid.)
The Stigall court explained: “In the first place we are not here concerned with the
technical terms and rules applicable to the making of contracts. The Legislature instead
seeks to establish rules governing the conduct of governmental officials. In this sense, is
an act done or an agreement ‘made’ only when the final, objective affirmation is
communicated? It is true that no rights and duties accrue and no contract is technically
made until such time, but the negotiations, discussions, reasoning, planning and give and
take which goes beforehand in the making of the decision to commit oneself must all be
deemed to be a part of the making of an agreement in the broad sense. The instant
14
statutes are concerned with any interest, other than perhaps a remote or minimal interest,
which would prevent the officials involved from exercising absolute loyalty and
undivided allegiance to the best interests of the city. [Citation.] Conceding that no fraud
or dishonesty is apparent in the instant case, the object of the enactments is to remove or
limit the possibility of any personal influence, either directly or indirectly which might
bear on an official’s decision, as well as to void contracts which are actually obtained
through fraud or dishonest conduct. [Citations.]
“ . . .
“The circumstances in the instant case present a most pertinent illustration of what
might transpire with impunity at other times and places, should the construction insisted
upon by defendants prevail. A council member could participate in all negotiations
giving a contract its substance and meaning, be instrumental in establishing specifications
and schedules most advantageous to his or his firm’s particular mode of operation,
participate in the selection of his or his firm’s offer, resign just prior to formal acceptance
of that offer and execute the contract as the other party thereto. While on the one hand
there is no allegation or claim of self-serving conduct in the instant case, on the other
hand this is not a situation in which a councilman was only remotely connected with the
making of the contract. On the contrary, Councilman Black was first forewarned, by the
charges made at the time the original bids were submitted that his continued presence on
the council might invalidate a contract with his company. Nevertheless, he thereafter
participated as a councilman, and the committee of which he had charge supervised the
drawing of plans and specifications and the call for bids for the civic center. Manifestly
the situation was one fraught with temptation and . . . the legislation ‘is more concerned
with what might have happened in a given situation than with what actually happened. It
attempts to prevent honest government agents from succumbing to temptation by making
it illegal for them to enter into relationships which are fraught with temptation.’ ”
(Stigall, supra, 58 Cal.2d at pp. 569–571.)
The court concluded, “[W]e are persuaded . . . to reject in the case at bar the
narrow and technical interpretation of the word ‘made’ and construe its statutory meaning
15
to encompass the planning, preliminary discussions, compromises, drawing of plans and
specifications and solicitation of bids, in all of which Councilman Black participated and
which here were, in the broad sense, embodied in the making of the contract.” (Stigall,
supra, 58 Cal.2d at p. 571.)
In Stigall, it was Black’s participation in the planning of the civic center building
before any contractors were selected and his participation in the selection of his firm’s
bid, activities undertaken in his official capacity as a city council member in charge of the
building committee, that concerned the court. There is no similar situation here. There is
no evidence, for example, that Taber drafted the RFQ/P’s to its own advantage or
participated in the School District’s selection of the construction firm to complete the
HVAC project, much less that it did either of these things in an official capacity for the
School District.
In short, we reject plaintiff’s claim that it was a conflict of interest for Taber to
enter into the lease-leaseback agreement for the HVAC project after Taber provided
preconstruction services on the same project pursuant to the PSA’s. There is no evidence
that Taber was transacting on behalf of the School District when it provided those
preconstruction services. Instead, the RFQ/P’s and PSA’s show that Taber was
transacting business as a provider of services to the School District.

Outcome: The judgment is affirmed. Costs on appeal are awarded to respondent Taber.

Plaintiff's Experts:

Defendant's Experts:

Comments: