Many of you have heard about the crazy decision recently issued by the Fourth Appellate District. In that decision, the Court said that Golden State Boring’s bond claim was time barred because its stop payment notice was premature. The Court basically ignored the plain language of Civil Code 3249 (now Civil Code 9356) and concluded that because the stop notice was filed before a notice of completion, it was premature and hence not valid.
Historically all subcontractors have filed stop payment notices during the course of a project if they have not been paid and they wish to ensure that there are funds available and set aside for them. The Golden State case put subcontractors in the position of having to serve two stop notices, one when it wanted to stop funds from being delivered to the contractor before delivering it to the sub, and one within 30 days of the notice completion.
Golden State asked the Supreme Court to review the decision. The Supreme Court refused to do so. But, it decertified the opinion. That in lay terms means that the decision, although remaining effective as to the parties to that case, cannot be used by anyone else, and has no force or effect anymore with respect to all other contractors. It is as if the opinion disappeared.