City of Calabasas ex rel. Brent Carpenter v. Bernards Bros. Inc. et al., Case No. B234205 (Cal. App. 2d Dist. Oct. 30, 2012): In an unpublished opinion, a California appellate court reversed, in part, and affirmed, in part, the trial court’s decision dismissing a qui tam action alleging that a contractor and subcontractor violated the California False Claims Act (California FCA). The plaintiff alleged that the defendant contractor fired him from a city project after he notified the defendant contractor about substandard work performed by other subcontractors, and that the defendant contractor then submitted to the city false claims for payment for such deficient work. The plaintiff further alleged that the contractor replaced him with an unlicensed subcontractor and then falsely claimed that the unlicensed subcontractor’s sister entity performed the work that the unlicensed subcontractor had actually performed. First, the appellate court found that because the defendant subcontractor’s sister company, which shared the same workforce as the defendant subcontractor, was licensed, the falsity about which entity performed the work was not material, and neither the defendant contractor nor the defendant subcontractor could be held liable for violating the California FCA on this basis. However, the appellate court also found that the plaintiff’s allegations that the subcontractors performed deficient work, that the defendant contractor knew about the deficient work, or acted in deliberate indifference or reckless disregard of that fact, and that the contractor submitted to the city claims for payment for such deficient work sufficed to state a cause of action against the contractor because they informed both the defendant and the court of the factual basis for the cause of action.
19 Mar '13