Rados v. Travelers Casualty and Surety Co. CA2/5

── Rados v. Travelers Casualty and Surety Co. CA2/5 ── Court: California Court of Appeal Date: June 04, 2026 Category: General Filed 6/4/26 Rados v. Travelers Casualty and Surety Co. CA2/5 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FIVE STEVE P. RADOS, INC., B339848 c/w B340974 Plaintiff, Cross- (Los Angeles County defendant, and Appellant; Super. Ct. No. 20STCV15277) TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, Cross-defendant and Respondent, v. BLACK & VEATCH CONSTRUCTION, INC.,  Defendant, Cross- complainant, and Appellant; FEDERAL INSURANCE COMPANY et al., Defendants and Appellants. APPEALS from a judgment of the Superior Court of Los Angeles County, J. Stephen Czuleger, Judge. Affirmed in part, reversed and remanded in part for further proceedings with directions. Monteleone & McCrory, Diana M. Dron, Michael F. Minchella, Litsa Georgantopolous; Benedon & Serlin, Judith E. Posner, Kelly R. Horowitz; Nida & Romyn and Douglas Yokomizo for Plaintiff, Cross-defendant, and Appellant Steve P. Rados, Inc. Monteleone & McCrory, Diana M. Dron, Michael F. Minchella, Litsa Georgantopolous; Nida & Romyn and Douglas Yokomizo for Cross-defendant and Respondent Travelers Casualty and Surety Company of America. Burke, Williams & Sorensen, Timothy A. Colvig, David Darroch, David J. Hyndman; Hicks Thomas, John B. Thomas, Eric Grant; Stris & Maher and Rachana A. Pathak for Defendant, Cross-complainant, and Appellant Black & Veatch Construction, Inc. 2  SMTD Law and Jonathan J. Dunn for Defendants and Appellants Federal Insurance Company, Fidelity and Deposit Company of Maryland, and Zurich American Insurance Company. ****** California Water Service Company (Cal Water), a private utility company, hired a general contractor to design and build a new pump station and seven miles of underground piping to serve the Palos Verdes Peninsula, and the general contractor hired a subcontractor to do most of the construction. The general contractor eventually terminated the subcontractor, and the general contractor and subcontractor (and their sureties) sued each other. After a five-week trial, a jury found that the termination was without cause and awarded the subcontractor more than $12 million in damages. Both sides have appealed. We conclude that the jury’s finding that the termination was without cause was not tainted by instructional error; that a new trial on damages is required because the trial court erred in not deciding—and thereby not instructing the jury—which damages provision of the subcontract was controlling and what that provision meant; that the general contractor is entitled to a $2.4 million chargeback during the new trial; and that the subcontractor is not entitled to seek prompt payment penalties. We accordingly affirm the judgment for the subcontractor in part and remand in part for a limited new trial on the issue of damages. 3  FACTS AND PROCEDURAL BACKGROUND I. Facts A. Cal Water Hires a general contractor Cal Water is a private utility company that California communities have hired to supply water. After more than a decade of study, Cal Water concluded that the “water supply system” to the Palos Verdes Peninsula, one of the communities it serves, needed “substantial capital improvements to its pumping and pipeline transmi