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Filed 2/26/21 Philadelphia Indemnity Ins. Co. v. Housing Authority etc. CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or 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

FIRST APPELLATE DISTRICT

DIVISION TWO

PHILADELPHIA INDEMNITY 

INSURANCE COMPANY,

Plaintiff and Appellant,

v.

HOUSING AUTHORITY OF THE 

COUNTY OF ALAMEDA,

Defendant and Respondent.

 A157691

 (San Francisco County

 Super. Ct. No. CGC-16-555946)

This appeal is about the enforceability of a construction performance 

bond for a public works contract. 

The Housing Authority of the County of Alameda (HACA) entered into 

a construction agreement with a contractor for a rehabilitation project known 

as the Emery Glen Project. The contractor, known to HACA from prior 

business dealings, did business under the names “World Priority, LLC,” 

“World Priority,” and “World Priority Construction.” HACA’s construction 

agreement for the Emery Glen Project identified the contractor as “World 

Priority, LLC.” 

HACA required a construction performance bond as a condition of

entering the agreement. The contractor submitted a bond issued by 

Philadelphia Indemnity Insurance Company (PIIC) for the Emery Glen 
2

Project (Bond); the Bond identified the principal as “World Priority 

Construction.”

1 HACA accepted the Bond because HACA staff knew the 

contractor also referred to itself by that name. 

Time passed, the contractor failed to complete the Emery Glen Project, 

and HACA submitted a claim to PIIC on the Bond. But PIIC denied HACA’s 

claim and eventually filed a complaint in superior court seeking a judicial 

declaration that the Bond had no force or effect and that PIIC had no surety 

obligations under the Bond to HACA. PIIC alleged it issued the Bond to 

“World Priority Construction,” and “World Priority, LLC,” is a different 

entity, a Wyoming limited liability company that is not licensed in California 

and was never a PIIC principal. HACA filed a cross-complaint against PIIC 

for breach of the Bond. 

Following a four-day bench trial on liability only, the trial court found 

in favor of HACA. The trial court found the Bond was valid and enforceable 

and that PIIC was equitably estopped from denying the validity and 

enforceability of the Bond. The parties then stipulated to the amount of 

damages and judgment was entered.

PIIC appeals. Although it attacked the trial court’s findings in its 

opening brief, PIIC concedes in its reply that the court’s finding of equitable 

estoppel withstands a substantial evidence challenge. PIIC is left with a 

contention it never made during trial or indeed in the 10 months following 

1 A performance bond creates a tripartite relationship among the surety 

(the issuer of the bond), the surety’s principal (the contractor, who obtains 

the bond from the surety), and the owner (also called the “obligee,” the party 

that has hired the contractor). (Fort Bragg Unified School Dist. v. Colonial 

American Casualty & Surety Co. (2011) 194 Cal.App.4th 891, 910.) The 

purpose of the bond is to protect the owner as “ ‘ “the surety agrees to answer 

for the debt, default, or miscarriage of the principal.” ’ ” (Cates Construction, 

Inc. v. Talbot Partners (1999) 21 Cal.4th 28, 38.) 
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the close of evidence: that it has no obligation to pay under the Bond because 

the underlying construction agreement between HACA and the contractor for 

the Emery Glen Project is void under Business and Professions Code section 

7028.15, subdivision (e) (§ 7028.15(e)). This statute provides that a bid 

submitted by an unlicensed contractor to a public agency must be considered 

nonresponsive and makes void any contract awarded by a public agency to an 

unlicensed contractor. (§ 7028.15(e)). 

PIIC only raised section 7028.15(e) in a motion filed after the court 

issued its final statement of decision. The trial court denied this posttrial 

motion as untimely and dismissed the argument as without merit.

PIIC has not shown error, and we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

HACA’s Dealings with the Contractor Known as “World Priority, LLC”

Ed La Perle presented himself to HACA as the CEO of a construction 

business he variously referred to as “World Priority, LLC,” “World Priority,” 

and “World Priority Construction.”2 Whichever name he used to refer to his 

business, La Perle always provided HACA the same address in Discovery 

Bay, California, the same federal tax identification number, and the same 

license number from the California Contractors State License Board (CSLB). 

HACA staff checked the contractor’s license number La Perle provided and 

2 For example, when La Perle attended a walk-through for a project in 

Union City in October 2012, he signed in for “World Priority.” When he 

submitted a bid for that project, the name on the bid was “World Priority, 

LLC.” Invoices La Perle submitted for that project had a logo with the words 

“World Priority,” a line, then “Construction” below the line, a symbol of a 

globe under a magnifying glass to the right, and below that “World Priority, 

LLC.” The HACA procurement analyst who prepared that contract (and later 

prepared the Project agreement) testified she said to La Perle “ ‘You’ve got 

two names on this invoice,’ and he said ‘It’s the same.’ ” 
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confirmed it belonged to “World Priority.” HACA staff also knew the tax 

identification number La Perle provided was associated with the name 

“World Priority, LLC.” La Perle’s business did two small construction 

projects for HACA before the Emery Glen Project, and in both cases the 

service contracts identified the contractor as “World Priority, LLC.” Based on 

La Perle’s conduct, HACA staff and its Executive Director believed the names

“World Priority, LLC,” “World Priority,” and “World Priority Construction” all 

referred to one business entity. 

In May 2013, HACA published a notice inviting contractors to bid on 

the Emery Glen Project. La Perle submitted a bid to complete the Emery 

Glen Project for $411,000 under the name “World Priority.” La Perle’s bid 

was determined to be the lowest, and in June HACA issued a notice of award 

for the Emery Glen Project (Award Notice) to La Perle’s business using the 

name “World Priority, LLC.” The procurement analyst who prepared the 

Award Notice testified she used that name because it was “the legal name the 

tax ID number was associated with.” La Perle subsequently delivered the 

Bond (that is, the required performance bond issued by PIIC for the Emery 

Glen Project) to HACA. HACA staff noticed the Bond named the principal

“World Priority Construction,” not “World Priority, LLC,” but they accepted 

the Bond because they believed the two names referred to the same 

business.3 In July 2013, HACA and La Perle executed the construction 

agreement for the Emery Glen Project (Agreement). The Agreement—which 

the Bond incorporated by reference (“hereby referred to and made a part 

3 The manager of the Project at HACA testified he knew “World 

Priority,” “World Priority Construction,” and “World Priority, LLC,” all had 

the same CSLB license number and tax identification number, and he 

believed “it was all the same thing; one company.” 
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thereof”)—identified the contractor as “World Priority, LLC,” and was signed 

by La Perle as CEO. La Perle had signed the Bond as CEO of “World Priority 

Construction.” 

The contractor did not finish the Emery Glen Project, and in June 2014, 

HACA terminated the Agreement. 

PIIC’s Issuance of a Performance Bond

La Perle obtained the Bond through Surety Solutions Insurance 

Services (Surety1), an insurance and surety bond broker and underwriter

that specializes in small and emerging contractors. According to Surety1’s 

president, John Page, “World Priority Construction” was its customer. La 

Perle provided Surety1 the same tax identification number and contractor’s

license number he used in his dealings with HACA. Page testified his office 

verified “World Priority Construction” was licensed. In fact, supporting 

documents in Surety1’s files showed that the California contractor’s license 

number La Perle provided was associated with an entity called “World 

Priority,” not “World Priority Construction.” 

Page testified that when his office received a copy of the Award Notice 

for the Emery Glen Project in the name “World Priority, LLC,” this was “the 

first time we had ever seen that name come to light.” But this testimony was 

contradicted by documents in Surety1’s file for La Perle’s construction 

business, which included a balance sheet and banking statements for “World 

Priority, LLC.” La Perle provided these documents as financial information 

to support his application for a performance bond for the Emery Glen Project, 

and Page testified his office relied on these documents in deciding to issue the 

Bond. After receiving the Award Notice and before the Bond was issued, 

Page mentioned to La Perle at the end of an email (which otherwise 

concerned a different matter), “We do need the contract name changed.” His 
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office then issued the Bond to “World Priority Construction” and gave it to La 

Perle with the intention that La Perle would use it to execute a construction 

agreement with HACA for the Emery Glen Project. In response to a question 

from the trial court, Page testified he was unaware of an entity called “World 

Priority, LLC,” and he did not know whether such an entity had a 

contractor’s license. 

Trial and Statement of Decision

Pursuant to stipulation, a bifurcated bench trial on liability was held 

over four days in January 2018. The parties submitted competing proposed 

statements of decision, and the court filed a tentative statement of decision 

finding in favor of HACA in June 2018. PIIC filed additional briefing in July 

and October 2018.4

On November 5, 2018, the trial court filed a 22-page final statement of 

decision finding in favor of HACA. 

The trial court found that HACA witnesses “testified credibly,” but 

Page testified “untruthfully” when he said the Award Notice was the first 

time he had seen the name “World Priority, LLC.” The court found that 

HACA and La Perle’s construction business “whether known as World 

Priority, World Priority Construction or World Priority LLC,” evidenced a 

clear intent to enter a construction agreement for the Emery Glen Project. It 

found that Page, acting as a broker agent to obtain bonding for La Perle’s 

construction business and as an underwriter for PIIC, intended to act as 

surety for La Perle’s business in connection with the Emery Glen Project. 

4 In July, PIIC filed a request for statement of decision asking the court 

to provide “the factual and legal basis for its decision as to” 72 questions. In 

October, PIIC filed a supplemental trial brief and a clarification to its 

supplemental trial brief. (PIIC filed its initial trial brief in January before 

the trial started.) PIIC never raised section 7028.15 in these filings.
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The court found no evidence that La Perle “was acting in a dual role for two 

different companies.” Based on the evidence and principles of contract 

interpretation, the court determined the names “World Priority, LLC” and 

“World Priority Construction” referred to “the same contractor entity using 

different names for purposes of” the Agreement and the Bond.

The court further concluded the Bond was valid and PIIC was equitably 

estopped from denying the validity and enforceability of the Bond.5 The court 

determined, “HACA reasonably relied on the Bond to its detriment” and 

“PIIC is liable to HACA and cannot now evade the obligations it owes to 

HACA under the Bond.”6 

5 Equitable “ ‘[e]stoppel is applicable where the conduct of one side has 

induced the other to take such a position that it would be injured if the first 

should be permitted to repudiate its acts.’ ” (DRG/Beverly Hills, Ltd. v. 

Chopstix Dim Sum Cafe & Takeout III, Ltd. (1994) 30 Cal.App.4th 54, 59 

(DRG).) 

6 In its discussion of equitable estoppel, the trial court cited DRG, 

supra, and Busse v. Pacific Employers Ins. Co. (1974) 43 Cal.App.3d 558

(Busse). Busse applied equitable estoppel in the surety context and stated the 

following rule. “Where a surety seeks to avoid liability on the ground that its 

undertaking was delivered conditionally and the conditions were not 

performed, the courts ordinarily apply one of two rules, depending on the 

facts presented: ‘When the surety’s undertaking is complete and regular on 

its face and the obligee has no notice of conditions imposed by the surety, the 

surety will be liable; . . . on the other hand, when the undertaking is so 

incomplete on its face as to suggest nonperformance of some condition 

imposed by a surety, it carries notice to the obligee and relieves the surety.’ ” 

(Busse, supra, 43 Cal.App.3d at pp. 568–569.) 

Applying Busse to the facts of this case, the trial court found PIIC was 

seeking to avoid liability on the ground the Bond was conditioned on 

changing the name in the underlying construction agreement to “World 

Priority Construction” even though the Award Notice was to “World Priority, 

LLC.” The trial court reasoned, “equitable estoppel should be applied in this 

case. If the surety’s performance bond [was intended to] have no effect unless 

the name on the . . . construction contract be changed[,] that should have 
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On December 14, 2018, the court set the trial for determination of 

damages for June 11, 2019. 

PIIC’s Post-Decision Motion

On December 18, 2018, PIIC filed a “Motion for Judgment Under C.C.P. 

§ 631.8 To All of PIIC’s Claims for Damages” and, two days later, filed a 

corrected motion.7 PIIC argued that HACA failed to establish the Agreement 

“is not void under Business and Professions Code § 7028.15(e), and as a 

result, HACA has no claim against PIIC’s Performance Bond or PIIC.” 

The trial court denied PIIC’s motion on the grounds the motion was

untimely, and the statute cited did not apply. 

DISCUSSION

We begin with a brief review of appellate practice. “A judgment or 

order of a lower court is presumed to be correct on appeal, and all 

intendments and presumptions are indulged in favor of its correctness.” (In 

re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133.) It is the appellant’s 

burden to affirmatively show error—“ ‘This is not only a general principle of 

appellate practice but an ingredient of the constitutional doctrine of 

reversible error.’ ” (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) 

been made known to HACA. The issuance of the bond for the named project, 

delivered by the contractor obligated to produce the bond, in a name 

associated with that contractor is a bond delivered complete and regular on 

its face. PIIC is estopped from denying its validity and enforceability.” 

7 “After a party has completed his presentation of evidence in a trial by 

the court, the other party, without waiving his right to offer evidence in 

support of his defense or in rebuttal in the event the motion is not granted, 

may move for a judgment. The court as trier of the facts shall weigh the 

evidence and may render a judgment in favor of the moving party, in which 

case the court shall make a statement of decision . . ., or may decline to 

render any judgment until the close of all the evidence.” (Code Civ. Proc., 

§ 631.8, subd. (a).) 
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“This means an appellant must do more than assert error and leave it 

to the appellate court to search the record and the law books to test his claim. 

The appellant must present an adequate argument including citations to 

supporting authorities and to relevant portions of the record.” (Yield 

Dynamics, Inc. v. TEA Systems Corp. (2007) 154 Cal.App.4th 547, 557 (Yield 

Dynamics).) “ ‘It is the duty of counsel to refer the reviewing court to the 

portion of the record which supports appellant’s contentions on appeal.

[Citation.] If no citation ‘is furnished on a particular point, the court may 

treat it as waived.’ ” (Guthrey v. State of California (1998) 63 Cal.App.4th 

1108, 1115.)

In a statement of decision, a trial court need not “ ‘address all the legal 

and factual issues raised by the parties.’ [Citation.] It ‘is required only to set 

out ultimate findings rather than evidentiary ones.’ ” (Yield Dynamics, 

supra, 154 Cal.App.4th at p. 559.) A trial court’s findings of fact “must be 

sustained if they are supported by substantial evidence, even though the 

evidence could also have justified contrary findings. [Citations.] . . . [T]his 

means an appellant who challenges a factual determination in the trial 

court—a jury verdict, or a finding by the judge in a nonjury trial—must 

marshal all of the record evidence relevant to the point in question and 

affirmatively demonstrate its insufficiency to sustain the challenged finding.” 

(Id. at p. 557.) “Trial judges and juries are the exclusive judges of credibility 

and may disbelieve any witness. Trial courts are designed and responsible 

for determining facts. Appellate courts are designed to review errors of law.” 

(Rivard v. Board of Pension Commissioners (1985) 164 Cal.App.3d 405, 412.) 

PIIC has not met its burden of demonstrating error. 

In its opening brief, PIIC took the position that this court should review 

the trial court’s decision de novo. PIIC proceeded to reargue its case and 
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requested that we “perform that analysis and confirm that PIIC’s 

Performance Bond never took effect and never provided any coverage for 

HACA’s claims.” After considering HACA’s respondent’s brief, however, PIIC 

concedes that it is not our role to reweigh the evidence that led the trial court

to find equitable estoppel applied in this case. In its reply, PIIC 

“acknowledges that the trial court’s factual findings supporting its finding of 

estoppel cannot be successfully attacked on appeal under the substantial

evidence rule.” This means PIIC no longer challenges the trial court’s 

credibility and factual findings, including its determination that HACA staff 

and PIIC were referring to “the same contractor entity using different names” 

when HACA staff used the name “World Priority, LLC” in the Award Notice 

and Agreement and Page used “World Priority Construction” in the Bond. 

Nonetheless, PIIC claims reversal is warranted because the Agreement 

is void under section 7028.15(e).8 PIIC never argued this theory during the 

trial on liability.

9 Generally, “ ‘appealing parties must adhere to the theory 

8 Section 7028.15(e) provides that, with exceptions not applicable here, 

“a bid submitted to a public agency by a contractor who is not licensed in 

accordance with this chapter shall be considered nonresponsive and shall be 

rejected by the public agency. . . . [A] local public agency shall, before 

awarding a contract or issuing a purchase order, verify that the contractor 

was properly licensed when the contractor submitted the bid. 

Notwithstanding any other provision of law . . . the registrar may issue a 

citation to any public officer or employee of a public entity who knowingly 

awards a contract or issues a purchase order to a contractor who is not 

licensed pursuant to this chapter. The amount of civil penalties, appeal, and 

finality of such citations shall be subject to Sections 7028.7 to 7028.13, 

inclusive. Any contract awarded to, or any purchase order issued to, a 

contractor who is not licensed pursuant to this chapter is void.”

9 PIIC did not cite section 7028.15(e) in any of its trial briefs, in its 

opening statement or closing argument at trial, or in any of the documents it 

filed before the final statement of decision was filed in November 2018. 
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(or theories) on which their cases were tried. This rule is based on fairness—

it would be unfair, both to the trial court and the opposing litigants, to permit 

a change of theory on appeal.’ ” (Nellie Gail Ranch Owners Assn. v. McMullin

(2016) 4 Cal.App.5th 982, 997.) Since PIIC did not argue section 7028.15(e) 

rendered the Agreement void during trial, the trial court “was under no 

obligation to address [the argument].” (Colony Ins. Co. v. Crusader Ins. Co. 

(2010) 188 Cal.App.4th 743, 751.) 

PIIC did raise section 7028.15(e) in a motion ostensibly brought under 

Code of Civil Procedure section 631.8 made after the trial court filed its final 

statement of decision and nearly a year after the close of evidence. In a 

bench trial, a party may move for judgment under section 631.8 after the 

other party has completed its presentation of evidence. (Code Civ. Proc., 

§ 631.8, subd. (a).) “The purpose of section 631.8 is to enable the court, when 

it finds at the completion of the plaintiff’s case that the evidence does not 

justify requiring the defendant to produce evidence in defense, to weigh the 

evidence and make findings of fact as in other trials.” (Conolley v. Bull (1968) 

258 Cal.App.2d 183, 195.) 

Here, the trial court observed such a motion for judgment “should come 

at the time in which the evidence was closed as to one party, and the motion 

would be for judgment because you do not feel that that other party proved 

their cause.” The litigation was “well beyond that” point, however, as the 

bifurcated trial on liability had concluded and the parties were now in the 

damages phase of trial. We agree with the trial court that PIIC’s motion was 

untimely. (Cf. Arntz Contracting Co. v. St. Paul Fire & Marine Ins. Co.

(1996) 47 Cal.App.4th 464, 487 [issue decided in earlier phase of bifurcated 

trial should not be relitigated; otherwise “bifurcation of trial issues would 
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create duplication, thus subverting the procedure’s goal of efficiency”].) PIIC 

does not claim otherwise.

We have the discretion to address the application of purely legal 

questions to undisputed facts (Colony Ins. Co. v. Crusader Ins. Co., supra, 188 

Cal.App.4th at p. 751), but, here, we cannot say the facts pertaining to the 

newly-raised statute are undisputed; HACA correctly observes that PIIC’s 

failure to raise section 7028.15(e) at trial denied HACA an opportunity to 

respond with evidence. Even assuming for the sake of argument the facts 

were undisputed, we see no reason to exercise our discretion to consider 

PIIC’s belated section 7028.15(e) argument in this case.

In any event, we observe that PIIC’s new argument based on section 

7028.15(e) cannot succeed on appeal in light of the trial court’s unchallenged 

factual findings that HACA and PIIC were referring to the same contractor 

entity when they used the names “World Priority, LLC” and “World Priority 

Construction” respectively; that HACA requires a contractor’s license number 

on bid forms, and LaPerle provided one; and that a HACA employee verified

on the CSLB’s website that the license number provided matched a name 

(World Priority) by which World Priority, LLC was known to HACA. As 

HACA argues, PIIC’s “various contract invalidity arguments based on there 

being a distinction [between World Priority, LLC and World Priority 

Construction] fall by the wayside” because the trial court found HACA and 

PIIC were referring to the same contractor entity whether they used the 

name “World Priority, LLC” or the name “World Priority Construction.”

DISPOSITION

The judgment is affirmed. Costs on appeal are awarded to HACA. 
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_________________________

Miller, J.

WE CONCUR:

_________________________

Richman, Acting P.J.

_________________________

Stewart, J.

A157691, Philadelphia Indemnity Insurance Co. v. Housing Authority of the 

County of Alameda