Court Opinion

ID: 3029321
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:42:37.252087+00
Date Added: 2024-06-11T07:37:45.331582
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                           FOR THE NINTH CIRCUIT                              NOV 18 2009

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

SAN FRANCISCO BAY AREA RAPID                     No. 07-15493
TRANSIT DISTRICT, a multi- county
rapid transit district established and           D.C. No. CV-04-04632-SI
existing under the laws of California,

             Plaintiff - Appellant,              MEMORANDUM *

  v.

WILLIAM D. SPENCER; F.W.
SPENCER & SON, INC.; BRISBANE
MECHANICAL CO., a California
corporation; WILLIAM MCGAHAN;
BRUCE BONAR,

             Defendants - Appellees.

SAN FRANCISCO BAY AREA RAPID                     No. 07-15932
TRANSIT DISTRICT, a multi- county
rapid transit district established and           D.C. No. CV-04-04632-SI
existing under the laws of California,

             Plaintiff - Appellee,

  v.

WILLIAM D. SPENCER; F.W.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
SPENCER & SON, INC.; BRISBANE
MECHANICAL CO., a California
corporation; WILLIAM MCGAHAN;
BRUCE BONAR,

             Defendants - Appellants.

                    Appeal from the United States District Court
                      for the Northern District of California
                      Susan Illston, District Judge, Presiding

                     Argued and Submitted November 2, 2009
                            San Francisco, California

Before: RYMER, McKEOWN and N.R. SMITH, Circuit Judges.

      San Francisco Bay Area Rapid Transit District (BART) appeals the district

court’s order granting summary judgment in favor of William Spencer, et al.,

(Spencer) and setting the penalties for violation of the California False Claims Act

(CFCA). Spencer cross-appeals the denial of post-trial motions and refusal to

award attorney’s fees. We affirm on all grounds.

                                           I

      BART’s unjust enrichment claim fails for want of a loss. Lectrodryer v.

SeoulBank, 77 Cal. App. 4th 723, 726 (2000) (noting that the elements of unjust

enrichment are “receipt of a benefit and unjust retention of the benefit at the

                                          2
expense of another.”). Even assuming that County of San Bernardino v. Walsh,

158 Cal. App. 4th 533 (2008), recognized an exception to this rule, BART’s claim

does not fall into that exception. See Peterson v. Cellco P’ship, 164 Cal. App. 4th

1583, 1594 (2008) (holding that Walsh “does not support plaintiffs’ assertion [that]

they need not allege any actual injury to bring an unjust enrichment claim”).

      Concrete financial loss is required for cognizable RICO injury, yet none

exists. Chaset v. Fleer/Skybox Int’l, LP, 300 F.3d 1083, 1086-87 (9th Cir. 2002).

BART relies on unjust enrichment, but as explained, it has no loss on that account.

Beyond this, BART received exactly what it bargained for – a certain percentage of

work performed by minority subcontractors. Nor were the attorney’s fees BART

paid for administrative proceedings necessarily incurred on account of a RICO

scheme. Accordingly, summary judgment was appropriately entered.1

      Finally, the district court acted within its discretion in setting penalties under

the CFCA. The court considered relevant factors when determining where within

the available range ($0 to $10,000 per claim) to set the penalty. Contrary to

BART’s submission, the court did not improperly invoke contributory negligence

as a defense; rather, it simply noted that, among other things, BART slept on its

rights after knowing that Spencer had formed a sham joint venture.

      1
          BART’s fraud claim also fails for lack of damage.

                                           3
                                         II

      Spencer argues that its Rule 59(e) motion to alter or amend the judgment

should have been granted because BART’s CFCA claim was barred by the statute

of limitations. This argument, however, was not raised in Spencer’s Rule 59(e)

motion and therefore is waived. Crawford v. Lungren, 96 F.3d 380, 389 n.6 (9th

Cir. 1996).

      Likewise, most of Spencer’s arguments about sufficiency of the evidence on

the CFCA claim were not raised in district court and are not preserved. In any

event, there was sufficient evidence from which the jury could infer that payment

applications from the prime contractors to BART incorporated payment

applications from the subcontractors to the primes. Thus, the jury could find that

Spencer made false claims to BART.

      Furthermore, there was sufficient evidence for the jury to determine that

these false claims were material. Holmes v. Gen. Dynamics Corp., 17 Cal. App.

4th 1418, 1431 (1993) (holding that “materiality involves only the capability of

influencing an agency’s governmental functions”). The whole point of Spencer’s

scheme was to influence his company’s chances of obtaining a contract.

      Finally, Spencer can only seek attorney’s fees from BART, a third party

beneficiary to Spencer’s contract with the prime contractors, if BART would be

                                         4
entitled to seek such fees had it prevailed. Real Prop. Servs. Corp. v. City of

Pasadena, 25 Cal. App. 4th 375, 380 (1994). Here, the contracts only provided

recovery of attorney’s fees in actions between parties to the contract. Therefore,

the district court properly denied Spencer’s request for attorney’s fees.

      AFFIRMED.

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