California Appellate Court Holds Direct Contractors Must Comply With 20-Day Stop Payment Notice Requirement
Brewer Corporation v. Point Center Financial, Inc.
Fourth Appellate District, Division 1 (San Diego County)
January 31, 2014
Direct contractors who fail to serve a preliminary 20-day stop payment notice on the project's construction lender do so at their own peril. The California Court of Appeal (hereinafter, the "Court") recently decided whether a direct contractor, who is not also a general or prime contractor, must serve a preliminary 20-day notice as a prerequisite to enforcing its stop notice claim against a construction lender. In Brewer Corporation v. Point Center Financial, Inc., Fourth Appellate District Division 1 (San Diego County), January 31, 2014, the Court held that the trial court erred as a matter of law when it concluded that respondent, direct contractor ("Direct Contractor"), was not required to serve the appellant, the project's construction lender ("Lender"), with a preliminary notice for its stop notice claim. Full write up, after the jump.