• Posts by Jonathan Vick
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    Jonathan Vick is a member of the Facilities, Construction, and Property Practice Group and has more than 30 years of experience in state and federal courts and administrative agencies. He started his career working for the United ...

In a recent decision, Pittsburg Unified School District v. S.J. Amoroso Construction Co., Inc. (December 22, 2014), the California Court of Appeal affirmed that public agencies have the right to unilaterally declare a default under a construction contract and demand a distribution of securities retained by escrow.  The Court based its decision on Public Contract Code section 22300, which provides that once a public agency sends a proper notice of default, it has the right to withdraw securities held in an escrow retention account “immediately upon its own determination” if it determines that a contractor has defaulted on the construction agreement. The key issue confirmed by the Court is that a public agency may unilaterally determine that a contractor defaulted on its obligations under a construction agreement without judicial determination, and thus, may unilaterally withdraw retention proceeds from an escrow account.

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