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1 PHILLIP A. JARET, ESQ. [SBN 092212]
ROBERT S. JARET, ESQ. [SBN 124876]
2 JARET & JARET
1016 Lincoln Avenue
3 San Rafael, California 94901
Telephone: (415) 455-1010
4
Facsimile: (415) 455-1050
5
Attorneys for Plaintiff SYNAPSE
6 ELECTRIC, INC., a California corporation
7
8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 IN AND FOR THE COUNTY OF KERN
10 CIVIL UNLIMITED JURISDICTION
11
No.
12 SYNAPSE ELECTRIC, INC., a California
corporation,
13
COMPLAINT FOR:
14 Plaintiff,
1) Breach of Construction Contract
15 V. 2) Breach of Implied Covenant of
Good Faith and Fair Dealing
16 ECOPLEXUS, INC., a Delaware corporation, 3) Public Works Stop Payment Notice
FAE KERN VALLEY, LLC, a California limited Enforcement [Civil Code § 9350, et
17 liability corporation, CALIFORNIA DEPARTMENT seq.]
OF GENERAL SERVICES, a California 4) Claim on Payment Bond
18 government agency, THE HANOVER 5) Violations of Public Contract
INSURANCE COMPANY, a surety existing under Code§§ 7107 and 10262.5,
19 the laws of the State of New Hampshire and Business and Professions Code
authorized to do business in California, §§ 7108.5 and 7031, and Civil
20
AMERICAN CONTRACTORS INDEMNITY Code§§ 8814 and 8818
21 COMPANY, a California corporation; and DOES 6) Recovery on Contractor's Bond
1 through 50, inclusive, and
22 7) Request for Accounting
Defendants.
23
24
25
26 Plaintiff SYNAPSE ELECTRIC, INC., a California corporation, complains and alleges as
27 follows:
28 Ill
COMPLAINT
1
1 THE PARTIES
2 1. Plaintiff SYNAPSE ELECTRIC, INC. (hereinafter "Plaintiff' or "SYNAPSE") is and
3 was at all times relevant to this action a California corporation in good standing, and duly
4 authorized and licensed to do business in the State of California. At the time the work was
5 performed, SYNAPSE's principal office was located in Muir Beach, California and is currently
6 located in Mill Valley, California.
7 2. SYNAPSE is informed and believes and based thereon alleges that defendant
8 ECOPLEXUS, INC. (hereinafter "Defendant" or "ECOPLEXUS") was the prime contractor on the
9 subject project and is and at all times herein was, a Delaware corporate entity, organized and
10 existing under the laws of the State of Delaware, and authorized to do business in the State of
11 California. ECOPLEXUS' principal office at the time the work was performed was located in San
12 Francisco, California and is currently in Durham, North Carolina. As of the date of this filing,
13 SYNAPSE is informed and believes and based thereon alleges that ECOPLEXUS' Contractor's
14 License No. 961750 is suspended.
15 3. SYNAPSE is informed and believes and based thereon alleges that defendant
16 FAE KERN VALLEY, LLC (hereinafter "Defendant" or "FAE") was the owner of the subject
17 project and is and at all times herein was, a limited liability company, organized and existing
18 under the laws of the State of California, and authorized to do business in the State of California.
19 FAE's principal office at the time the work was performed was located in San Francisco,
20 California and is currently in Durham, North Carolina.
21 4. SYNAPSE is informed and believes and based thereon alleges that defendant
22 THE HANOVER INSURANCE COMPANY (hereinafter "Defendant" or "HANOVER") is a
23 bonding company corporation authorized to do business as a surety in the State of California.
24 5. SYNAPSE is informed and believes and based thereon alleges that defendant
25 AMERICAN CONTRACTORS INDEMNITY COMPANY (hereinafter "Defendant" or "AMERICAN
26 CONTRACTORS") is a bonding company corporation formed in California and authorized to do
27 business as a surety in the State of California.
28 II/
COMPLAINT
2
I 6. SYNAPSE is informed and believes and based thereon alleges that defendant
2 CALIFORNIA DEPARTMENT OF GENERAL SERVICES (hereinafter "Defendant" or "DGS") is
3 and at all relevant times herein was a state government agency which serves as the business
4 manager for the State of California by providing services including procurement and acquisition,
5 real estate management, leasing and design services. (See Gov Code §14600 et seq.)
6 7. The State of California is not a party here but acted by and through DGS, along
7 with the California Department of Corrections and Rehabilitation, to enter into a site license
8 agreement with ECOPLEXUS regarding the subject project.
9 8. The true names and capacities, whether individual, corporate, associate or
1o otherwise, of Defendants DOES 1 through 50, inclusive, are unknown to SYNAPSE, who
11 therefore sues Defendants by such fictitious names. SYNAPSE is informed and believes and
12 thereon alleges that each of the Defendants designated herein as a fictitiously named Defendant
13 is in some manner responsible for the events and happenings herein referred to, either
14 contractually or tortiously, and caused the damage to SYNAPSE as herein alleged . When
15 SYNAPSE ascertains the true names and capacities of DOES 1 through 50, inclusive, it will ask
16 leave of this Court to amend its Complaint by setting forth the same.
17 9. At all times mentioned in this Complaint, Defendants were the agents and
18 employees of the other Defendants and were acting in the course and scope of such agency and
19 employment.
20 JURISDICTION & VENUE
21 10. SYNAPSE brings this action against Defendants pursuant to Civil Code §§ 8044,
22 8814, 8818, 9100, 9350-9356, 9500-9510, and 9550-9566, as well as California Public Contract
23 Code§§ 7107 and 10262.5, and California Business and Professions Code§ 7108.5.
24 11. Venue is proper in this court because all parties engaged in business in Kern
25 County, this is an action for breach of contract, foreclosure of stop payment notice, and claims
26 on payment and contractor's bonds in connection with the project performed in Kern County, and
27 the acts giving rise to this Complaint occurred in Kern County.
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COMPLAINT
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1 GENERAL ALLEGATIONS
2 12. SYNAPSE is informed and believes and based thereon alleges that the State of
3 California Legislature allows for state agencies to enter into energy saving contracts that provide
4 for the design, financing, installation and maintenance of alternative energy supply sources for
5 electrical or thermal energy.
6 13. SYNAPSE is informed and believes and based thereon alleges that on or about
7 December 13, 2016, the State of California, acting by and through DGS, entered into a site
8 license agreement for solar system, along with the California Department of Corrections and
9 Rehabilitation, with Defendant ECOPLEXUS (identified as the "licensee" in said agreement)
10 wherein Defendant ECOPLEXUS was granted a license for the design, construction, installation,
11 ownership, maintenance, and operation of the solar photovoltaic power facility.
12 14. SYNAPSE is informed and believes and based thereon alleges that on or about
13 September 28, 2020, FAE and ECOPLEXUS entered into a written prime contract for
14 ECOPLEXUS to construct the project known as Kern Valley State Prison Solar Project located
15 at 3000 West Cecil Avenue in Delano, California (the "prime contract").
16 15. SYNAPSE is informed and believes and based thereon alleges that pursuant to
17 the requirements of the prime contract, Defendant ECOPLEXUS, as principal, and Defendant
18 HANOVER, as surety, executed and delivered to FAE, a Performance Bond and Payment Bond.
19 The Payment Bond number is 1040957, attached hereto as Exhibit "C", and is for the protection
20 of all persons supplying labor and materials in the performance of the work on the project as
21 provided in the prime contract (the "Payment Bond").
22 16. Contractors are required to be properly licensed at all times for the specific work to
23 be performed. SYNAPSE is informed and believes and based thereon alleges that pursuant to
24 Business and Professions Code § 7028, ECOPLEXUS was required to hold a valid general
25 contractor's license at all times during the project which it failed to do. Pursuant to Business &
26 Professions Code § 7031 and controlling case law, ECOPLEXUS is barred from asserting or
27 collecting any offset or monetary damages from SYNAPSE by way of Cross-Complaint.
28 Ill
COMPLAINT
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1 17. On or about April 7, 2021, ECOPLEXUS and SYNAPSE entered into a written
2 Construction Services Agreement (the "Subcontract agreement"), which is attached hereto
3 excluding exhibits as Exhibit "A", authorizing SYNAPSE to install a photovoltaic system at the
4 project site, including the civil, mechanical, and electrical scope for a solar photovoltaic power
5 system facility (ground mount).
6 18. Under the terms of the ECOPLEXUS/SYNAPSE Subcontract agreement,
7 ECOPLEXUS was obligated to pay SYNAPSE for its scope of work, including additions or
8 changes to the Subcontract agreement. The original Subcontract agreement price for labor and
9 equipment to be furnished under the Subcontract agreement was $3,384,628.45.
10 19. Under the terms of the Subcontract agreement, any dispute between the parties
11 requires good faith efforts to resolve. (See Paragraph 24.1 "Dispute Resolution"). The
12 Subcontract agreement also provides for the parties to participate in mediation and if not
13 resolved, then either party may proceed to binding arbitration. (See Paragraph 24.1 (c) and (d) .)
14 Also provided in the Subcontract agreement, is a prevailing party provision stating that if any
15 dispute is submitted to court trial or binding arbitration, the prevailing party shall be entitled to
16 recover from the other party all expenses in those proceedings including its reasonable
17 attorneys' fees . (See Paragraph 24.1 (e).)
18 20. SYNAPSE performed its subcontract work on the project in a good and
19 workmanlike manner pursuant to the Subcontract agreement in accordance with the plans and
20 specifications and other reports provided, including the performance of changes made to the
21 scope of work after the Subcontract agreement was signed (described in detail below).
22 FIRST CAUSE OF ACTION
23 Breach of Construction Contract
24 Against Defendant ECOPLEXUS, Defendant FAE Kern Valley, Defendant HANOVER
25 INSURANCE COMPANY and DOES 1 through 50, inclusive
26 21. SYNAPSE realleges each and every allegation contained in the preceding
27 paragraphs as if set forth here in full, incorporates them here by reference.
28 Ill
COMPLAINT
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1 22. SYNAPSE has performed all of its duties and obligations under the Subcontract
2 agreement, except as such performance has been waived, excused or prevented by the actions
3 and/or omissions of Defendants.
4 23. During the course of construction of the project and thereafter, ECOPLEXUS
5 breached the Subcontract agreement by among other things:
6 A. Failing and/or refusing to pay SYNAPSE in full for labor, materials and
7 services furnished pursuant to the Subcontract agreement;
8 B. Failing and/or refusing to adjust the Subcontract agreement price to account
9 for changed and/or additional work not included in SYNAPSE's bid or the
10 original Subcontract agreement or Subcontract agreement price, as well as
11 for suspensions and delays caused or ordered by ECOPLEXUS;
12 C. Failing or refusing to approve SYNAPSE's properly submitted Change
13 Order Requests for additional compensation and/or extensions of time, and
14 unreasonably and coercively issuing change orders or other directives
15 which did not fully and completely adjust the Subcontract agreement price
16 or time for the changed and/or additional work;
17 D. Failing and/or refusing without justification to make timely payments of
18 monies owed to SYNAPSE for work performed, including changed and/or
19 additional work;
20 E. Failing and/or refusing to comply with the Subcontract agreement terms,
21 conditions and specifications related to the scope of the Subcontract
22 agreement work;
23 F. Negligently or intentionally preventing, instructing, hindering, interfering,
24 disrupting, delaying or suspending SYNAPSE's performance under the
25 Subcontract agreement, including but not limited to changed and/or
26 additional work;
27 G. Wrongfully withholding and failing and/or refusing to timely release progress
28 payments;
COMPLAINT
6
1 H. Delayed making certain payments to SYNAPSE and then, after
2 ECOPLEXUS terminated the Subcontract agreement, ECOPLEXUS made
3 direct payments to SYNAPSE's subcontractors thereby circumventing its
4 contractual obligations and depriving SYNAPSE of its rightful compensation;
5 I. Wrongfully withholding 7.5% retention when the legal retention rate on all
6 California public work projects is 5%;
7 J. As a result of ECOPLEXUS' slow and non-payment of invoices, SYNAPSE
8 was unable to timely pay all of its sub-contractors and suppliers;
9 K. Defaulting on the Project before its completion, ceasing all payments to
10 SYNAPSE, and failed or refused to release withheld retention monies
11 without any justification; and
12 L. Acting as a licensed general contractor with a suspended license.
13 24. SYNAPSE has suffered actual consequential damages as a direct and proximate
14 result of ECOPLEXUS', and then later HANOVER's, breaches of contract. The damages
15 incurred by SYNAPSE include, but are not limited to, unpaid contract balance, costs of
16 performing changed and additional work, disruption, impact, idle labor, idle equipment, overtime,
17 extended home office and jobsite overhead, increased labor, material, supervision, contract
18 administration and other associated field and office costs, and loss of profits, all in a sum to be
19 proven according to proof at trial.
20 25. SYNAPSE provided numerous notices to both ECOPLEXUS and HANOVER with
21 respect to its ongoing claims for damages resulting from the above-described contract breaches,
22 which both ECOPLEXUS and now HANOVER have failed or refused to rectify and pay.
23 26. SYNAPSE has been required to engage the services of an attorney to collect the
24 balance owing in pursuant to the Subcontract agreement, and SYNAPSE is entitled to recover
25 its reasonable costs and attorney's fees.
26 27. This dispute revolves around payment issues during the performance of the
27 Subcontract agreement, changes to the scope of the work to be performed, response delays to
28 repeated Requests for Information ("RFls") and change orders, and unforeseen conditions that
COMPLAINT
7
1 increased the cost of construction and resulted in material and equipment delays, a work
2 stoppage of the project, and a lack of payment by ECOPLEXUS (and later HANOVER) with
3 respect to the contract balance, approved and unapproved change orders, release of retention,
4 and interest.
5 28. From the beginning of the project, there were a number of project delays, starting
6 with a fourteen (14) day delay for initial site access. While SYNAPSE was ready to commence
7 work, it took two weeks to schedule the first site meeting due to facility approval. Then it took
8 thirty (30) days to resolve water access at the project site which delayed the commencement of
9 site grading at the project. Additional delays occurred, when necessary equipment to be
10 provided by ECOPLEXUS was not on site. For example, posts and racking were guaranteed to
11 be on site May 21, 2021 but were not delivered until June 21, 2021 and the balance of racking
12 guaranteed on site June 7, 2021 was not delivered until August 2, 2021. There were also
13 unexpected changes to the work itself that contributed to project delays.
14 29. At the end of August 2021, original skip-wiring methodology (skip wires came with
15 modules) was reviewed and approved for use by ECOPLEXUS manager Paul Werner on
16 September 1, 2021. Skip-wire methodology was adopted and installed on bi-facial modules.
17 However, two weeks later, on September 15, 2021, ECOPLEXUS manager Werner eliminated
18 the skip-wire methodology and instructed SYNAPSE to use a single-string methodology. As the
19 string wiring management method changed while installation was in progress, rework was
20 needed on all the completed portions. Clear approvals were given by ECOPLEXUS, and
21 documentation provided. On September 17, 2021, SYNAPSE submitted a String Wire
22 Management Change Order and yet ECOPLEXUS denied it.
23 30. Also in August 2021, SYNAPSE requested from ECOPLEXUS an RFI for the Point
24 of Interconnection ("POI") pull box detail which was required to complete critical path work. With
25 no response, SYNAPSE sent a follow up email and then on November 4, 2021, SYNAPSE
26 made the same request in person at a site meeting with Project Manager Sultan Henson. It was
27 at this site meeting that SYNAPSE learned that the original request had never been submitted
28 /II
COMPLAINT
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1 up the decision-making chain at ECOPLEXUS. SYNAPSE submitted additional requests for
2 details on January 1, 4, and 17, 2022.
3 31. On October 7, 2021, the DGS Inspector placed a work stoppage on the project
4 until the IFC ("issued for construction") plans were approved by DGS and signed off by the State
5 Fire Marshal. As a result, all critical path work stopped, and SYNAPSE completed some work in
6 progress and cleaned the site for demobilization.
7 32. On October 12, 2021, ECOPLEXUS sent SYNAPSE a letter serving as Notice that
8 Contractor is delayed in achieving the Guaranteed Milestone Dates and requested a response
9 within 5 business days. SYNAPSE complied and on October 18, 2021, provided a lengthy and
10 detailed response noting the circumstances surrounding delays that were beyond SYNAPSE'S
11 control, including (1) work stoppage issued by DGS halted critical path work, (2) material and
12 equipment delays, (3) minimum of two-week prison approval for workers site access, (4) change
13 while installation was in progress of skip-wiring methodology, and (5) four outstanding change
14 orders which were awaiting approval and execution. SYNAPSE submitted the requested
15 recovery plan and schedule and noted to ECOPLEXUS that an overall major project delay
16 existed with the upgrade of the Southern California Edison ("SCE") substation infrastructure and
17 that SYNAPSE was still waiting for a change order approval from ECOPLEXUS as this work
18 needed to be done prior to SCE doing their work. In addition, SYNAPSE requested timely
19 approval of submissions, change orders, RFls, phone calls, timely payments (which had been
20 routinely delayed more than 30 days), and an updated schedule for the project.
21 33. In response to the requested recovery schedule, on October 21, 2021,
22 ECOPLEXUS sent SYNAPSE a Notice to Increase Workforce requesting SYNAPSE increase its
23 work force, work overtime and/or extra shifts to complete all work and setting a deadline of
24 November 12, 2021.
25 34. On October 22, 2021, SYNAPSE informed ECOPLEXUS that the November 12
26 deadline was unlikely to be met given the enormous impact of the October 7 DGS Inspector
27 work stoppage on the critical path schedule. Indeed on October 13, 2021, ECOPLEXUS Site
28 Manager confirmed that SYNAPSE could not continue work until DGS gave its approval.
COMPLAINT
9
1 SYNAPSE also provided a detailed report of the impact of the stoppage as well as the status of
2 the project and requested an extension to complete the project for thirty (30) days from the date
3 of when the medium voltage wire was delivered to the site and would continue other non-critical
4 path work to keep the project moving.
5 35. Also on October 22, 2021, ECOPLEXUS halted the scheduled October 27, 2021
6 fence installation due to the fact that ECOPLEXUS had specified the wrong height. Since the
7 fence was made to order, ECOPLEXUS mistake meant that it had to be restocked and new
8 fencing made. (ECOPLEXUS did not provide the 4-5 week time extension for new fence to be
9 made.) On November 4, 2021, there was an onsite meeting between ECOPLEXUS and
1O SYNAPSE to discuss the project status and how to move forward given that critical path
11 schedule tasks could not be performed. From that meeting, ECOPLEXUS was to perform
12 specific action items in order for the project to continue. As a result, SYNAPSE demobilized from
13 the project site and provided to ECOPLEXUS a Notice of Work Stoppage on November 8, 2021.
14 Also on November 8, 2021, ECOPLEXUS sent SYNAPSE the revised IFC plan set with strict
15 instructions to not perform any work. SYNAPSE affirmed that it would remobilize and work
16 towards project completion once changes orders and RFls were addressed and approved and
17 the IFC plan set received the necessary approvals from DGS Inspector. SYNAPSE requested
18 ECOPLEXUS provide adequate advance notice in order to allow SYNAPSE and its sub-
19 subcontractors to schedule remobilization and ensure equipment and materials were onsite.
20 36. On November 24, 2021, the day before the Thanksgiving holiday, SYNAPSE was
21 notified that the State Fire Marshal and the DGS Inspector had approved the revised plan set
22 and it was expected that remobilization would occur on the following Monday, November 29,
23 2021. This was contrary to provisions in the Subcontract agreement which allows for ten ( 10)
24 business days to remobilize following a suspension of work (see Section 16.5). ECOPLEXUS
25 failed to adhere to contractual terms and essentially ignored SYNAPSE's requests for advance
26 notice once plans were approved to allow for adequate time to remobilize crews, equipment and
27 subcontractors to the site.
28 ///
COMPLAINT
10
1 37. Given the short notice for remobilization, SYNAPSE was unable to remobilize to
2 the site on November 29, 2021 as it took a week to get the crews and equipment back on site.
3 Further, ECOPLEXUS failed to share the final plans with SYNAPSE and did not respond to the
4 several items SYNAPSE needed to be addressed and/or clarified in order for SYNAPSE to
5 continue the work. In an effort to collaborate with ECOPLEXUS and complete the project, on
6 December 13, 2021, SYNAPSE sent a letter to ECOPLEXUS detailing the events since the
7 October 7, 2021 work stoppage and the ensuing delays to the project, and again requested
8 specific information and approvals from ECOPLEXUS which were necessary to complete the
9 work. On January 5, 2022, SYNAPSE sent a follow up letter to ECOPLEXUS again detailing the
1o work stoppage delays and the need for the requested information as well as the need for
11 additional days to remobilize and perform the critical path work that had been stopped because
12 of ECOPLEXUS.
13 38. Despite SYNAPSE's ongoing efforts to cooperate with ECOPLEXUS and to keep
14 it apprised of the work, SYNAPSE's requests, approvals and emails submitted in December
15 2021 and early January 2022 went largely unanswered. Thereafter, ECOPLEXUS' acting
16 assistant manager began responding to communications and SYNAPSE subsequently learned
17 that ECOPLEXUS' project manager resigned from the company. Thus, there was a period of
18 time during which there was no acting project manager for the project. This lack of response and
19 direction by ECOPLEXUS added confusion and slowed down work that could have been
20 accomplished had ECOPLEXUS responded to SYNAPSE's multiple inquiries and properly
21 managed this project.
22 39. Throughout the course of the project, ECOPLEXUS consistently failed to make
23 timely payments. Net 30 payments were routinely extended to anywhere from 34 to 108 days.
24 Each billing cycle was a fight to receive payment with multiple unanswered telephone calls and
25 emails by the accounting and service teams. For example, as of March 10, 2022, there was a
26 large outstanding amount of $235,875 due in the January Payment Application.
27 40. In addition, during the course of the Subcontract agreement, there were critical
28 path issues and certain events outside the control of SYNAPSE which caused delays to the
COMPLAINT
11
1 project's schedule, including (1) discovery of a monument in the field where the racking was to
2 be installed caused installation delay for ECOPLEXUS to reengineer layout; (2) new design and
3 manufacture of 8' fence material and installation; (3) supply chain issues stemming from the
4 Caldor and Dixie fires impacted the delivery of medium voltage wire; (4) outstanding necessary
5 RFls during survey that required the racking design and layout to be redone; (5) ECOPLEXUS'
6 failure to timely review and approve change orders necessitated by its change to the scope of
7 work; (6) delay to post I bracket delivery and post layout surveys; (7) ECOPLEXUS' delay in
8 racking at the project; and (8) DGS-ordered work stoppage wherein SYNAPSE was forced and
9 directed to demobilize from the project from early October 2021 to December 2021. Further,
10 during the pandemic, SYNAPSE faced difficulties maintaining a workforce given that workers
11 with COVID were required to quarantine for up to 14 days. Request for relief was specifically
12 submitted January 11 , 26, and 27, 2022 but ECOPLEXUS never responded.
13 41. On March 9, 2022, when SYNAPSE was about five weeks away from project
14 completion and awaiting responses from RFls and work by SCE, ECOPLEXUS notified
15 SYNAPSE it intended to terminate the Subcontract agreement, and alleged it was due to
16 SYNAPSE not reaching specific milestones (i.e., the Mechanical Completion Date of July 30 ,
17 2021 and Final Completion Date of October 14, 2021). However, these dates were incorrect and
18 did not account for necessary Change Order extensions and pending requests . Regardless,
19 ECOPLEXUS stated that SYNAPSE's alleged default must be cured with fifteen (15) days
20 subsequent to the alleged default which was March 24, 2022.
21 42. On March 10, 2022, SYNAPSE responded to ECOPLEXUS' Notice of Contractor
22 Event of Default and Termination and submitted a proposed recovery plan for project completion
23 as provided for in the Subcontract agreement. (SYNAPSE's scope of work was 89% completed
24 and just weeks away from project completion.) SYNAPSE also noted ECOPLEXUS had failed to
25 provide payment for work completed in January 2022 which put an undue burden on SYNAPSE
26 and its ability to pay sub-subcontractors and suppliers for completed work. SYNAPSE informed
27 ECOPLEXUS that it required payment of overdue funds in order to pay these sub-
28 subcontractors and suppliers and to successfully meet the submitted Recovery Plan . In addition,
COMPLAINT
12
1 SYNAPSE provided a detailed explanation of change orders, work stoppages, external
2 occurrences and the steps SYNAPSE took during the performance of the Subcontract
3 agreement that ECOPLEXUS was apparently failing to take into consideration.
4 43. As detailed in the March 10, 2022 response to ECOPLEXUS, the Milestones and
5 Milestone Completion Dates cited by ECOPLEXUS were incorrect and did not account for
6 Change Order extensions and pending requests. At the time of this correspondence, executed
7 Change Orders had granted a total of 59 days to extend the Guaranteed Milestone dates,
8 however, ECOPLEXUS' approval for time extension failed to adequately account for delays due
9 to the later delivery of material and the work stoppage caused by ECOPLEXUS. In addition,
1O there remained a disputed change order related to ECOPLEXUS changing the string wiring
11 management method and the outstanding issues related to pull box details, verification of
12 temporary fence location, and ECOPLEXUS' change of wire to tinned copper and sand
13 specification to be placed in medium voltage trench all of which added time to the project work
14 that was not contemplated at the beginning of the project.
15 44. In a letter, dated March 14, 2022, SYNAPSE advised ECOPLEXUS there was
16 currently $235,875 past due and owed to SYNAPSE for work completed January 1 - 30, 2022.
17 As a result of this non-payment, the letter served as a Notice of Potential Default by
18 ECOPLEXUS.
19 45. In a second letter, dated March 14, 2022, SYNAPSE sent to ECOPLEXUS a
20 Notice of Potential Delay requesting and specifically identifying the information and approvals
21 from ECOPLEXUS necessary to perform the required work on the project. Specifically,
22 SYNAPSE identified needing the Point of Interconnection pull box detail and approval for the
23 fence grounding change order which was necessitated by ECOPLEXUS changing the wire from
24 copper to tinned.
25 46. In a letter, dated March 17, 2022, ECOPLEXUS erroneously informed SYNAPSE
26 that it had failed to achieve Mechanical Completion by July 30, 2021, and Final Completion by
27 October 14, 2021, and was therefore in default, and terminated from the project. SYNAPSE was
28 requested to demobilize and exit the worksite by March 20, 2022.
COMPLAINT
13
1 47. On March 21, 2022, SYNAPSE filed with DGS, a Stop Payment Notice in the
2 amount of $765,953.53 and provided a copy to ECOPLEXUS. (Attached hereto as Exhibit "D" is
3 a copy of the Stop Payment Notice.)
4 48. On March 24, 2022, SYNAPSE notified ECOPLEXUS that it had demobilized from
5 the project site, as requested, and had completed a detailed documentation of work, and
6 material or equipment furnished and left on site was fully documented. SYNAPSE also noted
7 that a payment application of $111,000 for work completed up to the termination would be
8 submitted and the January and February 2022 billings in the amount of $371,697.38 remained
9 unpaid. Non-payment by ECOPLEXUS affected SYNAPSE's ability to pay its suppliers and sub-
10 subcontractors for completed work and furnished material during the timeframe of January 1,
11 2022 through March 17, 2022; SYNAPSE provided specific information to ECOPLEXUS of said
12 suppliers/sub-subcontractors and the amounts they were owed should ECOPLEXUS wish to
13 take over the sub-subcontracts and/or suppliers.
14 49. SYNAPSE promptly notified its suppliers and subcontractors that ECOPLEXUS
15 had terminated the Subcontract agreement.
16 50. By letter of March 29, 2022, SYNAPSE made a direct Payment Bond Claim to
17 HANOVER. (A true and correct copy of the letter is attached hereto as Exhibit "F".)
18 51. In a letter dated, April 6, 2022, HANOVER requested SYNAPSE provide
19 documentation and in turn SYNAPSE submitted substantial documentation per the request. The
20 information requested was provided with boxes of hard copy documents shipped directly to
21 HANOVER. HANOVER did not respond to SYNAPSE with respect to review of the contract
22 documents provided.
23 52. On June 10, 2022, after ECOPLEXUS made direct payments to all but one
24 SYNAPSE sub-subcontractor / supplier, SYNAPSE filed an Amended Stop Payment Notice with
25 Defendant DGS in the amount of $467,787.28. (Attached hereto as Exhibit "E" is a copy of the
26 Amended Stop Payment Notice.) No further payments by ECOPLEXUS on this current contract
27 balance claim have been made.
28 /II
COMPLAINT
14
53. On August 1, 2022, SYNAPSE requested DGS to provide notification of either
2 Substantial Completion or filing of a Notice of Completion with the Recorder's Office. To date, no
3 confirmation from DGS has been received with respect to either Substantial Completion or filing
4 of a Notice of Completion with the Recorder's Office. However, on information and belief,
5 SYNAPSE was recently informed that the project is operational as of February 2024.
6 54. SYNAPSE is informed and believes, and upon such information and belief alleges
7 that after SYNAPSE was forced from the worksite, the Project remained essentially at a
8 standstill with little or no further progress made by ECOPLEXUS and/or its replacement
9 subcontractor. SYNAPSE is informed and believes and upon such information and belief also
10 alleges that the subcontractor who replaced SYNAPSE on this project encountered sim ilar
11 issues of non-payment by ECOPLEXUS. The delay in completion of this project is entirely the
12 responsibility and liability of ECOPLEXUS buttressed by the fact that SYNAPSE was terminated
13 on March 17, 2022 when it was nearly complete with the project and now, nearly 2 years later,
14 the project apparently became operational.
15 55. As of the date of the Complaint, the amounts owed SYNAPSE include those for
16 unpaid base contract work; unpaid approved change orders; unpaid unapproved change orders;
17 interest (at different rates); the 7.5% retention (2.5% more than what is allowed by law) which
18 was never released by ECOPLEXUS for no apparent reason; and attorney's fees and interest
19 pursuant to statute and contract according to proof. It is believed that all of contract sums (not
20 including interest) SYNAPSE is entitled to were received by ECOPLEXUS from DGS and were
21 not paid to SYNAPSE .
22 WHEREFORE, SYNAPSE prays for judgment against Defendants as hereinafter set forth
23 below.
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26 Ill
27 Ill
28 Ill
COMPLAINT
15
1 SECOND CAUSE OF ACTION
2 Breach of Implied Covenant of Good Faith and Fair Dealing
3 Against Defendant ECOPEXUS, Defendant FAE KERN VALLEY, and Defendant HANOVER
4 INSURANCE COMPANY and DOES 1 through 50, inclusive
5 56. SYNAPSE realleges each and every allegation contained in the preceding
6 paragraphs as if set forth here in full, incorporates them here by reference.
7 57. The Subcontract agreement has implied in law covenant of good faith and fair
8 dealing by which ECOPLEXUS promised to give full cooperation to SYNAPSE and its
9 performance under the Subcontract agreement and refrain from any act that would prevent or
1O pay SYNAPSE from performing all of the conditions of the Subcontract agreement.
11 58. ECOPLEXUS, and now HANOVER, have breached a duty to act in good faith by
12 performing the Subcontract agreement in a manner that was unfaithful to the purpose of the
13 Subcontract agreement, thereby denying SYNAPSE's justified expectations. ECOPLEXUS did
14 not act in good faith and with fair dealing towards SYNAPSE with respect to the Subcontract
15 agreement, and some or all of ECOPLEXUS' acts or omissions set forth hereinabove were
16 unfair, lacked good faith, were intentional and/or in bad faith, all in violation of the covenant of
17 good faith and fair dealing. This course of conduct continued on and was adopted and exercised
18 by HANOVER.
19 59. The aforementioned acts and omissions of ECOPLEXUS were deliberate and
20 contravened, and undermined and circumvented the intention and spirit of the Subcontract
21 agreement. This course of conduct continued on and was adopted and exercised by HANOVER
22 after SYNAPSE filed its Demand on Payment Bond on March 29, 2022.
23 60. ECOPLEXUS breached its implied covenant of good faith and fair dealing with
24 regard to SYNAPSE when it negligently or intentionally prevented, obstructed, hindered or
25 interfered with SYNAPSE's performance of the Subcontract agreement, and refused to act to
26 equitably adjust the contract time and/or price and failed and refused to timely and fully
27 compensate SYNAPSE for the work performed and costs incurred.
28 II/
COMPLAINT
16
1 61. As a proximate cause of ECOPLEXUS' breaches of covenants of good faith and
2 fair dealing, later adopted and exercised by HANOVER after the Demand was filed, SYNAPSE
3 has suffered damages in an amount be proven at trial, together with interest thereon at the legal
4 rate , attorney's fees and costs. SYNAPSE reserves the right to amend this Complaint and seek
5 leave of Court to file a separate cause of action for First Party Insurance Bad Faith should
6 discovery produce supporting evidence of same consistent with California bad faith law
7 applicable to surety companies.
8 WHEREFORE, SYNAPSE prays for judgment against Defendants as hereinafter set forth
9 below.
10 THIRD CAUSE OF ACTION
11 Public Works Stop Payment Notice Enforcement [Civil Code §9350, et seq.]
12 Against Defendant CALIFORNIA DEPARTMENT OF GENERAL SERVICE
13 and DOES 1 through 50, inclusive
14 62. SYNAPSE realleges each and every allegation contained in the preceding
15 paragraphs as if set forth here in full, incorporates them here by reference.
16 63. SYNAPSE is informed and believes and based thereon that the State of California
17 DGS is, and at all relevant times herein was, the awarding body for and the Owner of the subject
18 project.
19 64. On or about April 14, 2021, SYNAPSE served a California 20-Day Preliminary
20 Notice on FAE and ECOPLEXUS, attached here as Exhibit "B", in accordance with§§ 3097 and
21 3098 of the California Civil Code (now Civil Code§ 9306). SYNAPSE did not serve this Notice
22 on HANOVER because SYNAPSE did not have the bonding company information when it
23 started the project. A copy of the Notice was sent to HANOVER as an attachment to the
24 Demand on Payment Bond, dated March 29, 2022, attached hereto as Exhibit "F".
25 65. On March 21, 2022, SYNAPSE filed with DGS, a Stop Payment Notice in the
26 amount of $765,953.53 and provided a copy to ECOPLEXUS. (Attached hereto as Exhibit "D" is
27 a copy of the first Stop Payment Notice.)
28 Ill
COMPLAINT
17
66. After ECOPLEXUS made direct payments to all but one SYNAPSE sub-
2 subcontractor/supplier, SYNAPSE filed an Amended Stop Payment Notice (the operative one)
3 on or about June 10, 2022 in the amount of $467,787.28 (attached hereto as Exhibit "E").
4 67. In filing the Amended Stop Payment Notice, SYNAPSE demanded that DGS
5 withhold sufficient funds to satisfy SYNAPSE's claims contained therein, with interest.
6 68. SYNAPSE has incurred, and will continue to incur, attorney's fees and costs in the
7 prosecution of this action.
8 WHEREFORE, SYNAPSE prays for judgment against Defendants as hereinafter set forth
9 below.
10 FOURTH CAUSE OF ACTION
11 Claim on Payment Bond
12 Against Defendant HANOVER INSURANCE COMPANY
13 and DOES 1 through 50, inclusive
14 68. SYNAPSE realleges each and every allegation contained in the preceding
15 paragraphs as if set forth here in full, incorporates them here by reference.
16 69. Based on ECOPLEXUS' failure to pay the unpaid balance on the Subcontract
17 agreement that was due and owing, SYNAPSE made an official claim against the Payment
18 Bond by sending a notice to Principal and Surety on Payment Bond on Public Work, by letter of
19 March 29, 2022, addressed to its attorney. (A true and correct copy of said Demand on Payment
20 Bond letter is attached hereto as Exhibit "F".)
21 70. Defendant HANOVER and Does 1 through 50 are obligated pursuant to the
22 Payment Bond, to pay SYNAPSE for labor, materials and services it furnished in the prosecution
23 of the work provided for in the prime contract and Subcontract agreement, and for which
24 ECOPLEXUS failed to make payment.
25 71. Defendants have failed to fulfill the obligations under the Payment Bond to pay
26 SYNAPSE for labor, materials and services furnished pursuant to the Subcontract agreement
27 and prosecution of the work provided for in the prime contract and Subcontract agreement, for
28 which ECOPLEXUS failed to make payment.
COMPLAINT
18
1 72. SYNAPSE is entitled to payment from Defendants pursuant to Civil Code §§ 9550-
2 9566.
3 73. SYNAPSE has been required to engage the services of an attorney to pursue the
4 action, and to recover reasonable costs and attorney's fees incurred herein from Defendants.
5 WHEREFORE, SYNAPSE prays for judgment against Defendants as hereinafter set forth
6 below.
7 FIFTH CAUSE OF ACTION
8 Violations of Public Contract Code §§ 7107 and 10262.5; Business and
9 Professions Code§§ 7108.5 and 7031; and Civil Code§§ 8814 and 8818 Against
10 Defendant ECOPEXUS, Defendant FAE KERN VALLEY, and
11 Defendant HANOVER INSURANCE COMPANY and DOES 1 through 50, inclusive
12 74. SYNAPSE realleges each and every allegation contained in the preceding
13 paragraphs as if set forth here in full, incorporates them here by reference.
14 75. California Public Contract Code § 10262.5 and Business and Professions Code
15 § 7108.5 require contractors (such as ECOPLEXUS) to, among other things, timely pay their
16 subcontractors (such as SYNAPSE) on receipt of a progress payment from the Project's owner;
17 and California Civil Code§§ 8814 and 8818 and Public Contract Code§ 7107 requires same
18 with respect to retention payment. In violation of Public Contract Code §§ 7107 and 10262.5;
19 Business & Professions Code §§ 7108.5 and 7031; and Civil Code §§ 8814 and 8818,
20 ECOPLEXUS and HANOVER unreasonably failed and/or refused to timely pay SYNAPSE
21 monies due and owing and misappropriated said funds for its own use.
22 76. Without explanation, ECOPLEXUS improperly and illegally withheld 7.5% retention
23 on SYNAPSE when the legal rate has been 5% for the last 10 years.
24 77. SYNAPSE further alleges that ECOPLEXUS allowed its DIR registration to expire
25 on June 30, 2021, which would serve as a violation and a bar to a contractor from performing
26 work on a California Public Works job. Furthermore, ECOPLEXUS had its California State
27 Contract License (no. 961750) suspended, effective May 4, 2022 because the license under its
28 qualifying individual, Robert Maurice Mccorkle, no longer owns 10% or more of the voting
COMPLAINT
19
1 stock/membership interest of the company, and therefore a Bond of Qualifying Individual is
2 required. While ECOPLEXUS restored its license in late July 2022, ECOPLEXUS was
3 nevertheless performing work on this project as a non-licensed contractor for several months
4 which constitutes a violation of Business and Professions Code§ 7028 and as such, bars it from
5 working on any project, private or public works, in California. SYNAPSE is informed and believes
6 and based thereon alleges that as of June 30, 2023, ECOPLEXUS allowed its license to lapse
7 again, and as of March 15, 2024, ECOPLEXUS' license was under suspension for failure to
8 comply with Workers Comp. In addition, ECOPLEXUS is barred from receiving payment during
9 this period of non-licensure and DGS is entitled to claw back monies it paid or owed
10 ECOPLEXUS during said time.
11 78. By reason of the foregoing, SYNAPSE is entitled to judgment against HANOVER,
12 who stands in the shoes of its Principal, ECOPLEXUS, in the amounts due and owing, plus
13 interest and accrued penalties pursuant to Public Contract Code§§ 7107 and 10262.5; Business
14 and Professions Code §§ 7108.5 and 7028; and Civil Code §§ 8814 and 8818. This illegal
15 pattern of conduct continued with HANOVER, who has failed or refused to pay any amount to
16 SYNAPSE, including even its erroneously held 7.5% retention which it also received and never
17 paid to SYNAPSE.
18 79. SYNAPSE has been required to engage the services of an attorney to pursue this
19 legal action. Pursuant to Public Contract Code §§ 7107 and 10262.5 and Business and
20 Professions Code§ 7108.5 and Civil Code§ 8118, SYNAPSE is entitled to recover reasonable
21 costs and attorney's fees incurred herein to enforce prompt payment from the Defendants.
22 WHEREFORE, SYNAPSE prays for judgment against Defendants as hereinafter set forth
23 below.
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27 Ill
28 ///
COMPLAINT
20
1 SIXTH CAUSE OF ACTION
2 Recovery on Contractor's Bond
3 Against Defendant ECOPLEXUS, Defendant AMERICAN CONTRACTORS INDEMNITY
4 COMPANY, and DOES 1 through 50, inclusive
5 80. SYNAPSE realleges each and every allegation contained in the preceding
6 paragrap
Preview
1 PHILLIP A. JARET, ESQ. [SBN 092212] ROBERT S. JARET, ESQ. [SBN 124876] 2 JARET & JARET 1016 Lincoln Avenue 3 San Rafael, California 94901 Telephone: (415) 455-1010 4 Facsimile: (415) 455-1050 5 Attorneys for Plaintiff SYNAPSE 6 ELECTRIC, INC., a California corporation 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 IN AND FOR THE COUNTY OF KERN 10 CIVIL UNLIMITED JURISDICTION 11 No. 12 SYNAPSE ELECTRIC, INC., a California corporation, 13 COMPLAINT FOR: 14 Plaintiff, 1) Breach of Construction Contract 15 V. 2) Breach of Implied Covenant of Good Faith and Fair Dealing 16 ECOPLEXUS, INC., a Delaware corporation, 3) Public Works Stop Payment Notice FAE KERN VALLEY, LLC, a California limited Enforcement [Civil Code § 9350, et 17 liability corporation, CALIFORNIA DEPARTMENT seq.] OF GENERAL SERVICES, a California 4) Claim on Payment Bond 18 government agency, THE HANOVER 5) Violations of Public Contract INSURANCE COMPANY, a surety existing under Code§§ 7107 and 10262.5, 19 the laws of the State of New Hampshire and Business and Professions Code authorized to do business in California, §§ 7108.5 and 7031, and Civil 20 AMERICAN CONTRACTORS INDEMNITY Code§§ 8814 and 8818 21 COMPANY, a California corporation; and DOES 6) Recovery on Contractor's Bond 1 through 50, inclusive, and 22 7) Request for Accounting Defendants. 23 24 25 26 Plaintiff SYNAPSE ELECTRIC, INC., a California corporation, complains and alleges as 27 follows: 28 Ill COMPLAINT 1 1 THE PARTIES 2 1. Plaintiff SYNAPSE ELECTRIC, INC. (hereinafter "Plaintiff' or "SYNAPSE") is and 3 was at all times relevant to this action a California corporation in good standing, and duly 4 authorized and licensed to do business in the State of California. At the time the work was 5 performed, SYNAPSE's principal office was located in Muir Beach, California and is currently 6 located in Mill Valley, California. 7 2. SYNAPSE is informed and believes and based thereon alleges that defendant 8 ECOPLEXUS, INC. (hereinafter "Defendant" or "ECOPLEXUS") was the prime contractor on the 9 subject project and is and at all times herein was, a Delaware corporate entity, organized and 10 existing under the laws of the State of Delaware, and authorized to do business in the State of 11 California. ECOPLEXUS' principal office at the time the work was performed was located in San 12 Francisco, California and is currently in Durham, North Carolina. As of the date of this filing, 13 SYNAPSE is informed and believes and based thereon alleges that ECOPLEXUS' Contractor's 14 License No. 961750 is suspended. 15 3. SYNAPSE is informed and believes and based thereon alleges that defendant 16 FAE KERN VALLEY, LLC (hereinafter "Defendant" or "FAE") was the owner of the subject 17 project and is and at all times herein was, a limited liability company, organized and existing 18 under the laws of the State of California, and authorized to do business in the State of California. 19 FAE's principal office at the time the work was performed was located in San Francisco, 20 California and is currently in Durham, North Carolina. 21 4. SYNAPSE is informed and believes and based thereon alleges that defendant 22 THE HANOVER INSURANCE COMPANY (hereinafter "Defendant" or "HANOVER") is a 23 bonding company corporation authorized to do business as a surety in the State of California. 24 5. SYNAPSE is informed and believes and based thereon alleges that defendant 25 AMERICAN CONTRACTORS INDEMNITY COMPANY (hereinafter "Defendant" or "AMERICAN 26 CONTRACTORS") is a bonding company corporation formed in California and authorized to do 27 business as a surety in the State of California. 28 II/ COMPLAINT 2 I 6. SYNAPSE is informed and believes and based thereon alleges that defendant 2 CALIFORNIA DEPARTMENT OF GENERAL SERVICES (hereinafter "Defendant" or "DGS") is 3 and at all relevant times herein was a state government agency which serves as the business 4 manager for the State of California by providing services including procurement and acquisition, 5 real estate management, leasing and design services. (See Gov Code §14600 et seq.) 6 7. The State of California is not a party here but acted by and through DGS, along 7 with the California Department of Corrections and Rehabilitation, to enter into a site license 8 agreement with ECOPLEXUS regarding the subject project. 9 8. The true names and capacities, whether individual, corporate, associate or 1o otherwise, of Defendants DOES 1 through 50, inclusive, are unknown to SYNAPSE, who 11 therefore sues Defendants by such fictitious names. SYNAPSE is informed and believes and 12 thereon alleges that each of the Defendants designated herein as a fictitiously named Defendant 13 is in some manner responsible for the events and happenings herein referred to, either 14 contractually or tortiously, and caused the damage to SYNAPSE as herein alleged . When 15 SYNAPSE ascertains the true names and capacities of DOES 1 through 50, inclusive, it will ask 16 leave of this Court to amend its Complaint by setting forth the same. 17 9. At all times mentioned in this Complaint, Defendants were the agents and 18 employees of the other Defendants and were acting in the course and scope of such agency and 19 employment. 20 JURISDICTION & VENUE 21 10. SYNAPSE brings this action against Defendants pursuant to Civil Code §§ 8044, 22 8814, 8818, 9100, 9350-9356, 9500-9510, and 9550-9566, as well as California Public Contract 23 Code§§ 7107 and 10262.5, and California Business and Professions Code§ 7108.5. 24 11. Venue is proper in this court because all parties engaged in business in Kern 25 County, this is an action for breach of contract, foreclosure of stop payment notice, and claims 26 on payment and contractor's bonds in connection with the project performed in Kern County, and 27 the acts giving rise to this Complaint occurred in Kern County. 28 Ill COMPLAINT 3 1 GENERAL ALLEGATIONS 2 12. SYNAPSE is informed and believes and based thereon alleges that the State of 3 California Legislature allows for state agencies to enter into energy saving contracts that provide 4 for the design, financing, installation and maintenance of alternative energy supply sources for 5 electrical or thermal energy. 6 13. SYNAPSE is informed and believes and based thereon alleges that on or about 7 December 13, 2016, the State of California, acting by and through DGS, entered into a site 8 license agreement for solar system, along with the California Department of Corrections and 9 Rehabilitation, with Defendant ECOPLEXUS (identified as the "licensee" in said agreement) 10 wherein Defendant ECOPLEXUS was granted a license for the design, construction, installation, 11 ownership, maintenance, and operation of the solar photovoltaic power facility. 12 14. SYNAPSE is informed and believes and based thereon alleges that on or about 13 September 28, 2020, FAE and ECOPLEXUS entered into a written prime contract for 14 ECOPLEXUS to construct the project known as Kern Valley State Prison Solar Project located 15 at 3000 West Cecil Avenue in Delano, California (the "prime contract"). 16 15. SYNAPSE is informed and believes and based thereon alleges that pursuant to 17 the requirements of the prime contract, Defendant ECOPLEXUS, as principal, and Defendant 18 HANOVER, as surety, executed and delivered to FAE, a Performance Bond and Payment Bond. 19 The Payment Bond number is 1040957, attached hereto as Exhibit "C", and is for the protection 20 of all persons supplying labor and materials in the performance of the work on the project as 21 provided in the prime contract (the "Payment Bond"). 22 16. Contractors are required to be properly licensed at all times for the specific work to 23 be performed. SYNAPSE is informed and believes and based thereon alleges that pursuant to 24 Business and Professions Code § 7028, ECOPLEXUS was required to hold a valid general 25 contractor's license at all times during the project which it failed to do. Pursuant to Business & 26 Professions Code § 7031 and controlling case law, ECOPLEXUS is barred from asserting or 27 collecting any offset or monetary damages from SYNAPSE by way of Cross-Complaint. 28 Ill COMPLAINT 4 1 17. On or about April 7, 2021, ECOPLEXUS and SYNAPSE entered into a written 2 Construction Services Agreement (the "Subcontract agreement"), which is attached hereto 3 excluding exhibits as Exhibit "A", authorizing SYNAPSE to install a photovoltaic system at the 4 project site, including the civil, mechanical, and electrical scope for a solar photovoltaic power 5 system facility (ground mount). 6 18. Under the terms of the ECOPLEXUS/SYNAPSE Subcontract agreement, 7 ECOPLEXUS was obligated to pay SYNAPSE for its scope of work, including additions or 8 changes to the Subcontract agreement. The original Subcontract agreement price for labor and 9 equipment to be furnished under the Subcontract agreement was $3,384,628.45. 10 19. Under the terms of the Subcontract agreement, any dispute between the parties 11 requires good faith efforts to resolve. (See Paragraph 24.1 "Dispute Resolution"). The 12 Subcontract agreement also provides for the parties to participate in mediation and if not 13 resolved, then either party may proceed to binding arbitration. (See Paragraph 24.1 (c) and (d) .) 14 Also provided in the Subcontract agreement, is a prevailing party provision stating that if any 15 dispute is submitted to court trial or binding arbitration, the prevailing party shall be entitled to 16 recover from the other party all expenses in those proceedings including its reasonable 17 attorneys' fees . (See Paragraph 24.1 (e).) 18 20. SYNAPSE performed its subcontract work on the project in a good and 19 workmanlike manner pursuant to the Subcontract agreement in accordance with the plans and 20 specifications and other reports provided, including the performance of changes made to the 21 scope of work after the Subcontract agreement was signed (described in detail below). 22 FIRST CAUSE OF ACTION 23 Breach of Construction Contract 24 Against Defendant ECOPLEXUS, Defendant FAE Kern Valley, Defendant HANOVER 25 INSURANCE COMPANY and DOES 1 through 50, inclusive 26 21. SYNAPSE realleges each and every allegation contained in the preceding 27 paragraphs as if set forth here in full, incorporates them here by reference. 28 Ill COMPLAINT 5 1 22. SYNAPSE has performed all of its duties and obligations under the Subcontract 2 agreement, except as such performance has been waived, excused or prevented by the actions 3 and/or omissions of Defendants. 4 23. During the course of construction of the project and thereafter, ECOPLEXUS 5 breached the Subcontract agreement by among other things: 6 A. Failing and/or refusing to pay SYNAPSE in full for labor, materials and 7 services furnished pursuant to the Subcontract agreement; 8 B. Failing and/or refusing to adjust the Subcontract agreement price to account 9 for changed and/or additional work not included in SYNAPSE's bid or the 10 original Subcontract agreement or Subcontract agreement price, as well as 11 for suspensions and delays caused or ordered by ECOPLEXUS; 12 C. Failing or refusing to approve SYNAPSE's properly submitted Change 13 Order Requests for additional compensation and/or extensions of time, and 14 unreasonably and coercively issuing change orders or other directives 15 which did not fully and completely adjust the Subcontract agreement price 16 or time for the changed and/or additional work; 17 D. Failing and/or refusing without justification to make timely payments of 18 monies owed to SYNAPSE for work performed, including changed and/or 19 additional work; 20 E. Failing and/or refusing to comply with the Subcontract agreement terms, 21 conditions and specifications related to the scope of the Subcontract 22 agreement work; 23 F. Negligently or intentionally preventing, instructing, hindering, interfering, 24 disrupting, delaying or suspending SYNAPSE's performance under the 25 Subcontract agreement, including but not limited to changed and/or 26 additional work; 27 G. Wrongfully withholding and failing and/or refusing to timely release progress 28 payments; COMPLAINT 6 1 H. Delayed making certain payments to SYNAPSE and then, after 2 ECOPLEXUS terminated the Subcontract agreement, ECOPLEXUS made 3 direct payments to SYNAPSE's subcontractors thereby circumventing its 4 contractual obligations and depriving SYNAPSE of its rightful compensation; 5 I. Wrongfully withholding 7.5% retention when the legal retention rate on all 6 California public work projects is 5%; 7 J. As a result of ECOPLEXUS' slow and non-payment of invoices, SYNAPSE 8 was unable to timely pay all of its sub-contractors and suppliers; 9 K. Defaulting on the Project before its completion, ceasing all payments to 10 SYNAPSE, and failed or refused to release withheld retention monies 11 without any justification; and 12 L. Acting as a licensed general contractor with a suspended license. 13 24. SYNAPSE has suffered actual consequential damages as a direct and proximate 14 result of ECOPLEXUS', and then later HANOVER's, breaches of contract. The damages 15 incurred by SYNAPSE include, but are not limited to, unpaid contract balance, costs of 16 performing changed and additional work, disruption, impact, idle labor, idle equipment, overtime, 17 extended home office and jobsite overhead, increased labor, material, supervision, contract 18 administration and other associated field and office costs, and loss of profits, all in a sum to be 19 proven according to proof at trial. 20 25. SYNAPSE provided numerous notices to both ECOPLEXUS and HANOVER with 21 respect to its ongoing claims for damages resulting from the above-described contract breaches, 22 which both ECOPLEXUS and now HANOVER have failed or refused to rectify and pay. 23 26. SYNAPSE has been required to engage the services of an attorney to collect the 24 balance owing in pursuant to the Subcontract agreement, and SYNAPSE is entitled to recover 25 its reasonable costs and attorney's fees. 26 27. This dispute revolves around payment issues during the performance of the 27 Subcontract agreement, changes to the scope of the work to be performed, response delays to 28 repeated Requests for Information ("RFls") and change orders, and unforeseen conditions that COMPLAINT 7 1 increased the cost of construction and resulted in material and equipment delays, a work 2 stoppage of the project, and a lack of payment by ECOPLEXUS (and later HANOVER) with 3 respect to the contract balance, approved and unapproved change orders, release of retention, 4 and interest. 5 28. From the beginning of the project, there were a number of project delays, starting 6 with a fourteen (14) day delay for initial site access. While SYNAPSE was ready to commence 7 work, it took two weeks to schedule the first site meeting due to facility approval. Then it took 8 thirty (30) days to resolve water access at the project site which delayed the commencement of 9 site grading at the project. Additional delays occurred, when necessary equipment to be 10 provided by ECOPLEXUS was not on site. For example, posts and racking were guaranteed to 11 be on site May 21, 2021 but were not delivered until June 21, 2021 and the balance of racking 12 guaranteed on site June 7, 2021 was not delivered until August 2, 2021. There were also 13 unexpected changes to the work itself that contributed to project delays. 14 29. At the end of August 2021, original skip-wiring methodology (skip wires came with 15 modules) was reviewed and approved for use by ECOPLEXUS manager Paul Werner on 16 September 1, 2021. Skip-wire methodology was adopted and installed on bi-facial modules. 17 However, two weeks later, on September 15, 2021, ECOPLEXUS manager Werner eliminated 18 the skip-wire methodology and instructed SYNAPSE to use a single-string methodology. As the 19 string wiring management method changed while installation was in progress, rework was 20 needed on all the completed portions. Clear approvals were given by ECOPLEXUS, and 21 documentation provided. On September 17, 2021, SYNAPSE submitted a String Wire 22 Management Change Order and yet ECOPLEXUS denied it. 23 30. Also in August 2021, SYNAPSE requested from ECOPLEXUS an RFI for the Point 24 of Interconnection ("POI") pull box detail which was required to complete critical path work. With 25 no response, SYNAPSE sent a follow up email and then on November 4, 2021, SYNAPSE 26 made the same request in person at a site meeting with Project Manager Sultan Henson. It was 27 at this site meeting that SYNAPSE learned that the original request had never been submitted 28 /II COMPLAINT 8 1 up the decision-making chain at ECOPLEXUS. SYNAPSE submitted additional requests for 2 details on January 1, 4, and 17, 2022. 3 31. On October 7, 2021, the DGS Inspector placed a work stoppage on the project 4 until the IFC ("issued for construction") plans were approved by DGS and signed off by the State 5 Fire Marshal. As a result, all critical path work stopped, and SYNAPSE completed some work in 6 progress and cleaned the site for demobilization. 7 32. On October 12, 2021, ECOPLEXUS sent SYNAPSE a letter serving as Notice that 8 Contractor is delayed in achieving the Guaranteed Milestone Dates and requested a response 9 within 5 business days. SYNAPSE complied and on October 18, 2021, provided a lengthy and 10 detailed response noting the circumstances surrounding delays that were beyond SYNAPSE'S 11 control, including (1) work stoppage issued by DGS halted critical path work, (2) material and 12 equipment delays, (3) minimum of two-week prison approval for workers site access, (4) change 13 while installation was in progress of skip-wiring methodology, and (5) four outstanding change 14 orders which were awaiting approval and execution. SYNAPSE submitted the requested 15 recovery plan and schedule and noted to ECOPLEXUS that an overall major project delay 16 existed with the upgrade of the Southern California Edison ("SCE") substation infrastructure and 17 that SYNAPSE was still waiting for a change order approval from ECOPLEXUS as this work 18 needed to be done prior to SCE doing their work. In addition, SYNAPSE requested timely 19 approval of submissions, change orders, RFls, phone calls, timely payments (which had been 20 routinely delayed more than 30 days), and an updated schedule for the project. 21 33. In response to the requested recovery schedule, on October 21, 2021, 22 ECOPLEXUS sent SYNAPSE a Notice to Increase Workforce requesting SYNAPSE increase its 23 work force, work overtime and/or extra shifts to complete all work and setting a deadline of 24 November 12, 2021. 25 34. On October 22, 2021, SYNAPSE informed ECOPLEXUS that the November 12 26 deadline was unlikely to be met given the enormous impact of the October 7 DGS Inspector 27 work stoppage on the critical path schedule. Indeed on October 13, 2021, ECOPLEXUS Site 28 Manager confirmed that SYNAPSE could not continue work until DGS gave its approval. COMPLAINT 9 1 SYNAPSE also provided a detailed report of the impact of the stoppage as well as the status of 2 the project and requested an extension to complete the project for thirty (30) days from the date 3 of when the medium voltage wire was delivered to the site and would continue other non-critical 4 path work to keep the project moving. 5 35. Also on October 22, 2021, ECOPLEXUS halted the scheduled October 27, 2021 6 fence installation due to the fact that ECOPLEXUS had specified the wrong height. Since the 7 fence was made to order, ECOPLEXUS mistake meant that it had to be restocked and new 8 fencing made. (ECOPLEXUS did not provide the 4-5 week time extension for new fence to be 9 made.) On November 4, 2021, there was an onsite meeting between ECOPLEXUS and 1O SYNAPSE to discuss the project status and how to move forward given that critical path 11 schedule tasks could not be performed. From that meeting, ECOPLEXUS was to perform 12 specific action items in order for the project to continue. As a result, SYNAPSE demobilized from 13 the project site and provided to ECOPLEXUS a Notice of Work Stoppage on November 8, 2021. 14 Also on November 8, 2021, ECOPLEXUS sent SYNAPSE the revised IFC plan set with strict 15 instructions to not perform any work. SYNAPSE affirmed that it would remobilize and work 16 towards project completion once changes orders and RFls were addressed and approved and 17 the IFC plan set received the necessary approvals from DGS Inspector. SYNAPSE requested 18 ECOPLEXUS provide adequate advance notice in order to allow SYNAPSE and its sub- 19 subcontractors to schedule remobilization and ensure equipment and materials were onsite. 20 36. On November 24, 2021, the day before the Thanksgiving holiday, SYNAPSE was 21 notified that the State Fire Marshal and the DGS Inspector had approved the revised plan set 22 and it was expected that remobilization would occur on the following Monday, November 29, 23 2021. This was contrary to provisions in the Subcontract agreement which allows for ten ( 10) 24 business days to remobilize following a suspension of work (see Section 16.5). ECOPLEXUS 25 failed to adhere to contractual terms and essentially ignored SYNAPSE's requests for advance 26 notice once plans were approved to allow for adequate time to remobilize crews, equipment and 27 subcontractors to the site. 28 /// COMPLAINT 10 1 37. Given the short notice for remobilization, SYNAPSE was unable to remobilize to 2 the site on November 29, 2021 as it took a week to get the crews and equipment back on site. 3 Further, ECOPLEXUS failed to share the final plans with SYNAPSE and did not respond to the 4 several items SYNAPSE needed to be addressed and/or clarified in order for SYNAPSE to 5 continue the work. In an effort to collaborate with ECOPLEXUS and complete the project, on 6 December 13, 2021, SYNAPSE sent a letter to ECOPLEXUS detailing the events since the 7 October 7, 2021 work stoppage and the ensuing delays to the project, and again requested 8 specific information and approvals from ECOPLEXUS which were necessary to complete the 9 work. On January 5, 2022, SYNAPSE sent a follow up letter to ECOPLEXUS again detailing the 1o work stoppage delays and the need for the requested information as well as the need for 11 additional days to remobilize and perform the critical path work that had been stopped because 12 of ECOPLEXUS. 13 38. Despite SYNAPSE's ongoing efforts to cooperate with ECOPLEXUS and to keep 14 it apprised of the work, SYNAPSE's requests, approvals and emails submitted in December 15 2021 and early January 2022 went largely unanswered. Thereafter, ECOPLEXUS' acting 16 assistant manager began responding to communications and SYNAPSE subsequently learned 17 that ECOPLEXUS' project manager resigned from the company. Thus, there was a period of 18 time during which there was no acting project manager for the project. This lack of response and 19 direction by ECOPLEXUS added confusion and slowed down work that could have been 20 accomplished had ECOPLEXUS responded to SYNAPSE's multiple inquiries and properly 21 managed this project. 22 39. Throughout the course of the project, ECOPLEXUS consistently failed to make 23 timely payments. Net 30 payments were routinely extended to anywhere from 34 to 108 days. 24 Each billing cycle was a fight to receive payment with multiple unanswered telephone calls and 25 emails by the accounting and service teams. For example, as of March 10, 2022, there was a 26 large outstanding amount of $235,875 due in the January Payment Application. 27 40. In addition, during the course of the Subcontract agreement, there were critical 28 path issues and certain events outside the control of SYNAPSE which caused delays to the COMPLAINT 11 1 project's schedule, including (1) discovery of a monument in the field where the racking was to 2 be installed caused installation delay for ECOPLEXUS to reengineer layout; (2) new design and 3 manufacture of 8' fence material and installation; (3) supply chain issues stemming from the 4 Caldor and Dixie fires impacted the delivery of medium voltage wire; (4) outstanding necessary 5 RFls during survey that required the racking design and layout to be redone; (5) ECOPLEXUS' 6 failure to timely review and approve change orders necessitated by its change to the scope of 7 work; (6) delay to post I bracket delivery and post layout surveys; (7) ECOPLEXUS' delay in 8 racking at the project; and (8) DGS-ordered work stoppage wherein SYNAPSE was forced and 9 directed to demobilize from the project from early October 2021 to December 2021. Further, 10 during the pandemic, SYNAPSE faced difficulties maintaining a workforce given that workers 11 with COVID were required to quarantine for up to 14 days. Request for relief was specifically 12 submitted January 11 , 26, and 27, 2022 but ECOPLEXUS never responded. 13 41. On March 9, 2022, when SYNAPSE was about five weeks away from project 14 completion and awaiting responses from RFls and work by SCE, ECOPLEXUS notified 15 SYNAPSE it intended to terminate the Subcontract agreement, and alleged it was due to 16 SYNAPSE not reaching specific milestones (i.e., the Mechanical Completion Date of July 30 , 17 2021 and Final Completion Date of October 14, 2021). However, these dates were incorrect and 18 did not account for necessary Change Order extensions and pending requests . Regardless, 19 ECOPLEXUS stated that SYNAPSE's alleged default must be cured with fifteen (15) days 20 subsequent to the alleged default which was March 24, 2022. 21 42. On March 10, 2022, SYNAPSE responded to ECOPLEXUS' Notice of Contractor 22 Event of Default and Termination and submitted a proposed recovery plan for project completion 23 as provided for in the Subcontract agreement. (SYNAPSE's scope of work was 89% completed 24 and just weeks away from project completion.) SYNAPSE also noted ECOPLEXUS had failed to 25 provide payment for work completed in January 2022 which put an undue burden on SYNAPSE 26 and its ability to pay sub-subcontractors and suppliers for completed work. SYNAPSE informed 27 ECOPLEXUS that it required payment of overdue funds in order to pay these sub- 28 subcontractors and suppliers and to successfully meet the submitted Recovery Plan . In addition, COMPLAINT 12 1 SYNAPSE provided a detailed explanation of change orders, work stoppages, external 2 occurrences and the steps SYNAPSE took during the performance of the Subcontract 3 agreement that ECOPLEXUS was apparently failing to take into consideration. 4 43. As detailed in the March 10, 2022 response to ECOPLEXUS, the Milestones and 5 Milestone Completion Dates cited by ECOPLEXUS were incorrect and did not account for 6 Change Order extensions and pending requests. At the time of this correspondence, executed 7 Change Orders had granted a total of 59 days to extend the Guaranteed Milestone dates, 8 however, ECOPLEXUS' approval for time extension failed to adequately account for delays due 9 to the later delivery of material and the work stoppage caused by ECOPLEXUS. In addition, 1O there remained a disputed change order related to ECOPLEXUS changing the string wiring 11 management method and the outstanding issues related to pull box details, verification of 12 temporary fence location, and ECOPLEXUS' change of wire to tinned copper and sand 13 specification to be placed in medium voltage trench all of which added time to the project work 14 that was not contemplated at the beginning of the project. 15 44. In a letter, dated March 14, 2022, SYNAPSE advised ECOPLEXUS there was 16 currently $235,875 past due and owed to SYNAPSE for work completed January 1 - 30, 2022. 17 As a result of this non-payment, the letter served as a Notice of Potential Default by 18 ECOPLEXUS. 19 45. In a second letter, dated March 14, 2022, SYNAPSE sent to ECOPLEXUS a 20 Notice of Potential Delay requesting and specifically identifying the information and approvals 21 from ECOPLEXUS necessary to perform the required work on the project. Specifically, 22 SYNAPSE identified needing the Point of Interconnection pull box detail and approval for the 23 fence grounding change order which was necessitated by ECOPLEXUS changing the wire from 24 copper to tinned. 25 46. In a letter, dated March 17, 2022, ECOPLEXUS erroneously informed SYNAPSE 26 that it had failed to achieve Mechanical Completion by July 30, 2021, and Final Completion by 27 October 14, 2021, and was therefore in default, and terminated from the project. SYNAPSE was 28 requested to demobilize and exit the worksite by March 20, 2022. COMPLAINT 13 1 47. On March 21, 2022, SYNAPSE filed with DGS, a Stop Payment Notice in the 2 amount of $765,953.53 and provided a copy to ECOPLEXUS. (Attached hereto as Exhibit "D" is 3 a copy of the Stop Payment Notice.) 4 48. On March 24, 2022, SYNAPSE notified ECOPLEXUS that it had demobilized from 5 the project site, as requested, and had completed a detailed documentation of work, and 6 material or equipment furnished and left on site was fully documented. SYNAPSE also noted 7 that a payment application of $111,000 for work completed up to the termination would be 8 submitted and the January and February 2022 billings in the amount of $371,697.38 remained 9 unpaid. Non-payment by ECOPLEXUS affected SYNAPSE's ability to pay its suppliers and sub- 10 subcontractors for completed work and furnished material during the timeframe of January 1, 11 2022 through March 17, 2022; SYNAPSE provided specific information to ECOPLEXUS of said 12 suppliers/sub-subcontractors and the amounts they were owed should ECOPLEXUS wish to 13 take over the sub-subcontracts and/or suppliers. 14 49. SYNAPSE promptly notified its suppliers and subcontractors that ECOPLEXUS 15 had terminated the Subcontract agreement. 16 50. By letter of March 29, 2022, SYNAPSE made a direct Payment Bond Claim to 17 HANOVER. (A true and correct copy of the letter is attached hereto as Exhibit "F".) 18 51. In a letter dated, April 6, 2022, HANOVER requested SYNAPSE provide 19 documentation and in turn SYNAPSE submitted substantial documentation per the request. The 20 information requested was provided with boxes of hard copy documents shipped directly to 21 HANOVER. HANOVER did not respond to SYNAPSE with respect to review of the contract 22 documents provided. 23 52. On June 10, 2022, after ECOPLEXUS made direct payments to all but one 24 SYNAPSE sub-subcontractor / supplier, SYNAPSE filed an Amended Stop Payment Notice with 25 Defendant DGS in the amount of $467,787.28. (Attached hereto as Exhibit "E" is a copy of the 26 Amended Stop Payment Notice.) No further payments by ECOPLEXUS on this current contract 27 balance claim have been made. 28 /II COMPLAINT 14 53. On August 1, 2022, SYNAPSE requested DGS to provide notification of either 2 Substantial Completion or filing of a Notice of Completion with the Recorder's Office. To date, no 3 confirmation from DGS has been received with respect to either Substantial Completion or filing 4 of a Notice of Completion with the Recorder's Office. However, on information and belief, 5 SYNAPSE was recently informed that the project is operational as of February 2024. 6 54. SYNAPSE is informed and believes, and upon such information and belief alleges 7 that after SYNAPSE was forced from the worksite, the Project remained essentially at a 8 standstill with little or no further progress made by ECOPLEXUS and/or its replacement 9 subcontractor. SYNAPSE is informed and believes and upon such information and belief also 10 alleges that the subcontractor who replaced SYNAPSE on this project encountered sim ilar 11 issues of non-payment by ECOPLEXUS. The delay in completion of this project is entirely the 12 responsibility and liability of ECOPLEXUS buttressed by the fact that SYNAPSE was terminated 13 on March 17, 2022 when it was nearly complete with the project and now, nearly 2 years later, 14 the project apparently became operational. 15 55. As of the date of the Complaint, the amounts owed SYNAPSE include those for 16 unpaid base contract work; unpaid approved change orders; unpaid unapproved change orders; 17 interest (at different rates); the 7.5% retention (2.5% more than what is allowed by law) which 18 was never released by ECOPLEXUS for no apparent reason; and attorney's fees and interest 19 pursuant to statute and contract according to proof. It is believed that all of contract sums (not 20 including interest) SYNAPSE is entitled to were received by ECOPLEXUS from DGS and were 21 not paid to SYNAPSE . 22 WHEREFORE, SYNAPSE prays for judgment against Defendants as hereinafter set forth 23 below. 24 Ill 25 Ill 26 Ill 27 Ill 28 Ill COMPLAINT 15 1 SECOND CAUSE OF ACTION 2 Breach of Implied Covenant of Good Faith and Fair Dealing 3 Against Defendant ECOPEXUS, Defendant FAE KERN VALLEY, and Defendant HANOVER 4 INSURANCE COMPANY and DOES 1 through 50, inclusive 5 56. SYNAPSE realleges each and every allegation contained in the preceding 6 paragraphs as if set forth here in full, incorporates them here by reference. 7 57. The Subcontract agreement has implied in law covenant of good faith and fair 8 dealing by which ECOPLEXUS promised to give full cooperation to SYNAPSE and its 9 performance under the Subcontract agreement and refrain from any act that would prevent or 1O pay SYNAPSE from performing all of the conditions of the Subcontract agreement. 11 58. ECOPLEXUS, and now HANOVER, have breached a duty to act in good faith by 12 performing the Subcontract agreement in a manner that was unfaithful to the purpose of the 13 Subcontract agreement, thereby denying SYNAPSE's justified expectations. ECOPLEXUS did 14 not act in good faith and with fair dealing towards SYNAPSE with respect to the Subcontract 15 agreement, and some or all of ECOPLEXUS' acts or omissions set forth hereinabove were 16 unfair, lacked good faith, were intentional and/or in bad faith, all in violation of the covenant of 17 good faith and fair dealing. This course of conduct continued on and was adopted and exercised 18 by HANOVER. 19 59. The aforementioned acts and omissions of ECOPLEXUS were deliberate and 20 contravened, and undermined and circumvented the intention and spirit of the Subcontract 21 agreement. This course of conduct continued on and was adopted and exercised by HANOVER 22 after SYNAPSE filed its Demand on Payment Bond on March 29, 2022. 23 60. ECOPLEXUS breached its implied covenant of good faith and fair dealing with 24 regard to SYNAPSE when it negligently or intentionally prevented, obstructed, hindered or 25 interfered with SYNAPSE's performance of the Subcontract agreement, and refused to act to 26 equitably adjust the contract time and/or price and failed and refused to timely and fully 27 compensate SYNAPSE for the work performed and costs incurred. 28 II/ COMPLAINT 16 1 61. As a proximate cause of ECOPLEXUS' breaches of covenants of good faith and 2 fair dealing, later adopted and exercised by HANOVER after the Demand was filed, SYNAPSE 3 has suffered damages in an amount be proven at trial, together with interest thereon at the legal 4 rate , attorney's fees and costs. SYNAPSE reserves the right to amend this Complaint and seek 5 leave of Court to file a separate cause of action for First Party Insurance Bad Faith should 6 discovery produce supporting evidence of same consistent with California bad faith law 7 applicable to surety companies. 8 WHEREFORE, SYNAPSE prays for judgment against Defendants as hereinafter set forth 9 below. 10 THIRD CAUSE OF ACTION 11 Public Works Stop Payment Notice Enforcement [Civil Code §9350, et seq.] 12 Against Defendant CALIFORNIA DEPARTMENT OF GENERAL SERVICE 13 and DOES 1 through 50, inclusive 14 62. SYNAPSE realleges each and every allegation contained in the preceding 15 paragraphs as if set forth here in full, incorporates them here by reference. 16 63. SYNAPSE is informed and believes and based thereon that the State of California 17 DGS is, and at all relevant times herein was, the awarding body for and the Owner of the subject 18 project. 19 64. On or about April 14, 2021, SYNAPSE served a California 20-Day Preliminary 20 Notice on FAE and ECOPLEXUS, attached here as Exhibit "B", in accordance with§§ 3097 and 21 3098 of the California Civil Code (now Civil Code§ 9306). SYNAPSE did not serve this Notice 22 on HANOVER because SYNAPSE did not have the bonding company information when it 23 started the project. A copy of the Notice was sent to HANOVER as an attachment to the 24 Demand on Payment Bond, dated March 29, 2022, attached hereto as Exhibit "F". 25 65. On March 21, 2022, SYNAPSE filed with DGS, a Stop Payment Notice in the 26 amount of $765,953.53 and provided a copy to ECOPLEXUS. (Attached hereto as Exhibit "D" is 27 a copy of the first Stop Payment Notice.) 28 Ill COMPLAINT 17 66. After ECOPLEXUS made direct payments to all but one SYNAPSE sub- 2 subcontractor/supplier, SYNAPSE filed an Amended Stop Payment Notice (the operative one) 3 on or about June 10, 2022 in the amount of $467,787.28 (attached hereto as Exhibit "E"). 4 67. In filing the Amended Stop Payment Notice, SYNAPSE demanded that DGS 5 withhold sufficient funds to satisfy SYNAPSE's claims contained therein, with interest. 6 68. SYNAPSE has incurred, and will continue to incur, attorney's fees and costs in the 7 prosecution of this action. 8 WHEREFORE, SYNAPSE prays for judgment against Defendants as hereinafter set forth 9 below. 10 FOURTH CAUSE OF ACTION 11 Claim on Payment Bond 12 Against Defendant HANOVER INSURANCE COMPANY 13 and DOES 1 through 50, inclusive 14 68. SYNAPSE realleges each and every allegation contained in the preceding 15 paragraphs as if set forth here in full, incorporates them here by reference. 16 69. Based on ECOPLEXUS' failure to pay the unpaid balance on the Subcontract 17 agreement that was due and owing, SYNAPSE made an official claim against the Payment 18 Bond by sending a notice to Principal and Surety on Payment Bond on Public Work, by letter of 19 March 29, 2022, addressed to its attorney. (A true and correct copy of said Demand on Payment 20 Bond letter is attached hereto as Exhibit "F".) 21 70. Defendant HANOVER and Does 1 through 50 are obligated pursuant to the 22 Payment Bond, to pay SYNAPSE for labor, materials and services it furnished in the prosecution 23 of the work provided for in the prime contract and Subcontract agreement, and for which 24 ECOPLEXUS failed to make payment. 25 71. Defendants have failed to fulfill the obligations under the Payment Bond to pay 26 SYNAPSE for labor, materials and services furnished pursuant to the Subcontract agreement 27 and prosecution of the work provided for in the prime contract and Subcontract agreement, for 28 which ECOPLEXUS failed to make payment. COMPLAINT 18 1 72. SYNAPSE is entitled to payment from Defendants pursuant to Civil Code §§ 9550- 2 9566. 3 73. SYNAPSE has been required to engage the services of an attorney to pursue the 4 action, and to recover reasonable costs and attorney's fees incurred herein from Defendants. 5 WHEREFORE, SYNAPSE prays for judgment against Defendants as hereinafter set forth 6 below. 7 FIFTH CAUSE OF ACTION 8 Violations of Public Contract Code §§ 7107 and 10262.5; Business and 9 Professions Code§§ 7108.5 and 7031; and Civil Code§§ 8814 and 8818 Against 10 Defendant ECOPEXUS, Defendant FAE KERN VALLEY, and 11 Defendant HANOVER INSURANCE COMPANY and DOES 1 through 50, inclusive 12 74. SYNAPSE realleges each and every allegation contained in the preceding 13 paragraphs as if set forth here in full, incorporates them here by reference. 14 75. California Public Contract Code § 10262.5 and Business and Professions Code 15 § 7108.5 require contractors (such as ECOPLEXUS) to, among other things, timely pay their 16 subcontractors (such as SYNAPSE) on receipt of a progress payment from the Project's owner; 17 and California Civil Code§§ 8814 and 8818 and Public Contract Code§ 7107 requires same 18 with respect to retention payment. In violation of Public Contract Code §§ 7107 and 10262.5; 19 Business & Professions Code §§ 7108.5 and 7031; and Civil Code §§ 8814 and 8818, 20 ECOPLEXUS and HANOVER unreasonably failed and/or refused to timely pay SYNAPSE 21 monies due and owing and misappropriated said funds for its own use. 22 76. Without explanation, ECOPLEXUS improperly and illegally withheld 7.5% retention 23 on SYNAPSE when the legal rate has been 5% for the last 10 years. 24 77. SYNAPSE further alleges that ECOPLEXUS allowed its DIR registration to expire 25 on June 30, 2021, which would serve as a violation and a bar to a contractor from performing 26 work on a California Public Works job. Furthermore, ECOPLEXUS had its California State 27 Contract License (no. 961750) suspended, effective May 4, 2022 because the license under its 28 qualifying individual, Robert Maurice Mccorkle, no longer owns 10% or more of the voting COMPLAINT 19 1 stock/membership interest of the company, and therefore a Bond of Qualifying Individual is 2 required. While ECOPLEXUS restored its license in late July 2022, ECOPLEXUS was 3 nevertheless performing work on this project as a non-licensed contractor for several months 4 which constitutes a violation of Business and Professions Code§ 7028 and as such, bars it from 5 working on any project, private or public works, in California. SYNAPSE is informed and believes 6 and based thereon alleges that as of June 30, 2023, ECOPLEXUS allowed its license to lapse 7 again, and as of March 15, 2024, ECOPLEXUS' license was under suspension for failure to 8 comply with Workers Comp. In addition, ECOPLEXUS is barred from receiving payment during 9 this period of non-licensure and DGS is entitled to claw back monies it paid or owed 10 ECOPLEXUS during said time. 11 78. By reason of the foregoing, SYNAPSE is entitled to judgment against HANOVER, 12 who stands in the shoes of its Principal, ECOPLEXUS, in the amounts due and owing, plus 13 interest and accrued penalties pursuant to Public Contract Code§§ 7107 and 10262.5; Business 14 and Professions Code §§ 7108.5 and 7028; and Civil Code §§ 8814 and 8818. This illegal 15 pattern of conduct continued with HANOVER, who has failed or refused to pay any amount to 16 SYNAPSE, including even its erroneously held 7.5% retention which it also received and never 17 paid to SYNAPSE. 18 79. SYNAPSE has been required to engage the services of an attorney to pursue this 19 legal action. Pursuant to Public Contract Code §§ 7107 and 10262.5 and Business and 20 Professions Code§ 7108.5 and Civil Code§ 8118, SYNAPSE is entitled to recover reasonable 21 costs and attorney's fees incurred herein to enforce prompt payment from the Defendants. 22 WHEREFORE, SYNAPSE prays for judgment against Defendants as hereinafter set forth 23 below. 24 Ill 25 Ill 26 Ill 27 Ill 28 /// COMPLAINT 20 1 SIXTH CAUSE OF ACTION 2 Recovery on Contractor's Bond 3 Against Defendant ECOPLEXUS, Defendant AMERICAN CONTRACTORS INDEMNITY 4 COMPANY, and DOES 1 through 50, inclusive 5 80. SYNAPSE realleges each and every allegation contained in the preceding 6 paragrap