Sufficiency of ability to pay wages

Subcontractor was erroneously granted summary judgment concerning the contractor's ability to pay wages.

On July 28, 2011, in Castillo v. Toll Bros. Inc., (California Courts of Appeal – 1st District, No. A128605) Castillo alleged California Labor Code Section 2810 claim against Toll Bros Inc. ("Toll") due to the subcontractor Capaz Construction Corp.'s ("Capaz") failure to pay wages. Toll stated that they had no reason to believe that the contract between Capaz and Toll was insufficient. However Toll, in on a previous job had replaced Capaz because of a failure to meet payroll. Additionally, Summary judgment was granted to Toll by the trial court.

The appellate court reversed, holding that there was a triable issue as to whether Toll, under Section 2810 knew of the contract's insufficiency. Due to Capaz paying workers above minimum wage and their previous contracts there was a triable issue of fact.

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