HOLDINGS: [1]-A development contractor’s application of a landowner’s payments to specific categories of work upon preparing liens was permissible under Civ. Code, § 1479, subd. (2), because the payments were made on account; [2]-Allocating a water infrastructure lien only to unsold lots was improper under former Civ. Code, § 3110, because the improvements benefited all lots and the owner did not direct applying payments to sold lots’ proportionate share; [3]-Because reasonable value under former Civ. Code, § 3123, equaled the contract price without interest, no contractual interest could accrue; [4]-Although a mechanic’s lien foreclosure was an action in contract under Civ. Code, § 3287, subd. (b), the prejudgment interest rate under Cal. Const., art. XV, § 1, and not Civ. Code, § 3289, subd. (b), applied because investors who owned interests in lots were not parties to the contract.
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Outcome
Reversed and remanded.
