Hoffman Pacific tells court audit and rate dispute create triable factual issues

Michael Grace, representing Hoffman Pacific JV, argued that reversal is required because the trial court resolved factual questions in favor of LEAP rather than leaving them for a trier of fact. He emphasized that invoices were paid from 2017 through 2020 but that the state’s audit in 2020 raised compliance questions about rates.

Grace told the panel that the JV "overpaid overpaid by $225,000" during the 2017–2020 period and stressed that after the state flagged audit problems, the JV tied its payments to what the state would pay and eventually reduced payments. He urged that whether payments continued during a September–December 2020 “gray area” and whether parties mutually modified rates are factual disputes appropriate for a jury, not for summary judgment.

The panel pressed counsel on why Hoffman Pacific continued paying higher invoices through December 2020 if an earlier email raised concerns in September. Grace said that the September–December months constituted a gray area and that a clear change occurred when the state stopped paying in December 2020.