California Codes, Civil Code - CIV, Division 4 — General Provisions, Part 6 — Works of Improvement, Title 3 — Public Work of Improvement, Chapter 4 — Stop Payment Notice, Article 1 — General Provisions, Section 9358
(a) The public entity shall, on receipt of a stop payment notice, withhold from the direct contractor sufficient funds due or to become due to the direct contractor to pay the claim stated in the stop payment notice and to provide for the public entity’s reasonable cost of any litigation pursuant to the stop payment notice.
(b) The public entity may satisfy its duty under this section by refusing to release funds held in escrow under Section 10263 or 22300 of the Public Contract Code.
Notes
Requires a public entity receiving a stop payment notice to withhold from the direct contractor enough funds due or becoming due to cover the stated claim and the entity’s reasonable related litigation costs. Allows the entity to satisfy that duty by refusing to release funds held in the referenced statutory escrow.
Use as reference
Lexinter.net | California Code, Civil Code - CIV § 9358 | https://laws.lexinter.net/codes/california/civil-code/division-4/part-6/title-3/chapter-4/article-1/section-9358