                     FOR PUBLICATION

      UNITED STATES COURT OF APPEALS
           FOR THE NINTH CIRCUIT

 RAMONA EQUIPMENT RENTAL, INC.,                     No. 12-55156
 for the use of the United States on
 behalf of a California corporation,                  D.C. No.
                     Plaintiff-Appellee,           3:08-cv-01685-
                                                      H-MDD
                      v.

 CAROLINA CASUALTY INSURANCE                          OPINION
 COMPANY, a Florida corporation;
 CANDELARIA CORPORATION, an
 Arizona corporation; OTAY GROUP,
 INC., a California corporation,
                Defendants-Appellants.

         Appeal from the United States District Court
           for the Southern District of California
          Marilyn L. Huff, District Judge, Presiding

                   Argued and Submitted
           October 11, 2013—Pasadena, California

                        Filed June 20, 2014

 Before: Richard A. Paez and Andrew D. Hurwitz, Circuit
  Judges, and Ralph R. Erickson, Chief District Judge.*

                     Opinion by Judge Paez;
                    Dissent by Judge Erickson

  *
   The Honorable Ralph R. Erickson, Chief District Judge for the U.S.
District Court for the District of North Dakota, sitting by designation.
2 RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO.

                           SUMMARY**


                             Miller Act

   The panel affirmed the district court’s judgment after
bench trial in favor of the plaintiff in an action under the
Miller Act.

    The plaintiff alleged that a subcontractor on a federal
project failed to pay for equipment rented on an open book
account. The panel held that the plaintiff’s notice of demand,
served on the prime contractor within ninety days of the last
day on which the plaintiff furnished the equipment, was
timely as to equipment furnished more than ninety days
before the notice. Agreeing with the First, Fourth, and Fifth
Circuits, the panel held that if all the goods in a series of
deliveries by a supplier on an open book account are used on
the same government project, then the ninety-day notice is
timely as to all of the deliveries if it is given within ninety
days from the last delivery.

    The panel also affirmed the district court’s determination
of when the plaintiff’s duty to mitigate damages arose, as
well as the district court’s award of contractual prejudgment
interest.

    Dissenting, Judge Erickson wrote that he would reverse
the district court’s judgment because, in light of the Miller
Act notice provision’s purpose of protecting the general
contractor and its surety, the plaintiff’s ninety-day notice was

  **
     This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
   RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO. 3

not timely as to equipment furnished more than ninety days
before the notice. Judge Erickson wrote that he also would
reverse as to mitigation of damages and prejudgment interest.


                        COUNSEL

Robert J. Berens (argued) and Adam D. Melton, Phoenix,
Arizona, for Defendants-Appellants.

James D. Crosby (argued) and Leah A. Plaskin, Klinedinst
PC, San Diego, California, for Plaintiffs-Appellees.


                         OPINION

PAEZ, Circuit Judge:

     Candelaria Corporation (“Candelaria”), a prime contractor
on a federal construction project, Carolina Casualty Insurance
Company (“CCIC”), its surety, and Otay Group, Inc.
(“Otay”), a subcontractor (collectively, “Defendants”), appeal
the district court’s judgment in favor of Ramona Equipment
Rental, Inc. (“Ramona”), Candelaria’s supplier of rental
equipment, in Ramona’s action under the Miller Act,
40 U.S.C. §§ 3131–3134. The suit involves Otay’s failure to
pay for equipment rented from Ramona on an open book
account. As required by the Miller Act, Ramona served
Candelaria with notice of demand for payment within ninety
days of the last day on which it furnished the equipment. The
critical issue in this appeal is whether Ramona’s notice is
timely as to rental equipment furnished more than ninety days
before the notice. We hold that it is, and affirm the district
court’s judgment.
4 RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO.

                                    I.

    This dispute arises from a federal construction project
known as ICE El Centro SPC - Perimeter Fence
Replacement/Internal Devising Fence Replacement ( the
“Project”). Candelaria was the prime contractor on the
Project and, in tandem with CCIC, provided a payment bond
as mandated by the Miller Act. See 40 U.S.C. § 3131. In
December 2007, Otay entered into a subcontract with
Candelaria agreeing to supply certain labor and equipment
for the Project. Shortly thereafter, Otay submitted, and
Ramona approved, a credit application which established an
open account for Otay to rent equipment from Ramona for
use on the Project. Under the terms of the credit application,
rentals would be documented by a rental agreement and
invoice.

    Between December 2007 and June 2008, Otay and
Ramona entered into eighty-nine rental agreements on credit,
totaling $235,446.84.     On June 6, 2008, Candelaria
terminated Otay’s subcontract for cause. At that time,
Candelaria owed Otay over $500,000 for labor and equipment
provided to the Project, and Otay had paid Ramona only
$17,658.57 on the outstanding rental agreements.

     On July 25, 2008, Ramona served a ninety-day notice of
its claim for payment on Candelaria’s payment bond pursuant
to 40 U.S.C. § 3133(b)(2).1 Following service of the notice,


  1
    Section 3133(b)(2) provides: “[a] person having a direct contractual
relationship with a subcontractor but no contractual relationship, express
or implied, with the contractor furnishing the payment bond may bring a
civil action on the payment bond on giving written notice to the contractor
within 90 days from the date on which the person did or performed the last
      RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO. 5

in September 2008, Ramona filed a complaint in district court
under the Miller Act to recover $393,567.09 in unpaid
equipment rentals plus monthly service charges. At trial,
Defendants argued that Ramona’s ninety-day notice was
untimely as to all rental equipment furnished to the project
more than ninety days before service of the notice on July 25,
2008. Defendants also argued that Ramona failed to mitigate
its damages and that Ramona was not entitled to recover
compound prejudgment interest, which the credit application
called “service charges.”

    The district court rejected Defendants’ first argument and
concluded that, in light of the open book account, the ninety-
day notice covered all rental equipment furnished to the
Project. The court, however, determined that Ramona’s duty
to mitigate damages arose as of June 10, 2008 (four days after
Otay’s termination by Candelaria) and barred recovery for
invoices after that date. Finally, the court rejected Ramona’s
claim for compound prejudgment interest and awarded simple
interest at the contractual rate of 1.5 %. Accordingly, on
August 31, 2011, the district court entered judgment awarding
Ramona $178,686.56 plus $106,516.64 in service charges and
$114,081.28 in attorneys’ fees. Defendants timely appealed.2


of the labor or furnished or supplied the last of the material for which the
claim is made . . . .” 18 U.S.C. § 3133(b)(2).
  2
     We have jurisdiction pursuant to 28 U.S.C. § 1291. We review the
district court’s findings of fact under Federal Rule of Civil Procedure
52(a)(1) for clear error and its legal conclusions de novo. See Fisher v.
Tucson Unified Sch. Dist., 652 F.3d 1131, 1136 (9th Cir. 2011); see also
United States v. Hinkson, 585 F.3d 1247, 1263 (9th Cir. 2009) (en banc)
(holding that factual findings are clearly erroneous where they are
“illogical, implausible, or without support in inferences that may be drawn
from facts in the record.”).
6 RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO.

                                  II.

    The Miller Act “represents a congressional effort to
protect persons supplying labor and material for the
construction of federal public buildings in lieu of the
protections they might receive under state statutes with
respect to the construction of nonfederal buildings.” Mai
Steel Serv. Inc. v. Blake Constr. Co., 981 F.2d 414, 416–17
(9th Cir. 1992) (internal citation omitted). To accomplish this
beneficial purpose, the Miller Act is entitled to a liberal
interpretation. See United States ex rel. Sherman v. Carter,
353 U.S. 210, 216 (1957); see also United States v. W. Elec.
Co., 337 F.2d 568, 572 (9th Cir. 1964). The Miller Act
requires that laborers and materialmen with no direct
relationship to the general contractor furnishing the payment
bond, “giv[e] written notice to the contractor within 90 days
from the date on which the person did or performed the last
of the labor or furnished or supplied the last of the material
for which the claim is made.” 40 U.S.C. § 3133(b)(2); see
United States ex rel. Water Works Supply Corp. v. George
Hyman Constr. Co., 131 F.3d 28, 31–32 (1st Cir. 1997). This
notice requirement “serves an important purpose: it
establishes a firm date after which the general contractor may
pay its subcontractors without fear of further liability to the
materialmen or suppliers of those contractors.” Id. at 32.
Failure to comply with the ninety-day notice requirement is
fatal to a Miller Act claim.

   We have not addressed the precise issue presented by this
appeal.3 In the absence of controlling Ninth Circuit authority,


 3
   In Apache Powder Co. v. Ashton Co., we dealt with a ninety-day notice
that demanded payment for material supplied more than ninety days
before the notice. 264 F.2d 417, 418 (9th Cir. 1959). The dispute there,
    RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO. 7

the district court turned to Noland Co. v. Allied Contractors,
Inc., 273 F.2d 917, 920 (4th Cir. 1959), for guidance. In
Noland, the Fourth Circuit considered a claim for six unpaid
shipments sent by Noland, a supplier of electrical equipment,
to a subcontractor on an open account. Id. at 919. Noland
sent written notice under the Miller Act within ninety days of
the last shipment. Id. at 918. The notice included claims for
several shipments that were delivered more than ninety days
before the notice. Id. The court held that the notice was
timely as to all shipments, concluding that where there are
multiple deliveries or contracts, “the measuring date will be
the date when the last material is furnished under the last
contract.” Id. at 920. Defendants acknowledge Noland, but
argue that it is outdated and that we should adopt the
reasoning of several more recent district court decisions that
protect the prime contractor and surety from the risk of
double payment. Several of our sister circuits, however, have
agreed with Noland’s holding, as do we.

    In United States ex rel. A & M Petroleum, Inc. v. Sante Fe
Engineers Inc., the Fifth Circuit concluded that notice within
ninety days of the last delivery on a project involving
multiple purchase orders—including orders made more than
ninety days before the notice—was timely under the Miller
Act. 822 F.2d 547, 548 (5th Cir. 1987). Noting that this
“seems to be the preferred interpretation” among the circuit
courts, the Fifth Circuit held that under the Miller Act, a
materialman or laborer need only give notice to a general
contractor within ninety days of the last delivery or rendition
of services, rather than after each unpaid delivery or provision
of labor. Id. Thus, when there is an open account, a ninety-


however, centered on the form of the notice, and not whether the notice
was timely for all deliveries covered by the notice.
8 RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO.

day notice is timely even when it includes material furnished
more than ninety days before the notice.

    Similarly, in Water Works Supply Corp., the First Circuit
considered circumstances where the plaintiff extended a line
of credit on an open book account for the purchase of pipe
and piping materials. 131 F.3d at 30. In March 1995, the
plaintiff served a ninety-day Miller Act notice relating to two
outstanding invoices from November 1994 and January 1995.
Id. The general contractor asserted that, notwithstanding the
open book account, each order represented a separate contract
with a separate ninety-day limit. Id. at 34. The court rejected
this argument, noting that “the weight of the authority
contradicts that position.” Id. Rather, the First Circuit
reasoned that although a strict reading of the notice provision
might offer more protection to the general contractor, “the
goal of a specific statutory provision must take a back seat to
the purpose of the overall statute, which is to provide
recovery for suppliers who have provided materials but not
received compensation.” Id. (citing Noland, 273 F.2d at
920–21). Accordingly, the court held that “[w]here claims
are based on an open account theory, the ninety-day notice
period for all of the deliveries begins on the date of the last
delivery to the project.” Id.4


  4
    Although Defendants rely on the Second Circuit’s opinion in United
States ex rel. J.A. Edwards & Co., Inc. v. Peter Reiss Construction Co.,
it involved circumstances distinguishable from those at issue here.
273 F.2d 880 (2nd Cir. 1959). That case addressed a series of unpaid
deliveries in August, September and October 1956. Id. at 881. In March
1957, the plaintiff made an additional delivery which also went unpaid,
and in April, served a Miller Act ninety-day notice seeking payment for
the March delivery and the deliveries made in the prior year. Id. The
Second Circuit held that, given the significant gap in deliveries, the 1957
delivery did not “revive a Miller Act liability long extinguished . . .” Id.
    RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO. 9

    Here, the relationship between Otay and Ramona was
governed by an open book account that allowed Otay to rent
equipment from Ramona on an ongoing credit basis. Ramona
continued to rent equipment to Otay for use at the Project
until Candelaria terminated its subcontract on June 6, 2008,
and, within ninety days of the last rental, Ramona served
notice of its claim for payment on Candelaria. These
circumstances are clearly analogous to those addressed by the
First, Fourth and Fifth Circuits. Accordingly, we join our
sister circuits and hold that if all the goods in a series of
deliveries by a supplier on an open book account are used on
the same government project, the ninety-day notice is timely
as to all of the deliveries if it is given within ninety days from
the last delivery.

    Relying on several recent district court cases, the dissent
asserts that the ninety-day notice requirement serves to
protect the general contractor and its surety. Dissent at 14;
see e.g., United States ex rel. Country Boys Feed & Farm
Supply v. Eickelmann, No. 08-3429-CV-S-GAF, 2010 WL
750059 (W.D. Mo. March 2, 2010); United States ex rel.
Robert DeFilippis Crane Serv. Inc. v. William L. Crow
Constr. Co., 826 F. Supp. 647 (E.D.N.Y. 1993). Although we
acknowledge that “an important purpose of the 90-day notice
provision is to protect the general contractor and his surety,”
United States ex rel. Miller & Bentley Equip. Co. v. Kelley,
327 F.2d 590, 591 (9th Cir. 1964), the weight of circuit


at 881–82. The court, however, explicitly noted that it was “not here
required to decide whether, when a materialman makes deliveries under
a series of purchase orders so that each delivery is within 90 days of its
predecessor, a notice given within 90 days of the last order or delivery will
relate back to include the entire chain.” Id. at 881. The issue in this case
is precisely that which the Second Circuit declined to address in J.A.
Edwards.
10 RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO.

authority recognizes a broader purpose in the Miller Act. In
the end, the goal of the notice provision “must take a back
seat to the purpose of the overall statute, which is to provide
recovery for suppliers who have provided materials but not
received compensation.” Water Works Supply Co., 131 F.3d
at 34.

    Moreover, contrary to Defendants’ argument, there is no
risk here of double liability to Candelaria. See United States
ex rel. Blue Circle West, Inc. v. Tucson Mech. Contracting,
Inc., 921 F.2d 911, 914 (9th Cir. 1990) (noting that the intent
of the Miller Act notice requirement is, in part, to help
general contractors to “avoid such double liability”). Rather,
Candelaria has thus far avoided payment almost entirely,
ultimately providing only $70,000 of the $600,000 due on
Otay’s subcontract. We therefore affirm the district court’s
award of $178,686.56 in damages, holding that all amounts
due for all the rental equipment furnished to Otay for
construction of the project were properly included in the
ninety-day notice.5



 5
   Defendants also argue that equipment Ramona rented from third parties
and then “re-rented” to Otay does not constitute materials “furnished or
supplied” under the Miller Act. We disagree. The words “furnished or
supplied” are not defined in the Miller Act and are therefore entitled to
their ordinary meaning. See Woods Constr. Co., Inc. v. Pool Constr. Co.,
348 F.2d 687, 689 (10th Cir. 1965); see also FDIC v. Meyer, 510 U.S.
471, 476 (1994) (“In the absence of [a definition in the statute], we
construe a statutory term in accordance with its ordinary or natural
meaning”). We agree with the district court that these words should not be
read to imply a requirement of ownership of the object being furnished or
supplied. Moreover, Defendants’ reliance on Woods is inapposite; Woods
dealt with access to real property and not re-rented personal property.
348 F.2d at 689. Accordingly, all equipment rented before June 10, 2008
to Otay was properly included in Ramona’s Miller Act claim.
   RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO. 11

                              III.

    Defendants also argue that the district court erred in
determining that Ramona’s duty to mitigate damages arose
only after June 10, 2008, four days after Candelaria
terminated Otay’s contract. Reviewing the district court’s
factual determination regarding the reasonableness of
Ramona’s mitigation efforts for clear error, we find none.
See Jackson v. Shell Oil Co., 702 F.2d 197, 202 (9th Cir.
1983).

    From December 2007 to June 2008, Ramona furnished
equipment to Otay for the project and regularly invoiced Otay
for the rentals. Otay paid the first nine invoices through
March 4, 2008, but by May 28, 2008, had paid only two of
the remaining eighty invoices. Recognizing that Otay was
having financial difficulties, Candelaria made several
attempts in May and June 2008 to meet with Otay
representatives in order to determine a payment plan. These
efforts were unsuccessful and, on June 6, 2008, Candelaria
terminated Otay for cause.         Ramona ceased renting
equipment to Otay upon learning of the termination, but
seventy-eight invoices remained unpaid in the amount of
$218,329.23.

    Defendants contend that because Ramona did not notify
Candelaria of Otay’s overdue payments, and did not cease
equipment rentals when prior invoices went unpaid, it failed
to properly mitigate damages. “Where a party is entitled to
the benefit of a contract and can save himself from a loss
arising from a breach of it at a trifling expense or with
reasonable exertions, it is his duty to do it . . . .” Commodity
Credit Corp. v. Rosenberg Bros. & Co. 243 F.2d 504, 511
(9th Cir. 1957). Here, the district court determined that
12 RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO.

because Otay and Candelaria were still trying to resolve their
business issues as of June 5, 2008, Ramona “had a good faith
belief that Otay and Candelaria would resolve their issues and
payment would be forthcoming from Otay.” The district
court also found that Ramona and Otay had a long-standing
business relationship and Otay was providing on-time
payments to Ramona on another federal government contract
during this time period, which, “add[ed] credence to
Ramona’s position that it expected Otay to also make
payments on the [Project].” Although Ramona failed to alert
Candelaria to Otay’s delinquency until seventy-eight invoices
from Otay were overdue, this does not render the district
court’s conclusion—that Ramona had commercially
reasonable justifications for choosing not to mitigate its
damages prior to June 10, 2008—“illogical [or] implausible.”
See Hinkson, 585 F.3d at 1263. Accordingly, we affirm the
district court’s ruling not to award damages for invoices
submitted on or after June 10, 2008.

                              IV.

    Finally, Defendants assert that Ramona waived its right
to collect service charges through its course of conduct, as
Ramona did not assess service charges until June 30, 2008.
This argument was raised for the first time in the district court
in a post-trial motion to alter or amend the judgment. The
issue is waived. See Beech Aircraft Corp. v. United States,
51 F.3d 834, 841 (9th Cir. 1995) (“That Plaintiffs raised the
issue in a post-judgment motion does not save this issue for
appeal for the Plaintiffs . . . . Because Plaintiffs could have
raised the issue at or before trial and because they have not
presented any valid reason for not having done so, we decline
to consider Plaintiffs’ . . . argument.”). Accordingly, we
   RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO. 13

affirm the district court’s award of contractual prejudgment
interest (service charges).

   AFFIRMED.



ERICKSON, Chief District Judge, dissenting:

   I respectfully dissent. The Miller Act provides,

       [a] person having a direct contractual
       relationship with a subcontractor but no
       contractual relationship, express or implied,
       with the contractor furnishing the payment
       bond may bring a civil action on the payment
       bond on giving written notice to the contractor
       within 90 days from the date on which the
       person did or performed the last of the labor
       or furnished or supplied the last of the
       material for which the claim is made.

40 U.S.C. § 3133(b)(2). This case involves a series of
contracts under an open account. From January 2008 through
July 2008, Otay paid only eleven of its eighty-nine invoices.
Of the $706,917.62 Otay paid Ramona during the relevant
time period, Otay allocated only $17,538.32 to this federal
construction project. The remainder was allocated to a
separate project. Ramona did not notify Candelaria until July
25, 2008 of the nonpayment. In the interim, Ramona
assessed 1.5% monthly compounding interest on each
outstanding balance.
14 RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO.

    A significant purpose of the 90-day notice provision in
the Miller Act is to protect the general contractor and its
surety. The potential extended duration of an open account
relationship risks surprising the general contractor with an
unforseen and possibly staggering obligation. Requiring a
subcontractor to provide notice at 90-day intervals is not
overly burdensome, comports with the purpose of the Miller
Act, and lessens the risk that a subcontractor might delay
notice of outstanding debt for a greater profit.

    I join the other courts that have adopted the more
stringent notice requirement advocated by Appellants. See,
e.g., United States ex rel. Country Boys Feed and Farm
Supply v. Eickelmann, No. 08-3429-CV-S-GAF, 2010 WL
750059, at *5 (W.D. Mo. March 2, 2010) (“Generally, an
open account should not be considered a contract for
purposes of the notice provision. Rather, the separate orders
of materials under the open account, which are typically
represented in purchase orders or invoices, satisfy the
underlying contract requirement.” (internal citation omitted));
United States ex rel. Robert DeFilippis Crane Serv. Inc. v.
William L. Crow Constr. Co., 826 F.Supp. 647, 655
(E.D.N.Y. 1993) (“Where claims are based on a series of
contracts, a claim must be made within 90 days from the date
on which the supplier ‘furnished or supplied the last of the
material’ for each underlying contract.”); see also United
States ex rel. J.A. Edwards & Co. v. Peter Reiss Const. Co.,
273 F.2d 880, 881–82 (2d Cir. 1959) (“[I]t would be wholly
inconsistent with the purpose of the notice provision of the
Miller Act . . . to hold that a shipment made on March 5,
1957, under an order of February 20, 1957, could revive a
Miller Act liability long extinguished.”).
   RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO. 15

    I believe Ramona’s July 25, 2008 notice of claim bars
recovery for the forty-seven invoices issued prior to April 26,
2008. Accordingly, I would reverse and remand for entry of
judgment, reducing the damages by $113,508.46 for failure
to provide the proper notice of claim.

    Appellants also contend that Otay’s prolonged
delinquency on project-related payments should have put
Ramona on notice of its need to mitigate damages. I agree.
By the time Otay’s subcontract was terminated on June 6,
2008, seventy-eight invoices remained unpaid.

   The general rule regarding a party’s duty to mitigate
damages provides:

       [W]here a party is entitled to the benefit of a
       contract and can save himself from a loss
       arising from a breach of it at a trifling expense
       or with reasonable exertions, it is his duty to
       do it; and he can charge the delinquent with
       such damages only as, with reasonable
       endeavors and expense, he could not prevent.

Commodity Credit Corp. v. Rosenberg Bros. & Co., 243 F.2d
504, 511 (9th Cir. 1957). Ramona allowed seventy-eight
invoices to go unpaid, accruing a debt of $218,329.23 and an
additional $175,658.57 in self-generated late fees.

    The district court failed to consider, as a reasonable
mitigating measure, Ramona’s failure to timely notify
Candelaria of Otay’s growing debt. Ramona concedes the
very act of filing a Miller Act claim can constitute “available
and judicially honorable means of mitigating” losses. United
States ex rel. Balboa Ins. Co. v. Algernon Blair, Inc.,
16 RAMONA EQUIP. RENTAL V. CAROLINA CAS. INS. CO.

795 F.2d 404, 409 (5th Cir. 1986). For a Miller Act obligee
to have the opportunity to mitigate damages, however, an
aggrieved party must actually submit the claim. Regardless
of the statutory notice requirements, sending Appellants
notice at any time in the months between Otay’s original
default and its ultimate termination would surely constitute
reasonable exertion “at a trifling expense.” See Commodity
Credit Corp., 243 F.2d at 511. Moreover, this measure could
have prevented hundreds of thousands of dollars in “service
charges” and litigation expenses.

    The district court’s determination that the duty to mitigate
damages did not arise until June 10, 2008 was clearly
erroneous. Providing notice to Appellants of Otay’s default
was a reasonable form of mitigation available to Ramona
prior to termination of the subcontract. I would reverse and
remand for further proceedings on this issue.

    Appellants also assert Ramona waived its right to service
charges through its course of conduct. Each rental agreement
provides that a customer “agrees to pay a monthly service
charge on all unpaid balances of 1–1/2% per month.” Despite
Otay’s growing delinquency, Ramona did not assess service
charges on any invoices issued during Otay’s subcontract
(with the exception of one service charge which Ramona
credited back to Otay). Ramona’s first exercise of this
contractual right took place on June 30, 2008—months after
Otay’s first default and weeks after its termination by
Candelaria—when Ramona issued thirty-five “finance
charge” invoices at once.

    Ramona waived its right to collect service charges
through its course of conduct. I would, therefore, vacate the
award of $106,516.64 for service charges.
