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CA Construction Contract ?

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SoCalLandscaper

Junior Member
What is the name of your state? CA

We are a licensed contractor in state with three classifications in landscape, pool, and concrete. We contracted to do a remodel on a job which included building a stucco deck/balcony. The stucco deck/balcony is non-watertight with travertine floor and wrought iron railing (wrought-iron contracted directly with homeowner). As in our state the description of non-watertight deck/balconies that a C-27 can build is a "grey" area according to the CSLB, we elected to subcontract that portion of the project to a "B" General Contractor whose license is higher than our three. The job is completed and all passed inspections by the city. The homeowner has now hired an attorney and is suing us for the entire amount of the project ($225,000.00) claiming we were not licensed under our classification to CONTRACT TO BUILD the stucco deck/balcony even though we subcontracted out to a B-General. The opposing attorney is siting the following cases: Calif. B & P Code 7031(b), Currie v. Stolowitz (1959) 169Cal.App.2d 810, 815; Vallejo Development Co. v. Beck Development Co. (1994) 24 Cal.App.4th 929, 941; and MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005 36 Cal.4th 412, 425. Is there something in the IBC that states it's OK to sub to a B-General for work of this nature because the B-General's license is higher?

In all of these cases I've looked up it talks about UNLICENSED contractors signing contracts. We are not unlicensed. As this deck/balcony is "incidental" to the entire project, less than 10%, and we subbed it out to a B-General, how can this guy expect to win in court? There is absolutely nothing wrong with any of the work. That is not the question in the suit. I think this homeowner found this attorney just so he could try and get back all of his money on this project. How is this legal? Any help you can give with this would be greatly appreciated. We have hired an attorney, but I am trying to do research on my own about this as our family could not handle a loss of this nature. It would put us out of business. Thank you.
 


danno6925

Member
This is the dumbest thing I've ever heard. He's suing you for doing the job properly? What an ass.

I sincerely hope the judge throws the book at this homeowner, has the bailiff retrieve the book and then proceeds to beat the plaintiff about the head and shoulders with the aforementioned book.

File your own countersuit on behalf of the company for reason or another. Let the attorney figure out the damages and the reason, but you should harass this jerk in similar fashion.

Best of luck to you.
 

SoCalLandscaper

Junior Member
This is the dumbest thing I've ever heard. He's suing you for doing the job properly? What an ass.

I sincerely hope the judge throws the book at this homeowner, has the bailiff retrieve the book and then proceeds to beat the plaintiff about the head and shoulders with the aforementioned book.

File your own countersuit on behalf of the company for reason or another. Let the attorney figure out the damages and the reason, but you should harass this jerk in similar fashion.

Best of luck to you.
Thanks...What's even more worse is this guy is the retired chief of police of another city and now the assistant to the mayor of a city 30 miles away. He's even made reference to others that we should "watch our back because he KNOWs people".

Hopefully, we'll get a judge who looks at this and does exactly what you've stated. However, I'm still worried about the whole "Contracting out of classification" issue. I've researched tons of court cases about this issue, but nothing is similar to what we have here especially with us subcontracting to a B-General. That's why I posted to see if anyone else has ever heard of a case like this. The only thing I've seen about this is the state contractor's board will issue a citation with a small fine, but that's all. I don't think anyone has ever won the entire amount of the job back. $225,000????????
 

HappyHusband

Senior Member
What is the name of your state? CA

We are a licensed contractor in state with three classifications in landscape, pool, and concrete. We contracted to do a remodel on a job which included building a stucco deck/balcony. The stucco deck/balcony is non-watertight with travertine floor and wrought iron railing (wrought-iron contracted directly with homeowner). As in our state the description of non-watertight deck/balconies that a C-27 can build is a "grey" area according to the CSLB, we elected to subcontract that portion of the project to a "B" General Contractor whose license is higher than our three. The job is completed and all passed inspections by the city. The homeowner has now hired an attorney and is suing us for the entire amount of the project ($225,000.00) claiming we were not licensed under our classification to CONTRACT TO BUILD the stucco deck/balcony even though we subcontracted out to a B-General. The opposing attorney is siting the following cases: Calif. B & P Code 7031(b), Currie v. Stolowitz (1959) 169Cal.App.2d 810, 815; Vallejo Development Co. v. Beck Development Co. (1994) 24 Cal.App.4th 929, 941; and MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005 36 Cal.4th 412, 425. Is there something in the IBC that states it's OK to sub to a B-General for work of this nature because the B-General's license is higher?

In all of these cases I've looked up it talks about UNLICENSED contractors signing contracts. We are not unlicensed. As this deck/balcony is "incidental" to the entire project, less than 10%, and we subbed it out to a B-General, how can this guy expect to win in court? There is absolutely nothing wrong with any of the work. That is not the question in the suit. I think this homeowner found this attorney just so he could try and get back all of his money on this project. How is this legal? Any help you can give with this would be greatly appreciated. We have hired an attorney, but I am trying to do research on my own about this as our family could not handle a loss of this nature. It would put us out of business. Thank you.
I agree with danno. That is stupid. But apparently, it is California law.

However, this answers your question on point, and unfortunately for you, doesn't look good,

Currie v. Stolowitz cites Hollywood Termite Control Co. v. Structural Pest Control Board, 95 Cal.App.2d 56 [212 P.2d 278], which says...

In Hollywood Termite Control Co. v. Structural Pest Control Board, 95 Cal.App.2d 56 [212 P.2d 278], the appellant contractor held a "D" license to engage in certain types of pest control work, but did not have an "A" or "C" license for the use of fumigants. Appellant entered into a contract for fumigation work and subcontracted this aspect of the work to the holders of "A" and "C" licenses. In a prosecution for violation of the Structural Pest Control Act, it was argued that because the work was in all cases actually performed by a licensed subcontractor, there was no violation of the act in merely contracting to do the work. To this the court replied at pages 58 and 59:
"It is the essence of the act that the public be protected against persons who are unqualified to perform the required work. It would violate the letter of the act to offer to do and to contract to do that which he was legally unqualified to do. It is the element of sub-contracting that the original contractor assume the primary responsibility, thereafter delegating that responsibility to a further contractor who is secondarily responsible. The pest control operator cannot delegate to another that which he is unqualified to do. For the foregoing reason it is unlawful for a pest control operator to contract to perform any fumigation work which he is not legally authorized to do, *816 and he cannot escape the effect of the statute by subcontracting the work to a duly licensed operator."
 

fairisfair

Senior Member
I found where the General B can subcontract to the Specialty (C's) but nothing visa versa in cslb regulations.
"In some instances, a general building contractor may take a contract for projects involving one trade only if the general contractor holds the appropriate specialty license or subcontracts with an appropriately licensed specialty contractor to perform the work."

I also read through two of the cases you provided and am not sure how they apply. One only had to do with a contractor and homeowner's responsiblity regarding licensing and workmen's compensation, the other was regarding unacceptable workmanship and SOL.

Have you tried contacting the cslb and asking what their policy regarding subcontracting to a "higher" licensed contractor would be??

Uh oh, just read happy's reply. That was the one case I didn't read.
 
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SoCalLandscaper

Junior Member
I agree with danno. That is stupid. But apparently, it is California law.

However, this answers your question on point, and unfortunately for you, doesn't look good,

Currie v. Stolowitz cites Hollywood Termite Control Co. v. Structural Pest Control Board, 95 Cal.App.2d 56 [212 P.2d 278], which says...

In Hollywood Termite Control Co. v. Structural Pest Control Board, 95 Cal.App.2d 56 [212 P.2d 278], the appellant contractor held a "D" license to engage in certain types of pest control work, but did not have an "A" or "C" license for the use of fumigants. Appellant entered into a contract for fumigation work and subcontracted this aspect of the work to the holders of "A" and "C" licenses. In a prosecution for violation of the Structural Pest Control Act, it was argued that because the work was in all cases actually performed by a licensed subcontractor, there was no violation of the act in merely contracting to do the work. To this the court replied at pages 58 and 59:
"It is the essence of the act that the public be protected against persons who are unqualified to perform the required work. It would violate the letter of the act to offer to do and to contract to do that which he was legally unqualified to do. It is the element of sub-contracting that the original contractor assume the primary responsibility, thereafter delegating that responsibility to a further contractor who is secondarily responsible. The pest control operator cannot delegate to another that which he is unqualified to do. For the foregoing reason it is unlawful for a pest control operator to contract to perform any fumigation work which he is not legally authorized to do, *816 and he cannot escape the effect of the statute by subcontracting the work to a duly licensed operator."
Do you know what the court awarded the plaintiff? Was it the entire contract? I cannot see how that can be legal when we held the appropriate classification licenses for all but the 10%? I thought the IBC had a code/statement that stated as long as it was not more than 50% of the entire project? And what about the law stating "as long as it is not the majority of the project and is INCIDENTAL to the entire contract/project****************************...." What in your opinion would CSLB description of INCIDENTAL mean?
 

SoCalLandscaper

Junior Member
Not sure if this might help

http://ag.ca.gov/opinions/pdfs/98-906.pdf?PHPSESSID=b326c5c39909795d69652525ce9bd323

but this is an opinion citing the "bug guys", where in the Attorney General opined that it was acceptable for a subcontract to another licensed entity so long as that portion was incidental to the general business of the original contractor.
Thanks. I've copied and have read, and it also answers my question as to what is incidental to the entire project. The other problem is the CSLB states on their website under questions and answers that a C-27 can build or subcontract to build patio covers and non-watertight decks. It also goes on to state that the deck can be of any size, height, width. If that is the case, then in our opinion what was built was a non-watertight stucco deck/balcony, and it would be considered a "grey" area by the CSLB and would need to be decided by a judge or jury.

This is the part of California contract construction law that gets me. Why can't the legislature make it more clear what a C-27 can build and what it can't. I've been told by the CLCA (CA Landscaper Association) that right now they are meeting with legislatures to determine whether it's legal for C-27's to build outdoor fireplaces, fire pits, Barbecue/Entertainment Centers. Right now the CSLB says it's a "grey" area to be decided on a case by case basis. We believe it's masonry and is inclusive of the C-27. Why can't they just make everything a little more clearer on each classification? Many are too broad and confusing.
 

fairisfair

Senior Member
none of us who have answered are attorneys. ( Unless someone is hiding a diploma up their sleeve :eek: ) Now that the additional information has been posted, wait to see if one of the attorneys comes to comment. Of course this is a specialty field and I am not aware if any attorneys on the site specialize in this type of law. The regulations are vague because there are just too many deviations in the construction industry. I can not imagine that anyone would be awarded a refund of an entire project based on what you have posted here. I would imagine it would involve more of a fine, or something of that nature. But, who knows. I guess stranger things have happened.
 

fairisfair

Senior Member
Do you know what the court awarded the plaintiff? Was it the entire contract? I cannot see how that can be legal when we held the appropriate classification licenses for all but the 10%? I thought the IBC had a code/statement that stated as long as it was not more than 50% of the entire project? And what about the law stating "as long as it is not the majority of the project and is INCIDENTAL to the entire contract/project****************************...." What in your opinion would CSLB description of INCIDENTAL mean?
as to the court award
"After notice and a hearing before an administrative officer of respondent board petitioners were disciplined for violating the Structural Pest Control Act by suspension of their license for 30 days on the ground that petitioners had violated section 8651 of the act."
I did not find any award to the plaintiff.

http://login.findlaw.com/scripts/callaw
 

SoCalLandscaper

Junior Member
as to the court award
"After notice and a hearing before an administrative officer of respondent board petitioners were disciplined for violating the Structural Pest Control Act by suspension of their license for 30 days on the ground that petitioners had violated section 8651 of the act."
I did not find any award to the plaintiff.

http://login.findlaw.com/scripts/callaw
EXACTLY, that's all I've found about working out of classification. A fine (usually small) and a possibly suspension. That's it! Not refunding back $225,000!!!! That is crazy to me. Again, thanks for your responses. Maybe a lawyer will read this and answer.
 

Zigner

Senior Member, Non-Attorney
In order to help that process, please make use of the Orange "Post Your Case To An Attorney" button - good luck!
 

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