January 2018 – Law and Civil Engineering

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Don’t Delay in Completing the Punch List
by Eugene Bass

A contractor built a new home and was fully paid for the work. Before the final payment, there were three punch lists. Eight months after the final payment, the owners had an additional 22 item punch list. The contractor repaired some of the items and refused to deal with others.

When the contractor failed to satisfy the owners they complained to the Contractor’s State License Board. The License Board hired a consultant who concluded that 20 of the 22 latest punch list items were below industry standard.

The License Board continued to attempt to informally resolve the dispute and to have the contractor do the work required to bring the job to industry standards. After numerous excuses and delays, the owners again complained to the License Board about the lack of progress in the work. The supervisor at the Board agreed that the contractor had ample time to have completed the work and authorized the owners to hire someone else to make the repairs. Thereafter, the Board filed a citation against the contractor.

After an administrative hearing and trial, which the contractor lost, the case was heard by the court of appeals where the contractor disputed that he had willfully departed from accepted trade standards in violation of Section 7109, subdivision (a), of the Business and Professions Code

Section 7109(a) of the Business and Professions code states that “A willful departure in any material respect from accepted trade standards for good and workmanlike construction constitutes a cause for disciplinary action, unless the departure was in accordance with plans and specifications prepared by or under the direct supervision of an architect.”

The contractor argued that he did not willfully depart from accepted trade standards. The court concluded that a reasonable inference could be made that the contractor knew his work was substandard based on evidence that he was a knowledgeable, licensed contractor, with substantial construction experience. Such an inference was also supported by evidence that the section 7109 violation was based on 17 instances of substandard work involving significant errors, such as the failure to prepare surfaces properly for tiling; using improper adhesives causing tile to fall off; failing to use proper caulking when setting the sinks and numerous other examples.
The contractor also disputed his violation of ྭsection 7113 of the Business and Professions code which provides: “Failure in a material respect on the part of a licensee to complete any construction project or operation for the price stated in the contract for such construction project or operation or in any modification of such contract constitutes a cause for disciplinary action.”

The contractor argued that since he was ready, able and willing to repair the 17 items, he could not have been found to have violated section 7113. The court disagreed. The court noted that it did not intend to discourage contractors from repairing substandard work after having been cited for violations. The court recognized the need to require contractors to make sure their work meets trade standards before requesting payment in full. Furthermore, the court stated if the Board gave a contractor the opportunity to make repairs, the contractor should act expeditiously in making the repairs, knowing that any delay may subject the contractor to prosecution. In this case, the contractor took the risk of further delaying the needed repairs by refusing to perform some of the repairs in the manner recommended by the Board, and my unreasonably delaying the repairs.

This was a case where the contractor’s tactic of delay and obfuscation to deal with problems did not work and caused him significant problems.


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