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LEGAL ISSUES Protecting Your License:


Best Practices for Handling License Board Claims


By T. Darren Barker & Eric Rans, Michelman & Robinson, LLP


and regulating the construction industry. Both residential and commercial contractors must take their duties and obligations under the CSLB seriously, as negative findings can impact their livelihoods. Unfortunately, licensed contractors are often forced to address thin or unfounded complaints to the CSLB, putting their licenses in jeopardy. However, by understanding the


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details of the complaint and investi- gation process, and anticipating each phase of the proceedings, contractors can bolster their chances of defending their license. Complaints against licensed


contractors may be filed with the CSLB by owners and other contractors. Te CSLB has jurisdiction to consider complaints for code viola- tions as well as the alleged failure by a licensed contractor to fulfill the terms of an agreement.


Actionable Failures Actionable failures include poor


workmanship; abandonment of a project; failure to pay subcontractors, material suppliers or employees; or building code violations. Other potential failures are lack of reasonable diligence in executing a construction project; use of false, misleading, or deceptive advertising; home improvement contract violations; etc. Treats to public health, safety, and


cases where consumers have suffered a significant financial injury are given the highest priority. Once an initial complaint is filed,


the CSLB commences an investigation under Business & Professions Code §§ 7085 – 7085.9. Tese investiga-


16 May/June 2016


he Contractors State Licensing Board (CSLB) was designed to protect consumers by licensing


tions are often one-sided and based solely on the complainant’s allega- tions. Te contractor faces an uphill battle, fighting a presumption that work was performed improperly, and that the trusting, naïve consumer has been hoodwinked by the unscru- pulous contractor. If after an initial settlement conference the case has not been resolved, the matter is sent to arbitration, or a further investigation is launched by the CLSB. It is vital during the critical


pre-arbitration and arbitration phases that contractors embrace the legal best practices, outlined below, should a complaint ever be filed against them.


Pre-Arbitration Initially, it is imperative that the


contractor take the complaint seriously and respond to the CSLB’s early inquiries. A contractor should provide requested information, and make the CSLB aware in writing of any disagreements with the owner’s claims. Contractors should demand that


they be notified of any proceedings and provided with copies of all documents concerning the complaint. At this stage, complaints are often dismissed (with a warning letter) where the contractor’s actions were not egregious and they possess no history of viola- tions. If the matter is not dismissed outright, the CSLB normally will make efforts to mediate a resolution between the parties. While mediation is ideal, many


matters are not resolved, and proceed to arbitration.


The Path to Arbitration Often at this stage of the


proceedings, the complainant has had the advantage of maintaining an open line of communication with the CSLB file administrator. Based on these communications, the administrator, in turn, provides the relevant records and


Barker Rans


facts to the CSLB expert investigator, as well as the arbitrator. Further, the CSLB expert inves-


tigator performs an inspection of the project, but is under strict rules to only review what is in the complaint. Moreover, the site investigation is almost always led by the owner, who will introduce those facts that best serve their claims. After the inspection, the industry


expert will issue a repair recommen- dation, including the cost. Next, an arbitration date is set and the parties await the hearing. At arbitration, there will be an arbitrator, usually an attorney, who is highly familiar with construction matters. Te owner begins the proceeding and is allowed to bring all witnesses and evidence that it is believed will prove claims and expenses. Upon completion of the owner’s case, the CSLB expert will provide and explain its report(s). After the CSLB considers


the complainant’s grievances, the expert’s investigation, and the start of arbitration, the contractor has an oppor- tunity to defend its position. Many contractors view the CSLB’s protocol as unfair and unbalanced, and are left wondering how they could have better protected themselves throughout this process.


How to Succeed at Arbitration While not reflected in the formal


CSLB rules, there are numerous opportunities for a diligent contractor to prepare its case, and ultimately succeed at arbitration. Some of them include:


 Records Request. Request that the CSLB provide all records submitted by the owner for arbitration. Tis will assist in


California Constructor


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