Opinion
A151257
11-20-2018
LOG JAM CONSTRUCTION, Plaintiff and Appellant, v. CONTRACTORS STATE LICENSE BOARD, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Contra Costa County Super. Ct. No. MSN16-2092)
Plaintiff and appellant Robert Berkeley Smith, a licensed general contractor doing business as Log Jam Construction, contracted with a homeowner to tear down an existing deck and build a new deck and stairs connected to the home. Dissatisfied with Smith's work and unable to resolve the issue with him, the homeowner filed a complaint with the Contractors State License Board (Board), resulting in a citation. After the Registrar of Contractors affirmed the citation following an administrative appeal hearing, Smith filed a petition for writ of administrative mandate, which was denied.
On appeal, Smith contends there is no substantial evidence his conduct was done "willfully" as required for a violation of Business and Professions Code sections 7109 and 7110, and there is no substantial evidence he violated section 7113 because he was not allowed to complete the deck project. He also argues the order of correction is excessive. We affirm.
Further undesignated statutory references are to the Business and Professions Code.
FACTUAL AND PROCEDURAL BACKGROUND
Agreement to Construct the Orinda Project
On October 27, 2014, Smith and Jeffrey Blum entered a written contract for the removal of an existing deck and the construction of a new deck, stairs, landings, and benches at Blum's home in Orinda (Orinda project). The contract provided, "Contractor is basing scope of work from plans provided by owner, drawn by Joan More," and a one-page drawing was attached to the contract. The contract also stated, "There may be some slight deviations from plans due to construction conditions. i.e. Slope, fence, etc." The total contract price for the Orinda project was $9,000.
Smith began work the day the parties signed the contract. He completed the tear-down of the old deck in the first day or two and finished construction of the new deck by the following week. At that point, Blum had paid Smith $7,000. Blum had some concerns about the deck, and he withheld the balance of $2,000 "[b]ecause there were some things that needed to be addressed" regarding workmanship and safety. Blum wrote Smith a letter dated November 11, 2014, documenting his concerns. Blum did not receive a written response to his letter, although he recalled that Smith told him at some point that the completed work was acceptable.
Complaint and Investigation
On January 27, 2015, Blum filed a complaint against Smith with the Board. Brian Gedney, a Board enforcement representative, investigated Blum's complaint. He went to Blum's house and interviewed him, and then he discussed the case with Smith. Two individuals had worked on the Orinda project with Smith, and Smith admitted to Gedney that he did not have workers compensation insurance for them. Gedney also retained an industry expert, Leonard Nielson, to investigate the complaint.
On July 16, 2015, Nielson inspected the Orinda project. He noticed workmanship issues right away. The stairway was too narrow, the risers were of inconsistent height, and most were taller than allowed by code, and each of these issues presented a safety concern. There were four flights of stairs, all missing graspable handrails, and the stairs lacked the minimum required landing depth in the direction of travel, posing additional safety risks.
Neilson observed that the connection between the deck and the house was not industry or code approved. The braces for the posts supporting the deck were nailed instead of bolted and used an insufficient number of nails. The railing was not secure, as the upright elements of the railing were nailed, but industry standard requires a minimum of two bolts to the stairs or deck framing. A bottom rail was sagging about one-half to three-quarters of an inch in its five feet of horizontal run, which could indicate insufficient support. The railing "topper" was insufficiently connected to the existing fence, raising safety concerns because the fence could fall over in a windstorm and because it was "not clear to [him] whether somebody came down these stairs and tripped and hit that fence, whether that would be sufficiently strong to do the work the guardrail is supposed to do." The spacing between the pickets varied and did not meet code standards, another safety issue. Neilson also observed that the gate did not meet industry standards in various aspects, and the stair horses did not have the required metal connectors at the top and bottom.
Neilson found the built-in bench failed to conform to the plans that were part of the contract. The one-page drawing attached to the written contract showed a three-sided segmented bench with the sections joined at 45-degree angles, but the constructed bench was a rectangular bench with the back corners mitered off.
Neilson prepared a 64-page report documenting the problems with the Orinda project. He listed 18 items of deficiency and concluded, "Due to each of these conditions, I do not see any way to salvage any portion of this deck or stairs or railing. Costs to correct is an aggregate cost to dismantle the entire present deck structure and in addition to refund to the Owner the entire contract price." Neilson estimated that it would cost about $1,500 to dismantle the deck Smith had built.
Neilson listed 15 numbered complaint items, but number 11 comprised four different issues with the gate for a total of 18 individual complaint items. The complaint items were (1) the bench construction was not in the correct location per the plans, (2) the railing was not secure, (3) the railing top was installed with a gouged board, (4) the bottom of the railing was bowed, (5) the railing "topper" was insufficiently connected to the existing fence, (6) the railing picket spacing was not to industry standards, (7) the stairs had inconsistent risers, (8) the stairs lacked required handrails, (9) the stairway widths were not to industry standards, (10) the stairs lacked the required minimum landing depth in the direction of the travel path, (11) the gate did not swing freely, (12) the gate headroom was too short for industry standards, (13) the gate protruded into required stairway width, (14) the gate latch protruded into the stairway, (15) the stair horses were insufficiently connected to the framing, (16) no required ledger was attached to the wall to support joists, (17) there were insufficient bracing attachments on deck supports, and (18) the foundations were not inspected, and the project required a building permit and zoning permit for proximity to the creek.
Citation
On October 7, 2015, the Board issued a citation regarding the Orinda project. Smith was cited for six violations of the Contractors' State License Law (§ 7000 et seq.) as follows:
Item No. 1, violation of section 7109, subdivision (a), willfully departing in a material respect from accepted trade standards for good and workmanlike construction based on the complaint items identified by Neilson, civil penalty of $500;
Item No. 2, violation of section 7109, subdivision (b), willfully disregarding project plans and specifications in a material respect in failing to construct the built-in bench in conformity with the plans, civil penalty of $300;
Item No. 3, violation of section 7110, failing to obtain a required permit for the project, civil penalty of $300;
Item No. 4, violation of section 7113, failing in a material respect to complete/correct the project for the price stated in the contract, order of correction to pay $8,500 to Blum, civil penalty of $500;
Item No. 5, violation of section 7125.4, subdivision (a), failing to secure workers compensation coverage for employees, civil penalty of $2,500;
Item No. 6, violation of section 7159, failing to provide a written contract that complies with the law regarding home improvement contracts, civil penalty $250.
The citation provided a "time to correct" of October 28, 2015, for each of the six items.
Appeal and Hearing
On October 21, 2015, Smith filed an appeal contesting the citation. He did not contest the allegations of Item No. 6, violation of section 7159.
On July 20, 2016, a hearing on the appeal was conducted before an administrative law judge (ALJ). Blum, Nielson, and Gedney testified for the Board. In addition, the Board called Joe Losado, a manager in the code enforcement division of the Contra Costa County Department of Conservation and Development, who testified regarding permit requirements. He researched records and confirmed that no permit was "pulled" for the Orinda project. Losado testified that a permit is required for the repair or construction of a deck under Building Code section 105.1.
Smith testified on his own behalf. At the time of the hearing, he had been a licensed contractor for about 30 years and had built 100 to 150 decks. He testified that the plans could not work because there was not enough space to build the deck as drawn. Smith testified he told Blum it was a problem, Blum asked if he could make it work, and Smith said, yes, " 'I'm pretty sure I can make this thing work for you.' " According to Smith, Blum understood that the stairs would be steep and said it was all right because the stairs would primarily be used by the dogs.
Smith testified that Blum did not want to get a permit for the project, "And I even kind of agreed, I thought it was like a remodel job and it was—we could probably do without getting one, and he [Blum] was all for that."
Smith agreed the bench was not built in conformity with the drawing, but he "couldn't build that bench the way it was on the plan" because he had to move the stairs and "widen out everything." He testified that he discussed the problem with Blum and his wife, and they said, " 'okay, if that's what we have to do, let's do it.' " Smith admitted he did not get anything in writing showing the Blums agreed to change the bench from the plans.
Smith testified that Blum did not mention any concerns as the work was being done and only said things were looking good. After the initial construction of the deck, however, Smith asked for a "punch list of anything you are not quite happy with," and when he returned to the Blum house there were "like 65 Post-its" tagging problems identified by Blum's wife. At that point, Smith "got this sick feeling in [his] stomach" that "something wasn't right," and he tried to tell Blum's wife that "some of these things are within industry standards" and that he thought she was "being just a little bit unreasonable." He testified, "I don't know how a job could go so perfect right up to a point, and then, all of a sudden, I get this." He suspected the Blums were just trying to avoid paying him the balance of the contract price. He testified he was reluctant to try to work on their concerns because he feared he could work "for another two weeks" and "still not get paid, so I kind of held back."
Contrary to Neilson's opinion that the deck had to be dismantled and rebuilt, Smith testified that almost every item identified by Neilson was repairable. He said some of the issues Neilson identified were not repairs but "just unfinished work" and he was prepared to make all the repairs and finish the work. However, when asked whether he was prepared to do whatever was required to complete the Orinda project and "keep the [Board] happy," Smith did not say yes. He responded, "I didn't know—to have the State Board already involved at that point, I was—maybe took an attitude, maybe it's already too late. If the Blums have gone that far, okay. That there's probably no chance they'll talk to me or whatever. So that—yeah."
With respect to workers compensation insurance, Smith testified he had insurance "off and on" over the years and he thought he had "a dormant policy." But he also admitted he was aware he did not have workers compensation by the time he started work on the Orinda project, and he was trying to obtain insurance during the time Smith had two men working at the Blum house.
ALJ Decision
On July 28, 2016, the ALJ issued a proposed decision. She found Neilson's testimony "persuasive and credible in all respects." She did not find Smith's testimony entirely credible and wrote, "To the extent that there were contradictions between the testimony of Smith and that of Blum, the testimony of Blum was found to be more persuasive."
The ALJ found all six alleged violations (citation Items Nos. 1-6) were established by the evidence. She found Smith committed numerous violations, the "deck as constructed is a safety hazard," and the civil penalties were reasonable in light of the circumstances of the case.
The ALJ also approved the order of correction that Smith pay Blum $8,500. She explained, "The Board has imposed an order of correction in the amount of $8,500, in order to compensate Blum for the cost of demolishing the deck and to return the money he paid towards the contract. This amount is reasonable. [Smith]'s request that he be permitted to salvage any reusable materials is denied. To the extent that Blum might recoup additional value from these materials, he would not be unjustly enriched. Blum was left without a usable deck and he will be unable to rebuild it for the amount he originally contracted for with [Smith]."
On August 18, 2016, the Registrar of Contractors adopted the ALJ's proposed decision and affirmed the citation.
Petition
Smith filed a petition for writ of administrative mandate arguing the Board abused its discretion by "[f]ailing to issue a decision that is supported by the findings" and by imposing excessive discipline.
Trial Court Decision
The trial court denied Smith's petition. The court found substantial evidence supporting the determination that Smith committed the violations alleged as Items Nos. 1 through 5 of the citation.
Smith claimed the order of correction resulted in unjust enrichment because Blum was allowed to retain the deck components. The trial court found no abuse of discretion explaining, "it is reasonable for the ALJ to allow the Blums to keep the materials as additional compensation for having to deal with having the deck torn down and re-built." The court also noted that Smith presented no legal reason why the ALJ should have permitted him to return to the property to salvage the deck materials.
DISCUSSION
A. Applicable Law and Standard of Review
"The Contractors' State License Law provisions govern contractor licensing requirements and disciplinary actions against contractors." (Tellis v. Contractors' State License Bd. (2000) 79 Cal.App.4th 153, 158 (Tellis).)
Our Supreme Court "has stated that the purpose of the Contractors' State License Law is to protect the public against the perils of contracting with dishonest or incompetent contractors. [Citations.] The Legislature intended that this statute be interpreted broadly in order that contractors could not easily evade the statute's protective purposes." (Viking Pools, Inc. v. Maloney (1989) 48 Cal.3d 602, 606-607 (Viking Pools).) "In light of the intent of the legislature and the purpose behind the statutory scheme—to protect consumers and the public from dishonest or incompetent contractors—[courts] must afford the statute a reasonable and practical construction." (Id. at p. 607.)
"Disciplinary proceedings for violations of the Contractors' State License Law are subject to the Administrative Procedure Act (Gov. Code, § 11340 et seq.)." (Tellis, supra, 79 Cal.App.4th at p. 158.)
"Since this case involves only a fine and not any licensing sanction, . . . this is not an instance where the trial court was authorized to exercise its independent judgment on the evidence. [Citations.] Thus, as to issues of fact, the only question for us, as it was for the trial court, is whether the Board's findings were supported by substantial evidence in the administrative record. [Citation.] As to issues of law, we must give great weight to the Board's interpretation but ultimately exercise our independent judgment." (Steinsmith v. Medical Board (2000) 85 Cal.App.4th 458, 464-465 [reviewing citation issued by the Medical Board of California to a licensed physician]; see Handyman Connection of Sacramento, Inc. v. Sands (2004) 123 Cal.App.4th 867, 880 [reviewing disciplinary proceeding before the Board].)
"At the trial court level, the petitioner in an administrative mandamus proceeding has the burden of proving that the agency's decision was invalid and should be set aside, because it is presumed that the agency regularly performed its official duty. When the standard of review is the substantial evidence test, as it is here, it is presumed that the findings and actions of the administrative agency were supported by substantial evidence. [Citations.] Thus, since the same standard of review applies now on appeal as did in the trial court, the burden is on appellant to show there is no substantial evidence whatsoever to support the findings of the Board." (Desmond v. County of Contra Costa (1993) 21 Cal.App.4th 330, 335-336.)
"The reviewing court, like the trial court, may not reweigh the evidence, and is 'bound to consider the facts in the light most favorable to the Board, giving it every reasonable inference and resolving all conflicts in its favor. [Citations.]' " (Jaramillo v. State Bd. for Geologists & Geophysicists (2006) 136 Cal.App.4th 880, 889.) B. Substantial Evidence Supports the Board's Findings
1. Section 7109, subdivision (a) (Item No. 1)
Section 7109, subdivision (a), provides, "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."
Here, Nielson's testimony and report provide substantial evidence that Smith's work in constructing the deck, stairs, and bench deviated from accepted trade standards. Indeed, Smith does not dispute that the project did not meet industry standards. He argues only that there is insufficient evidence his conduct was done "willfully" as required by the statute.
Smith urges that "willful" as used in section 7109 and section 7110 should be interpreted to mean "hardheaded," "stubborn," and even "malicious." Smith cites to "http://dictionary.law.com/Default.aspx?selected=2250," but offers no supporting case law or other legal authority. Given our high court's admonition to interpret the Contractors' State License Law broadly so "that contractors could not easily evade the statute's protective purposes" (Viking Pools, supra, 48 Cal.3d at p. 607), we decline to adopt such a stringent meaning of "willful" for purposes of sections 7109 and 7110. (After all, the law should "protect consumers and the public from dishonest or incompetent contractors" even if those contractors' conduct is not stubborn, hardheaded, or malicious. (Ibid.))
The Attorney General argues that only a general intent to commit the act is required to show "willful" conduct under the statute, citing Mickelson Concrete Co. v. Contractors' State License Bd. (1979) 95 Cal.App.3d 631. In that case, the licensed contractor Mickelson poured a concrete slab without expansion joints, and the customer soon noticed large puddles of water and cracks. Mickelson did a pour over to correct the defects, "but the result was worse than the initial slab." (Id. at pp. 633-634.) The Court of Appeal found substantial evidence supporting a violation of section 7109, explaining, "Mickelson's representation that he could repair the first slab with a pour over, his inadequate preparation of the bottom slab to accept a pour over, his failure to use expansion joints in either the first or the second slabs, and his failure to adequately grade for the first slab indicates a purposeful departure from accepted trade standards which may be properly characterized as 'willful,' " citing Penal Code section 7, subdivision 1. (Mickelson at pp. 634-635, italics added.) Following the reasoning of Mickelson, we easily conclude that Smith's conduct in first constructing a deck with the myriad deviations from accepted trade standards identified by Neilson—many constituting safety hazards—and then insisting to Blum that the completed work was acceptable may be properly characterized as "willful."
He also cites cases demonstrating that a showing of "willful" conduct in the context of statutes regulating professional conduct generally requires a showing of intent to commit the act but does not require evidence of intent to violate the law or bad faith. (Dahlman v. State Bar (1990) 50 Cal.3d 1088, 1092-1093 [State Bar disbarring attorney for willful failure to comply with order]; Milner v. Fox (1980) 102 Cal.App.3d 567, 573, fn. 9 [Commissioner of Real Estate suspending real estate broker's license for six months for willful violation of the law]; Pittenger v. Collection Agency Licensing Bureau (1962) 208 Cal.App.2d 585, 588 [Collection Agency Licensing Bureau denying application for registration as an employee of a collection agency for willfully violating law].) These cases are persuasive authority that "willfulness" in the context of the Contractors' State License Law should be interpreted to require only a general intent to commit the act.
Penal Code section 7, subdivision 1, provides, "The word 'willfully,' when applied to the intent with which an act is done or omitted, implies simply a purpose or willingness to commit the act, or make the omission referred to. It does not require any intent to violate law, or to injure another, or to acquire any advantage."
In a later case, Tellis, supra, 79 Cal.App.4th at page 158, the licensed contractor Tellis argued general intent was not enough; he posited "evidence that the contractor knew his conduct was substandard was required in order for there to be a willful departure from trade standards, in violation of section 7109." (Italics added.) In that case, the Court of Appeal did not have to decide between a general intent standard and a knowledge requirement for "willfulness" under section 7109 because there was substantial evidence of a violation even under Tellis's suggested standard. The court explained, "Even assuming, without deciding, that the phrase 'willful departure . . . from accepted trade standards' requires knowledge by the contractor that the work is substandard, we conclude there was substantial evidence supporting the finding that Tellis knew his work was substandard. [¶] A reasonable inference could be made that Tellis knew his work was substandard based on evidence that he was a knowledgeable licensed contractor, with substantial construction experience. Such an inference is 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, which caused the sinks to come loose; failing to use a proper shower receptor; improperly mixing and installing mortar, which resulted in the shower stall leaking; failing to bond tiles properly to the floor and maintain a flat plane at the tile surface; and failing to attach tile trim properly around the sink, which caused water seepage under the sink and swelling of particle board cabinet material. In addition, the 17 instances of deficient work were found substandard by an experienced contractor retained by the Board to investigate the matter, and Tellis eventually agreed to repair the substandard work." (Id. at pp. 159-160.)
Similarly, in this case if we apply a knowledge requirement for willfulness, a reasonable inference could be made that Smith knew his work was substandard based on his 30 years' experience, which includied building 100 to 150 decks, and the 18 items of deficiency identified by Neilson.
In sum, we reject Smith's interpretation of "willful" as unfounded, and whether "willful" conduct means a general intent to commit the act or requires knowledge, substantial evidence supports the finding Smith's conduct in this case was willful.
2. Section 7109, subdivision (b) (Item No. 2)
Section 7109, subdivision (b), provides, "A willful departure from or disregard of plans or specifications in any material respect, which is prejudicial to another, without the consent of the owner or his or her duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans or specifications, constitutes a cause for disciplinary action."
In this case, Smith conceded that he departed from the plans for the bench in a material respect in that he built a straight bench rather than a three-section curved bench as shown in the one-page drawing attached to the written contract. Smith's and Nielson's testimony provide substantial evidence that Smith departed from the plans in respect to the bench.
Again, Smith argues there is no substantial evidence he deviated from the plans "willfully." But there is no dispute that he built a bench that was different from the plans. To the extent Smith's argument is that he must be excused from following the plans because he and Blum agreed to a different bench, the only evidence of such an agreement came from Smith's testimony, but the ALJ did not find him entirely credible. It is not our job to reweigh the evidence and credit Smith's testimony that Blum agreed to the change when the ALJ implicitly did not believe Smith on this point.
3. Section 7110 (Item No. 3)
Section 7110 provides, "Willful or deliberate disregard and violation of the building laws of the state, or of any political subdivision thereof, or [other enumerated laws], constitutes a cause for disciplinary action." Losado's testimony that building or repairing a deck requires a permit and no permit was obtained for the Orinda project is substantial evidence supporting the finding that Smith violated section 7110.
Smith argues Losado applied the wrong version of the Building Code. He relies on an email exchange between Losado and Gedney in which Losado cited the 2010 Building Code in discussing whether a permit was required for the Orinda project. At the hearing, Losado agreed that the 2010 code did not apply to the Orinda project. But he also testified the law had not changed. In any event, Losado's earlier email exchange does not negate his testimony that a permit was required to build or repair a deck.
Losado testified that there was an exemption to the permit requirement, but any deck attached to a dwelling over 200 square feet or over 30 inches in height requires a permit. Smith argues there is no evidence the Orinda project did not fall within an exemption to the permit requirement. But Smith has not cited any evidence that the deck was necessarily exempted from the permitting requirement, and there was evidence from which it could be inferred the exemption did not apply. Neilson testified the deck was attached to the house (and the connection was not industry or code approved), and it was "a second-story deck, effectively" with joists that were seven or eight feet off the ground.
4. Section 7113 (Item No. 4)
Section 7113 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."
Neilson's testimony and his conclusion that there was no way to salvage any portion of the deck or stairs or railing is substantial evidence supporting the finding that Smith failed to complete the project for the price stated in violation of section 7113.
Smith argues he should not be found in violation of section 7113 because he was not allowed to complete the project. This argument lacks merit. He relies on Terminix Co. v. Contractors' State License Etc. Bd. (1948) 84 Cal.App.2d 167, 174 (Terminix), in which the court observed, "A contractor cannot be held guilty of a violation of the act so long as he stands ready, able and willing to fulfill his contract." The court further held, "A contractor who has done inferior work is not a violator of the statute if, before he has made any settlement with the owner, he offers and is able and willing to replace the inferior work with good work at no expense to the owner. In determining whether injury has resulted to the owner, the positions of the owner and contractor must be judged as of the time when their business is concluded. Although during the course of the work there may be mistakes and failures on the part of the contractor to keep his agreements, if, when the time for payment for the work arrives, he makes a fair and satisfactory settlement with the owner, he has been guilty of no breach of the law and the same, of course, is true if he corrects any overcharges whether they were made inadvertently or intentionally." (Id. at pp. 175-176, italics added.)
Terminix is of little help to Smith. He claims he was ready, able, and willing to fulfill the contract, citing his post-complaint offer of compromise to the Board in which he offered to acquiesce to the recommendations of Neilson's report. Smith made this offer of compromise in December 2015. But Terminix contemplates assessing whether the consumer received the benefit of the contract at the time the work is concluded. (Terminix, supra, 84 Cal.App.2d at p. 175.)
Here, Smith himself admitted that some of the issues Neilson later identified were not repairs but "just unfinished work." Yet, when he first learned of the Blums' concerns (tagged by "65 Post-its"), he did not return to try to fix the identified problems (or finish the "unfinished work"). Instead, Smith told Blum the completed work was acceptable. Under these circumstances, it cannot be said that "when the time for payment for the work arrive[d], [Smith] ma[de] a fair and satisfactory settlement with the owner." (Terminix, supra, 84 Cal.App.2d at p. 176.) To the contrary, Blum was forced to file a complaint with the Board because Smith maintained that his work on the deck was acceptable. Smith's offer of compromise, which was made more than a year after he stopped working on the Orinda project and 11 months after Blum filed his complaint, does not show that Smith stood "ready, able and willing to fulfill his contract" under Terminix. (Id. at p. 174.) 5. Section 7125.4 (Item No. 5)
In Tellis, the court rejected a similar argument. Tellis argued that since he was ready, able and willing to repair the 17 items of deficiency identified by the Board, he could not be found to have violated section 7113 under Terminix. (Tellis, supra, 79 Cal.App.4th at p. 160.) The court rejected this argument explaining, "Tellis's reliance on Terminix is misplaced because in Terminix the owners had not paid the contractor in full for completion of the project when the contractor offered either to repair deficient work or reduce the contract price. Here, as conceded by Tellis in his appellant's opening brief, Tellis had ostensibly completed the project in September 1996, when he requested and received payment in full for the project. Any material substandard work existing at that time constituted a violation of section 7113. Tellis's agreement to repair the work later on does not negate the violation or absolve him of liability for the violation." (Id. at p. 161, italics added.) In the present case, while Blum had not paid the total contract price, Smith had ostensibly completed the Orinda project by early November 2014, and he refused to do any more work on the deck, forcing Blum to file a complaint with the Board. Smith's violation of section 7113 arose when he failed to fix or complete the Orinda project in November 2014, and certainly arose no later than July 2015, when Neilson found that the work Smith had done was so substandard and unsafe that it had to be dismantled. Smith's offer of compromise made in December 2015 does not absolve him of liability for failing to satisfy the contract for over a year. --------
Section 7125.4, subdivision (a), provides in part, "the employment of a person subject to coverage under the workers' compensation laws without maintaining coverage for that person, constitutes cause for disciplinary action." Smith does not claim that he had workers compensation insurance for the two workers he used for the Orinda project. He claims only that he had a good faith belief that he had such insurance. But he offers no authority for his position that there is a good faith exception to the insurance requirement. Moreover, the evidence does not show even a good faith belief. Smith admitted that he knew he did not have insurance by the time he started the Orinda project. He testified he did not have time to obtain insurance before starting the work. The civil penalty ordered for this violation is not an abuse of discretion. C. The Order of Correction Is Not an Abuse of Discretion
Finally, Smith argues that he bought the materials for the deck and upon its demolition he should be entitled to recover them. We see no abuse of discretion in the order of correction. The ALJ denied Smith's request to salvage reusable materials, rejecting Smith's claim that allowing Blum to keep the materials would result in unjust enrichment. She explained, "To the extent that Blum might recoup additional value from these materials, he would not be unjustly enriched. Blum was left without a usable deck and he will be unable to rebuild it for the amount he originally contracted for with [Smith]."
The trial court rejected Smith's unjust enrichment claim because it was "reasonable for the ALJ to allow the Blums to keep the materials as additional compensation for having to deal with having the deck torn down and re-built." We agree with the trial court. Smith argues that Blum is left in a position better than status quo ante because the order of correction allows Blum to recover the money he paid Smith ($7,000) and money to pay for dismantling the deck ($1,500) and he is allowed to keep the salvageable materials from the deck. But we agree with the trial court that the salvageable materials may be viewed as compensation for the time Blum has had to put up with an unsafe deck in his backyard. Further, Smith forgets that Blum previously had a deck, which Smith tore down. When Blum dismantles the current substandard and unsafe deck, he will not be placed in status quo ante because he will be without a deck of any kind.
DISPOSITION
The judgment is affirmed.
/s/_________
Miller, J. We concur: /s/_________
Kline, P.J. /s/_________
Stewart, J.