BILL NUMBER: AB 993 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Linder
FEBRUARY 22, 2013
An act to amend Section 7085.5 of the Business and Professions
Code, relating to contractors.
LEGISLATIVE COUNSEL'S DIGEST
AB 993, as introduced, Linder. Contractors: arbitration.
The Contractors' State License Law provides for licensing and
regulation of contractors by the Contractors' State License Board.
Existing law establishes an arbitration process administered by the
board to resolve disputes between contractors and consumers. Existing
law authorizes an arbitrator to grant any remedy or relief deemed
just and equitable and within the scope of the board's referral to
the arbitrator and the requirements of the board, including costs and
expenses.
This bill would prohibit the arbitrator from awarding specific
performance of any project, and from making a determination relative
to any remedy not expressly authorized under these provisions,
including attorney's fees, monetary damages for personal injury, and
punitive damages.
Existing law requires the board or appointed arbitration
association to provide the parties with a list of the times, dates,
and locations of the hearing to be held, and requires the parties to
notify the arbitrator of the convenient times and dates. A record is
not required to be taken of the proceedings.
This bill would delete the requirement to notify the arbitrator of
the convenient times and dates of the hearing. The bill would
require a party making a recording of a hearing to supply the
recording to the arbitrator at the party's expense.
Existing law authorizes the hearing to be reopened on the
arbitrator's own motion, and provides that service of any papers or
process in connection with these proceedings shall be by personal
service or by regular mail on a party at the last known address.
This bill would authorize the hearing to be reopened on the
arbitrator's motion prior to the rendering of an award, and would
provide that service by first class mail is complete upon deposit
into specified mail receptacles.
Existing law requires the registrar of contractors to advise the
parties that names of industry experts may be obtained by requesting
this information from the registrar.
This bill would delete this requirement.
The bill would make other related changes.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 7085.5 of the Business and Professions Code is
amended to read:
7085.5. Arbitrations of disputes arising out of cases filed with
or by the board shall be conducted in accordance with the following
rules:
(a) All "agreements to arbitrate" shall include the names,
addresses, and telephone numbers of the parties to the dispute, the
issue in dispute, and the amount in dollars or any other
remedy of monetary damages sought. Except
for the release of a mechanics lien or the return of tools or
materials, monetary damages are the only remedy available
pursuant to this article. The arbitrator shall not order or provide
for the specific performance of any project, including, but not
limited to, the completion of work, repairs, or corrections.
The appropriate fee for arbitration services shall be paid
to the appointed arbitration association by the board
from the Contractors' License Fund.
(b) (1) The board or appointed arbitration association shall
appoint an arbitrator in the following manner: immediately after the
filing of the agreement to arbitrate, the board or appointed
arbitration association shall submit simultaneously to each party to
the dispute, an identical list of names of persons chosen from the
panel. Each party to the dispute shall have seven days from the
mailing date in which to cross off any names to which it objects,
number the remaining names to indicate the order of preference, and
return the list to the board or appointed arbitration association. If
a party does not return the list within the time specified, all
persons named in the list are acceptable. From among the persons who
have been approved on both lists, and in accordance with the
designated order of mutual preference, the board or appointed
arbitration association shall appoint an arbitrator to serve. If the
parties fail to agree on any of the parties named, if acceptable
arbitrators are unable to act, or if, for any other reason, the
appointment cannot be made from the submitted lists, the board or
appointed arbitration association shall have the power to make the
appointment from among other members of the panel without the
submission of any additional lists. Each dispute shall be heard and
determined by one arbitrator unless the board or appointed
arbitration association, in its discretion, directs that a greater
number of arbitrators be appointed.
(2) In all cases in which a complaint has been referred to
arbitration pursuant to subdivision (b) of Section 7085, the board or
the appointed arbitration association shall have the power to
appoint an arbitrator to hear the matter.
(3) The board shall adopt regulations setting minimum
qualification standards for listed arbitrators based upon relevant
training, experience, and performance.
(c) No A person shall not
serve as an arbitrator in any arbitration in which that person has
any financial or personal interest in the result of the arbitration.
Prior to accepting an appointment, the prospective arbitrator shall
disclose to the appointed arbitration association any
circumstances likely to prevent a prompt hearing or to create a
presumption of bias. Upon receipt of that information, the board or
appointed arbitration association shall immediately replace the
arbitrator or communicate the information to the parties for their
comments. Thereafter, the board or appointed arbitration association
shall determine whether the arbitrator should be disqualified and
shall inform the parties of its decision, which shall be conclusive.
(d) The board or appointed arbitration association may appoint
another arbitrator if a vacancy occurs, or if an appointed arbitrator
is unable to serve in a timely manner.
(e) (1) The board or appointed arbitration association shall
provide the parties with a list of the times
and , dates, and locations of the
hearing to be held. The parties shall notify the arbitrator,
within seven calendar days of the mailing of the list, of the times
and dates convenient to each party. If the parties fail to respond to
the arbitrator within the seven-day period, the arbitrator shall fix
the time, place, and location of the hearing. An
arbitrator may, at the arbitrator's sole discretion, make an
inspection of the construction site which is the subject of the
arbitration. The arbitrator shall notify the parties of the time and
date set for the inspection. Any party who so desires may be present
at the inspection.
(2) The board or appointed arbitration association shall fix the
time, place date , and location of the
hearing for all cases referred to arbitration pursuant to subdivision
(b) of Section 7085. An arbitrator may, at the arbitrator's sole
discretion, make an inspection of the construction site
which that is the subject of the arbitration.
The arbitrator shall notify the parties of the time and date set for
the inspection. Any party who desires may be present at the
inspection.
(f) Any A person having a direct
interest in the arbitration is entitled to attend the hearing. The
arbitrator shall otherwise have the power to require the exclusion of
any witness, other than a party or other essential person, during
the testimony of any other witness. It shall be
discretionary with is in the discretion of the
arbitrator to determine the propriety of the attendance of any other
person.
(g) Hearings A hearing shall be
adjourned by the arbitrator only for good cause.
(h) A record is not required to be taken of the proceedings.
However, any party to the proceeding may have a record made at its
own expense. A party making a recording of a hearing shall
supply the recording to the arbitrator at the party's own expense.
The parties may make appropriate notes of the proceedings.
(i) The hearing shall be conducted by the arbitrator in any manner
which that will permit full and
expeditious presentation of the case by both parties. Consistent with
the expedited nature of arbitration, the arbitrator shall establish
the extent of, and schedule for, the production of relevant documents
and other information, the identification of any witnesses to be
called, and a schedule for any hearings to elicit facts solely within
the knowledge of one party. The complaining party shall present its
claims, proofs, and witnesses, who shall submit to questions or other
examination. The defending party shall then present its defenses,
proofs, and witnesses, who shall submit to questions or other
examination. The arbitrator has discretion to vary this procedure
, but shall afford full and equal opportunity to the
parties for the presentation of any material or relevant proofs.
(j) The arbitration may proceed in the absence of any party who,
after due notice, fails to be present. The arbitrator shall require
the attending party to submit supporting evidence in order to make an
award. An award for the attending party shall not be based solely on
the fact that the other party has failed to appear at the
arbitration hearing.
(k) The arbitrator shall be the sole judge of the relevancy and
materiality of the evidence offered , and conformity to
legal rules of evidence shall not be required.
( l ) The arbitrator may receive and consider
documentary evidence. Documents to be considered by the arbitrator
may be submitted prior to the hearing. However, a copy shall be
simultaneously transmitted to all other parties and to the board or
appointed arbitration association for transmittal to the arbitrator
or board appointed arbitrator.
(m) The arbitrator shall specifically inquire of the parties
whether they have any further proofs to offer or witnesses to be
heard. Upon receiving negative replies, the arbitrator shall declare
the hearing closed and minutes thereof shall be recorded. If briefs
are to be filed, the hearing shall be declared closed as of the final
date set by the arbitrator for the receipt of briefs. If documents
are to be filed as requested by the arbitrator and the date set for
their receipt is later than that set for the receipt of briefs, the
later date shall be the date of closing the hearings
hearing . The time limit within which the
arbitrator is required to make the award shall commence to run, in
the absence of other agreements by the parties, upon the closing of
the hearings hearing .
(n) The hearing may be reopened on the arbitrator's own motion
prior to the rendering of an award .
(o) Any A party who proceeds with
the arbitration after knowledge that any provision or requirement of
these rules has not been complied with, and who fails to state his or
her objections to the arbitrator in writing, within 10 calendar days
of close of the hearing, shall be deemed to have waived
his or her right to object.
(p) (1) Except as provided in paragraph (2), any papers or process
necessary or proper for the initiation or continuation of an
arbitration under these rules , and for any court action
in connection therewith, or for the entry of judgment on an award
made thereunder, may be served upon any
party (A) by regular a party by first-class mail
addressed to that party or his or her attorney at the party's last
known address, or (B) by personal service.
Service by first-class mail is complete upon deposit in a post
office, mailbox, subpost office, substation, or mail chute, or other
like facility regularly maintained by the United States Postal
Service in a sealed addressed envelope, with postage paid.
(2) Notwithstanding paragraph (1), in all cases referred to
arbitration pursuant to subdivision (b) of Section 7085 in which the
contractor fails or refuses to return an executed copy of the notice
to arbitrate within the time specified, any papers or process
specified in paragraph (1) to be sent to the contractor, including
the notice of hearing, shall be mailed by certified mail to the
contractor's address of record.
(q) The award shall be made promptly by the arbitrator ,
and unless . Unless otherwise agreed by the
parties, the award shall be made no later than 30 calendar
days from the date of closing the hearing, from closing a
reopened hearing, or if oral hearing has been waived, from the date
of transmitting the final statements and proofs to the arbitrator.
The arbitrator may for good cause extend any period of time
established by these rules, except the time for making the award. The
arbitrator shall notify the parties of any extension and the reason
therefor.
(r) (1) The arbitrator may grant any remedy or relief
authorized pursuant to this section that the arbitrator deems
just and equitable and , and that is
within the scope of the board's referral and the requirements of the
board. The arbitrator, in his or her sole discretion, may award costs
or expenses , but shall not award specific performance of any
project or make a determination relative to any remedy not
expressly authorized under this article, including, but not limited
to, attorney's fees, monetary damages for personal injury, and
punitive damages .
(2) The amendments made in paragraph (1) during the
2003-04 Regular Session shall not be interpreted to prevent an
arbitrator from awarding a complainant An arbitrator
may award all direct costs and expenses for the completion or
repair of the project.
(s) (1) The award shall become final 30
calendar days from the date the arbitration award is issued ,
notwithstanding the actua l date either party
receives the award . The arbitrator, upon written application
of a party to the arbitration, may correct the award upon the
following grounds:
(1)
(A) There was an evident miscalculation of figures or
an evident mistake in the description of any person, things, or
property referred to in the award.
(2)
(B) There is any other clerical error in the award, not
affecting the merits of the controversy.
An
(2) An application for correction
of the award shall be made within 10 calendar days of the date of
service of the award by serving a copy of the application on the
arbitrator, and all other parties to the arbitration. Any
A party to the arbitration may make a written
objection to the application for correction by serving a copy of the
written objection on the arbitrator, the board, and all other parties
to the arbitration, within 10 calendar days of the date of service
of the application for correction.
The
(3) The arbitrator shall either
deny the application or correct the award within 30 calendar days of
the date of service of the original award by mailing a copy of the
denial or correction to all parties to the arbitration. Any appeal
from the denial or correction shall be filed with a court of
competent jurisdiction and a true copy thereof shall be filed with
the arbitrator or appointed arbitration
association within 30 calendar days after the award has become final.
The award shall be in writing, and shall be signed by the arbitrator
or a majority of them. If no appeal request
for correction is filed within the 30-calendar day period, it
shall become a final order of the registrar.
(t) Service of the award by certified mail shall be effective if a
certified letter containing the award, or a true copy thereof, is
mailed by the arbitrator or arbitration
association to each party or to a party's attorney of record at their
last known address, address of record, or by personally serving any
party. Service may be proved in the manner authorized in
civil actions. Service by certified mail is complete
upon deposit in a post office, mailbox, subpost office,
substation, or mail chute, or other like facility regularly
maintained by the United States Postal Service in a sealed addressed
envelope, with postage paid .
(u) (1) The board shall pay the expenses of
one expert witness appointed by the board when the
if both of the following apply:
(A) The services of an expert
witness are requested by either party involved in arbitration
pursuant to this article and the article.
(B) The case involves workmanship
issues that are itemized in the complaint and have not been repaired
or replaced. Parties who choose
(2) A party that chooses to
present the findings of another expert witness as evidence shall pay
for those services. Payment for expert witnesses appointed by the
board shall be limited to the expert witness costs for inspection of
the problem at the construction site, preparation of the expert
witness' report, and expert witness fees for appearing or testifying
at a hearing. All requests for payment to an expert witness shall be
submitted on a form that has been approved by the registrar. All
requests for payment to an expert witness shall be reviewed and
approved by the board prior to payment. The registrar shall
advise the parties that names of industry experts may be obtained by
requesting this information from the registrar.
(v) The arbitrator shall interpret and apply these rules insofar
as they relate to his or her powers and duties.
(w) The following shall apply as to court procedure and exclusion
of liability:
(1) The board, the appointed arbitration association, or any
arbitrator in a proceeding under these rules is not a necessary party
in judicial proceedings relating to the arbitration.
(2) Parties to these rules shall be deemed to have consented that
judgment upon the arbitration award may be entered in any federal or
state court having jurisdiction thereof.
(3) The board, the appointed arbitration association, or any
arbitrator is not liable to any party for any act or omission in
connection with any arbitration conducted under these rules.