7085. (a) After investigating any verified complaint alleging a
violation of Section 7107, 7109, 7110, 7113, 7119, or 7120, and any
complaint arising from a contract involving works of improvement and
finding a possible violation, the registrar may, with the concurrence
of both the licensee and the complainant, refer the alleged
violation, and any dispute between the licensee and the complainant
arising thereunder, to arbitration pursuant to this article, provided
the registrar finds that:
(1) There is evidence that the complainant has suffered or is
likely to suffer material damages as a result of a violation of
Section 7107, 7109, 7110, 7113, 7119, or 7120, and any complaint
arising from a contract involving works of improvement.
(2) There are reasonable grounds for the registrar to believe that
the public interest would be better served by arbitration than by
disciplinary action.
(3) The licensee does not have a history of repeated or similar
violations.
(4) The licensee was in good standing at the time of the alleged
violation.
(5) The licensee does not have any outstanding disciplinary
actions filed against him or her.
(6) The parties have not previously agreed to private arbitration
of the dispute pursuant to contract or otherwise.
(7) The parties have been advised of the provisions of Section
2855 of the Civil Code.
For the purposes of paragraph (1), "material damages" means
damages greater than the amount of the bond required under
subdivision (a) of Section 7071.6, but less than fifty thousand
dollars ($50,000).
(b) In all cases in which a possible violation of the sections set
forth in paragraph (1) of subdivision (a) exists and the contract
price, or the demand for damages is equal to or less than the amount
of the bond required under Section 7071.6, but, regardless of the
contract price, the complaint shall be referred to arbitration,
utilizing the criteria set forth in paragraphs (2) to (6), inclusive,
of subdivision (a).
7085.2. An arbitrator may render an award and that award shall be
deemed to be an order of the registrar.
7085.3. Once the registrar determines that arbitration pursuant to
subdivision (a) of Section 7085 would be a suitable means of
resolving the dispute, the registrar shall notify the complainant and
the licensee of this decision. The registrar shall also notify the
complainant of the consequences of selecting administrative
arbitration over judicial remedies and advise the parties of their
rights to retain counsel at their own expense. The registrar shall
forward an "agreement to arbitrate" to the complainant and the
licensee. This agreement shall be returned to the registrar within 30
calendar days of the date that the agreement is mailed by the
registrar. The return of this agreement by the parties shall
authorize the registrar to proceed with administrative arbitration.
7085.4. (a) For cases that the registrar determines to refer to
arbitration under subdivision (a) of Section 7085, once the
complainant and the licensee authorize the registrar to proceed with
administrative arbitration, the registrar shall refer the agreement
to arbitrate to an arbitrator or an arbitration association approved
by the board.
(b) Once the registrar determines that a complaint must be
referred to arbitration pursuant to subdivision (b) of Section 7085,
the registrar shall notify the complainant and the licensee of that
decision. The registrar shall inform the parties of the consequences
of administrative arbitration over judicial remedies and shall advise
the parties of their right to retain counsel at their own expense if
they so choose. The registrar shall forward a notice to arbitrate to
the complainant and the licensee. This notice shall be returned to
the registrar within 30 calendar days of the date that the notice is
mailed by the registrar. The complainant's failure to return an
executed copy of the notice shall result in the closure of the
complaint.
Notwithstanding Section 7085.5, a licensee's failure to return an
executed copy of the notice shall not prohibit the registrar from
referring the dispute to arbitration or bar the registrar from
issuing an order enforcing any award resulting therefrom, pursuant to
Section 7085.6, whether the award resulted from a contested hearing
or a noncontested hearing.
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
sought. The appropriate fee shall be paid 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 person shall 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 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, 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 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 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 the arbitrator to determine
the propriety of the attendance of any other person.
(g) Hearings 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. The parties may make appropriate notes of the
proceedings.
(i) The hearing shall be conducted by the arbitrator in any manner
which 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. 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.
(n) The hearing may be reopened on the arbitrator's own motion.
(o) Any 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 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 mail addressed to that
party or his or her attorney at the party's last known address, or
(B) by personal service.
(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
otherwise agreed by the parties, no later than 30 calendar days from
the date of closing the hearing, 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 that the
arbitrator deems just and equitable and 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.
(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 all direct costs and expenses for the
completion or repair of the project.
(s) The award shall become final 30 calendar days from the date
the arbitration award is issued. The arbitrator, upon written
application of a party to the arbitration, may correct the award upon
the following grounds:
(1) 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) There is any other clerical error in the award, not affecting
the merits of the controversy.
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 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 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 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.
(u) The board shall pay the expenses of one expert witness
appointed by the board when the services of an expert witness are
requested by either party involved in arbitration pursuant to this
article and the case involves workmanship issues that are itemized in
the complaint and have not been repaired or replaced. Parties who
choose 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.
7085.6. (a) (1) The failure of a licensee to comply with an
arbitration award rendered under this article shall result in the
automatic suspension of a license by operation of law.
(2) The registrar shall notify the licensee by certified mail of
the failure to comply with the arbitrator's award, and that the
license shall be automatically suspended 30 calendar days from the
date of that notice.
(3) The licensee may appeal the suspension for noncompliance
within 15 calendar days after service of the notice by written notice
to the registrar.
(4) Reinstatement may be made at any time following the suspension
by complying with the arbitrator's award and the final order of the
registrar. If no reinstatement of the license is made within 90 days
of the date of the automatic suspension, the license and any other
contractor's license issued to the licensee shall be automatically
revoked by operation of law for a period to be determined by the
registrar pursuant to Section 7102.
(5) The registrar may delay, for good cause, the revocation of a
contractor's license for failure to comply with the arbitration
award. The delay in the revocation of the license shall not exceed
one year. When seeking a delay of the revocation of his or her
license, a licensee shall apply to the registrar in writing prior to
the date of the revocation of the licensee's license by operation of
law and state the reasons that establish good cause for the delay.
The registrar's power to grant a delay of the revocation shall expire
upon the effective date of the revocation of the licensee's license
by operation of law.
(b) The licensee shall be automatically prohibited from serving as
an officer, director, associate, partner, manager, or qualifying
individual of another licensee, for the period determined by the
registrar and the employment, election, or association of that person
by another licensee shall constitute grounds for disciplinary
action. A qualifier disassociated pursuant to this section shall be
replaced within 90 days from the date of disassociation. Upon failure
to replace the qualifier within 90 days of the disassociation, the
license of the other licensee shall be automatically suspended or the
qualifier's classification removed at the end of the 90 days.
7085.7. A complainant may enforce an arbitrator's award in
accordance with Chapter 2 (commencing with Section 1285) of Title 9
of Part 3 of the Code of Civil Procedure.
7085.9. Notwithstanding any other provision of law, a complaint
referred to arbitration pursuant to Section 7085 is not subject to
disclosure to the public until such time as an investigation into an
alleged violation of Section 7085.6 has been initiated by the
registrar.
7085. (a) After investigating any verified complaint alleging a
violation of Section 7107, 7109, 7110, 7113, 7119, or 7120, and any
complaint arising from a contract involving works of improvement and
finding a possible violation, the registrar may, with the concurrence
of both the licensee and the complainant, refer the alleged
violation, and any dispute between the licensee and the complainant
arising thereunder, to arbitration pursuant to this article, provided
the registrar finds that:
(1) There is evidence that the complainant has suffered or is
likely to suffer material damages as a result of a violation of
Section 7107, 7109, 7110, 7113, 7119, or 7120, and any complaint
arising from a contract involving works of improvement.
(2) There are reasonable grounds for the registrar to believe that
the public interest would be better served by arbitration than by
disciplinary action.
(3) The licensee does not have a history of repeated or similar
violations.
(4) The licensee was in good standing at the time of the alleged
violation.
(5) The licensee does not have any outstanding disciplinary
actions filed against him or her.
(6) The parties have not previously agreed to private arbitration
of the dispute pursuant to contract or otherwise.
(7) The parties have been advised of the provisions of Section
2855 of the Civil Code.
For the purposes of paragraph (1), "material damages" means
damages greater than the amount of the bond required under
subdivision (a) of Section 7071.6, but less than fifty thousand
dollars ($50,000).
(b) In all cases in which a possible violation of the sections set
forth in paragraph (1) of subdivision (a) exists and the contract
price, or the demand for damages is equal to or less than the amount
of the bond required under Section 7071.6, but, regardless of the
contract price, the complaint shall be referred to arbitration,
utilizing the criteria set forth in paragraphs (2) to (6), inclusive,
of subdivision (a).
7085.2. An arbitrator may render an award and that award shall be
deemed to be an order of the registrar.
7085.3. Once the registrar determines that arbitration pursuant to
subdivision (a) of Section 7085 would be a suitable means of
resolving the dispute, the registrar shall notify the complainant and
the licensee of this decision. The registrar shall also notify the
complainant of the consequences of selecting administrative
arbitration over judicial remedies and advise the parties of their
rights to retain counsel at their own expense. The registrar shall
forward an "agreement to arbitrate" to the complainant and the
licensee. This agreement shall be returned to the registrar within 30
calendar days of the date that the agreement is mailed by the
registrar. The return of this agreement by the parties shall
authorize the registrar to proceed with administrative arbitration.
7085.4. (a) For cases that the registrar determines to refer to
arbitration under subdivision (a) of Section 7085, once the
complainant and the licensee authorize the registrar to proceed with
administrative arbitration, the registrar shall refer the agreement
to arbitrate to an arbitrator or an arbitration association approved
by the board.
(b) Once the registrar determines that a complaint must be
referred to arbitration pursuant to subdivision (b) of Section 7085,
the registrar shall notify the complainant and the licensee of that
decision. The registrar shall inform the parties of the consequences
of administrative arbitration over judicial remedies and shall advise
the parties of their right to retain counsel at their own expense if
they so choose. The registrar shall forward a notice to arbitrate to
the complainant and the licensee. This notice shall be returned to
the registrar within 30 calendar days of the date that the notice is
mailed by the registrar. The complainant's failure to return an
executed copy of the notice shall result in the closure of the
complaint.
Notwithstanding Section 7085.5, a licensee's failure to return an
executed copy of the notice shall not prohibit the registrar from
referring the dispute to arbitration or bar the registrar from
issuing an order enforcing any award resulting therefrom, pursuant to
Section 7085.6, whether the award resulted from a contested hearing
or a noncontested hearing.
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
sought. The appropriate fee shall be paid 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 person shall 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 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, 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 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 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 the arbitrator to determine
the propriety of the attendance of any other person.
(g) Hearings 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. The parties may make appropriate notes of the
proceedings.
(i) The hearing shall be conducted by the arbitrator in any manner
which 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. 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.
(n) The hearing may be reopened on the arbitrator's own motion.
(o) Any 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 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 mail addressed to that
party or his or her attorney at the party's last known address, or
(B) by personal service.
(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
otherwise agreed by the parties, no later than 30 calendar days from
the date of closing the hearing, 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 that the
arbitrator deems just and equitable and 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.
(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 all direct costs and expenses for the
completion or repair of the project.
(s) The award shall become final 30 calendar days from the date
the arbitration award is issued. The arbitrator, upon written
application of a party to the arbitration, may correct the award upon
the following grounds:
(1) 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) There is any other clerical error in the award, not affecting
the merits of the controversy.
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 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 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 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.
(u) The board shall pay the expenses of one expert witness
appointed by the board when the services of an expert witness are
requested by either party involved in arbitration pursuant to this
article and the case involves workmanship issues that are itemized in
the complaint and have not been repaired or replaced. Parties who
choose 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.
7085.6. (a) (1) The failure of a licensee to comply with an
arbitration award rendered under this article shall result in the
automatic suspension of a license by operation of law.
(2) The registrar shall notify the licensee by certified mail of
the failure to comply with the arbitrator's award, and that the
license shall be automatically suspended 30 calendar days from the
date of that notice.
(3) The licensee may appeal the suspension for noncompliance
within 15 calendar days after service of the notice by written notice
to the registrar.
(4) Reinstatement may be made at any time following the suspension
by complying with the arbitrator's award and the final order of the
registrar. If no reinstatement of the license is made within 90 days
of the date of the automatic suspension, the license and any other
contractor's license issued to the licensee shall be automatically
revoked by operation of law for a period to be determined by the
registrar pursuant to Section 7102.
(5) The registrar may delay, for good cause, the revocation of a
contractor's license for failure to comply with the arbitration
award. The delay in the revocation of the license shall not exceed
one year. When seeking a delay of the revocation of his or her
license, a licensee shall apply to the registrar in writing prior to
the date of the revocation of the licensee's license by operation of
law and state the reasons that establish good cause for the delay.
The registrar's power to grant a delay of the revocation shall expire
upon the effective date of the revocation of the licensee's license
by operation of law.
(b) The licensee shall be automatically prohibited from serving as
an officer, director, associate, partner, manager, or qualifying
individual of another licensee, for the period determined by the
registrar and the employment, election, or association of that person
by another licensee shall constitute grounds for disciplinary
action. A qualifier disassociated pursuant to this section shall be
replaced within 90 days from the date of disassociation. Upon failure
to replace the qualifier within 90 days of the disassociation, the
license of the other licensee shall be automatically suspended or the
qualifier's classification removed at the end of the 90 days.
7085.7. A complainant may enforce an arbitrator's award in
accordance with Chapter 2 (commencing with Section 1285) of Title 9
of Part 3 of the Code of Civil Procedure.
7085.9. Notwithstanding any other provision of law, a complaint
referred to arbitration pursuant to Section 7085 is not subject to
disclosure to the public until such time as an investigation into an
alleged violation of Section 7085.6 has been initiated by the
registrar.
7085. (a) After investigating any verified complaint alleging a
violation of Section 7107, 7109, 7110, 7113, 7119, or 7120, and any
complaint arising from a contract involving works of improvement and
finding a possible violation, the registrar may, with the concurrence
of both the licensee and the complainant, refer the alleged
violation, and any dispute between the licensee and the complainant
arising thereunder, to arbitration pursuant to this article, provided
the registrar finds that:
(1) There is evidence that the complainant has suffered or is
likely to suffer material damages as a result of a violation of
Section 7107, 7109, 7110, 7113, 7119, or 7120, and any complaint
arising from a contract involving works of improvement.
(2) There are reasonable grounds for the registrar to believe that
the public interest would be better served by arbitration than by
disciplinary action.
(3) The licensee does not have a history of repeated or similar
violations.
(4) The licensee was in good standing at the time of the alleged
violation.
(5) The licensee does not have any outstanding disciplinary
actions filed against him or her.
(6) The parties have not previously agreed to private arbitration
of the dispute pursuant to contract or otherwise.
(7) The parties have been advised of the provisions of Section
2855 of the Civil Code.
For the purposes of paragraph (1), "material damages" means
damages greater than the amount of the bond required under
subdivision (a) of Section 7071.6, but less than fifty thousand
dollars ($50,000).
(b) In all cases in which a possible violation of the sections set
forth in paragraph (1) of subdivision (a) exists and the contract
price, or the demand for damages is equal to or less than the amount
of the bond required under Section 7071.6, but, regardless of the
contract price, the complaint shall be referred to arbitration,
utilizing the criteria set forth in paragraphs (2) to (6), inclusive,
of subdivision (a).
7085.2. An arbitrator may render an award and that award shall be
deemed to be an order of the registrar.
7085.3. Once the registrar determines that arbitration pursuant to
subdivision (a) of Section 7085 would be a suitable means of
resolving the dispute, the registrar shall notify the complainant and
the licensee of this decision. The registrar shall also notify the
complainant of the consequences of selecting administrative
arbitration over judicial remedies and advise the parties of their
rights to retain counsel at their own expense. The registrar shall
forward an "agreement to arbitrate" to the complainant and the
licensee. This agreement shall be returned to the registrar within 30
calendar days of the date that the agreement is mailed by the
registrar. The return of this agreement by the parties shall
authorize the registrar to proceed with administrative arbitration.
7085.4. (a) For cases that the registrar determines to refer to
arbitration under subdivision (a) of Section 7085, once the
complainant and the licensee authorize the registrar to proceed with
administrative arbitration, the registrar shall refer the agreement
to arbitrate to an arbitrator or an arbitration association approved
by the board.
(b) Once the registrar determines that a complaint must be
referred to arbitration pursuant to subdivision (b) of Section 7085,
the registrar shall notify the complainant and the licensee of that
decision. The registrar shall inform the parties of the consequences
of administrative arbitration over judicial remedies and shall advise
the parties of their right to retain counsel at their own expense if
they so choose. The registrar shall forward a notice to arbitrate to
the complainant and the licensee. This notice shall be returned to
the registrar within 30 calendar days of the date that the notice is
mailed by the registrar. The complainant's failure to return an
executed copy of the notice shall result in the closure of the
complaint.
Notwithstanding Section 7085.5, a licensee's failure to return an
executed copy of the notice shall not prohibit the registrar from
referring the dispute to arbitration or bar the registrar from
issuing an order enforcing any award resulting therefrom, pursuant to
Section 7085.6, whether the award resulted from a contested hearing
or a noncontested hearing.
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
sought. The appropriate fee shall be paid 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 person shall 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 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, 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 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 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 the arbitrator to determine
the propriety of the attendance of any other person.
(g) Hearings 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. The parties may make appropriate notes of the
proceedings.
(i) The hearing shall be conducted by the arbitrator in any manner
which 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. 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.
(n) The hearing may be reopened on the arbitrator's own motion.
(o) Any 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 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 mail addressed to that
party or his or her attorney at the party's last known address, or
(B) by personal service.
(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
otherwise agreed by the parties, no later than 30 calendar days from
the date of closing the hearing, 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 that the
arbitrator deems just and equitable and 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.
(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 all direct costs and expenses for the
completion or repair of the project.
(s) The award shall become final 30 calendar days from the date
the arbitration award is issued. The arbitrator, upon written
application of a party to the arbitration, may correct the award upon
the following grounds:
(1) 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) There is any other clerical error in the award, not affecting
the merits of the controversy.
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 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 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 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.
(u) The board shall pay the expenses of one expert witness
appointed by the board when the services of an expert witness are
requested by either party involved in arbitration pursuant to this
article and the case involves workmanship issues that are itemized in
the complaint and have not been repaired or replaced. Parties who
choose 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.
7085.6. (a) (1) The failure of a licensee to comply with an
arbitration award rendered under this article shall result in the
automatic suspension of a license by operation of law.
(2) The registrar shall notify the licensee by certified mail of
the failure to comply with the arbitrator's award, and that the
license shall be automatically suspended 30 calendar days from the
date of that notice.
(3) The licensee may appeal the suspension for noncompliance
within 15 calendar days after service of the notice by written notice
to the registrar.
(4) Reinstatement may be made at any time following the suspension
by complying with the arbitrator's award and the final order of the
registrar. If no reinstatement of the license is made within 90 days
of the date of the automatic suspension, the license and any other
contractor's license issued to the licensee shall be automatically
revoked by operation of law for a period to be determined by the
registrar pursuant to Section 7102.
(5) The registrar may delay, for good cause, the revocation of a
contractor's license for failure to comply with the arbitration
award. The delay in the revocation of the license shall not exceed
one year. When seeking a delay of the revocation of his or her
license, a licensee shall apply to the registrar in writing prior to
the date of the revocation of the licensee's license by operation of
law and state the reasons that establish good cause for the delay.
The registrar's power to grant a delay of the revocation shall expire
upon the effective date of the revocation of the licensee's license
by operation of law.
(b) The licensee shall be automatically prohibited from serving as
an officer, director, associate, partner, manager, or qualifying
individual of another licensee, for the period determined by the
registrar and the employment, election, or association of that person
by another licensee shall constitute grounds for disciplinary
action. A qualifier disassociated pursuant to this section shall be
replaced within 90 days from the date of disassociation. Upon failure
to replace the qualifier within 90 days of the disassociation, the
license of the other licensee shall be automatically suspended or the
qualifier's classification removed at the end of the 90 days.
7085.7. A complainant may enforce an arbitrator's award in
accordance with Chapter 2 (commencing with Section 1285) of Title 9
of Part 3 of the Code of Civil Procedure.
7085.9. Notwithstanding any other provision of law, a complaint
referred to arbitration pursuant to Section 7085 is not subject to
disclosure to the public until such time as an investigation into an
alleged violation of Section 7085.6 has been initiated by the
registrar.
