Seig v. Fogt

Seig v. Fogt Case: You May Not Be Off The Hook

By Larry Lubka

Seig v. Fogt relates to a decision rendered by the California Contractors State License Board (“CSLB”) regarding what was determined to be defective flooring installation by George Seig.  After a two-day hearing, the CSLB ruled against Seig, the contractor.  The contractor sought to challenge the decision through a writ of administrative mandamus filed with a trial court and when the trial court ruled against him, appealed the court’s decision.  Seig lost its appeal. 

First, we start with the key code section.  Business and Professions Code §7109 states in part “(a) 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.”  As stated, this rule applies to CSLB disciplinary actions. 

Of note, the court held that “willful” as used above has a very limited meeting.  “In civil cases, the word “willful,” as ordinarily used in courts of law, does not necessarily imply anything blamable, or any malice or wrong toward the other party, or perverseness or moral delinquency, but merely that the thing done or omitted to be done was done or omitted intentionally. It amounts to nothing more than this: That the person knows what he is doing, intends to do what he is doing, and is a free agent.”  If the contractor did work that fell below accepted trade standards, it was “willful”.  I’m not sure how one can avoid that definition. 

A critical issue in the case involved the client initialing a statement that a “MOISTURE BARRIER NEEDED”.  When the owner pressed Seig to speed up the installation, it was decided not to install the moisture barrier and the contractor had the owner sign a disclaimer and release regarding possible claims regarding the decision not to install a moisture barrier.  As usual there were issues as to who said what to whom and when it was said.             

On the issue of having the owner sign a disclaimer, the court found that under Business and Professions Code §7109, the contractor could not obtain an enforceable disclaimer or release where the contractor’s action or inaction falls below the standard of the industry.

The key court discussion of this issue is:

Because this is not a private action between Sieg and Torchia, we see no need to address matters of unconscionability or contract illegality. Whether the Disclaimer was valid and enforceable as a contract is beside the point, since we are dealing with a disciplinary enforcement proceeding brought by CSLB on behalf of the public. For purposes of licensing enforcement, a homeowner cannot consent to a contractor’s departure from accepted trade standards for good and workmanlike construction. (Civ. Code § 3513 [a law established for a public reason cannot be contravened by a private agreement].)

Whatever private arrangements may be made between a contractor and a client, the contractor has an independent obligation to the public to adhere to statutorily established standards of performance. (§ 7109, subd. (a); cf. Mickelson, supra, 95 Cal.App.3d at p. 635 [rejecting concrete contractor’s attempt to defeat willfulness finding in section 7109 enforcement proceeding on the ground that “he informed both [clients] that a pour over was an improper method of repair, that he read [to the clients] the contents of the contract absolving himself of responsibility before proceeding with the 18 pour over”].) We base this reading of section 7109, subdivision (a), on the text and legislative history of the statute. As the CSLB correctly points out, the Legislature amended section 7109, subdivision (a), in 1988, to remove language which once made it possible for contractors facing discipline to defend accusations of departure from statutory trade standards by arguing client consent. (§ 7109, as amended by Stats. 1988, ch. 1619, § 4.) Thus, while the governing contract here established the benchmark for Sieg’s obligations to Torchia, in discharging those obligations he was bound to adhere to statutorily imposed standards of workmanship that could not be diluted, circumvented, or released away by private consent.

Even if a contractor has the owner sign a disclaimer, if the work was not as directed by an architect, the disclaimer may be of no force or effect.  While Business and Professions Code §7109 may on its face only apply to CSLB disciplinary actions, these rules often affect how a court or arbitrator views a disclaimer or release.  Courts do not like to act in a fashion contrary to such CSLB hearing rules.            

The bottom line is that a contractor should not take action or by inaction fall below the standard of the industry, regardless of whether the owner approves in writing that the contractor can take such action or not take an action.  If both owner and contractor agree to such action or inaction, they are well advised to arrange the participation of an architect who will then directly supervise the modified approach to the work.  Otherwise, the contractor will be on the hook, regardless of any written release.

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