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Transcript of Mandatory Arbitration Guide
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8/8/2019 Mandatory Arbitration Guide
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CONTRACTORS STATE
LICENSE BOARD
California Department of Consumer Affairs
Mandatory ArbitrationProgram Guide
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2010, CAliforniA ContrACtors stAte liCense BoArD
Mmb h Cac sa lc Bad
Lisa Miller-Strunk, Contractor Member, Chair
Robert Lamb, Public Member, Vice Chair
Paul Schifno, Contractor Member, Secretary
Edward Eddie Barnes, Public MemberRobert Brown, Public Member
Joan Hancock, Contractor Member
Pastor Herrera Jr., Public Member
Matthew Kelly, Public Member
Louise Kirkbride, Public Member
Ed Lang, Public Member
James Miller, Public Member
Cynthia Mitchell, Contractor Member
Bruce Rust, Public Member
Mark A. Thurman, Contractor Member
Ruben Zuniga, Public Member
Arnold SchwarzeneggerGovernor
Bill LeonardSecretary, State and Consumer Services Agency
Brian StigerDirector, Department o Consumer Aairs
Stephen P. SandsRegistrar, Contractors State License Board
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1
What is
Ar-bitration-n.-1. The process by which the parties to a dispute
submit their differences to the judgment of an impartial neutral
person appointed by statutory provision.
Many-disputes-between-consumers-and-
contractors-can-be-resolved-efciently-
and-satisactorily-through-arbitration.-
Mandatory-arbitration-is-a-process-
in-which-an-impartial-third-person-is-
appointed-by-the-Contractors-State-
License-Board-(CSLB)-or-its-representa
tive-to-make-a-fnal-decision-in-a-dispute-
between-two-or-more-parties.-
CSLB-oers-arbitration-to-resolve-disputes-that-meet-certain-
criteria.-CSLB-will-pay-or-the-hearing,-the-arbitrator,-and-the--
services-o-one-stateappointed-expert-witness-per-complaint.-
Only-contractors-in-good-standing-with-CSLB-will-qualiy-to--
participate-in-arbitration.-Complaints-involving-deceptive-or-
raudulent-practices-will-be-investigated-by-CSLB.
This-brochure-provides-the-inormation-necessary-to-understand-
the-CSLB-arbitration-program-or-the-resolution-o-complaints-in-
which-the-damage-is-$12,500-or-less.
Does My Case Qualify?
A-case-qualifes-or-mandatory-arbitration-under-Business-and-
Proessions-Code-Section-(B&P)-7085,-i:
(1)-- The-claim-or-fnancial-injury-does-not-exceed-$12,500;-
Mandatory Arbitration
Program Guide
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M A N D A T O R Y A R B I T R A T I O N P R O G R A M G U I D E
C A L I F O R N I A C O N T R A C T O R S S T A T E L I C E N S E B O A R D
(2)-- The-contractor-possesses-a-license-that-is-in-good-standing;
(3)-- The-contractor-does-not-have-a-history-o-repeated-or-similar-
violations;
(4)-- The-contractor-does-not-currently-have-a-disciplinary-action-
pending-against-him-or-her;-and
(5)-- The-parties-have-not-previously-agreed-to-or-are-willing-to-waive-a-contractual-agreement-to-arbitrate.
There-are-two-distinct-categories-o-complaints.-For-a-case--
that-involves-a-patent-(obvious)-act-or-omission-that-is-a-violation-
o-the-Contractors-State-License-Law,-a-complaint-must-be-fled-
within-our-(4)-years-o-the-alleged-wrongul-act-or-omission.-For-
a-case-that-involves-a-latent-(undetected)-act-or-omission-regarding-
structural-deects,-a-complaint-must-be-fled-within-10-years-o-the-alleged-wrongul-act-or-omission.-A-structural defect-is-a-
condition-that-would-probably-result-in-a-ailure-in-the-load-bearing-
portion-o-a-structure-that-was-not-constructed-in-compliance-
with-the-building-code-in-eect-at-the-time-and-the-condition--
results-in-an-inability-to-use-the-aected-portion-o-the-structure-
or-the-purpose-or-which-it-was-intended.-Either-type-can-be-
fled-within-the-duration-o-any-written-warranty-in-which-the-
breach-occurs-(B&P-Code-Section-7091,-7109,-and-16-CCR-861.5).
Mandatory and Binding Arbitration
Mandatory-and-binding-are-key-terms-to-understand-beore-
entering-into-arbitration.-Participation-in-this-program-is-mandatory-
i-a-complainant-wishes-to-have-his-or-her-complaint-resolved-
by-CSLB.-I-the-complainant-(the-person-fling-the-complaint)-
chooses-not-to-participate-in-arbitration,-the-complaint-will-be-
closed-and-no-urther-action-will-be-taken-by-CSLB.-I-the--
complainant-chooses-to-participate-in-arbitration,-the-respondent--
will-be-obligated-to-participate.-I-the-respondent-(the-party-
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MANDATORY ARBITRATION PROGRAM GUI DE
against-whom-the-complaint-is-fled-by-the-complainant)-reuses-
to-participate-in-arbitration-and-the-complainant-obtains-an-award-
against-the-respondent,-the-award-will-be-enorced-as-i-the-
respondent-had-been-present-at-all-o-the-proceedings.
Arbitration-in-this-program-is binding.-This-means-that-both-
parties,-whose-dispute-is-resolved-by-an-independent-third--
person-(the-arbitrator),-must-comply-with-the-decision-o-that-third-person.-In-binding-arbitration,-parties-who-reuse-to-comply-
with-the-arbitrators-award-may-be-taken-to-court-where-the--
arbitration-award-could-be-confrmed-and-turned-into-a-civil--
judgment-against-them.-In-addition,-a-licensed-contractor-who-
ails-to-comply-with-an-award-that-is-issued-against-them-may-
have-their-license-suspended-or-revoked.
The Arbitration Forum
An-"arbitration-orum"-has-been-selected-to-administer-arbitrations--
or-CSLB.-The-arbitration-orum-has-proessional-arbitrators-
throughout-Caliornia-who-have-been-trained-to-resolve--
construction-disputes.-All-have-undergone-intensive-training--
to-ensure-that-both-parties-receive-a-air-hearing.-The-arbitration-
orum-will-contact-you-ater-CSLB-reers-your-dispute-or--
scheduling.
When-the-arbitration-orum-receives-a-signed-Submission-to-
Mandatory-Arbitration-orm,-it-will-select-an-arbitrator-to-conduct-
the-hearing.-The-arbitration-orum-will-then-set-a-hearing-date,-
time,-and-place,-and-will-notiy-the-parties-in-writing.
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M A N D A T O R Y A R B I T R A T I O N P R O G R A M G U I D E
C A L I F O R N I A C O N T R A C T O R S S T A T E L I C E N S E B O A R D
When to Consider Arbitration
Parties-to-a-construction-contract-should-consider-arbitration-
when-communication-has-broken-down,-when-a-complainant-
has-fled-a-complaint-with-CSLB,-and-CSLB-has-determined-that-
the-dispute-could-be-eectively-handled-through-arbitration.-
Once-a-representative-o-CSLB-determines-that-a-complaint-
involving-damages-(fnancial-injury)-o-$12,500-or-less-qualifes--
or-arbitration,-a-Submission-to-Mandatory-Arbitration-orm--
(13I117)-will-be-sent-to-the-consumer-and-the-contractor.-This-
orm,-indicating-the-names-and-addresses-o-the-respective-
parties,-will-outline-the-claims-and-relie-sought-by-each-party.-
This-orm-will-advise-both-parties-o-the-consequences-o-ailing-
to-participate-in-arbitration.-I-the-complainant-does-not-return-a-
completed-and-properly-executed-(signed-and-dated)-submission-orm-to-CSLB-within-30-calendar-days-o-CSLBs-mailing-date,-
the-complaint-will-be-closed-and-no-urther-action-will-be-taken-
by-CSLB.
I-the-respondent-does-not-return-a-properly-executed-Submission--
to-Mandatory-Arbitration-orm-within-30-calendar-days,-and-
the-complainant-does,-the-complaint-will-be-resolved-through-
arbitration-and-any-award-rendered-against-the-respondent-will-be-enorced-as-i-both-parties-had-been-present-at-all-o-the-
proceedings.
CSLB-will-send-copies-o-the-signed-submission-orms-to-the-
other-party-so-that-both-o-them-will-know-exactly-what-issues-
are-in-dispute-and-what-remedies-are-being-sought.-Both-can-
then-prepare-their-cases-or-presentation-at-the-arbitration--
hearing.-A-copy-o-the-signed-submission-orms-will-also-be--sent-to-the-arbitration-orum.
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Preparing Your Case
Each-party-will-be-responsible-or-his-or-her-own-case-presentation-
at-the-hearing,-including-relevant-documents.-(Documents--
previously-sent-to-CSLB-or-the-complaint-fle-will-not-be--
orwarded-to-the-arbitration-orum.)-
Parties-may-hire-an-attorney-to--
represent-them-or-they-may--
present-their-own-cases.-In-either-
instance,-case-preparation-is-very-
important.-Both-parties-should-
review-the-submission-orms-to-
thoroughly-understand-all-o-the-
issues-and-as-preparation-or--
gathering-relevant-evidence.
Following-is-a-list-o-items-that-may-be-helpul-in-presenting--
evidence-to-the-arbitrator-at-the-hearing.-This-list-is-not-intended-
to-limit-you-rom-presenting-other-evidence-that-you-deem--
necessary.-
Contract
- Gather-the-contract,-plans-and/or-specifcations,-proposals,-or-any-other-evidence-o-an-agreement-with-the-other-party-that-
tends-to-prove-the-services,-materials,-etc.,-that-were-to-be-
provided-and-or-how-much.*
Payment
- Include-checks,-receipts,-and-ledgers-that-prove-what-has-
been-paid,-what-is-owed,-and-what-services-or-materials--were-provided.
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the-dispute-to-arbitration.-This-expert-will-become-the-state
appointed-expert-or-the-dispute.
When-a-stateappointed-expert-is-used,-both-parties-will-receive-
a-copy-o-the-report-o-the-expert-witness-shortly-ater-the--
dispute-is-reerred-to-the-arbitration-orum.-Either-party-may-
use-the-expert-witness-at-the-arbitration-hearing.-A-party-who-
wishes-to-use-the-testimony-o-the-stateappointed-expert-at--the-hearing-will-be-responsible-or-making-arrangements-with-
the-witness-to-ensure-his-or-her-attendance-at-the-hearing.--
Arrangements to have a state-appointed expert testify
should be made with the expert at least 15 days prior
to the scheduled hearing.
The consumer or the contractor may use an expert who
is not appointed by the state, but that party will beresponsible for arranging and paying for the services
of that expert witness.
To-locate-an-expert-who-is-not-appointed-by-the-state,-consult--
local-sources,-reerences,-trade-associations,-building-exchanges,-
or-the-telephone-directory.
The HearingArbitration-hearings-are-conducted-in-an-inormal-setting-and--
are-designed-to-bring-out-the-acts-involved-in-a-case.
The-complainant-presents-his-or-her-claims,-evidence,-and--
witnesses-frst,-and-the-respondent-ollows-with-his-or-her-
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M A N D A T O R Y A R B I T R A T I O N P R O G R A M G U I D E
C A L I F O R N I A C O N T R A C T O R S S T A T E L I C E N S E B O A R D
claims,-evidence,-and-witnesses.-Parties-may-be-represented--
by-legal-counsel-i-they-wish,-but-at-their-own-expense.-The-rules-
that-govern-arbitration-hearings-under-this-program-are-ound--
in-B&P-Code-Section-7085.5.-
When-a-hearing-is-completed,-the-arbitrator-has-30-calendar-
days-in-which-to-render-a-decision.-The-arbitrator-has-the--
authority-to-rule-on-the-asserted-claims-and-to-award-or--monetary-damages.
The Award
The-arbitrators-award-is-fnal-and-binding;-both-parties-must-
abide-by-the-terms-o-an-award.-I-either-party-does-not-comply,-
the-other-may-petition-the-court-to-have-the-award-confrmed-
and-made-a-judgment-o-the-court.-The-court-can-then-enorce-the-award-as-its-civil-judgment.
The-procedure-or-enorcing-awards-can-be-ound-in-the-Code-
o-Civil-Procedure-starting-with-Section-1285.-However,-i-court-
enorcement-is-necessary,-an-attorney-should-be-consulted.
Consumers-who-wish-urther-recourse-through-the-courts--
ater-an-arbitration-award-is-rendered-must-do-so-at-their-own--
expense.-A-consumer-or-contractor's-reusal-to-accept-the-terms-
o-an-award-will-not-preclude-CSLB-rom-taking-action-ater-an-
award-is-granted.
CSLB-has-the-authority-to-discipline-
contractors-who-do-not-comply-with-
an-arbitration-award.-Most awards
will specify a nal date for com-
pliance. I-the-award-is-against-the-contractor-and-the-contractor-does-
not-comply-within-the-time-specifed-
in-the-award,-the-consumer-should-
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notiy-CSLBs-Northern-Caliornia-Case-Management-Ofce-at-
P.O.-Box-26888,-Sacramento,-CA-95826.-CSLB-will-investigate-
the-report-o-noncompliance-and,-i-appropriate,-CSLB-may-
suspend-the-contractors-license.-I-the-contractor-complies-with-
the-arbitrators-award-within-90-days,-his-or-her-license-may-be-
reinstated;-otherwise,-it-will-be-revoked.
NOTE: Civil Code Section 2855 states, An arbitration award rendered against
a principal alone shall not be, be deemed to be, or be utilized as, an award
against his surety. The fact that a consumer receives a favorable award
through CSLB arbitration program does not mean that a surety company
must pay the consumer from the proceeds of a contractors license bond.
Points to Remember about Mandatory
Arbitration
- Arbitration-may-be-mandatory-i-the-complaint-is-to-be--
resolved-by-the-Contractors-State-License-Board.
- The-complainant-must-return-a-properly-executed-Submission-
to-Mandatory-Arbitration-orm-to-CSLB-within-30-calendar-
days-o-receipt.
- CSLB-will-pay-or-the-hearing,-the-arbitrator,-and-the-services-
o-one-boardappointed-expert-witness-per-complaint.
- Arbitration-hearings-are-inormal-and-held-at-a-location-near-
the-parties.
- Only-selected-cases-involving-contractors-with-good-records-
will-be-reerred-to-arbitration.
- Once-the-complainant-returns-a-properly-executed-Submission-
to-Mandatory-Arbitration-orm,-the-complaint-will-be-reerred-
to-arbitration-whether-or-not-the-contractor-returns-one.
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M A N D A T O R Y A R B I T R A T I O N P R O G R A M G U I D E
C A L I F O R N I A C O N T R A C T O R S S T A T E L I C E N S E B O A R D
- Both-parties-are-responsible-or-preparing-their-cases-and-
presenting-them-at-the-hearing.
- I-parties-want-a-record-o-the-hearing,-they-will-have-to-pay-
or-a-court-reporter-or-make-other-arrangements-to-record--
the-proceedings.---
- I-parties-want-to-be-represented-by-an-attorney,-they-will-
have-to-hire-one-at-their-own-expense.
- I-parties-need-an-expert-witness-to-assist-in-the-presentation-
o-their-cases,-they-may-hire-one-at-their-own-expense,-or-
they-may-use-the-services-o-a-CSLBpaid-expert-witness.
- In-most-cases,-a-party-will-not-be-able-to-fle-an-independent-
civil-suit-in-court-regarding-the-same-issues-that-have-been-
decided-through-arbitration.
- Grounds-or-correcting-or-otherwise-altering-an-arbitration-
award-once-rendered-are-very-limited.
- An-arbitration-decision-rendered-against-a-contractor-does--
not-necessarily-result-in-a-payout-on-the-license-bond.
- I-a-contractor-fles-or-bankruptcy,-CSLB-or-the-arbitration--
association-must-be-notifed-immediately.
Why Arbitration?
- Arbitration-is-ast.-It-takes-approximately-50-days-to-resolve--
a-dispute.
- Arbitration-provides-an-inormal-setting-to-resolve-a-dispute.
- Arbitrators-are-experts-trained-in-hearing-construction-matters.
- Arbitration-is-binding.
- An-award-may-be-enorced-in-court.
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. . . to the Consumer
- I-the-contractor-ails-to-comply-with-the-award,-the-contractors-
license-may-be-suspended-or-revoked.
. . . to the Contractor
- Under-current-complaint-disclosure-laws-and-policies,-a--
complaint-fled-against-a-contractor-will-not-be-disclosed-to-the-public-unless-the-contractor-ails-to-comply-with-the-
award,-and-i-the-license-is-suspended-or-revoked.
- A-contractors-license-will-not-be-suspended-or-revoked-on--
a-complaint-allegation-reerred-to-arbitration-unless-the--
contractor-ails-to-comply-with-the-arbitrators-award.
Addresses-and-phone-numbers-or-ofces-o-the-Contractors-
State-License-Board-are-ound-in-the-white-pages-o-the--
telephone-directory-under-State-o-Caliornia-listings-or-online--
at-www.cslb.ca.gov.-CSLB-also-oers-an-automated-tollree-
telephone-line:-800.321.CSLB (2752).
Contractors-State-License-Board-
P.O.-Box-26000-
Sacramento,-CA-95826
-Copyright-2010-Contractors-State-License-Board
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M A N D A T O R Y A R B I T R A T I O N P R O G R A M G U I D E
C A L I F O R N I A C O N T R A C T O R S S T A T E L I C E N S E B O A R D
NOTES:
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www.cslb.ca.gov
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ContrACtors stAte LiCense BoArd
P.o. Bx 26000
sacrament, CA 95826-0026
800.321.CslB (2752)www.cslb.ca.gov CheckTheLicenseFirst.com
13P-006/0810