Western Electrical Contractors Association, Inc.

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Arbitration is Not Always Final

Thursday, April 25, 2019

Content courtesy of: Bruce Rudman of Abdulaziz, Grossbart & Rudman

Most of the time the articles that we publish are about cases that come across our desk in what are called the "advance sheets" from a newspaper or publication that is dedicated to lawyers.  In this case, we recently appeared before the Court of Appeal in a matter that resulted in an unpublished case, which means that our case cannot be used as authority in another case, but which was based upon legal precedents set by prior cases before the Court.  At issue in the case was whether an arbitrator could properly determine that an entity did not require a contractor's license and award that entity money under a contract, where the contention that was being made was that a license was required.

Without giving away any names, at issue was a company that would assemble and install, including anchoring to a floor, large trampolines for a sports facility.  These trampolines were the size of a warehouse.  They were assembled and bolted to the floor.  The company also assembled some ramps and other miscellaneous work.  When the owner of the facility decided that they were unhappy with the work, they filed suit not only for breach of contract, but for disgorgement, seeking all money paid to the unlicensed entity. 

The entity filed a Petition in the Court to Compel Binding Arbitration.  This was objected to on the licensure issue.  The Superior Court had held that the matter could go to Arbitration but then the Court would have the ability to review any ultimate award.  The matter went to Arbitration and a retired Judge found that the supplier and installer was selling finished work, and therefore exempt from the license law. 

It was vigorously argued that the item did not qualify as a finished work.  Indeed, just the labor to install the equipment was valued at more than $30,000, and the labor was not incidental and supplemental to the installation of  other types of finished goods such as a refrigerator, washer and dryer, or even a prefabricated all-in-one kitchen unit when it's simply hooked up to water and a drain. 

To read more, click here.