I have an apartment building, for which I contracted a California
Licensed Contractor to redo the roof. The roof was redone in 1995,
and leaked excessively. The contractor agreed to redo the roof in
2000, and the leakage was even worse. In 2002 I noticed evidence of
structural damage (rot) inder the roofing. I hired an independent
roofing inspector, who provided a report indicating the roof was
improperly installed, and recommending complete replacement. I
hired a second contractor, who completely replaced the roof,
including significant repairs to the plywood substructure, at
a cost of $38,000. This latest roof seems perfect - no leaks
through a very rainy winter in 2002.
I attempted to sue the contractor, thereafter finding then that
he has filed for bankruptcy. I filed a complaint with California
Contractor's License Board, and the investigation is proceeding
at glacial speed, although a recommendation has recently been filed
with the California Attourney General's office, to revoke the roofer's
license. Interestingly, the licence had already been suspended for
failure to keep up the bond .... and the contractor thereafter
somehow restructured his business, obtained another bond and
another license, and continues to do business as before.
I also filed against the bonding company. They initially offered,
in writing, to pay the full amount of the bond - $7,500. After we
agreed to this we got a second letter stating there was a second
claim against the bond, and offering us about $3,200. So my question
is - is the maximum coverage under a California Contractor's bond
$7,500 per incident, or $7,500 aggregate per year, to be divided
among all claims. I fear it's the latter. I see in Section VI. The
Contractors State License Board; License Law, Rules and Regulations,
and Related Laws Chapter 12. Contractors License Law, paragraph
7071.11.(a) ....
"If any bond which may be required is insufficient to pay all claims
in full, the sum of the bond shall be distributed to all claimants in
proportion to the amount of their respective claims."
My last thought is to make a claim againt the Bonding company for
$15,000, since the contractor installed two roofs, one in 1995 and
one in 2000, and both were defective.
Opinions/ideas appreciated.
The action of the Contractors Licensing Board could result in payment to
you
regardless of the bankruptcy. Contractors who want to continue in business
often pay claimants in order to keep their license. You have one claim
against the bond, not two. The amount you can claim is your damages from
breach, $38,000. Claim the full amount. You will be paid your
proportionate share of the bond amount, along with other claimants. The
amount of the bond may be $7,500, as you say, but that's not the maximum
possible bond. If the bonding company has not told you in writing the
amount of the bond, you should ask for that information in writing. And
the
payout is not per incident. The face amount of hte bond is the total the
bonding company will pay out.
If you have been notified that the contractor has file for bankruptcy
protection, you did the right thing by stopping prosecuting the lawsuit.
If
you have not been notified, continue the lawsuit. A rumor isn't enouth.
If
there is a bankruptcy, file a claim in the bankruptcy case. And just
because a BK has been filed isn't enough. Check the status of the case.
Sometimes BK cases get dismissed.
McGyver
