Making a Mountain Out of a Molehill

Most of my blog posts are about missed opportunities -- how a good contract could have avoided a costly mistake. But occasionally, a contractor does it right – and saves thousands. Consider a case decided last week by a Ventura, CA court. Plyley v. Renovating Specialist, Inc. (RSI). Here’s a summary.

The job was simple. Replace two oak doors with two sliding glass doors. Plyley agreed to pay $3,885. RSI wrote the contract, got it signed and did the work. The new doors passed inspection. Plyley rated the work as “Excellent” on RSI’s job completion certificate. But satisfaction didn’t last. A dispute followed. Eventually, Plyley filed a 42-page complaint, insisting the new doors didn’t meet contract specs and didn’t comply with the building code.

Essence of the dispute was height of the door sill. The sill on the old doors was nearly flush with the interior floor level. The new doors slid in the old frame, making the height of the new sill almost two inches above the interior floor level. Even worse, the drop from the new sill to the exterior patio was now 9 inches. The building code limits step height to 7-3/4 inches.

Sliding a replacement door into an existing frame is called retrofit construction. As anyone doing window and door replacement knows, there’s another choice. Remove and replace the entire frame: demo existing siding around the door perimeter, remove the old sill and frame, install a new door and frame, waterproof the opening and restore the siding. That’s like new construction. It’s also more work and more expense. But doing it that way would leave the height of the new door sill nearly the same as the old sill.

When Plyley sued, RSI was forced to defend both their work and their contract. The trial ran for 6 days. The trial court found no problem with either RSI’s work or their contract, awarding RSI costs of $1,223 plus $95,531 in attorney fees. Plyley appealed. Key points in that appeal: 

1. The contract violated California Business and Professions Code § 7159 which requires written contracts and written change orders.
   The appellate court found no violation of § 7159 in the RSI contract. A contract doesn’t have to list all job specs.
2. RSI had agreed to perform new construction, not retrofit construction.
   The appellate court allowed RSI’s salesman to testify about what he told Plyley. Retrofit replacement and new construction are different. In retrofit, the sill was going to be higher. Plyley insisted on retrofit.
3. The contract was unconscionable, allowing RSI to install the unsafe doors in violation of the building code.
   The appellate court didn’t agree. “Appellant cites no authority to the effect that building codes are implied terms of all home improvement contracts and that the contractor must comply with them at his own expense despite the homeowner's insistence that he not comply.”
4. RSI violated Business and Professions Code §7160. Their contract included 'false or fraudulent representation or false statements knowingly made'.
   The trial court found no false or misleading statements in the contract. The appellate court agreed.
5. Because RSI’s contract required the losing party to pay attorney fees of the winning party, the appellate court affirmed an award of $95,531 to RSI.

The appellate court’s conclusion: Plyley's complaint was “making a mountain out of a molehill”. Chalk one up for good contracts.

If you want to draft nothing but good contracts, regardless of the type of project or the state where you work, have a look at Construction Contract Writer. The trial version is free.