The Registrar of Contractors has the power to initiate disciplinary action against any licensee after undertaking an investigation of their activities, either in response to a complaint or on the Registrar’s own initiative. Discipline may consist of a letter of admonishment, denial of licensure or renewal, imposition of corrective action, penalties by citation, or license suspension or revocation through the accusation procedure. (Bus. & Prof. Code, § 7090.) This article will generally discuss CSLB accusations.
What is a CSLB Accusation?
Pursuant to Business and Professions Code section 7091, the Registrar may initiate disciplinary proceedings against any contractor by filing an accusation. Accusation proceedings begin with the Registrar’s filing of an accusation and its service on the licensee. The licensee may file a notice of defense and be represented by legal counsel. A reviewing court may permit the licensee to continue doing business as a contractor subject to its posting of a bond to guarantee compliance with the Registrar’s decision.
Responding to an Accusation: Timely File a Notice of Defense
Pursuant to California Government Code section 11506, within 15 days after service of the accusation, the respondent may file a notice of defense to the accusation by which the respondent may:
- Request a hearing;
- Object to the accusation upon the ground that it does not state acts or omissions upon which the agency may proceed;
- Object to the form of the accusation on the ground that it is so indefinite or uncertain that the respondent cannot identify the transaction or prepare a defense;
- Admit the accusation in whole or in part;
- Present new matter by way of defense; and
- Object to the accusation upon the ground that, under the circumstances, compliance with the requirements of a regulation would result in a material violation of another regulation enacted by another department affecting substantive rights.
What If I Fail to Timely File a Notice of Defense?
If you fail to timely file a notice of defense, you could be defaulted, and have a decision and order entered against you without a further opportunity to present evidence. However, California Government Code section 11520, subdivision (c), expressly states that within seven days after service on the respondent of a decision based on the respondent’s default, the respondent may serve a written motion requesting that the decision be vacated. As used in this subdivision, good cause for vacating the decision includes, but is not limited to, any of the following:
- Failure of the person to receive notice served pursuant to California Government Code section 11505; and
- Mistake, inadvertence, surprise, or excusable neglect.
What Happens at an Accusation Hearing?
Pursuant to California Government Code section 11508, the hearing shall be held at a hearing facility maintained by the office in Sacramento, Oakland, Los Angeles, or San Diego and shall be held at the facility that is closest to the location where the transaction occurred or where the respondent resides. The agency shall deliver or mail a notice of hearing to all parties at least 10 days prior to the hearing. The hearing shall not be prior to the expiration of the time within which the respondent is entitled to file a notice of defense. (Gov. Code, § 11509.)
At the hearing of the accusation, the CSLB must prove with clear and convincing evidence why the licensee’s contractor’s license should be either suspended or revoked. The hearing procedure allows each party to make opening and closing arguments and present its case-in-chief by calling witnesses and presenting documents, subject to cross-examination by the other party.
How Does The Judge Make a Ruling?
At the conclusion of the hearing, the administrative law judge files a proposed decision, which the Registrar may or may not adopt. Within 100 days, the Registrar may elect to:
- Adopt the proposed decision;
- Reduce or otherwise mitigate the proposed penalty and adopt the balance of the proposed decision;
- Make technical or minor changes to the proposed decision;
- Reject the proposed decision and refer the case to the same administrative law judge, if available, or otherwise to another administrative judge to take new evidence; or
- Reject the proposed decision and decide the case on the record or on an agreed-on statement of the parties, with or without taking additional evidence.
The Registrar has the authority to suspend or revoke a contractor’s license for violations of the license law. (Bus. & Prof. Code, § 7090.) Its decision, pursuant to Business and Professions Code section 7095, may:
- Provide for the licensee’s immediate and complete suspension of all contracting operations for a period fixed by the decision;
- Permit the licensee to complete any contracts shown at the hearing to be uncompleted; and
- Impose conditions on the licensee and provide that an application for restoration of a suspended or revoked license will not be accepted until the conditions have been fulfilled.
Request to Stay the Execution of the Decision and Order
A Request to Stay the Execution of a decision must be made after service of the decision but before the decision’s effective date. Pursuant to California Government Code section 11519, a stay of execution may be included in the decision, but if it is not included in the decision, it may be granted by the agency at any time before the decision becomes effective. The Administrative Procedures Act does not specify the grounds on which the agency may grant or deny a stay of execution. The agency’s discretion in denying or granting such a stay is broad.
Why Would Someone Stay the Execution?
A respondent would stay the execution of a decision and order for the following reasons:
- To allow additional time to seek reconsideration or review of the decision;
- To allow time for the respondent to organize their affairs before a suspension becomes effective; or
- To impose probationary terms in lieu of the penalty.
Petition for Reconsideration
Pursuant to California Government Code section 11521, the power to order a reconsideration shall expire 30 days after the delivery or mailing of a decision to a respondent. However, the respondent may request a stay of the decision and order for up to an additional 30 days, as discussed above, for the purpose of filing a Petition for Reconsideration. If more time is needed to consider the petition, the agency may grant an additional stay of no more than 10 days, solely for the purpose of considering the petition. If no action is taken on the petition within the time frame for reconsideration, the petition shall be denied.
Can I Appeal the Decision?
If a respondent is unsatisfied with the final decision and order, it can file a writ of administrative mandamus with the superior court after it has exhausted all the administrative remedies discussed above. Pursuant to California Government Code section 11523, unless exempt, a respondent has thirty (30) days after the last day on which reconsideration can be ordered to file a petition for a writ of administrative mandamus. A respondent may also appeal a decision of the superior court to the Court of Appeal.