Scherer v. CONTRACTORS LICENSE BOARD

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NOT FOR PU`BLICA'I`ION lN \’\"ES'I"S H.z&\?\"¢‘$.l‘l RII.POR'|`S AND P.‘-’\C”,`I_F'!C REPOR"I`MER

NO. 2795"

C`L

IN THE INTERMEDlATE COURT OF APPEALS

or ran start or HAwAiU

GARY W. SCHERER and lNTERNATIONAL FLATWORK SPEClALlST, lNC.,
doing business as Kongcrete Construction Company, Appellant~
Appei1ant, v. CoNTnAcToRs L:cENsE soARD, sTATE or HAwA:T;;,
Appeilee-Appellee,

APPEAL FROM THE ClRCUlT COURT ©F THE FIRST ClR@UlT on
(ClV. NO. O5~l~l32O `

> ' ' ;~,j;:m

SUMMARY DlSPOSlTlON ORDER wi wo
(By: Foley, Presiding Judge, Fujise and Leonard, JJ.)
In this secondary appeal arising from a construction

dispute and consequent regulatory sanction, Appellants~Appellants

Gary W. Scherer (Scherer) and lnternational Flatwork Specialist,

lnc., doing business as Kongcrete Construction Company
(collectively, Appellants) appeal from the April 28, 2006 final
judgment of the Circuit Court of the First Circuit (circuit

court)1 in favor of Appellee-Appellee Contractors License Board

(cLB>, stats of HawaFi.
After a careful review of the issues raised, arguments

advanced, applicable law, and the record in this case, we resolve

Appellants' appeal as follows:
l. The Hearings Officer, the CLB, and the circuit

court did not err by not granting Appellants' Motion in Limine.

Hawaii Administrative Rules (HAR) § l6~20l-2l(a), which
governs the admissibility of evidence at the Department of

Commerce and Consumer Affairs (DCCA) administrative hearings,

provides:

1 The Honorable Eden Elizabeth Hifo presided.

NOT FOR P'U'BI,ICA.'[`ION IN WEST’S HAWAI°I REPORTS AND PACI.FIC REPOR'I`ER

Homeowner lynn L. Lundguist's (Lundguist) testimony
regarding remedial work and materials was not irrelevant.

Rather, it established (l} that remedial work was performed,
albeit by an unlicensed contractor, to correct the work performed
by Appellants, and (2) the cost and purchase of materials that
were used to make the repairs.

Whether or not Lundguist's testimony regarding remedial
work and materials was prejudicial is impertinent because there
is no authority for the proposition that evidence can be excluded
merely for the reason that it is prejudicial to the opponent.3

Lastly, Lundguist's alleged noncompliance with Hawaii
Revised Statutes (HRS) Chapter 444 has no bearing on her veracity
or credibility.

2. The Hearings 0fficer and the CLB did not err by not
granting Appellants' Motion to Dismiss.

Appellants' reliance on Toney v. Fauhiva, l09 Hawafi
96, 123 P.3d 691 (App. 2005) is misplaced. Toney dealt with the
obligations under and benefits of HRS § 444-25.5--disclosures by
licensed contractors--which is not at issue here. Moreover,
Appellants‘ claims against Lundguist do not undermine the CLB's
authority to enforce the provisions of HRS Chapter 444 against

Appellants. See HRS § 444-4(4) (l993).3

'>

“ As stated by the Supreme Court of Hawafi, in explaining "unfair
prejudice" under Hawaii Rules of Evidence (HRE) Rule 403, "[v]irtually all
evidence is prejudicial or it isn't materia ." Ranches v. Citv & Countv of
Honolulu, ll5 Hawaid_462, 475, 168 P.3d 592, 605 (2007) (quoting Rollins v.
Bd. of Governors for Higher Educ., 761 F. Supp 939, 94l (D.R.l. l99l)).

3 lt is true that HRS § 444~22 (l993) pro‘ides that,

[tjhe failure of any person to comply with any provision of

this chapter shall prevent such person from recovering for

work done, or materials or supplies furnished, or both on a
(continued...)

NOT FOR PUBLICA'.l`fION [N VVICS'I"S HAWAI°I RfEPOR'l`S AND PACIF!C REPOR'FER

3. The Hearings Officer, the CLB, and the circuit
the

court did not err by permittin receipt into evidence of

documents that were not authenticated, i.e., Exhibits 5, 6, and
S.

As appellants acknowledge, the HRB does not apply in
administrative hearings. HAR § l6~20l~2l(a) {"the admissibility
of evidence at the hearings shall not be governed by the laws of
evidence").

Furthermore, the admission of irrelevant or incompetent
evidence by an administrative agency is not grounds for reversal

if there is substantial evidence to support its decision. Shorba

v. Bd. of Educ., 59 Haw. 388, 397~98, 583 P.2d 3l3, 3l9(l978);

see also Prioe v. Zoning Bd. of Appeals, 77 Hawafi l68, l76, 883
P.2d 629, 637 (l994) (citing Shorba with approval). There was
substantial evidence presented to support the agency's decision
as modified by the circuit court, even if these exhibits are not
considered.

4. The Hearings Officer, the CLB, and the circuit
court did not err by determining Appellants willfully departed
from or willfully disregarded the plans and specifications, and
willfully failed to comply with HRS Chapter 444.

Appellants' failure to complete the concrete work in
accordance with the approved plans and specifications, which were
clear and available, and their failure to take any remedial

action in response to their alleged concrete shortage

3(...continued)
contract or on the basis of the reasonable value thereof, in
a civil action, if such person failed to obtain a license
under this chapter prior to contracting for such work{,l

and a consistent theme throughout this case is Appellants' argument that
Lundguist violated provisions of Chapter 444. However, the evidence presented
to the Hearings Officer supported, and the Hearings Officer so found, that
Lundguist was an owner/builder, and was exempt from the licensing requirement
under HRS § 444-2(7) (Supp. 2008). Moreover, Lundquist did not bring a civil
action to recover damages under the contract, but rather lodged a complaint
with the CLB for the defective workmanship performed by Appellants. Thus, HRS
§ 444-22 is not applicable to this case.

3

NOT I<`OR PUBL§I(.`.¢\TION IN WES'I"'S }SIA\VAI‘I R.E'POR'I`S AND PACIFIC RI£`.POR'.I`PI'R

sufficiently supports the conclusion that Appellants' actions
were voluntary and intentional.“

5. The Hearings Officer, the CLB, and the circuit

court did not err by awarding restitution to Lundquist.
HRS § 444-22 does not support Appellants' argument.

See Jones v, Phillipson, 92 HawaiK.ll7, l25, 037 P.2d l0l5, l023

(App. l999) ("HRS § 444~22 bars civil actions by unlicensed
contractors"}. Here, assuming the filing of a complaint with the
CLB constituted a "civil action," Lundquist was exempt from the
licensing requirements of Chapter 444, HRS § 444~2(7), and was
compensated only for the cost of materials she purchased for
remedial work. Nothing in HRS Chapter 444 prohibits such
compensation.

The record provides sufficient evidence to establish
that the remedial work and materials were reasonable and
necessary.

Lundquist testified that after noticing problems with
the concrete work and attempting to resolve the problems with
Appellants, she received proposals from three construction
companies to repair/complete the concrete work. Each proposal
detailed the remedial services to be performed, the materials to
be utilized, and the estimated costs. Prices quoted for the
labor and materials were $5,675.00, $5,l57.00, and $3,000.00.

Lundquist further testified that she had the concrete
work repaired, employing the services of a different company, and
paying $3,600.00 for the labor and $l,l7l.89 for the materials,
which falls within the range suggested by the prior proposals.

4 A willful act is one that is voluntary and intentional, but not
necessarily malicious. Black's Law Dictionarv 1630 (8th ed. 2004) . Moreover,
HAR § l6-20l-2l( ), which governs the burden of proof at DCCA administrative
hearings, expressly states that, "[p]roof of a matter shall be by a
preponderance of the evidence."

work performed and/or the mat@rial5 util'

NOT F()R PUBLICATION IN W'ES']."S HA\VAI‘I REPOR'I`S AND PAC`IYFlC REP()RTER

C)')

No @vid@noe wa3 pr@Sonred Suqqe ring that the r@m@dial

d were unr@a3onable or

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unn@oe53ary.
ThereforQ, the April 23, 2006 final judgmQnt of rha
Circuit Court of the FirSt Cirouit is &ffirm@d.

DATED: Honolulu, HawaiU¢ u&nuary l9, 2010.

On the briefS:

Pr@3ton A. Gima, C12Zm@L/éz§:Q %'7£§;§%

for AppellantS~AppellantS. Pre5iding judge

Joseph W. Lee, k _ _
ReqUlated InduStrieS <iZ§§:j**~
C0mplaintS Offioe, ASsociato Judge

D@partment of Commeroo and
ConSumer AffairS,

state of Hawai‘i,
for Appellee~Appellee.