Construction Industry Standards Fall 2013

I’ll Respect You In theMorning

And Other Industry StandardPerspectives on the Analysis of ConstructionDefects

Jones, Esq.

TheThe

CodesThe Building Codes define the exact standards

Products

Manufacturers’ specifications for their

LocalCustoms

Custom and Practices are not“Standards”

TradeAssociati

ons

Professional association preferred

The “Junk Reasoning” Behind Identifying the

“Toto, I don’t think we’re in Kansas anymore!” What was once an established basis for measuring the performance of a contractor has become whisked up, blown around and relocated to a distant land that has different rules for the evaluation of a contractors’ performance in construction defect claims. The term: “Industry Standard” no longer has a uniform definition or an understood reference. Many judges and

arbitrators as well as many in the constructionindustry have been bulldozed into believing thatanything a “Testifying Expert” calls an “IndustryStandard” must, in fact, be a widely held belief. Thefact is: The standards for contractors are only definedin writing.

By Bill Dexter and Mary S.

This issue of “standardization” is not unique to the construction industry; we deal with “standards” every day of our lives and we have come to rely on the accuracy of measured commodities that we purchase. We expect that the pumps at the service stations are actually giving us a true gallon of gas, that the supermarkets are selling us a pound of pastrami and that a yard of fabric is, in fact, 36 inches long. The test and validation of all of these measurements is the actual comparison to a recognized and established international standard verified by the International Organization for Standardization, also known as the ISO. Every state in the country has a Bureau of Weights and Measures that certifies the accuracy of scales and measuring devicesfor volume, weight, length and time. They do this, for example, by maintaining a weight that is the standard for one pound, a measure for one yard, one gallon, etc. The bureau also conducts evaluations on new commercial weighing and measuring devices as part of a national certification program. This is how we know, as consumers, that we got exactly what we paid for.

In construction, it is a little different. We do not have physical standards; our “bureau of weights and measures” is actually a collectionof written product specifications and laws that are known as the “Building Codes.” In California it is Title 24 of the California Code of Regulations and in other states the International Building Code applies. Those codes incorporate all of the various standards that are enforced by the numerous agencies. Similar to the physical standard fora gallon or a pound, the building standards are in the form of written codes and the standards that are incorporated by reference within the codes. That’s it; plain and simple. All standards within the construction industry are written; they are the rules that contractors must follow. Most importantly, there are no unwritten “standards.”

When the courts began to see an increase in the number of construction defect lawsuits in the 1980’s, plaintiffs were scrambling to define industry standards to bolster the validity of their claims. The use ofthe term “Industry Standard” came into use without any solid definition;just the assertion of an appointed “expert” who emphatically stated that“…this work falls below industry standards.” Quite often, the only validation of such an expert’s opinion was the statement: “This is just not how it is done!”Since then, many experts have been mixing true standards with these illegitimate measures and packaging them all under the mantle of

1. Violation of the Regulatory Laws; the building codes and local building ordinances.

2. Failure to Adhere to Local Customs and Practice; a collection of unwritten standards that all contractors in a given area are expectedand required to comply with.

3. Disregard of Trade Associations Preferred Practices; a collection of recommendations for higher levels of workmanship that are created by and for the members of private trade associations.

4. Deviation from the Standard of Care; unwritten, but recognized obligations that apply to contractors during the process of construction.

5. Manufacturers’ Written Specifications for Listed and Non-Listed Products; the precise requirements for the installation of listed andnon-listed products specified by the manufacturer.

To adequately evaluate the merits of the various allegations involving a contractor’s performance in a construction defect case, consider the legaleffect of the alleged industry standards at issue:

1. REGULATORY LAWS: This standard for compliance is based upon the building codes that have been adopted by the state and the ordinances that have been created by local communities. When any state adopts a body of codes to regulate building activities, methods and materials, it can only be superseded by local communities that create more restrictive provisions than the state adopted codes. Although acknowledged as the minimum requirements for construction performance,it is a collection of formidable requirements that must be complied with and are the only enforceable standards that contractors must adhere to. The operative word is “enforceable.”

2. LOCAL CUSTOMS AND PRACTICE: Many experts and attorneys have attemptedto make this concept stand up as a recognized “standard.” Customs andpractices are similar to when an employer will allow its workers to come to work on Fridays in casual clothes. For that company, “Casual Fridays” has become a local custom and practice. If a worker did not want to dress down on Friday, there is no adverse consequence; it is unenforceable. The concept that in certain communities all of the contractors have universally established informal practices that then become enforceable within their locality is simply a fabrication of wishful thinkers. There are no practical examples of when this ever takes place. If local conditions require regional variations, specialaction or attention, the governing authority incorporates the

4. STANDARD OF CARE: Standard of care claims have almost no applicationagainst contractors. Typically, these claims are based upon the legal doctrine of negligence and apply and refer to professionals performing design services for clients. Within the construction industry, a standard of care complaint is usually brought against theproject engineer or architect. Violation of the standard of care is defined as negligent conduct required by law for the protection of persons or property from foreseeable risks of harm. Such claims mightinclude failure to consider the bearing capacity of the soil for the intended structure or specifying a window system that did not meet the wind load conditions at the site. Architects and other design professionals are held to this standard by virtue of their education,knowledge, training and experience. The problem for all that assert this claim (or even defense) is that the “standard” is often a subjective issue upon which reasonable people can disagree. The application of this standard to design professionals can only come from expert testimony since, as a custom and practice; it is not committed to writing.

a. In light of the above definition, contractors are not considered“professionals” in the sense of registered architects and engineers and cannot be held to a standard of care for construction activities. In many cases, contractors lack the education and certification to perform any service other than the mechanical process of construction. (Most states do not evenrequire that contractors be licensed. California has no education requirement for license applicants and no continuing education requirements for licensees.) For the most part, everydirection or instruction that a contractor needs to execute the specifications for a given project is provided in writing. Prior to bidding a job, contractors are given drawings, specifications, project manuals, schedules of fixtures, appliances, windows and doors. They are even told what size nails to use and how they are to be spaced. Additionally, they are given a copy of the contract, general conditions of the contract, a sample of the invoice to be used and a list of insurance coverage to be provided. Contractors are even given instructions on the process of how to fill out the bidding forms. Nothing is left to the discretion of the contractor.

5. MANUFACTURERS’ PRECISE SPECIFICATIONS: The manufacturers of appliances, equipment, fixtures and devices that are used in the construction of a building create specific installation instructions that guarantee compliance with the building codes or are requisites fora warranty. Prior to distribution of products, manufacturers must secure an International Code Commission Evaluation Service (ICC-ES) report and certification. ICC-ES is a nonprofit, public-benefit corporation that does technical evaluations of building products, components, methods, and materials. The evaluation process culminates with the issuance of technical reports that, because they directly address the issue of code compliance, are used by both regulatory agencies and building-product manufacturers. Additionally, numerous accrediting agencies, working under the authority of OSHA establish accepted standards that are incorporated into the body of the building codes by reference. These standards can be found in the appendices of the code volumes. Building authorities use evaluation reports to help determine code compliance and enforce building regulations; manufacturers use reports as evidence that their products meet code requirements and warrant regulatory approval. All of these entities look to the various agencies’ evaluation reports for evidence that products and systems are code-compliant. Consequently, the manufacturer’s specifications for use, installation and configuration are incorporated within the codes as enforceable industry standards.

There are also products used in construction that do not require certification but nonetheless, have very precise specifications for theproper use and installation. Quite often, the manufacturer will withdraw their warranties if their instructions are not followed. Solid wood or wood product doors, for example, carry a manufacturer’s warranty for stability and assembly. That warranty is voided if the contractor does not paint all six sides of the door as indicated in theproduct literature that comes with the door. The application of elastomeric paint, for example, is not a code issue, but the manufacturer will withdraw its warranty for longevity if the contractordoes not apply the product in strict conformance with the instructions on the container. Even though this product specification is not enforceable under the code, it is a standard that universally applies to every contractor who installs a particular product; listed or not. Most often, this type of claim falls under the breach of contract complaints for failing to perform the work in a “workmanlike manner.” Thus it is a contract issue, not a standard issue.

Quite often, contractors, when being challenged on issues of code compliance, fail to consult with the local building authority for acceptance of a literal violation of the code when, in fact, the as-built feature satisfies the intent of the code. Plaintiff’s experts in construction defect litigation will invariably argue the merits ofthe written code and not investigate the alternative compliance approval that could be granted by the building official.

MULTIPLE STANDARDS: It has been argued in countless mediations and litigations that multiple standards apply to the evaluation of a contractor’s performance. The sheer force of the arguments does not add sufficient validity to the claim of failing to meet multiple industry standards. The introduction of subjective standards causes confusion and the possibility that a contractor following one standard may be held to have breached another. Since the contractor’s only construction standard of a project is the current adopted building code, the introduction of other nebulous and non-applicable standards only tends to confuse a trier of fact and cloud the primary claim that the work does not meet the requirements of thewritten code.

CONCLUSIONS: Lessons learned over the past 30 years of evaluating construction defect litigation have revealed a few things about the process. Some of the more evident lessons are:

1. The only industry standards that universally apply to and are enforced concerning construction activities performed by contractors are written laws and specifications; the building codes and the listed product-specific requirements for installation and use (as incorporated into the codes).

2. Local Customs and Practices are not industry standards.3. Professional associations’ lists of preferred practices are so-

called standards created as a marketing tool for members of the association as a “value added” feature and are not enforceable by any government authority.

4. The contract, project plans and specifications are not industry standards; however, they are enforceable between the parties of a specific project as a component of their contractual obligations.

5. The written word of the building codes is not the last word in compliance. The building official has the ultimate and binding

Bill Dexter is a 40-year veteran of the construction industry and the former Director of the California Center for Construction Education for the College of Architecture and Environmental Design at California Polytechnic State University, San Luis Obispo. As a nationally recognized risk management-consultant, his industry training company serves construction organizations nationwide in the areas of liability mitigation.  Bill has participated as an industry spokesman before The American Institute of Architects, The Construction Specifications Institute, Pacific Coast Builders Conference, the California and Nevada Contractors State License Boards and the Association of General Contractors.

Mary S. Jones, Esq., has practiced law in California for over 25 years. Since 1994, she has devoted her practice principally to alternate dispute resolution. She is a full-time professional neutral, specializing in arbitrating and mediating all types of business and construction disputes. Mary has been on the Panel of Arbitrators for the American Arbitration Association since 1982 and over the past 10 years she has arbitrated and/or mediated more than 500 matters. Mary is a frequent presenter for the California and Nevada Contractors State License Boards on topics of Alternative Dispute Resolution and creating effective contracts for residential and light commercial projects.