Facts

Petitioners Claude and Rose McCombs, a retired married couple, retained respondent architect Victor Fabionar to prepare plans and specifications, provide administration of the contract between owner and builder, and to be the owners' representative during construction. The project scope was a 7,576 square feet tenant improvement. Fabionar prepared selected drawings in 2005. R.L. Vannata Corporation dba Hightower Construction won the bidding process. It was a design/built project, wherein the general contractor designed the plumbing and HVAC in addition to constructing the project. Vannata hired subcontractors for the work including Coffey Electric, PND Drywall, Chillpoint Refrigeration Inc., Bestcal Inc., and Kellum's Construction.

After the renovations by Vannata were completed, the commercial tenant started a medical and dental clinic on-site and has occupied it since Dec. 1, 2005. The first defect, which spawned this dispute arose in July 2007, when one toilet backed up. Petitioners then hired counsel and experts and performed site inspections to investigate the issues. In the end, John Shepherd prepared a defect report, alleging various defects with the tenant improvement construction. Michael Carolan prepared a cost of repair report, which totaled $1,501,879.

The arbitration proceeded on liability theories of breach of contract, negligence in the construction, professional negligence by the architect, breach of warranty, and breach of the third party beneficiary contract. Petitioners also asserted joint and several liabilities between Fabionar and general contractor Vannata.

PETITIONERS' CONTENTIONS:
Petitioners claimed that the potable water supply was contaminated as there was an oily substance and black flakes. The cause was believed to be the use of black iron fittings, in violation of the code, and the cutting oil from the initial installation, as it was surmised the system had not been sanitized and flushed.

Petitioners also claimed that the plumbing plans approved by the City of Chowchilla substantially deviated from the as-built conditions, such as different plumbing materials for the potable water supply (copper was called out in the plans but galvanized piping was installed), there was only one sewer lateral when three were drawn on the plans, there were insufficient number of sewer clean-outs and they were buried by drywall and flooring, there was only a two-inch water line from the water meter to the building (2½ was alleged to have been called for) and deviations from the specified plumbing routes.

Petitioners asserted various defects with the water heater, the size and attachments of the HVAC units on the roof, and that improper concrete repairs were done after the trenching work was completed, thus resulting in trip hazards at certain areas of the clinic.

Petitioners further alleged that there were sections of the underfloor waste line that were flat or reverse graded leading to toilet stoppages.

Expert Joseph Garcia opined that Fabionar's conduct fell below the standard of care. Generally it was asserted that Fabionar should have been a better supervisor, thus ensuring better construction, and further, that he should not have let the plumber install galvanized piping.

RESPONDENTS' CONTENTIONS:
Vannata and Fabionar asserted in their defense that the commercial tenant, a medical and dental clinic, had been running full steam without extended shutdowns or shutdown of any portion of the business as a result of any alleged defect.

As it concerns the plumbing issues, the plumbing plans were prepared by Bestcal Inc. under the design/build provision and were not part of the AIA contract between Vannata and McCombs. McCombs only contracted for the plumbing to be done in accordance with the code.

The plumber testified that he used no black iron pipe or fittings in the potable water supply plumbing, and that he flushed the system upon completion, so there should have been no oily residue from his work in the water supply.

Experts Ruben Moreno and Jerry Green noted that water in Chowchilla comes from wells, where iron and manganese have been found. Respondents contended that these minerals could have caused the water complaints alleged by petitioners.

Vannata and Fabionar contended that the plumber bid the project with the intent to use galvanized pipes, so there was no cost difference and thus no need for a change order. Further, petitioners saw the plumber bringing in the galvanized pipe and questioned Fabionar about it. Fabionar told them that galvanized pipe was allowed per the code and he gave the contractor the discretion. Lastly, the plumbing was operational and the supply lines and waste lines complied with the code, according to the engineering calculations of expert Bruce Hagopian.

Respondents further contended that the sewer line was properly graded. Experts Esteban Pauli and Sebastian Artel took measurements and conducted a survey to calculate that the grade was according to the code. Expert Sebastian Artel also did a survey of the concrete floors and found them to be level.

Respondents admitted that PND Drywall wrongfully covered up some clean-outs, but that contractor settled out for $8,000, thus addressing that claim.

Vannata also asserted a statute of limitation argument per the AIA contract.

Vannata and Fabionar also contested petitioners' assertions of joint and several liabilities.

Settlement Discussions

No settlement demands were made. Vannata offered $60,000 per CCP 998, for a general dismissal. Offer was made four months prior to arbitration and lapsed 30 days after service.

Damages

Petitioners' expert Michael Carolan prepared a cost of repair, which totaled $1,501,879. It called for an interior demolition and complete reconstruction. The tenant would be relocated to continue their medical and dental work in mobile trailers situated in the parking lot. Respondents claimed that there could be no damages stated aside from a few "punch list" items. Given an offset for the PND Drywall prior settlement ($8,000) and improper charge-backs (petitioners withheld $1,100 from Vannata at the project end for repair of an item that was not within the scope of work), respondents claimed that petitioners should not be awarded any money for repairs. Further, respondents argued that the AIA written contracts did not have a prevailing party attorney fee clause, so petitioners needed to bear their own fees and costs.

Result

The arbitrator found in favor of all the respondents. The arbitrator also re-allocated some of the arbitration fees so that respondents would be reimbursed by the petitioners.

Other Information

PND Drywall settled for $8,000 prior to arbitration. Coffey Electric was dismissed on the first day of arbitration in exchange for the waiver of costs. Chillpoint Refrigeration Inc., Bestcal Inc., and Kellum's Construction were all in pro per and did not participate in the arbitration. Vannata filed a memorandum of costs. Besides prevailing party costs, Vannata also requested expert witness fees per CCP 998. INSURER: Vannata had general liability insurance. Fabionar has no insurance and pro per parties.