October/November 2011 Newsletter

If You Haven't Already,

Come And Take a Look At Us Now!

Interesting facts about pumpkins: 

• The name pumpkin originated from "pepon" - the Greek word for "large melon."
• Pumpkins contain potassium and Vitamin A.
• Pumpkins are fruit.
• Pumpkin flowers are edible.
• Pumpkin seeds can be roasted as a snack.
• Pumpkins are used to make soups, pies and breads.
• Pumpkins are used for feed for animals.
• Pumpkins are 90 percent water.
• The largest "official" pumpkin ever grown weighed 1,340 pounds.
• In early colonial times, pumpkins were used as an ingredient for the crust of pies, not the filling.
• Colonists sliced off pumpkin tips; removed seeds and filled the insides with milk, spices and honey. This was baked in hot ashes and is the origin of pumpkin pie. 

Pumpkin facts taken from Pumpkinfresh.com

For years, contractors and other employers have designated persons as "independent contractors" while performing tasks for them. Some have done so legitimately, and others to save the costs of employment. The most common in the construction industry is a contractor that employs salespeople. Although the Employment Development Department and the IRS have factors to determine whether one is truly an independent contractor, the Contractors' Board has taken the position that a salesperson must be an employee of the contractor. While there could be circumstances where the Contractors' Board's position is wrong, many contractors we deal with use their salespeople for more than just selling the project, such as coordinating trades or project management, and once those tasks are undertaken, their role is well beyond that of a salesperson and they must be employees of the contractor, unless they are also licensed contractors.

 

The Legislature is currently amending certain Labor Code provisions, and one of their proposals is to add a section to the Labor Code that will make it unlawful for any person to willfully misclassify an individual as an independent contractor. The penalty will be not less than $5,000 nor more than $15,000 for each violation of this section. Further, if there is evidence of a pattern of violations, the fines can escalate.

 

In addition, the new Labor Code section proposes that when someone does hire an independent contractor, they must provide that person with the notice regarding his or her independent status, the impact on his or her tax obligations and eligibility for labor and employment protections, provide notice that they have the right to seek advice from the Employment Development Department or the Labor Commissioner, and then the statute also provides requirements regarding retaining records regarding these people.

 

One thing that the Labor Code provisions don't provide, but which case law has recently demonstrated, is that if you employ people that are not on your workers' compensation insurance when they should have been, that is grounds for a court to determine that you did not comply with the workers' compensation laws and are therefore not a validly licensed contractor. Being unlicensed has significant ramifications including the ability of the person contracting with the unlicensed contractor to seek a full reimbursement of all monies paid for the entire project.

 

If in doubt, discuss your actions with an employment lawyer before using anyone you consider to be an independent contractor.

1. You try to enter your password on the microwave.

2. You have not played solitaire with real cards in years.

3. You've run out of family member's birthdays to use for all the PINs, passwords, and other codes you need to remember.

4. You chat with strangers from foreign country's but have never spoke with your neighbors.

5. You have a list of 20 phone numbers to reach your family of four.

6. You don't stay in touch with old friends because it is too inconvenient not to use Facebook or email them.

 

In the case T.O. IX et al v. The Superior Court of Ventura County the Court of Appeals reviewed a matter where Asphalt Professionals, Inc. (API) contracted with T.O. IX, LLC et al (T.O.) to construct a street that would go through a nine home subdivision that T.O. developed. API was allegedly not paid $79,831.18 on their contract. Therefore API recorded nine mechanic's liens (one against each parcel), each in the amount of $79,831.18. When API filed their complaint to foreclose on the mechanic's liens, T.O. filed a motion to remove the liens because the liens were willfully overstated according to Civil Code section 3118, which the trial court denied. Thereafter, T.O. applied ex parte (which is a motion before the court with little or no notice required to the other parties, usually because time is of the essence) for an order allowing them to release the nine liens by posting a single surety bond in an amount that would equal one and one-half times the total amount of API's claims. T.O. stated that this is allowed under Civil Code section 3143. Again, the trial court denied this application.

 

T.O. then filed a petition for a writ of mandate (in this case it is requesting a court order to the trial court asking them to fix their prior wrongful actions) to get the trial court to either grant their motion to remove the liens or allow the ex parte application to post a single surety bond. The Court of Appeals granted T.O.'s petition for a writ of mandate, ruling that the trial court will vacate its order denying the ex parte application and allow T.O. to post a single surety bond in accordance with Civil Code section 3143. The Court of Appeals stated that they need to look at what the Legislature's intent was when enacting the mechanic's lien statutes which was to protect a contractor's right for payment "for the reasonable value of the labor, services, equipment, or materials furnished..." (section 3123, subd. (a).). They felt that a fair and reasonable result in this case would be to secure API's entire claim and give T.O. a sensible chance to restore their property rights. This is allowed under Civil Code section 3130 which allows a trial court to divide a lien claim among several parcels.

 

A single bond to release several liens, although different, is no less equitable. By allowing the single bond, API still has security for their payment and T.O. recovers their property rights by posting security for the debt allegedly owed to API. That is why the petition for writ of mandate was granted.

"If a man is standing in the middle of the forest speaking and there is no woman around to hear him... is he still wrong?"

"Is there another word for synonym?"

"I went to a bookstore and asked the saleswoman, 'Where's the self-help section?' She said if she told me, it would defeat the purpose."

"Isn't it a bit unnerving that doctors call what they do 'practice'?"