CONTACTS 
0201 - Amer. Arbtrn Assn.                 415 981 3901 fax 781 8426
020101 - Ms. Kim Seaborn; Tribunal Administrator =415 984 5447
020102 - Case Administration Department
0202 - Leach, McGreevy, & Eliassen        415 775 4455 fax 7435
020201 - Mr. J. Curtis Cox, Esq.
0203 - Wilson Miller                      415 641 4607 fax 824 4011
020301 - Mr. John Wilson; President
020302 - Mr. Mathew Miller; Partner

SUBJECTS
AAA Wilson, Miller v. Llama, 74 E 110 00154 93
Hearing
Claimant Wilson/Miller

0505 -    ..
0506 - Summary/Objective
0507 -
050701 - Began hearings. ref SDS 5 0000
050702 -
050703 - Curtis Cox, representing respondent Llama, asked prior to the hearings
050704 - to discuss the counter claim filed 930406, ref DRP 5.
050705 -
050706 - I advised this can be discussed when the hearings commence in presence
050707 - of opposing counsel.
050708 -
050709 - Took testimony until 2030.  Recessed hearings.  Parties will advise
050710 - AAA next week, if they wish to submit further evidence, or close the
050711 - hearings.  I advised that if there is another hearing day, I will be
050712 - compensated.
050713 -
050714 -
050715 -  ..
0508 -
0509 -
0510 - 1259 Hearings commence
0511 -
051101 - Will decide on hearing evidence on counter claim at conclusion
051102 - of complainant's case in chief.
051103 -
051104 -    Subsequently I permitted evidence on Respondent's counterclaim,
051105 -    which mainly arises as a response to claimant's position with
051106 -    respect to the window problem.
051107 -
051108 -    Wilson Miller is entitled to additional time to respond to
051109 -    counterclaim, if they wish to do so.
051110 -
051111 -
051112 - Parties made opening statements.
051113 -
051114 -
051115 -  ..
0512 -
0513 -
0514 - 1327 John Wilson testifies on own behalf
0515 -
051501 - Witness was sworn in, and testified on his own behalf.
051502 -
051503 - John is the president and owner of WM.  In business 1.5 years. He is a
051504 - general contractor with B license.  390648 issued in 1978.  His
051505 - license was inactive for 3 years, 1981 - 1984.  They do interior
051506 - remodel, light commercial and homes.
051507 -
051508 - This project was to provide CM services for constructing a single
051509 - family private residence.  Project was about $400K.  It began oa
051510 - 920915 and is still uncompleted.  Job is located at 8th ave and
051511 - Ortega in SF.
051512 -
051513 - He was to receive 10% of all labor and materials for the work.  In
051514 - mid-Dec some windows were delivered.  Mr. Llama objected to the
051515 - quality of the windows and fired Wilson Miller.
051516 -         ..
051517 -      This was a T&M contract to provide service.  Under that
051518 -      arrangement, what level of risk does the contractor carry for
051519 -      defective work?
051520 -
051521 -
051522 -  ..
051523 - On 921222 Wilson met with Mr. Llama and Ms. McGowan, who provided
051524 - design support.  They said they did not like the windows and they were
051525 - going to fire WM.
051526 -
051527 - Prior to ordering the windows, Mr. Llama's associate, Ms McGowan,
051528 - acting on behalf of Mr. Llama and with his knowledge and consent,
051529 - marked a project floor plan drawing with the window specifications she
051530 - and Mr. Llama chose.  This was submitted to Wilson Miller.  Mr. Wilson
051531 - prepared a Window Schedule, ref OF 4, using the input from Ms. McGow-
051532 - an.  Mr. Wilson said the drawing submitted by Ms. McGowan is missing
051533 - from the record.  Ms. McGowan said she submitted window selections to
051534 - Wilson Miller which showed what Mr. Llama and she wanted for the
051535 - house.  She said the windows looked different from her expectations,
051536 - after they were delivered and installed.  Mr. Llama said the windows
051537 - delivered were the ones he and Ms. McGowan ordered.  Mr. Llama and Ms.
051538 - McGowan both said they expected Wilson Miller to warn them that the
051539 - selections they made were inadequate, since they were not experts and
051540 - could not visualize the final appearance.
051541 -
051542 -      ..
051543 -     The City inspector testified the windows may not have had adequate
051544 -     recess, and did not conform to the "grid" pattern on the approved
051545 -     drawings.  This presents the issue of whether the work done by
051546 -     Wilson Miller was of sufficient professional competence to avoid a
051547 -     claim of negligence.  My sense is that the City's position may not
051548 -     have prevailed if challenged, since there was testimony that the
051549 -     Llama home was consistent wtih other homes in the neighborhood.
051550 -     Mr. Lee, testified he would have advised the owner's their window
051551 -     selection was inadequate, and indicate to them guidelines for mak-
051552 -     ing their selection that would meet City standards.  The standard
051553 -     at issue seems merely that the windows give a consistent appear-
051554 -     ance.  The matters of a grid pattern and adequate recess are not
051555 -     really controlling.
051556 -
051557 -      ..
051558 -     Mr. Llama testified that after the windows were installed, his
051559 -     framing contractor heatedly told him that the windows were inade-
051560 -     quate with respect to asthetic design, and threatened to abandon
051561 -     the job, if Mr. Llama did not take action to change the windows to
051562 -     conform to the contractor's understanding of a better selection.
051563 -     Mr. Llama testified the secretary for Mr. Lee, who prepared the
051564 -     plans approved by the City, called Mr. Llama the day after the
051565 -     windows were installed, and expressed the opinion that the window
051566 -     selection was inadequate.
051567 -
051568 -  ..
051569 - On or about 921106, Wilson and Llama met at window supplier's office.
051570 - There were full size models of windows.  Mr. Llama investigated the
051571 - model windows and selected the one's he wanted.  At that meeting, Mr.
051572 - Wilson and the window vendor's representative jointly prepared a
051573 - purchase order based on Mr. Llama's selections.
051574 -
051575 -  ..
051576 - There seems to be no dispute that the windows delivered were the ones
051577 - ordered.  So question is on what should have been ordered.
051578 -
051579 - Mr. Llama stipulated he withheld payment from Wilson, in the amount of
051580 - $10k, on funds otherwise properly owed to Wilson.
051581 -
051582 -  ..
051583 - Mr. Wilson said Mr. Llama never objected to Wilson's work.
051584 -
051585 - Mr. Wilson said Mr. Llama selected the windows, knowing they deviated
051586 - from what was shown on the plans, approved by the City Building
051587 - department.  Mr. Wilson testified that he told Mr. Llama that a plan
051588 - revision might have to be submitted to the City for approval to
051589 - deviate from the approved project plans showing a grid window pattern.
051590 - Mr. Wilson said Mr. Llama did not object to this possibility.
051591 -
051592 - Mr. Miller testified his design responsibilities covered by Ex R01,
051593 - ref OF 16, did not include the window schedule.  He never worked on
051594 - it.
051595 -
051596 -  ..
051597 - Mr. Llama submitted Ex C03 to Wilson, showing the windows to be
051598 - purchased.  Mr. Llama was getting prices and investigating window
051599 - design separately, with Pella, from whom the windows were ultimately
051600 - purchased.
051601 -
051602 -     ..
051603 -    Comment
051604 -
051605 -    What was Wilson's duty re windows under his CM agreement, and what
051606 -    if anything did he do wrong?
051607 -
051608 -    *   Should have done a drawing and submitted to City for approval
051609 -
051610 -    *   Should have showed client pictures of windows.
051611 -
051612 -    *   Should have submitted window schedule to Lee for review and
051613 -        incorporation into working drawings.
051614 -        ..
051615 -        Should have advised client that its selections conflicted
051616 -        with standard practice.
051617 -
051618 -     ..
051619 -    What was Llama's duty
051620 -
051621 -        Should have permitted larger design budget.
051622 -
051623 -        Should have investigated Wilson Miller's design competence, in
051624 -        particular on matters of engineering management.
051625 -
051626 -    •  Should have submitted their window selections to Mr. Lee and/or
051627 -       City for approval selections to Mr. Lee and/or City for approval
051628 -       prior to purchasing windows, apparently called for in the
051629 -       agreement between Llama and WM.
051630 -
051631 -    •  Should have looked at a model of windows on purchase order,
051632 -       before releasing for manufacture.
051633 -
051634 -    •  Should have given WM notice of dissatisfaction and demanded
051635 -       correction of defective work.
051636 -
051637 -
051638 -  ..
051639 - Mr. Wilson submitted an exhibit showing savings relative to the
051640 - original budget, which benefited Mr. Llama.
051641 -
051642 -
051643 -
051644 -  ..
0517 -
0518 -
0519 - 1433 Mr. Max Putra,
0520 -
052001 - He is Plan Checker with City of San Francisco.  He has been doing
052002 - plan check on building for last 6 years.  He specializes in
052003 - residential alterations.  He said he cannot give an opinion on
052004 - whether the Clad Double Hung window detail is a recessed window, ref
052005 - OF 9.
052006 -
052007 - He testified they needed a variance which required the house to have
052008 - recessed windows, which he noted on the plans.
052009 -
052010 -  ..
052011 - Mr. Putra visited the building and found the windows were not recessed
052012 - and did not conform to plan window grid design.  He determined the
052013 - windows were not recessed by general assessment.
052014 -
052015 - He does not know if the windows now installed, meet the plan
052016 - requirements.
052017 -
052018 -
052019 -
052020 -  ..
0521 -
0522 -
0523 - 1435 Mr. Hawk N. Lee, Civil Engineer.
0524 -
052401 - They did the plans submitted for approval to City.  Approved on
052402 - 921007.  He said the owner was to determine the design of the windows
052403 - with the Construction Manager.
052404 -
052405 - Mr. Lee incorporated the instruction from City Inspector about having
052406 - recessed windows, into the drawing.  Ex C06 sets general standard for
052407 - recessed windows, but the City goes by the neighborhood standards.
052408 -
052409 -  ..
052410 - There was evidence that the neighborhood has buildings with mixed
052411 - window types on the same wall, which is the complaint in this case.
052412 - In that case, the City may not been able to prevail if it rejected
052413 - the Wilson Miller window schedule.
052414 -
052415 - Mr. Lee said that had he seen the window schedule showing Mr. Llama's
052416 - choices, he would have told Mr. Llama that he had to change his window
052417 - selections, to avoid the problem Mr. Llama later complained about in
052418 - terminating WM.
052419 -
052420 -
052421 -
052422 -  ..
0525 -
0526 -
0527 - 1445 Mr. Dermott J. Sullivan
0528 -
052801 - He is with SF Dep Public Works, Building Inspector.  He has been an
052802 - inspector for 3 years.  He was a carpenter for 18 years.
052803 -
052804 -  ..
052805 - On 930112 he inspected the property.  There was a correction notice,
052806 - Resp #6.
052807 -
052808 -      Notice says windows do not meet recess requirements.  One window
052809 -      has to meet the egress requirements.  Two windows in the room
052810 -      were .3 sf too small.
052811 -
052812 -      There was also a question about the adequacy of window recess.
052813 -
052814 -      The windows on one side of the house have double hung windows
052815 -      and on the other side the order is reversed.
052816 -
052817 -
052818 -
052819 -  ..
052820 - Cross Examination
052821 -
052822 - Re correction notice.  He examines Replacing Windows, from SF City
052823 - Planning, received by WM 930310.
052824 -
052825 - Mr. Sullivan feels the "Clad Double Hung" window detail shows a
052826 - recessed window design.  He feels sheet of this exhibit, would have
052827 - to be inspected at the site to decide if it is recessed.
052828 -
052829 -  ..
052830 - He found the windows installed correctly.  The windows meet the
052831 - building code.
052832 -
052833 - Mr. Sullivan asked by Competent Builders to do the inspection on
052834 - 930112.
052835 -
052836 -
052837 -
052838 -  ..
0529 -
0530 -
0531 - 1641 Commence Rebuttal & Cross Complaint by Respondent
0532 -
053201 - Design changes were inadequate.
053202 -
053203 - Wilson as CM did not take notes to incorporate instructions from
053204 - Llama.  Mr. Llama was very concerned during Mr. Wilson's tenure
053205 - managing the project that Mr. Wilson "never took any notes."
053206 -
053207 -
053208 -
053209 -  ..
0533 -
0534 -
0535 - 1704 Ellen McGowan
0536 -
053601 - Ms. Ellen was a co-project manager with Llama in supervising the job.
053602 -
053603 - He advised John that plans show "recessed" windows.  He asked him
053604 - what does that mean?  John did not answer.
053605 -
053606 - They hired Sam Raiter for framing contractor.  He has not done any
053607 - construction projects before.  He is in the petroleum as marketing.
053608 -
053609 -  ..
053610 - As a result of earthquake his home was damaged.  They initially hired
053611 - Lee to design.  They interviewed three contractors to build the house
053612 - Lee was designing.  A neighbor recommended WM to Llama.  They met them
053613 - on 920129.  John Wilson later introduced his partner, Mat Miller as
053614 - the designer.  WM told Llama his design plans lacked "details."
053615 -
053616 -  ..
053617 - There were 6 months of studies by City to stabilize the ground.  This
053618 - is a hillside area that posed problems of damage from sliding houses.
053619 - City went to FEMA and they paid for a wall to stabalize the area.
053620 - Wall was completed oa 911231.  They began discussions in Jan 92.
053621 -
053622 -  ..
053623 - He was chatting with Wilson & Miller while Lee was designing the
053624 - house.  WM suggested design changes.
053625 -
053626 - Sam Raiter was hired to complete work after WM was fired.  Raiter was
053627 - the framing contractor.
053628 -
053629 -  ..
053630 - How much was the cost of the house:  $400.
053631 -
053632 -                                      $450
053633 -
053634 -          $4,800 for CM not design
053635 -
053636 -
053637 -
053638 -  ..
0537 -
0538 -
0539 - 1933 Mr. Llama
0540 -
054001 - Mr. Llama recalls Ellen told John Wilson that the windows did not
054002 - look the way they wanted.
054003 -
054004 - At noon, Sam called and asked Llama to visit the site 921218.  Mr.
054005 - Llama did not like the windows.  Sam did not like the windows because
054006 - they were going different ways.  On Monday, Mr. Lee's secretary
054007 - called and said the windows do not look good.
054008 -
054009 -  ..
054010 - Mr. Llama discussed possible cost run ups with WM.  He testified that
054011 - when he confronted Mr. Wilson about unnecessary extra costs, Mr.
054012 - Wilson told him they get 10% on all costs, so they did not have
054013 - incentive to meet the budget.  Mr. Llama told Mr. Wilson that if the
054014 - job came in under budget, they would get a bonus.
054015 -
054016 -     Mr. Wilson introduced a budget and buy out schedule showing a
054017 -     total project budget of $421K.  Many of the items in the budget
054018 -     show Wilson Miller make considerable savings on behalf of Mr.
054019 -     Llama.  Mr. Llama said the figures in this document are incorrect,
054020 -     but could not recall other figures.
054021 -
054022 -  ..
054023 - Mat helped Ellen with hardware selection, after the window problem
054024 - arose.  He feels Mat should have alerted Ellen that her window
054025 - selection was inadequate.
054026 -
054027 - When Llama told John he was terminated, John said he would fix the
054028 - window problem at his own expense of approximately $5K.
054029 -
054030 -  ..
054031 - Mr. Llama testified WM managed the contract incorrectly in the manner
054032 - set out in the cross complaint, and as a result Mr. Llama feels he
054033 - incurred unnecessary and excessive expenses, as detailed in the cross
054034 - complaint.  Mr. Llama testified he never informed WM in writing they
054035 - would be termineated if they did not take corrective action.
054036 -
054037 -
054038 -
054039 -
054040 -
054041 -
054042 -
054043 -
054044 -
054045 -
054046 -
054047 -
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0541 -