From: East Bay Times
By: Matt Hamilton, 4/21/2017
SACRAMENTO — Finding that it had willfully ignored building plans, the state on Friday revoked the license of the general contractor who built a downtown Berkeley apartment complex where six people died and seven were hurt in 2015 when a balcony collapsed, sending them sprawling to the street below.
Segue Construction of Pleasanton agreed to the terms in a settlement with the California State Contractor’s Licensing Board, the agency announced Friday. The company was accused of using cheaper, weaker material on the balcony than plans specified. That material became waterlogged after a sub-subcontractor failed to install a membrane to keep out moisture.
The building was under construction from 2005 to 2007.
Two Segue officials agreed to reimburse more than $100,000 in investigative costs, wait five years before applying for a new contractor’s license and post a “disciplinary bond” of between $15,000 and $150,000 if they do.
Former CEO Kirk Alan Wallis agreed pay the state $99,950 if he were to seek another contractor’s license. David Michael Dunlop, Segue’s managing partner, agreed to pay up to $15,000 under the same terms.
A Segue attorney, Alicia Kennon, on Friday wrote in a statement that Segue did not agree with the state’s findings, but that defending them “would be impracticable” and opted to settle the matter. Citing ongoing litigation in wrongful death lawsuits, she said company officials could not be interviewed.
She touted the company’s two decades-long history of building more than 6,000 units in the greater Bay Area, with “flawless records” with state regulators. As general contractor, Segue did not perform any physical labor on its projects, instead relying on groups of subcontractors, she wrote.
Court records showed that Segue paid $6.5 million to settle two lawsuits alleging that decks on buildings where it was the general contractor rotted prematurely in the years leading up to the Berkeley collapse.
Bill Leys, a San Luis Obispo-based deck expert who has followed the Berkeley tragedy, called the settlement to revoke the license “unprecedented.”
“This is very rare. Usually, (companies) fight tooth and nail, extending the process by years … while continuing to contract,” Leys said. The settlement “shows that the proof (the state) has was overwhelming against Segue Construction. While they saved their own skin by settling, they still have to look themselves in a mirror every morning after saying good morning to their children.”
In a later tweet, Leys wrote that the state “chickened out” and should have sought to ban Segue’s owners from the construction trade permanently.
Five Irish nationals visiting Berkeley for the summer died in the collapse along with a woman from Sonoma County. Olivia Burke, 21; Eoghan Culligan, 21; Niccolai Schuster, 21; Lorcan Miller, 21; and Eimear Walsh, 21, were from Ireland. The other victim was Ashley Donohoe, 22, of Rohnert Park.
They and others attending a party had crowded on the small, fifth-floor balcony at the Library Garden Apartments overlooking Kittredge Street on June 16, 2015, shortly after midnight. The deck suddenly tore away from the building.
Alameda County District Attorney Nancy O’Malley opted to not file criminal charges in the deaths following a short investigation. In the wake of the deaths, state lawmakers passed a law requiring the Division of Occupational Safety and Health and the state licensing board to share information about citations or other actions taken against a contractor.
The original bill would have required contractors to release the amount of lawsuit settlements reached out of court, but that provision was killed under pressure from the construction lobby.
Eustace de Saint Phalle, a lawyer representing the families of several victims, wrote in an email Friday afternoon that additional legal safeguards to protect the public are still needed.
His clients are “still hopeful that additional legislation will be signed to prevent secret settlements by contractors who are determined to have done negligent work. It is important that the contractors licensing board is made aware of these types of settlements so that the board can be proactive in regulating contractors in the future,” de Saint Phalle wrote.