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SC&A Construction, Inc. v. Department of Licenses and Inspections of City of Wilmington

Superior Court of Delaware, New Castle

April 11, 2014

SC&A CONSTRUCTION, INC., Petitioner/Appellant,

Date Submitted: February 7, 2014

Upon Consideration of Appellant's Writ of Certiorari.

Donald L. Logan, Esquire and Victoria K. Petrone, Esquire, LOGAN & PETRONE, LLC, New Castle, Delaware. Attorneys for Petitioner/Appellant.

Brenda James-Roberts, Esquire, CITY OF WILMINGTON LAW DEPARTMENT, Wilmington, Delaware. Attorney for Respondents/Appellees.


Charles E. Butler, Judge


This action was initiated by Petitioner SC&A Construction, Inc. ("SC&A") pursuant to the filing of a writ of certiorari challenging a decision of the Board of License and Inspection Review ("Board"). The Board affirmed an order of the Department of Licenses and Inspections ("L & I"), which required SC&A to obtain an upgraded permit to include work beyond its original contract permit and to conduct additional inspections for the completed work. For the reasons set forth below, the Board's decision is REVERSED and REMANDED for further proceedings consistent with this opinion.


On September 30, 2010, a tree fell in the yard of a residence owned by Charles and Velda Potter ("homeowners"), causing substantial damage to the house. The Potters retained SC&A to perform construction services to repair the damage. On March 11, 2011, SC&A applied to the City of Wilmington ("City") for a building permit to perform repairs to the homeowners' roof based on a total contract valuation of $74, 000.

Although the permit recites that a copy of the contract between SC&A and the homeowners is attached, the attachment has not survived in this record. The City issued the permit. For reasons again not clear in this record, the scope of the work under the original permit and contract expanded. In May 2011, SC&A and the homeowners entered into a new, American Institute of Architects' (AIA) contract in the amount of $214, 367. SC&A readily concedes that it never upgraded the March 11th permit with the City or pulled a new permit to reflect the increased contract valuation.

Over the next several months of construction, there were numerous change orders, delays, and (apparently) concerns by the homeowners. The homeowners contacted L & I, which responded by issuing an Assessment Report dated September 28, 2012. In that Report, L & I noted that SC&A had failed to obtain the upgraded permit and had failed to request the "required inspections" during the construction process. Although L & I had, in fact, performed several inspections, its Assessment Report required SC&A to obtain both an upgraded permit and to allow for a thorough inspection of all completed work. SC&A appealed the Assessment Report to the Board, and the Board[1] convened a hearing.

At the hearing before the Board, the City took a somewhat different tack. The City now claimed that the value of the contract was actually $280, 516.42, not the $214, 367 in the original AIA contract. The City's reasoning was that certain items of work performed by other contractors (and paid for separately by the homeowners) should be added to the SC&A contract valuation. These separate contracts covered work on the chimney, water/mold remediation, and some electrical work. The City also contended that additional inspections were needed. SC&A argued that the additional work was outside the scope of the amended contract and not subject to the additional permit fees or inspections. However, it conceded that the contract price had risen from the original $74, 000 figure and it had not gone back to the City to amend the permit.

One area receiving more attention than it deserved was SC&A's change order seeking some $14, 000 in "supervision fees" which was never paid by the homeowners. Whether that fee should be included within the permit valuation calculation was the subject of considerable testimony.

The Board issued a written order denying SC&A's appeal, with two of the three members finding that all of the work that was performed on the premises by other contractors should be included in the valuation of the SC&A contract and consequent permit valuation. One member in the majority felt that SC&A's permit valuation should exclude the $14, 000 permit valuation, but the remaining items should all be included. In addition, the majority of the Board ruled that the additional work performed on the premises required ...

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