In People v. Danny Victor Williams, 218 Cal. App. 4th 1038 (5th Dist., August 8, 2013) case, a fire protection contractor was convicted of violating Penal Code sections 386, 484(b), 487, subdivision (a), and Health and Safety Code, resulting in three felony convictions and numerous misdemeanor convictions for violating an assortment of State Fire Marshal regulations. There is also a pending accusation by the Contractors State License Board to revoke his contractor’s license.
Danny Williams, was the owner and RMO of American Fire Protection (“APC”), a company which specialized in inspecting and maintaining fire sprinklers and other fire protection systems. APC entered into a contract with Svenhard’s bakery to repair the then existing fire sprinkler system in a factory acquired by Svenhard’s. The fire department inspected the repairs and found numerous deficiencies in the APC’s work along with numerous fire code violations. Williams was also charged with violating Penal Code §386, which provides that any person who “willfully or maliciously constructs or maintains a fire-protection system in any structure with the intent to install a fire protection system which is known to be inoperable or to impair the effective operation of a system, so as to threaten the safety of any occupant or user of the structure in the event of a fire, shall be subject to imprisonment . . ..”
Although the Court of Appeal reversed the conviction as to Penal Code §386 violations, it affirmed Williams’s conviction under Penal Code §484(b) which provides: “Any person who receives money for the purpose of obtaining or paying for services, labor, materials or equipment and willfully fails to apply such money for such purpose by either willfully failing to complete the improvements for which funds were provided or willfully failing to pay for services, labor, materials or equipment provided incident to such construction, and wrongfully diverts the funds to a use other than that for which the funds were received, shall be guilty of a public offense …”
APC had charged Svenhard’s bakery for fixing five zones of the sprinkler system, but failed to perform at least half of the work required. The Court of Appeal found APC had not earned all of the funds it had received for the repair work and, thereby committed an unlawful diversion of funds.
The Court of Appeal’s analysis of what constitutes an unlawful diversion of funds resulting in a violation of §484(b) is broad enough that it could lead to prosecutions in many construction projects subject only to the respective District Attorneys’ having time and interest in pursuing them.
Advice: Be aware of these Penal Code Sections and the possibility of their use. I have long argued for shoring and scaffolding companies I’ve represented that the failure to return materials after the termination or expiration of a lease or rental constitutes a violation of Penal Code §484 so I’m not surprised by this decision. I assume the more egregious the violation, the more likely a prosecution.
Robert