ALJDEC

00F-0519-ROC · Registrar of Contractors · 2000-03-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 7, 2000. APPEARANCES: Carl and Linda Johnson, the Complainants; Lewis King, Registrar of Contractors Inspector; Steve Richman, Attorney for Respondent; Shaun Chlarson, Director of Construction for Respondent; Jim Speros, witness; Scott Wells, witness; Gene Salario, witness; and Les Woody, witness. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________ Carl and Linda Johnson did not establish that Pulte Home Corporation (“Pulte”) improperly installed the fascia on their home resulting in damage. Therefore, I recommend that the Registrar of Contractors close the Johnson’s Complaint without taking action against Pulte’s license. FINDINGS OF FACT 1. Carl and Linda Johnson contracted with Pulte Home Corporation in July 1997 for the construction of their home. In September 1997, they moved in. By August 17, 1999, birds had pecked apart places in the exterior fascia on the home prompting them to file a Complaint with the Registrar of Contractors that day. The Complaint stated as its basis, “Exterior fascia under eaves in front and back are being pecked apart by birds. Builder says they are not responsible for birds. I believe that the workmanship is defective. See attached documents and pictures.” 2. After visiting the site, an Registrar of Contractor’s Inspector, Lewis King, issued a Corrective Work Order on October 26, 1999. While it found no violation by Pulte for damage by birds, it stated that the fascia was “not applied to the manufacturer’s specifications/limitations” and ordered Pulte to correct the fascia by the appropriate means. Pulte maintained that it was not responsible for any corrections to the home. Ultimately, the Office of Administrative Hearings set a hearing on the merits of the Complaint for March 7, 2000. 3. At hearing, the Johnson’s submitted photographs of the home that showed holes in the exterior fascia. They also submitted evidence that the fascia was installed by nailing foam decorative forms to the eaves, covering the foam with a product called Sto brand R-wall Primer/Adhesive-B (“Sto”) by spraying the Sto on as a skim coat, covering that with a cement- lime mixture followed by paint. The Johnsons argued that the skim coat was the incorrect application. The proper application, they argued, would have been an Exterior Insulation and Finish System (“EIFS”) or a one-coat stucco covering like on the outer walls of the home. They submitted manufacturer’s instructions on a Sto EIFS installation (to which Pulte objected stating that this was not an EIFS and so those instructions did not apply), a manufacturer instruction pamphlet, testimony and the report of an expert witness, and a letter from a Sto representative. 4. Mrs. Johnson testified that the EIFS is the only reference she could find in the manufacturer’s instructions. Therefore, it appeared to her that EIFS is the only proper installation of the Sto product. Registrar of Contractor’s Inspector King testified that he found the installation improper because one of the limitations in the manufacturer’s instruction pamphlet states that Sto should not be used on a slope as deep or wide as the Johnsons’ fascia. Pulte’s witnesses referred to the pamphlet in rebutting this testimony. They pointed out that the pamphlet does give instructions on doing a skim coat and concluded that this is a proper application. The Johnsons’ expert, Jim Speros, testified that he read the pamphlet’s instructions on skim coating to refer to touching up a base coat application; however, the pamphlet does not specify any such limitation to Sto’s use. Regarding the slope limitation, Pulte offered a letter from the manufacturer which stated that the limitation is intended for top surfaces only due to weathering and exposure. The letter stated that the slope limitation does not apply to exterior fascia details. 5. Mr. Speros also testified regarding other criticisms he had with the installation of the fascia such as whether the black paper under the foam completely covered the home and whether the house had an appropriate moisture barrier. These problems, however, would not have caused the damage complained of and cannot, therefore, be included in this Complaint. He submitted photographs of the home stating that there is peeling in some areas where the birds may not have pecked. He also pointed out a crack in the finish. Mr. Speros testified that the Sto EIFS instructions contain a list of “nevers” (Exhibit 2) that include never penetrating the insulation foam and never leaving the foam unprotected without mesh. Under cross examination, Mr. Speros admitted that he has seen houses where birds have pecked through a one-coat stucco system. 6. The letter from the Sto representative referred to “pop-outs”. Though the term is sometimes inappropriately applied to decorative fascia in the eaves, it is actually a decorative application in the middle of a wall. The Sto representative stated that pop-outs should have the same covering as the wall with no interruption of the stucco system. He included a pamphlet which illustrated this, but for pop-outs, not for eaves. 7. Mr. Johnson testified that the width of the Sto application was 10/1000ths of an inch; however, the instructions for a skim coat specified that the width should not exceed 1/16th of an inch with no minimum. 8. Scott Wells applied the Sto to the Johnsons’ home. He testified that he was trained in EIFS applications and was also trained in skim coat applications. His experience and research assured him that the skim coat application was appropriate and was not prohibited or recommended against by the manufacturer. He agreed that this was not an EIFS application. In his experience, birds were a problem that could not be addressed by a different type of installation. He had seen birds peck through a one-coat stucco system as well. 9. Gene Salario sold the Sto to Scott Wells. He testified that he is an authorized dealer of Sto products and agrees with the appropriateness of its application as a skim coat. He stated that the skim coat is only there to protect the foam from the elements. Since it is acrylic, it should be applied in a thin layer as a thicker layer will tend to crack and sag. It is also an adhesive for the cement-lime coating to cling to. He noted that stucco may crack as a normal part of its settling process and that is does require upkeep. He also had seen birds peck through stucco. Noting that the pamphlet did not prohibit Sto’s use as a skim coat, he stated that he would not recommend it if he thought it was being used incorrectly. 10. Shawn Chlarson, Pulte Director of Construction, testified regarding the proper reading of detail drawings in construction. In his opinion, the problem here was the birds. Even the chipping mentioned by Speros, he believed, was caused by birds that started pecking and then flew away before pecking deeper. He testified that birds in areas such as the Johnsons’ are looking for nests or for insects and there is little one can do about them. Since contractors cannot do anything about bird problems, Pulte did not accept responsibility for the Johnsons’ damage. CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§32-1104(A)(4), 32-1154(B) and 32-1156. 2. The Citation and Complaint issued by the Registrar of Contractors in this matter alleged potential violations of A.R.S. §32-1154(A), (3), (7) and (23) and A.A.C. R4-9-108. 3. The Arizona Revised Statutes at §32-1154(A)(3) provides grounds for suspension or revocation of a contractor’s license for “[v]iolation of any rule adopted by the registrar”. The only applicable rule in the Arizona Administrative Code in this case refers to workmanship standards. A.A.C. R4-9-108. 4. The Arizona Revised Statutes at §32-1154(A)(7) provides for suspension or revocation of a contractor’s license for the “doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured”. 5. The Arizona Revised Statutes at §32-1154(A)(23) provides grounds for suspension or revocation of a contractor’s license for failure to take appropriate corrective action on a Corrective Work Order without valid justification and within a reasonable period of time. 6. Pulte does not dispute that the Johnsons’ home has suffered substantial injury by birds pecking at it. It does, however, dispute the claim that improper installation of the fascia to the house is the cause of the damage. Pulte’s license can only be disciplined for a wrongful or fraudulent act or for poor workmanship. If there was poor workmanship or a wrongful or fraudulent act, then the license could also be disciplined for failure to take corrective action. 7. The burden of proof at an administrative hearing is generally upon the Complainant. Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). Further, the standard of proof at hearing is a “preponderance of the evidence”. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). 8. In this case, Carl and Linda Johnson did not establish that the damage to their home was the result of improperly installed fascia. While EIFS appears to be the general use for the Sto product, it was not used improperly for the non-EIFS application here. An EIFS application is a superior quality application, but that does not mean that more inexpensive applications are improper. The application here of a skim coat followed by a texture coat was sufficient for the needs of the home under its eaves. Further, the birds could have pecked through another system as much as this one. Although there are chips in the paint, the level of damage from the birds is so great that it is not clear from the evidence what caused them, the birds or something else. RECOMMENDED DECISION Because Complainants offered insufficient evidence of causation of the damage or of poor workmanship or wrongdoing, the Registrar of Contractors should not discipline Pulte’s license.

Done this day, March 10, 2000. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2000, to:

Registrar of Contractors Michael P. Goldwater ATTN: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826