ALJDEC

00F-2622-ROC-res · Registrar of Contractors · 2001-04-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 19, 2001. APPEARANCES: COMPLAINANT (Sunrise Custom Homes, Inc.): did not appear. HOMEOWNERS (Charles and Pat Peterson): by Dow Glenn Ostland, Esq. RESPONDENT (Ermanno Ciummo Construction Co.): by Ermanno Ciummo, sole proprietor.

ADMINISTRATIVE LAW JUDGE: Anthony Halas _____________________________________________________________________

Hearing was convened to determine whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors. Evidence and testimony were presented, and based on the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Decision are made:

FINDINGS OF FACT 1. Respondent Ermanno Ciummo (Ciummo) is a sole proprietor dba Ermanno Ciummo Construction Co. He is qualifying party and holds Arizona Contractor’s License No. 075198, Class B, which was issued by the Registrar of Contractors (Registrar) on February 1, 1988. The license is currently active and has been so at all times relevant. 2. In April, 1998, Charles and Pat Peterson (the Petersons) contracted with Complainant Sunrise Custom Homes, Inc. (Sunrise), which holds Arizona Contractor’s License No. 105847, Class B, to have that general contractor build their home (the Peterson residence) at 11964 East Casitas Del Rio Drive, in Scottsdale, Arizona. The Petersons moved into the substantially completed home in November, 1999. 3. Prior to the fall of 1999, Ciummo had never worked for or been associated with Sunrise Custom Homes, Inc. At that time, he was contacted by Jean Klien, a principal for Sunrise, and as a result, he provided a proposal to Sunrise to perform certain exterior concrete work (patio, driveway, walkway and porch) at the Peterson residence, for the sum of $7596.00. Sunrise accepted the proposal; Ciummo’s crew substantially completed the work prior to the Petersons’ move-in date, and Sunrise paid Ciummo a discounted amount on the proposal price. (See Exhibit 1, a partially illegible photocopy of Ciummo’s proposal).[1] 4. In January, 2000, (after a courtesy inspection on December 16, 1999, by Inspector Joseph Cotton for the Registrar of Contractors at the request of Sunrise) the Petersons filed a complaint with the Registrar against Sunrise Custom Homes, Inc. in Case No. 00-1850[2], alleging a number of deficiencies, including workmanship deficiencies in the concrete work subcontracted to Ciummo. 5. A. Premised on the Petersons’ complaint against it, Sunrise Custom Homes, Inc. then filed the complaint herein with the Registrar against Ermanno Ciummo Construction in Case No. 00-2622, alleging deficiencies in the concrete work done on the drive, entry, walkway, and rear patio. B. On May 25, 2000, Inspector Cotton conducted a jobsite inspection of the concrete in question, C. On May 26, 2000, Inspector Cotton issued a Corrective Work Order to Ciummo Construction Co., directing that the following action be taken within fifteen days: 1. Driveway finish unsightly in several areas, with footprints, voids and trowel defects: Contractor to correct by appropriate means. 2. Front sidewalk and entry slab: Salt finish inconsistent and unsightly. Footprints unsightly. Contractor to correct by appropriate means. 3. Back patio: Three panels contain compound cracks. One panel with unsightly footprints. Contractor to correct by appropriate means.

D. When the matter was not administratively resolved, the Registrar issued CITATION AND COMPLAINT in Case No. 00-2622, charging Respondent Ciummo Construction Co. with possible violations of A.R.S. § 32- 1154.A.3 (and A.A.C. R4-9-108, the workmanship rule), A.7, and A.23. E. On Ciummo’s timely answer to the CITATION AND COMPLAINT, this case was consolidated for hearing with Case No. 00-1850.[3] 6. At hearing, no one appeared on behalf of Complainant Sunrise Custom Homes, Inc. However, the Petersons appeared, with counsel, and offered sworn testimony and evidence (Exhibits A through G) in support of the allegations of the CITATION AND COMPLAINT. In essence, the Petersons’ testimony and evidence demonstrated workmanship deficiencies of three sorts, all consistent with the Registrar’s Corrective Work Order: A. In preparing the soil, Ciummo had failed to conform to the minimal standard of using ABS as the substrate upon which to pour the cement, but instead had just used dirt from the jobsite, resulting in settling and progressive cracking in excess of standard (See Exhibit G); B. In constructing the back patio, Ciummo had failed to include expansion joints for runs in excess of 10 feet, contrary to standard (See Exhibits B and G); C. Ciummo’s concrete finishing work in all areas was of substandard quality and inconsistent, resulting in salt-finish clumps and voids, poor trowelling, poor edge-work, cracking and discoloration, and numerous footprints (See photographs in Exhibits A, B, C, and D). 7. The Petersons asserted that Ciummo’s offer to correct by overlaying an acrylic coating would only provide a temporary cosmetic and stop-gap solution and would not address the more serious foundational or structural deficiencies in preparing the substrate, which if uncorrected would soon result in excessive cracking through the acrylic coating as the concrete continued to settle on its insufficient dirt substrate. They also asserted that such an acrylic coating had never been considered as an acceptable finish to them, even prior to construction. 8. Respondent Ermanno Ciummo appeared on his own behalf, and offered sworn testimony and evidence (Exhibits 1 and 2). He did not dispute the particular deficiencies described by the Petersons in their testimony and demonstrated in their photographs, except to the extent that: A. He did not believe his crew had left the footprints; B. He had been instructed by Sunrise to lay dirt instead of ABS before pouring the cement, which instruction was contrary to the advice he had given Sunrise; C. He asserted that the Registrar’s standards did not require expansion joints in concrete, no matter what the length of a run; and, D. He believed the concrete deficiencies could essentially all be corrected by overlaying the existing concrete with an acrylic coating. 9. Although he conceded deficiencies in the concrete, Ciummo’s primary contention was that his license should not be disciplined because he had been acting not as a licensed contractor or subcontractor but only as an individual in making the concrete proposal (Exhibit 1) to Sunrise Custom Homes, Inc., and in then hiring a crew to work piecemeal (by the square foot) in performing the work. 10. Ciummo asserted that he had not used his license in several years, and that Sunrise was aware he was providing piecemeal workers without insurance.

APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors charged Respondent with possible violations of A.R.S. § 32-1154.A.3 (and A.A.C. R4-9-108, the workmanship rule), A.7, and A.23. Those statutory sections require that a holder of a license or a person listed on a license shall not commit the following:

3. Violation of any rule adopted by the Registrar. … 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. … 23. Failure to take corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving written directive from the Registrar.

A.A.C. R4-9-108 is named as the rule violation charged pursuant to A.R.S. § 32-1154.A.3. That rule provides that all work shall be done in a professional and workmanlike manner, and in accordance with any applicable building codes and professional industry standards.

CONCLUSIONS OF LAW 1. The Registrar of Contractors has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et. seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154. 2. To warrant such sanctions by the Registrar, a preponderance of the evidence must demonstrate that Respondent violated one or more of the statutory sections cited. Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (Rev. 6th ed. 1990). 3. The uncontroverted evidence of record demonstrates, by greater than a preponderance, that the concrete work which Ciummo subcontracted to perform fails to meet minimal workmanship standards with regard to preparation, construction, and finish, as determined in Findings of Fact No. 6, above. Therefore, a violation of A.R.S. § 32-1154.A.3 (and A.A.C. R4- 9-108) has been proven. 4. Given the significant degree to which the evidence demonstrates that the concrete work fails to meet workmanship standards, it is further determined that the Petersons have been substantially injured by Respondent Ciummo’s wrongful act, and a violation of A.R.S. § 32-1154.A.7 has therefore been proven. 5. Respondent Ciummo has contended that most corrective action necessary could essentially be cosmetically accomplished by overlaying the existing concrete with an acrylic coating. The Petersons chose not to allow such corrective action, believing the only acceptable action would be to remove and replace the concrete. Given that impasse, no action has been taken by Ciummo. 6. Because it is generally not for the Registrar to direct a contractor on the means and methods by which corrective action is taken to meet the end result of minimal workmanship standards, it is concluded by the undersigned that Respondent Ciummo has provided just-sufficient valid justification for failing to take corrective action within a reasonable period after the Registrar’s Corrective Work Order, through the time of hearing. Therefore, no violation of A.R.S. § 32-1154.A.23 has been proven. 7. Nevertheless, the testimony and evidence at hearing now demonstrates convincingly a reasonable basis for the Petersons to have decided that an acrylic coating is an insufficient cosmetic remedy to address the structural deficiency in preparation in which the concrete was laid over a substandard dirt substrate. Therefore, based on the evidence presented, it is further concluded by the undersigned that while Ciummo’s proposed acrylic coating might temporarily remedy certain of the finish deficiencies, it will not suffice as the corrective action necessary to bring the underlying concrete substrate preparation and construction into minimally-acceptable workmanship standards sufficient to prevent the likely occurrence of excessive cracking in the near future. 8. Presumably in order to shield his license (Arizona Contractor’s License, No. 075198, Class B, active at all times relevant to this proceeding) from discipline by the Registrar, Respondent Ciummo’s primary contention is that the concrete subcontract work on the Peterson residence was somehow done outside or beyond the scope of that license. However, there is no doubt that the scope of that residential contractor’s license includes the subspecialty of concrete work. Ciummo’s contention is simply not well taken by the undersigned, for his explanation certainly does not meet any definition pursuant to A.R.S. § 32-1121 of a person not required to be licensed to perform that work, but certainly does meet the statutory definitions of a residential contractor required to be licensed as set forth at A.R.S. § 32-1101 and A.R.S. § 32-1102. 9. Indeed, since his work on the Peterson residence meets no exception to contracting work which otherwise requires a license, any conclusion that Ciummo was somehow acting without a license in performing that work would establish a violation of § 32-1151, and subject him to civil penalties pursuant to A.R.S. § 32-1166, and criminal fines pursuant to A.R.S. § 32-1164.

RECOMMENDED DECISION On the basis of the foregoing, IT IS RECOMMENDED that, commencing on the effective date of the Registrar’s Order entered in this matter (thirty- five days after issuance), that the Class B license of Respondent Ciummo be suspended until and unless the Registrar of Contractors receives written proof that Respondent has accomplished appropriate, effective, and workmanlike action to correct those items determined above in Findings of Fact No. 6 and Conclusion of Law No. 3. IT IS FURTHER RECOMMENDED that if Respondent accomplishes the required work in a competent and workmanlike manner on or before the effective date of the Registrar’s Order, or is unreasonably denied access for such purpose, the above license suspension shall not take place. IT IS FURTHER RECOMMENDED that, in addition to the foregoing, any continuation or restoration of Respondent’s contracting rights shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of 24 months, including future renewal periods, in the amount of $500.00, such bond or deposit to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. § 32-1152. Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above- provided 24 month period and only if no claims are then pending. Done this day, April 23, 2001.

______________________________________ Anthony Halas Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2001, to:

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

By ___________________________ ----------------------- [1] Note: both Ciummo and the Petersons agreed he had not met or discussed the concrete work to be done with them at any time before it was done. [2] When Case No. 00-1850 was not resolved administratively, the Registrar issued a CITATION AND COMPLAINT charging Respondent therein, Sunrise Custom Homes, Inc. with possible violations of A.R.S. § 32-1154, including subsection A.3 (and A.A.C. R4-9-108, the workmanship rule). Upon timely answer to the CITATION AND COMPLAINT by Respondent Sunrise (acknowledging certain workmanship deficiencies and efforts to correct them), the matter was eventually set for consolidated hearing on April 19, 2001 (Docket No. 00F-1850-ROC) with the instant matter (Docket No. 00F-2622-ROC). On April 16, 2001, Sunrise Custom Homes, Inc. filed a Petition for Bankruptcy in federal court. As a result of the automatic stay imposed pursuant to § 11 U.S.C. 362(a), Docket No. 00F-1850-ROC was vacated from the calendar of the Office of Administrative Hearings and remanded to the Registrar of Contractors with the recommendation that Case No. 00-1850 against Respondent Sunrise be closed unless the automatic stay were lifted. Case No. 00-2622, with Sunrise as Complainant, proceeded to hearing. [3] See footnote 1.

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