ALJDEC

00F-F0233-ROC · Registrar of Contractors · 2000-08-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 14, 2000, with the record held open through July 21, 2000. APPEARANCES: COMPLAINANT: Stephanie McGrath, on her own behalf. RESPONDENT: by Whitney Cunningham, Esq., with Arthur Ortiz, sole proprietor.

ADMINISTRATIVE LAW JUDGE: Anthony Halas _____________________________________________________________________ The hearing in this matter was convened to determine whether Respondent Arthur Ortiz, dba Art’s Painting, violated state law as alleged by Complainant Stephanie McGrath 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. Complainant Stephanie McGrath (McGrath) is the owner, builder, and resident of a Santa Fe-style home at 2200 Tissaw Road, in Cornville, Arizona. 2. Arthur Ortiz (Ortiz) holds Arizona Contractors License No. 113614, Class C-34, and does business as the sole proprietor of Art’s Painting. 3. When the home was originally constructed in 1996, McGrath subcontracted directly with Ortiz in July of that year to paint the exterior, over a sand-finish stucco applied by another sub-contractor. The subcontract also included painting of the interior of the residence. Ortiz was not associated with the work of the framing and roofing subcontractors hired by or for McGrath. 4. The interior painting has always been acceptable to McGrath, but the exterior painting has previously been the subject matter of a complaint with the Registrar of Contractors (Registrar) in Case No. F99-0074, in which the Registrar’s Inspector Mark Schweiger (Schweiger) issued a Corrective Work Order on November 16, 1998, relative to workmanship standards. To comply with that directive, Ortiz repainted the entire exterior of the residence, and the case was closed. 5. Subsequently, on January 13, 2000, McGrath filed a second complaint (Case No. F00-0233, the subject matter herein) against Ortiz, again relative to the exterior painting, alleging that the paint was bubbling and blistering and not adhering properly to certain of the exterior surfaces: worse on the east wall of the apartment and east and west walls of the garage, with some small bubbles on the garage south wall, and with the north and east walls of the house OK. McGrath expressed concern with caulking she thought had been done by Ortiz during his original remedial work, and that he had repainted too thickly in areas, and also her further concern that moisture seepage was causing the paint to deteriorate. 6. To address the complaint, Inspector Schweiger conducted a jobsite inspection on January 31, 2000, in the presence of McGrath, Ortiz, and K.W. Lunsford (Lunsford), a painting consultant retained by Ortiz. Based on his findings, the inspector then issued a Corrective Work Order on February 3, 2000, which directed that: From the facts now before us, the repainted residence appears to have areas of bubbled, blistered, and scraped off paint contrary to Industry Standards.

The Contractor shall properly prepare and refinish affected areas, matching color as closely as possible. Where finish corrections affects the majority of the wall or area, the whole area should be refinished.

7. After both parties requested administrative hearings, the Registrar then issued a CITATION AND COMPLAINT on March 1, 2000, charging 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. 8. Ortiz timely answered the CITATION AND COMPLAINT on March 3, 2000, asserting that moisture intrusion was the cause of the problem, such that repainting again would not resolve it, and that the original contract did not call for him to provide perpetual maintenance of the exterior paint. 9. Hearing was therefore convened on July 14, 2000, at which time Complainant McGrath appeared and testified, and offered Exhibits 1 through 7, consisting of photographs, documents, and demonstrative paint samples. All such exhibits were marked and admitted, and considered by the undersigned. 10. Respondent Ortiz appeared and testified, represented by counsel, and presented the testimony of Lunsford as an expert in paint and exterior finishes. Respondent also offered Exhibits A through F, consisting of photographs and documents, which were marked and admitted, and considered. 11. The Registrar’s Inspector Schweiger also testified relative to his jobsite findings, conclusions, and Corrective Work Orders in each complaint. 12. In this case, the undersigned finds that Inspector Schweiger, Respondent Ortiz, and witness Lunsford all possess expertise - to varying degrees - relative to the application of exterior paint, and industry standards affecting its use, and that Complainant McGrath, although observant, does not possess such expertise. 13. On the basis of the evidence presented, there is no doubt that both the original exterior elastomeric paint (chosen and applied by Respondent), and the elastomeric paint used to repaint (with that paint chosen by Complainant and applied by Respondent) is failing to adhere to the stucco to which it was applied, and/or the stucco itself is deteriorating, worse in some areas than others, generally consistent with degree of exposure to the warmth of the sun. This finding is based on the consensus of the testimony of all those with the opportunity to view the exterior paint and stucco on site, and upon review of the photographic and demonstrative exhibits by the undersigned. 14. The probative evidence does not demonstrate any failure by Respondent to meet contract specifications, or any inherent defect in the two different brands of elastomeric paint originally applied or subsequently used in the repainting, or any failure to meet workmanship standards in the manner, method and sufficiency of the paint application during the original or repainting processes. This is so, despite Complainant’s allegations to that effect and her contention that the repainting was too thinly applied. 15. The evidence as a whole is found to demonstrate that the failure of the paint to satisfactorily adhere to the exterior structure of the house, both originally and after repainting, has been caused over time most significantly by moisture intrusion under the paint, most likely from exterior voids and cracks related to insufficient control joints, insufficient use of weep screeds or other construction deficits unrelated to Ortiz’s application of the paint, and none of which were reasonably visible or apparent to him as deficiencies prior to first painting the house. 16. The undersigned finds that prior to the original paint application, Respondent Ortiz did not observe any such known or unknown deficiencies, and made no written or verbal disclaimer to Complainant McGrath about whether such existed. Ortiz therefore accepted the stucco subsurface, and other components of the construction, as then existing. 17. It is further found that after the first CWO (in Case No. F99- 0074) but before (and after) repainting the residence, Ortiz advised McGrath of his concerns that water intrusion resulting from construction problems - and not the original paint or painting process - was the cause of the paint’s failure to adhere to the exterior stucco sub-surface. 18. The expert testimony of Lunsford, based on his extensive experience and knowledge, confirms that such moisture intrusion results in “coating fatigue” over time as water-soluble alkaline salts migrate from the stucco subsurface to chemically deteriorate the bonding of the paint to the stucco (or the stucco itself) - even in the absence of any defect in the paint or its application - after which the bubbling and blistering becomes apparent, as here. // // // //

APPLICABLE LAW A.R.S. § 32-1154.A provides, in pertinent part, as follows: A. The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: … 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, Complainant McGrath must demonstrate by a preponderance of the evidence that Respondent Ortiz violated any one 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. This tribunal acknowledges that there is a principle in construction and generally recognized by the Registrar of Contractors under appropriate circumstances, that a contractor, performing work over a surface constructed and/or prepared by another contractor, accepts the surface at the time of the subsequent work, based on the opportunity to inspect for any visible flaws or defects before performing such work. 4. However, such principle does not necessarily impose strict liability on the subsequent contractor if the subsurface should fail or contain inherent properties which cause damage to the subsequent work after that work was accomplished over said subsurface. This is so, particularly if the contractor sufficiently warns of or disclaims the likelihood that the subsurface will fail, or already has. 5. In consideration of the history of this and the original complaint, the undersigned concludes that, given Ortiz’ failure to disclaim prior to first painting the home, he accepted the stucco (and framing and roofing) subsurface such that he was properly directed to correct the original paint when it evidenced bubbling and blistering, which direction he complied with by repainting the entire structure, and the prior complaint in Case No. F99-0074 was then closed. 6. However, in the instance of this complaint in Case No. F00-0233, it is concluded that Respondent Ortiz, before accomplishing such repainting, sufficiently disclaimed to Complainant McGrath that moisture intrusion, unrelated to the original painting or subsequent repainting, was the cause of the paint failure, and that such moisture resulted from subsurface construction deficiencies (in the stucco, framing, or roofing), such that he did not continue to accept the subsurface for purposes of perpetual maintenance of the exterior paint. 7. For that reason, the preponderance of the evidence does not sustain a conclusion that Respondent Ortiz violated any provision of A.R.S. § 32-1154.A as charged in the CITATION AND COMPLAINT. // // // // // //

RECOMMENDED DECISION On the basis of the foregoing, IT IS RECOMMENDED that the CITATION AND COMPLAINT in Case No F00-0233 be dismissed. Done this day, August 4, 2000.

______________________________________ Anthony Halas 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