ALJDEC

00F-F0322-ROC · Registrar of Contractors · 2001-03-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 27, 2001 APPEARANCES: Complainant Jordan Road Owner’s Association appeared, through its President Larry Cepak. Steven J. Keilman, Qualifying Party, appeared for Respondent Genesis Custom Coatings, Inc. ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn _____________________________________________________________________ The hearing in this above captioned matter was held for the purpose of determining whether Respondent was in violation of statute as alleged by the Complainant and as Cited by the Registrar of Contractors. Evidence and testimony were presented, and based upon review of the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. Respondent is the holder of a Class C-05 specialty restricted license issued by the Registrar of Contractors (Registrar). This license is restricted to caulking, waterproofing and specialty coating. 2. Respondent was the contractor for a roofing coating system at the condominium units at 720 Jordan Road in Sedona, Arizona. The new roofing coating was placed on the roofs of Unit #1, Unit #2, and a portion of Unit #3. 3. The new roofing was sought due to some roofing problems then in existence, on the seventeen year old units [Units #1 and #2] and a portion of the twelve year old Unit #3. The Units had been built by two different builders and had differing roofing materials, although fewer problems were then being experienced with the roofing on Units #3 and #4. The roofing on Units #1 and #2 was built-up asphalt consisting of felt, tar and gravel. The roof areas are of varied elevations, with some draining to other roofs and some draining to the edges. 4. The initial installation of this coating roofing system was pursuant to a written contract in January 1996. The contract called for removal of loose granules (existing); repair of (existing) failed seams, penetrations and transitions; application of an acrylic base coat “as required but no less than one gallon per 100 S.F. and allow to dry”; replacement of granules; application of one acrylic top coat “as required but no …” . The contract specified a warranty of “GacoFlex Five plus Five Guarantee. The warranty was not submitted to the hearing record. 5. The coating materials used on the roofing project were manufactured by Gaco Western, and the project specifications were “to be performed per GACO Western’s standard specs for this type of work.” 6. The parties do not dispute that the manufacturer’s area representative [Bob Nielson] at the time indicated that they had not had problems with such a coating application as was being considered for this repair application. 7. Respondent performed the work in January and February 1996 under the specifications given by the manufacturer, and was even assisted or directed in the work by Mr. Nielson. 8. In April 1997, some cracking of the roofing coating was discovered, apparently in connection with some cracking and water problems at Units #1 and #2. Complainant notified Respondent, and repairs were made by Respondent. The repairs were repairs of cracks and/or re-coatings of affected areas. 9. In August of 1997, a leak was discovered in Unit #1 at about the same location as previous leaks. Complainant again notified Respondent, and Respondent again made repairs. The repairs were repairs of cracks and/or re-coatings of affected areas. 10. In May 1998, additional or continued leaking or cracking of the roofing coating was occurring. Complainant notified Respondent, and repairs were made by Respondent. The repairs were repairs of cracks and/or re-coatings of affected areas. 11. In March 1999, additional or continued leaking or cracking of the roofing coating was occurring. Complainant notified Respondent, and repairs were made by Respondent. The repairs were repairs of cracks and/or re-coatings of affected areas. 12. In July 1999, additional or continued leaking or cracking of the roofing coating was occurring. Complainant notified Respondent and the manufacturer’s representative. Repairs were effected by the manufacturer in January 2000. There is no specific information as to these repairs.

13. In July 2000, additional or continued leaking or cracking of the roofing coating was occurring. Complainant sought repairs through a different contractor, Versatile Roofing. 14. In January 2001, additional or continued leaking or cracking of the roofing coating was occurring. Complainant sought repairs through Versatile Roofing. 15. In April 2000, Complainant filed a formal complaint with the Registrar alleging complaints against Respondent’s re-roofing work at the condominium sites. In June 2000, Complainant followed up with additional representation authorization information regarding the association, and the Registrar began its complaint process. 16. As a result of receiving the complaint, Registrar’s Inspector (Inspector) Schweiger scheduled a site inspection. 17. On July 14, 2000, the Registrar’s Inspector issued his Corrective Work Order (CWO) regarding the re-roofed areas: “where patching has been performed on units 1 and 2.” The Registrar’s Inspector indicated that Respondent was to “correct the entire roof areas over units 1 and 2 to insure compliance with industry standards and stop leakage.” Respondent was required to make corrections within fifteen days. 18. Respondent made some repairs on the fifteenth day. See Complainant’s August 3, 2000 letter to the Registrar’s Inspector. 19. On August 3, 2000, Complainant wrote to the Registrar’s Inspector. Complainant stated: that repairs had been made, but not the “proper corrections (i.e. roof replacement) required” in the CWO. Complainant stated: it believed that the current Gaco Western representative would testify that attempts to repair the conditions will fail and that the only solution is complete and proper replacement of the existing roofing. Complainant stated: its position that the “original roofing installed and the subsequent repair attempts made by [Respondent] do not meet industry standards, nor will these repair attempts permanently stop the continuing moisture penetration into Units #1 and #2.” Complainant asked for an administrative hearing regarding the re-roofing “to determine an appropriate and permanent solution to the problem.” 20. On October 3, 2000, the Registrar issued its Citation and Complaint against Respondent alleging violations of Arizona Revised Statutes (A.R.S.) §§32-1154.A.7, 32-1154.A.23 and 32-1154.A.3, specifying Arizona Administrative Code (A.A.C.) R4-9-108. 21. In October 2000, Respondent filed its written answer, indicating that it had taken appropriate corrective action and that the roof was no longer leaking, but that Complainant wanted the entire roofing system removed and a new system installed anyway. 22. The matter remained unresolved, and was forwarded for formal administrative hearing. 23. The Registrar’s Inspector testified that the CWO applied only to the re-roofed areas where patched within the two year Registrar’s jurisdictional time period. The Registrar’s Inspector testified that, at the inspection, the repairs (all but one) over the three and one half years since the original installation were close to previous repairs. The Registrar’s Inspector testified that appropriate correction would be by whatever method would stop the leakage and be in compliance with industry standards, opining that there would be no one method and that it could entail a range of action from simple repairs to taking off the entire roofing system and replacing it. The Registrar’s Inspector testified that using caulking to repair the cracks would last a varied time (from two days to two years), and that it would depend on the moisture, dust, weather, and the application. The Registrar’s Inspector testified that roof leaks are impossible to find and that sometimes leaks continue to occur simply because water runs downhill from any gap or separation. 24. Complainant’s Unit #1 and Unit #2 residents testified that they have leaks whenever it rains or whenever there is a change in the weather. The residents presented photographs of damaged interior leaking areas and of water beading up along one interior ceiling area. 25. The current Gaco Western representative, Mike Wadding, testified that he inspected the roof areas and found splitting in the covering on Units #1 and #2. Mr. Wadding testified that the roof has good drainage and there are no areas where water can pond. Mr. Wadding testified that he would not have recommended such an application on an older organic roof [felt, asphalt and gravel], and that an older organic roof is unpredictable and may continue to split. Mr. Wadding recommended removal of the roof and replacement. Mr. Wadding testified that the manufacturer did not want to keep providing material for continued repairs, but that they had made an offer to supply enough GACO material [to the limits of the GACO material originally provided] to re-roof the areas. 26. The Complainant’s position is that they relied on the manufacturer and the Respondent in determining that the 1996 roofing installation would work over the existing asphalt roofing, and that since then the work has failed and continues to fail. The Complainant requests a permanent solution of removal of all roofing and a new roof be installed with the materials supplied by GACO. The Complainant requests that the work be monitored by an independent inspector to ensure that it is done properly. The Complainant requests that the emergency repairs done by Versatile Roofing be paid for by Respondent. 27. Complainant presented two invoices from Versatile Roofing: August 2000 and February 2001. The August 2000 repair appears to cover both areas previously repaired and an area not previously repaired (areas by the carport). The February 2001 repairs appears to have been on areas previously repaired. No person from Versatile Roofing was presented as a witness. 28. The former Gaco Western representative, Mr. Nielson, was not presented as a witness. 29. Respondent testified that he is a Gaco approved applicator, that he had been contacted by Mr. Nielson to bid on the job, and that Mr. Nielson had wanted to use the acrylic system over the existing roof area, saying that it was a viable application for the Complainant. Respondent testified that he and Mr. Nielson applied the roofing according to specifications given to them by the manufacturer. Respondent testified that there was an initial inspection, at least two interim inspections of the work process, and a final inspection - which was necessary for the warranty to be issued by Gaco. Respondent testified that he believes the Gaco coating is not the problem, but that the substrate is damaged due to lateral water migration. Respondent testified that once water has undermined the substrate that changes in the weather cause the water to expand and the surface will continue to crack. Respondent testified that the roof will continue to have problems until the substrate is addressed. Respondent testified that the continuing cracks in the roofing are occurring in areas adjacent to the repairs he had made each time, and will continue to progress in the same manner due to the water damaged substrate.

30. A respondent is required to appropriately and properly repair items as noted on Registrar’s CWO, absent proof that the CWO direction is inaccurate, inappropriate or unnecessary. 31. Based on the evidence and testimony, the Respondent has corrected the cracks or problems found on the site inspection according to the CWO and as necessary by industry standards. APPLICABLE LAW A.R.S. §32-1154.A. provides that a holder of a license or a person listed on a license 3. Violation of any rule adopted by the Registrar; specifically Arizona Administrative Code (A.A.C.) R4-9-108[1]. … 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 appropriate 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. CONCLUSIONS OF LAW 1. The evidence of record shows that the actual contract in this matter was for a repair of cracking and leaking existing roofing at the site. The contract does not indicate that the cause of leaks and water damage will be located and fixed. The contract does not include removal of the then existing seventeen year old organic roofing system so as to locate any internal or structural water damage or water entry points. The contract only includes a repair application of an acrylic system over an existing organic roof, and that existing roof was a leaking roof. The residents’ testimony was that all the interior leaks were continuing to occur at the same locations. The Inspector’s and Respondent’s testimony was that the cracks in the coating have continued to occur, but at nearby or adjacent locations to repairs. Therefore, the failures in this matter, and the cause of the leaking, appears to be the then existing organic old roof. Based on the testimony given, the existing old organic roof is the cause of the continued and adjacent cracking in the new coating. 2. The contract in this matter was completed in February 1996. The Registrar’s jurisdiction over the work of a contractor extends for two years. Within that two years, Respondent did make additional repairs, and those repairs have not failed. New cracks in the coating system appear in nearby areas, but not in the same repair. Again, the underlying roof was, in fact, failed at the time of the 1996 repair by Respondent. Respondent has complied with its two year guarantee of its workmanship. 3. Complainant believes the acrylic roofing repairs to be inferior, defective and/or incorrect; however, Complainants’ evidence was insufficient to show inferior, defective, or incorrect installation of the acrylic material. In fact, the evidence shows that the application was done and completed pursuant to the manufacturer’s specifications. 4. The hearing testimony showed the repairs installed by Respondent to be in working order, with no current leaks and with no visible problems. Respondent had repaired leaks and seam problems which had occurred prior to the Complainant’s filed complaint. The evidence and testimony at the hearing established no violations, by Respondent, of A.R.S. §§32-1154.A.3. 32-1154.A.7 or 32-1154.A.23. RECOMMENDED ORDER In view of the foregoing, based on finding no violations, it is recommended that this Registrar’s Citation No. H00-0228, together with the Complaint on which it is based, be dismissed and the case be closed. RECOMMENDED this day, March 14, 2001.

______________________________________ Kay A. Abramsohn Administrative Law Judge

Transmitted by mail this _____ day of March, 2001 to:

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

By ___________________________ ----------------------- [1] A.A.C. R4-9-108 provides that all work shall be done in a workmanlike manner which is described to be in compliance with local building codes of express application to the types of work done and complained of.

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 PH(602) 542-9826/ FAX 542-9827