ALJDEC

00F-M1717-ROC · Registrar of Contractors · 2001-03-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

_____________________________________________________________________

HEARING: March 8, 2001 APPEARANCES: Kim and Kevin Sutton (Sutton) appeared through Kevin Sutton. The Carpet Broker (“Broker”) appeared through its qualifying party, Douglas Lentz. D I V A Interior Designs, Inc. (“Diva”) appeared through its vice-president, Vita Distable. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. The above captioned matters were consolidated for the purpose of hearing, due to the fact that both cases involved similar issues and entailed the use of the same witnesses. The Suttons retained Broker for the purpose of having new floor tile installed in their home. The home was approximately four years old at the time of the tile installation contract. The Suttons were replacing existing carpet and vinyl flooring in the lower level of their home. Diva was the flooring contractor selected by Broker to perform the tile installation.

2. The floor tile in question was installed on or about February 1999. Within one year of having the new tile installed in their home, a degree of cracking began to appear in a number of tiles. Although the number has increased over time, presently there are only about twenty-three (23) cracked tiles and a few areas of the grout which are also cracked. The tile installation covers approximately 670 square feet of the home. Thus, the cracking that is present at this point in time is only a very minor portion of the over-all tile installation project.

3. Shortly after the Sutton’s observed the cracks in the tile installation, they contacted one or both of the named Respondents. When they were unable to get any positive resolution to their problem, they filed the instant complaint, against Broker, on or about March 10, 2000.

4. A jobsite inspection by the appointed inspector for the Registrar of Contractors was held, in response to the Sutton’s complaint against Broker, on May 10, 2000. Evidence of record demonstrated that a specified number of cracked tiles were pulled up, at this time. The Registrar’s inspector observed a crack in the concrete under the tile and that said crack had thinset material in the crack. This indicated to the inspector that the concrete crack was present, at the time the tile was installed.

5. Based on his findings at the May 10, 2000 jobsite inspection, the inspector issued a Corrective Work Order to Broker on May 15, 2000, which gave Broker fifteen (15) days to “repair cracked floor tiles by the appropriate means.” Notwithstanding the terms and conditions of said Agency directive, Broker failed to comply with same.

6. Rather than attempt to comply with the above-described Corrective Work Order, Broker merely filed its own complaint against Diva on June 9, 2000.

7. Another jobsite inspection by the same inspector for the Registrar of Contractors was held on July 27,2000, regarding the complaint filed by Broker. The same tile cracking was again observed by the inspector and on July 27, 2000. Therefore, he issued another Corrective Work Order, this time directed to Diva, to “repair the cracked floor tiles by appropriate means.”

8. It is important to note, that on or about the time that the Sutton complaint came into the office of the Registrar of Contractors, the working relationship of Broker and Diva had totally deteriorated, to the point where it was extremely difficult for the two licensed professionals to even speak to each other, let alone cooperate with each other to resolve the deficiency in the floor tiles installed in the Sutton home.

9. For unexplained reasons, Broker was unable to locate replacement tiles. Nevertheless, evidence of record demonstrated that although it took Diva a significant period of time to locate and obtain replacement tiles, it was able to accomplish said required task, albeit not within the time period set forth in the July 27, 2000 Corrective Work Order. It is important to note that the replacement tiles were not available in the United States and had to be shipped from Italy. Diva sustained the full cost for the replacement tiles, without any assistance from Broker.

10. It also needs to be noted that the replacement tiles were shipped via United Parcel Service and the first shipment came in with all of the tiles broken during shipment. Thus, Diva was forced to place an order for a second shipment. Although a number of the tiles in the second shipment were also broken, Diva testified that it believes it now has a sufficient number of replacement tiles to accomplish the required remedial work.

11. Ultimately, Diva brought the replacement tiles to the Sutton home. Although it was determined that the replacement tiles were an exact match for the existing tiles, at this point in time the Suttons were concerned that they might experience further cracking in other areas of the tile installation and they now wanted the entire floor replaced. The Suttons would not allow Diva to perform any remedial work unless it was going to replace the entire floor. Since Diva was only prepared to replace the few tiles that were cracked and the requirement of both Corrective Work Orders was limited to such replacement, no remedial work was performed.

12. The Suttons testified that during the original tile installation they had, in fact, observed cracks in the concrete slab. Nevertheless, it was undisputed that no form of slip sheeting or other crack preparation was applied by Diva during the original tile installation.

13. Diva contends that the work order provided by Broker did not call for same. However, Broker testified that any tile installation from its company necessarily includes slip sheeting or other crack treatment (preparation), as long as the cost is under $100.00. Broker further contends that it instructs all of its installers regarding the company policy for concrete crack treatment prior to installation of floor tile.

14. Diva also contends that the city of Gilbert is noted for having expansive soil and that it believes movement in the concrete slab caused the cracking of the floor tile. Diva also asserts that it was unaware of said expansive soil condition in Gilbert at the time the original install was performed in the Sutton home.

15. The home in question was four years old at the time of the original tile installation. The evidence of record was inadequate to support any finding that the Suttons did anything regarding their water drainage for their home, subsequent to the time that the tile was installed, which would have had a negative effect on the soil under the concrete slab. Moreover, there was no evidence presented to support any finding that the soil under the concrete slab was not properly prepared by the general contractor for the Sutton home, prior to the concrete placement.

16. Diva had ample opportunity to examine and, if it felt the need, to test the concrete slab upon which the tile was to be installed. If Diva, in its professional opinion, determined that some form of slip sheeting or other crack treatment was required, it should have refused to perform the tile installation without such precautions. It is determined and held, under all of the facts and circumstances presented herein, that by proceeding with the tile installation, Diva effectively accepted the concrete surface as being adequate to support a workmanlike tile installation. While any tile installation over a concrete slab placed by others may not always carry strict or absolute liability for unacceptable results, neither does it generate any immunity against claims based upon substandard results.

17. Diva further contends that it has no responsibility for the cracks in the tile based on the fact that there is a pre-printed disclaimer in the contract between Sutton and Broker, referable to the fact that Broker does not assume any liability for damage to tile caused by floor movement or crack expansion.

18. Disclaimers of liability are frowned upon in the law as being contrary to public policy. For a disclaimer to have any enforceability, it must be clearly established by substantial evidence that the matter being disclaimed was so carefully explained and accepted that little doubt remains as to the intent of the parties.

19. The disclaimer in question herein is pre-printed on the purchase document between the Suttons and Broker. There is nothing on the contract indicating that the Suttons read and understood this portion of the contract. Moreover, there was no evidence that any intent by Broker and/or Diva to disclaim liability for cracking of the floor tile was ever explained to the Suttons. In the instant matter Diva failed to provide evidence which is persuasive to adequately establish that the intent of the parties was to clearly pass the risk of floor tile cracking caused by concrete cracking onto the Complainants. Without such clear and unambiguous contract language, which is clearly accepted by written acknowledgment of the homeowner, a contractor should refuse to perform construction work that is reasonably calculated to result in substandard workmanship.

20. The cracking of the floor tiles in the Sutton’s home reflects an unworkmanlike result which, under the facts presented herein, is found to constitute violations of the applicable charged provisions of the State’s Contracting laws against Diva and Broker. Nevertheless, this Tribunal will not engage in speculation and although the Suttons may be concerned referable to future tile cracking, the evidence of record was inadequate to support any finding that the entire tile installation must be replaced. Thus, the Respondents named herein are only found to be responsible, at this time, to replace and repair the tile and grout areas that currently evidence unacceptable cracking.

21. The Sutton’s unreasonable demand to Diva, that the entire floor must be replaced, effectively denied Diva access to comply with the conditions set forth in the July 27, 2000 Agency directive. Although Diva failed to tender the required remedial work within the time frame set forth in said Agency directive, under all of the facts and circumstances presented herein, it is determined and held that the actions of Diva to respond to the above-described July 27, 2000 Corrective Work Order constituted a reasonable effort to achieve compliance. Therefore, the facts presented herein militate against any conclusion that Diva violated the applicable provision of the State’s Contracting laws regarding a failure to properly respond to an Agency directive.

22. Despite the foregoing findings of contracting law violations by Diva, it must be noted that the contractual obligations of Broker, who was acting in a manner almost like a general contractor on this project, are not discharged merely by making demands, albeit reasonable, upon or filing formal complaints against its subcontractors. Deficiencies or substandard workmanship must be corrected notwithstanding the unwillingness or inability of a subcontractor to perform appropriate and necessary corrective work. The homeowner contracts with the general contractor, not its subcontractors, and thus, the “buck stops” on the general contractor’s desk. It is of no concern to the homeowner that the general contractor wants its subcontractor to complete the remedial work. Consequently, in the instant cases, although it is found that Diva effectively accepted the concrete slab as being adequate to support a workmanlike result and same was not achieved, it is further held that Broker violated the applicable charged provisions of the State’s Contracting laws due not only to its duty to properly supervise the tile installation to assure a good and proper installation but moreover, by not providing an effective response and appropriate resolution in accordance with the directives issued by the Registrar of Contractors and by allowing the homeowners’ problem to continue for a protracted period of time.

23. Broker’s lack of effort to personally comply with the terms and conditions of the May 15, 2000 Corrective Work Order is determined to constitute a violation of the applicable charged provision of the State’s Contracting laws regarding the need to comply with an official Agency directive.

CONCLUSIONS OF LAW

1. Broker violated the provisions of A.R.S. § 32-1154A (23), (7), and (3); namely Rule R 4-9-108.

2. Diva violated the provisions of A.R.S. § 32-1154A (7), and (3); namely Rule R4-9-108.

3. Any contractual provision that attempts to “write-out” the Registrar of Contractors’ jurisdiction, under the State’s Contracting laws, to discipline a contractor for failures to provide a consumer with good and proper workmanship, should be viewed to be void as against public policy.

RECOMMENDED ORDER

In view of the foregoing, with respect to case no. M00-1717, it is recommended, commencing on the effective date of the Order entered in this matter, that the Class C-48 license of Diva shall be suspended until the Registrar of Contractors receives written proof that Diva has accomplished appropriate and effective remedial work on the cracked tile and cracked grout joints present in the Sutton home or has been denied access to perform said corrective work. It is further recommended that if Diva accomplishes the above- described corrective work or is denied access on or before the effective date of the Order entered in this matter, then the aforementioned license suspension shall not take place and, in that event, the citation and complaint issued in case no. M00-1717 shall be closed. It is further recommended, with respect to case no. M00-1256, that the Class C-08 license of Broker shall be actively suspended, commencing fifteen (15) days after the effective date of the Order in this matter becomes final, until the Registrar of Contractors receives proof that appropriate and effective remedial work has been accomplished on the cracked tile and grout in the Sutton home either by Diva or, in the event Diva fails to perform the corrective work, that said tile and grout has been properly replaced by Broker or another licensed contractor selected by Broker. It is further recommended that if compliance with this Order is achieved by Broker, either through the efforts of Diva, through its own efforts, through the efforts of another licensed installer, or due to a denial of access by the Suttons on or before fifteen (15) days after the effective date of the Order entered in this matter becomes final, then the aforementioned license suspension shall not take place, but instead Broker’s Class C-08 license shall be placed on 150 days probation, commencing on said extended deadline date or the date on which notice of compliance is filed with the Registrar of Contractors, whichever is later. It is further recommended, in addition to the above-provided penalties, that Broker pay the sum of $400.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32-1154D. The failure by Broker to pay the entire amount of the aforesaid civil penalty, on or before 35 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent , as defined in A.R.S. §32-1101A(5), unless payment of any outstanding prior civil penalty is tendered. It is further recommended that Broker be and hereby is formally admonished that its obligation as a licensed contractor encompass more than merely notifying, requesting, or filing against a selected subcontractor to remedy any construction deficiencies, and the comfort and entitlements of homeowners must remain a controlling consideration, which may frequently necessitate a prompt resolution through other sources.

Done this day, March 12, 2001

______________________________________ Mark A. Silver 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 ___________________________

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