ALJDEC

01F-2465-ROC · Registrar of Contractors · 2001-11-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 22, 2001 APPEARANCES: The Complainant appeared in his own behalf John Ryan, Esq. and Jim Dietz, Esq. appeared on behalf of the Respondent ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact 1. The Complainant’s home was built by Del Web Coventry Homes (Coventry), in Scottsdale, Arizona. The Respondent subcontractor, Arizona State Plastering, did the stucco work on the home. 2. The Complainant took occupancy as the second owner on March 13, 1997. 3. By letter to Coventry, dated February 17, 1998, the Complainant addressed problems with stucco cracking. According to the Complainant, this resulted in the home being painted. 4. Another letter from the Complainant to Coventry, dated January 5, 1999, states that the exterior paint and stucco had deteriorated, making cracks and stud locations visible. 5. On March 12, 1999, the Complainant filed a complaint against the Respondent, Arizona State Plastering, with the Registrar of Contractors (Registrar). 6. On May 10, 1999, Inspector Marty DiAntonio (DiAntonio) of the Registrar’s Office issued a Corrective Work Order (CWO) which required among other things, that the Respondent correct rust spots coming through stucco. The placement of the spots was not specifically identified nor was the fact of how DiAntonio determined that the spots were of rust origin, established for this record. 7. Based on the evidence in this case, the Respondent did corrective work by applying muriatic acid to the affected areas in order to remove the chelate or ferrous materials. The home was again repainted. 8. On April 12, 2001, the Complainant filed another complaint against the Respondent with the Registrar because of rust spots coming through stucco and paint. The Complainant also sent another repair letter to, and filed a complaint with the Registrar, against Coventry. 9. On April 27, 2001, Inspector Les Combs (Combs) did a job site inspection. 10. On May 14, 2001, Combs sent a letter to the Complainant that the complaint was being closed because Coventry agreed to treat rust spots and paint. 11. The Complainant requested a hearing. Both the Coventry and Arizona Plastering cases were scheduled for hearing. 12. On August 22, 2001, the Complainant and Coventry Homes entered a settlement of their case, 01F-2466-ROC, whereby Coventry agreed in pertinent part to repair all stucco cracks over a 1/16 of an inch or that allow water to penetrate, seal all stucco penetrations, prime the entire stucco surface with acrylic metal prime, paint the entire stucco per manufacturer’s specifications, warrant against iron pyrite reoccurrence for four years (the settlement misspelled “pyrite” but the meaning is clear). 13. Combs testified he saw approximately 12 small red spots ( 1/16 of an inch diameter), at eye level or above on the east wall during his inspection of April 27, 2001. According to Combs, these spots were not visible from 15 to 20 feet. Combs did not require the Respondent to correct the condition because he could not determine if the spots were the same as the ones corrected in 1999, in response to DiAntonio’s CWO. Absent such a connection and an extension (renewal) of the Statute of Limitations due to prior corrective work, the Respondent argues that the Statute of Limitations for this complaint before the Registrar has run.

14. The Complainant testified that the spots which were treated under the DiAntonio CWO were all over the stucco and included the spots which were part of the instant complaint. The testimony is suspect in that absent some evidence to show that the current spots are the same as the previously treated spots, it would be highly conjectural to conclude that they are the same spots. 15. Aside from DiAntonio’s conclusion in the prior work order, there are other references to the nature of the spots. The settlement with Coventry (Exhibit 17) refers to “iron pirate” (pyrite). It is understood that the settlement was drafted by the Complainant and is based on his understanding of similar problems with other Coventry homes as well as homes done by Arizona State Plastering. The parties stipulated that iron pyrite should not be in a sand mixture which is used for stucco. Articles (Exhibits 24 and 25) and other evidence make it clear that rust spots or stains on concrete may be caused by the presence of some form of iron in an aggregate which is used in a mixture. Photographs which were taken approximately 4 months after Combs performed his job site inspection show fairly obvious rust colored spots and staining. Combs testified that he did not recognize the stains depicted in the photographs as those he had seen previously. The Complainant testified the photographs depicted the wall as it existed when the photographs were taken. 16. The evidence in its entirety is sufficient to show that the spots and staining are in all likelihood the consequence of a ferrous material in the stucco mixture which material should not be in the mixture and which material contaminated the stucco. This finding is made and is in keeping with standard set forth in Culpepper v. State, 187 Ariz. 431, (App.1996), which requires proof by a preponderance of the evidence, as well as A.A.C. R2-19-119 which requires the party asserting the claim to bear the burden of proof. Conclusions of Law The Citation and Complaint allege violations of A.R.S. §32- 1154(A)(3)/A.A.C.R4-9-108, workmanship and (A)(7) a wrongful act with substantial injury. A.R.S.§32-1155 (A) provides in pertinent part that upon filing a written complaint with the Registrar, charging a licensee with the commission of an act (a violation), within two years prior to the date of the filing the complaint, that the Registrar may issue a citation. 1. A.R.S.§32-1155 (A) is the applicable Statute of Limitations in a Registrar’s case. 2. Also pertinent is the Arizona Attorney General’s Opinion I79-119 wherein it is intimated that the statute of limitations may run anew if repair work has been undertaken by the contractor. 3. It is evident that if the Complainant does not satisfy the requirements of the Statute of Limitations, then irrespective of the conclusion in paragraph 16 of the Findings of Fact, his claim cannot be ruled upon by the Registrar. 4. The cited Attorney General’s opinion is not necessarily binding on the agency since it’s language is equivocal, ”However, it is possible that the repair work if performed may… give rise to an independent claim….” . It is the understanding of this Administrative Law Judge (ALJ) that the Attorney General’s Opinion is given serious consideration by the Registrar. It is the opinion by the ALJ that public policy requires such a construction of the statute. Were it otherwise, no matter when corrective work was done, it would only have to last until the end of the initial two year period. If corrective work needed to be done in the 23rd month of the two year period, it would only have to last another month. It does not appear that the legislature intended to leave such an open invitation to potential slipshod repairs in an area with significant public health and safety concerns. 5. The remaining issue is whether the language “…the repair work if performed…”, of the Attorney General’s Opinion, refers only to the repair of the visible or manifested problems, or whether the language should be construed to apply to the underlying problems which may not have been addressed by an attempted repair. Logic would dictate that repair work of any kind should at least address the known cause of a problem. The concept can be taken further and a “should have known” standard with respect to the nature of the underlying problem could also be adopted. Again, if it was otherwise, a repair can simply correct a manifestation leaving the underlying cause untouched. This could result in future manifestations of the problem including the underlying problem, being outside the statute. Such an interpretation would potentially encourage corrective work which may correct a manifestation but not the more serious basic cause. It does not seem that this is a reasonable application of the statute in light of the public policy considerations. 6. The instant case provides an example of the possible dilemma under the statute. The finding of fact in paragraph 16 above was that there was some type of ferrous material in the stucco mixture. Questions which are unanswered are whether the Respondent was aware of this when the original corrective work was done in 1999. If so, did the Respondent have any knowledge of the severity of the problem. Stated another way, did the Respondent know or have reason to know that in correcting the spots which showed in 1999 (some two years after the Complainant took occupancy), it was likely that more such spots would be appearing after the statute of limitations expired? These questions were not satisfactorily answered in the instant hearing and the evidence is insufficient to conclude that the Respondent knew or should have known that the underlying problem would manifest itself again in other areas and that the repair of the obvious problems was only a temporary fix. 7. In light of the evidence, it cannot be concluded that the current spots are the same spots as previously corrected by the Respondent. Nor is the evidence sufficient to show that the Respondent knew or should have known of the apparent greater ferrous contamination than was manifested during the initial correction. 8. It is concluded that the Statute of Limitations bars this case for the reasons stated in paragraphs 6 and 7 of these conclusions. In addition, the issue should be considered moot because there is a practical problem even if the statute did not bar the case from being determined on the merits. This is because any order requiring the Respondent to correct the problem is usually stated in general language “correct by appropriate means” . This being the case, it is normally for the Respondent to determine the appropriate means of correction. However, the Complainant has already entered a settlement with Coventry which specifies the nature of the corrective work and has a four year warranty provision. If the Respondent determines it wishes to correct using an alternative method to the one already agreed to by the Complainant, would the Registrar be required to act as the intermediary? That is not the Registrar’s statutory function. The evidence indicated the potential such a problem in that Coventry no longer uses the muriatic acid method of correction which was initially used by the Respondent. 9. In light of all the evidence in this case and the reasons stated in this Recommended Decision, it is concluded that the issue of the new spots is not within the Statute of Limitations. Absent jurisdiction, no violations can be found. Recommended Order In view of the foregoing it is recommended that the Citation and Complaint upon which it is based be closed.

Done this day, November 1, 2001

______________________________________ Allen Reed 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 ___________________________ -----------------------

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