ALJDEC

01F-A0258-ROC · Registrar of Contractors · 2001-08-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 26, 2001. APPEARANCES: Jim and Anita Christen represented themselves. Respondent was represented by Christine Bailey, Esq. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________ This matter was heard on July 26, 2001 and the record held open to allow the parties to complete additional briefing on the issue of the statute of limitations and its application to this case. The undersigned has considered the evidence adduced at the hearing in this matter and the post hearing memoranda provided by the parties. Based on the above, the following findings of fact, conclusions of law, and recommended order are made. FINDINGS OF FACT 1. Complainants Jim and Anita Christen (hereinafter Complainants) entered into a contract whereby Respondent Rainbow Canyon Properties (hereinafter Respondent) built Complainants a home in 1994. 2. Soon after moving into the home in November, 1994, Complainants began to notice problems with some facets of the home’s construction. First, the front sidewalk and entryway of the home began to settle in an abnormal fashion. In addition, the Complainant’s began to notice sometime in 1995, that the interior of the foundation wall in the crawl space began to exhibit large amounts of moisture. Complainants had apparently converted that part of the crawl space into a workshop. It is undisputed that the crawl space was not, at the time it was built, designed or intended by either Complainant or Respondent to be a livable space. An issue also came up with the garage floor. Apparently, the garage floor where it meets the garage door had begun to settle, creating a gap between the door and the floor. Finally, the electrical panel on the exterior of the home began to pull away from the side of the home due to settling ground. 3. Respondent was contacted regarding these problems and completed repairs. The front sidewalk problem was addressed by cutting out the existing concrete, taking out the compacted ABC and the soil beneath it, then replacing and again compacting the soil and ABC and then replacing the concrete. This operation was completed in 1995. According to Complainant’s testimony, the sidewalk and entry way started to sink again and, once again, Respondent removed the concrete entryway, compacted the soil and ABC, and poured new concrete in 1997. The dampness and moisture issue in the crawl space was also addressed by Respondent, apparently during 1996. Large fans were installed and a vapor barrier placed on the dirt floor of the crawl space to keep the moisture out of the livable space of the home. The evidence demonstrated that the existence of the moisture has no deleterious affect on the foundation walls. The problem with the carport was addressed by tearing out the concrete floor and replacing a part of it during 1997. In this instance, a portion of the floor was removed , the ABC beneath the concrete was taken out and reset, and the concrete was then replaced along with some type of grate to allow for drainage. During 2000, in order to address the widening gap issue, a concrete hump was placed in the garage floor where the floor meets the garage door and a new grate was installed. In addition, a portion of the driveway between the catch basin and garage was taken up and then replaced (See Respondent’s Exhibit #2) The problem with the electrical panel was addressed in 1995, when the electrical subcontractor returned to the home and completed some repairs to the electrical panel. 4. Complainants did not file their complaint with the Registrar of Contractors until January, 2001, more than six years after taking occupancy of the home, and more than three years after the repairs to the garage, entryway, crawl space, and electrical panel were made. 5. It is undisputed (as demonstrated by both Complainants’ and Respondent’s president’s testimony,) that Complainants were aware of the sinking entryway, garage/driveway issue, moisture issue with the crawl space, and electrical panel issue as early as 1995. Complainants were aware of what they perceive as the failure of the repairs to correct these issues soon after the repairs were made and more than three years before Complainants filed their complaint. 6. Apparently, Complainants did not know that the foundation had not been water proofed on the exterior of the block wall until sometime during 2000. It is clear from the testimony adduced that there is no county requirement to water proof a foundation where, as here, the space inside the foundation is not intended by the parties to be used as livable space. According to Respondent’s owner, based on his training and experience in the construction industry, there is no requirement that a foundation wall which is not intended to be used as livable space be waterproofed. This position is reinforced by the affidavit of Michael Klein, admitted into evidence at the hearing. Mr. Klein (who is no relation to the Respondent's president) was retained by an insurance company to investigate the Complainants' complaints. The affidavit indicates that Mr. Klein is a licensed general contractor in the State of Arizona. Klein indicated in his affidavit that there was no workmanship requirement to waterproof the stem wall. The undersigned finds this testimony and evidence to be credible and, relying upon the testimony, finds that Complainants have failed to demonstrate by a preponderance of the evidence that Respondent’s workmanship on the foundation violated any rule promulgated by the Registrar. 7. Only one of the repairs, that to the entryway of the garage, was undertaken within the two years prior to the filing of the complaint. According to the registrar’s inspector, the workmanship completed at this time comported with the standards of the registrar for workmanship. 8. While Complainants contend that Respondent failed to follow the building plans with respect to the waterproofing issue, the testimony has not borne this out. In fact, as the Respondent president’s testimony showed, the plans for the Complainants’ home, which did not call for building a basement, do not require placing waterproofing or the placement of drain tile along the walls of the crawl space. CONCLUSIONS OF LAW 1. A.R.S. § 32-1154(A) provides in pertinent part: 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: (2). Departure from or disregard of plans or specifications . . . in any material respect which is prejudicial to another without consent of the owner . . . * * * (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. * * * A.A.C. R4-9-108 specifically states that “[a]ll work shall be done in a workmanlike manner.” 2. Arizona Revised Statutes §32-1155 (A) indicates that the Registrar may take action against a contractor for committing an act that occurs “within two years prior to the date of the filing of the complaint . . .” This statute has been interpreted by the Arizona courts to mean that a complaint under the statute must be brought within two years of the date of occupancy of the home or the date of the discovery of the defect, whichever occurs first. 3. The Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). A "preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not." Morris K. Udall, Arizona Law of Evidence, §5 (1960). 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 (6th ed. 1990). 4. The evidence as demonstrated in Findings of Fact Paragraph Two, Three, Four, and Five demonstrate that the statute of limitations has expired with respect to Registrar’s jurisdiction over the complaints about the entryway, garage floor, panel box, and crawl space. It is undisputed that Complainants were aware of the issues relating to these alleged defects almost six years prior to the initiation of the complaint. The repairs were completed more than three years prior to the initiation of the complaint. With respect to each issue, the Complainants’ candid admission that they were aware of the problems soon after taking possession and were aware that the repairs had not accomplished what Complainants desired no later than 1997 demonstrate that the statute of limitations with respect to these issues has expired. Complainant’s citation to A.R.S. §12-552 has no application to this case. That statute of limitation may give rise to a claim against Respondent in superior court; it does not confer jurisdiction upon the registrar once the two year limitation has expired. 5. Even if one were to assume that the issue of waterproofing of the foundation walls was not barred by the statute of limitations, Complainants’ would have no basis for relief. The contract between the parties does not call for the foundation walls to be waterproofed where , as here, the wall serves no purpose other than as a foundation (i.e., is not intended to form part of a living space). Moreover, based on the testimony of Respondent’s president and the affidavit of Michael Klein, the undersigned does not find that failure to waterproof the foundation walls fell below acceptable workmanship practices prescribed in A.A.C. R4-9-108. 6. With respect to the issue regarding the building of the concrete hump in the driveway, the undersigned finds that, based on the testimony of the registrar’s inspector, this repair does not fall below the standards of workmanship set forth in A.A.C. R4-9-108. RECOMMENDED DECISION In view of the foregoing, it is recommended that Citation and Complaint in this matter be dismissed. Done this day, August 29, 2001

______________________________________ Gregory L. Hanchett 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