ALJDEC

01F-F0022-ROC · Registrar of Contractors · 2001-07-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 11, 2001 APPEARANCES: Steve Bell, President, appeared on behalf of the Complainant, American Frames, Inc. Mike Loven, President-Owner, appeared on behalf of the Respondent Loven Contracting, Inc. Keith Moore, Managing Member, appeared on behalf of the Respondent RKM Construction LLC ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact 1. On or about January 2, 1998, the Complainant entered a contract with the Respondent, Loven Contracting, Inc. (Loven), for construction of a 5100 square foot manufacturing plant in Flagstaff, Arizona. The plant would manufacture picture frames. The contract price was $383,000.00. 2. On January 30, 1998, Loven contracted with the Respondent, RKM, to do the concrete work at the plant. The concrete pad was to be six inches of reinforced concrete. 3. Respondent Loven had ATL, Inc. (ATL), do the soil testing at the half- acre site. Soil samples showed native soils consisted of 12 inches of loam at the surface, the next one and a half to three feet were fat clay with high swell potential and some silt. The underlying layers were brown and silty sand, and vesicular basalt. The exact composition of the soil varied at the different boring sites. The general conclusion was that the top 40 to 50 inches of soil was not satisfactory material as structural backfill, or to support a building foundation or pavement section. The material underlying the top 40 to 50 inches (presumably the sand and basalt), was suitable for a building foundation. (Exhibit 2, Section 7.1). 4. After preliminary trenching, ATL recommended two fill options for the site. The first was to over excavate the highly expansive clay layer to the silty sandy layer and then cinder fill. The second was to over excavate the highly expansive clay layer to 24 inches and fill with a non free-draining granular fill (Exhibit 1). 5. There is some confusion regarding which ATL option was used. According to the initial testimony of Mike Loven, option two (24 inch excavation) was used but with cinder fill rather than the non free draining granular fill specified in that option. Later testimony by Mike Loven and construction superintendent “Corky” Baca was that excavation was between and 40 inches. Cinder fill was used with six inches of ABC on top. In any event, based on the boring sample at 21 feet east and 30 feet north of southwest property corner (Exhibit 2, A-3), the fat clay at that location went to a depth of four feet (48 inches). Excavation of 36 to 40 inches would not be in conformance with the ATL recommendation to excavate to the silty sandy layer if cinder fill is to be used. This also appears to be the case for the sample taken at 60 feet east and 35 feet south of northwest lot corner where there is visicular basalt, clay and basalt in the area 30 to 60 inches in depth (Exhibit 2, A-1). Excavation of 36 to 40 inches in this area would not reach silty sandy soil. According to Mike Loven these deviations were acceptable to the soil- testing lab. 6. An ATL Report of Nuclear Compaction Test Data (native soil), dated January 26, 1998, showed 18.2 percent for moisture content for Test No. 3. The optimum is 24.4. Although the moisture content for test no. 3 was below optimum, the compaction was at 98% which was 3% above the density specification (Exhibit 3). The evidence presented at the hearing was that if compaction was at the specified level or above, the below optimum moisture content was not indicative of a defective or inadequate soil condition. 7. The concrete pad was poured with number 3 (3/8 inch) rebar at 12 “ intervals. It was covered with blankets in order that it would cure adequately during the cold nights. Joint cuts were made within 24 hours of the pour. The largest concrete sections are approximately 20’X20’. The rebar was not supported “chaired” during the concrete pour. It was raised “hooked” and apparently migrated toward the bottom of the concrete in some places. A sample taken from the site shortly prior to the hearing showed the rebar was 3 ¾ inches from the top of the slab and 1¼ inches from the bottom. The sample showed the concrete was only 5 inches thick at the spot from which it was taken. The plans and specifications showed the rebar in the center of the slab. Roger Hocking (Hocking), a civil engineer who worked in an engineering supervisory capacity on the project, testified that although a reason for using rebar was to control cracking, he did not know if the placement within the slab (near the top, center or bottom), made any difference. Hocking testified the placement of the rebar was shown in the center of the slab in the plans for graphic illustration and not as a design or construction specification. 8. Construction of the Complainant’s plant was completed in April 1998. City of Flagstaff building requirements, including soil compaction requirements, had been met and a certificate of occupancy was issued. The Complainant moved in on April 28, 1998. 9. In approximately July, 1998, the Complainant began to notice various problems and contacted Loven. Over the next two years the parties were in communication regarding issues with doors that divided the manufacturing area, cracking, bumps and uneven areas on the concrete floor, low spots in the parking lot, and matters which are no longer relevant to the case. 10. When various problems were not satisfactorily corrected, the Complainant filed his complaints against Loven and RKM, with the Registrar of Contractors (Registrar), on July 20, 2000. 11. On August 7, 2000, Inspector Mark Schweiger (Schweiger), of the Registrar’s Office performed a job site inspection. Based on that inspection, Schweiger issued Corrective Work Orders (CWO), on August 23, 2000, which required the Respondents to determine the cause (as applicable), and correct bumps and uneven floor conditions exceeding a ¼ inch per 10 feet in the floor, cracks exceeding 3/32’s of an inch in width, cracks that were filled with a non approved material, settling in excess of ¼ of an inch, slab thickness and diverse items which are no longer at issue and relate to matters other than the concrete pad. 12. Schweiger performed another jobsite inspection on June 6, 2001. He noted that although some corrective work had been done (some floor grinding had been done), there were still raised floor areas which exceeded minimum standards. Cracks were filled with a non cementitious material which Schweiger considered to be a sealant rather than a repair material. The difference between repair with a cement like material and caulking is noted in that a proper repair should give the floor the structural integrity of cement whereas a sealant only fills the crack. A central crack in the building was also not adequately repaired. Additional evidence indicates that the caulking or sealant used in the cracks is beginning to come out or the cracks are getting wider. Keith Moore (Moore) of RKM acknowledged that there possibly was some “curling “ or bumpiness of the concrete because of uneven drying between the top and bottom of the slab. Photographic evidence also supports a finding that various areas of the pad continue to require additional repair work of the noted conditions. Conclusions of Law The allegations in the Citation and Complaint concern A.R.S.§32- 1154(A)(3)/ A.A.C.R4-9-108, workmanship standards, (A)(7) a wrongful or fraudulent act with substantial injury, (A)(23) failure to do corrective work. A preliminary matter concerns the issue of the Statute of Limitations. On April 28, 1998, the Complainant occupied the building. The complaints were not filed with the Registrar until July 20, 2000. This is well after the two year limitation period of A.R.S. §32-1155. However, the evidence establishes that corrective work was done within the past two years in an attempt to address the problems with the slab. The Arizona Attorney General’s Opinion I79-119 suggests that “… it is possible that the repair work if performed may in and of itself give rise to an independent claim from which the applicable statute of limitations may again begin to run.“ Although Attorney General’s Opinions are not binding they offer guidance and may be considered in reaching legal conclusions. It is concluded that under the facts of these cases the Complainant does not need to file new complaints based on repair work which has been done by the Respondents, in order to allow the Registrar to retain jurisdiction. The instant cases are within the jurisdictional period based on repair work which was done within the past two years. This work was directly related and in response to the matters raised by the Complainant within two years of occupancy and some repair work was done within two years of the initial complaints filed by the Complainant with the Registrar. The evidence of exactly when and what repair work was done prior to the filing of the complaints lacked specificity. However, the fact is that repair work was done after the complaints were filed and in response to the CWO’s. If the Respondents wanted to avail themselves of the two year limitations period as a defense, they could have requested a hearing. Rather, they attempted to correct the conditions allowing the statute to run anew. Another preliminary issue concerns the Complainant’s Motion to Amend the Complaint. This was made on the day of the hearing. The Complainant wished to allege violation of A.R.S.§32-1154(A)(2) disregard of plans and specifications. Essentially the Complainant urged that the particular placement of the rebar in the pad and the question of depth of the excavation and type of backfill, were not as specified and that this has caused a latent defect in the pad causing it to continue to settle and crack indefinitely. The evidence on the above issue was suggestive of deviations from plans and specifications but the evidence was insufficient to prove that the problems with the pad are attributable to various factors (independently or in combination), such as five inch thickness in parts of the concrete, failure to place rebar in the center of the concrete, failure to possibly excavate deep enough or remove all clay, or the use of unsuitable backfill. The lateness of the motion to amend was based on the fact that the Complainant had not been able to obtain certain information until the day before the hearing. This information was purportedly in the control of the Respondents and had to be obtained by alternate means. The evidence did not establish that there was a relationship between the deviations or alleged deviations and the damage to the pad. This is understandable in that the Complainant apparently did not have sufficient time to fully explore or develop evidence on the matters asserted although he managed to bring in two concrete samples which were cut out of the pad. In any event, there was insufficient showing that any deviation, whether actual or alleged, was prejudicial to the Complainant. To conclude that the complained of conditions were caused by the deviations would be conjecture at this point. The Complainant’s motion is denied but this is not a finding or conclusion which constitutes res adjudicata or is sufficient for purposes of collateral estoppel or issue preclusion if evidence is discovered which casually links the alleged deviations to the defects in the floor, and if the matter is set for further adjudication of the issue.

1. The evidence shows violations of A.R.S.§32-1154(A)(3)/A.A.C.R4-9-108 (the original as well as some of the corrective work did not meet workmanship standards) and (A)(23), some of the attempts to correct have been inadequate. The fact that some corrective work was satisfactory does not alter the conclusion but may be considered in mitigation. The violations apply to both Respondents and they are jointly and severally liable. 2. There is no finding of an independent wrongful or fraudulent act. 3. A trip hazard at the northwest corner storage area as testified to by Schweiger was not part of the original filed complaint and will not be considered for the purpose of making any determinations in the instant case. There was no showing that any corrective work was done on it in the past two years or that it was otherwise within the two year statutory period. To the extent that the condition may be related to any latent defect asserted by the Complainant, it will have to be resolved within that context, or in some other manner as determined by the Complainant. 4. Due to the potential nature of the corrective work, additional time to accomplish such work is allowed in the Recommended Order. In addition, the Respondents are reminded that the scope of the Recommended Order is broadly stated because a licensed contractor is presumed to have the knowledge, expertise and experience to meet workmanship standards (for original and corrective work), in the areas in which they are licensed. It is presumed that self interest and discretion will ensure that there will be no question but that any corrective work done in response to the Registrar’s Order in this case will meet required workmanship standards. Recommended Order In view of the of the foregoing it is recommended that commencing thirty days from the effective date of the Order entered in this matter, the Class B-01 license of Respondent Loven Contracting Inc. and the Class B-02 of Respondent RKM shall be suspended until the Respondents have determined the cause of, and repaired the unevenness, bumps and cracks on the floor, in a workmanlike manner. It is further recommended that if the Respondents accomplish the above described corrective work on or before the effective date of the Order entered in this matter then the aforementioned suspension shall not take place and the Citation and Complaint shall be closed.

Done this day, July 20, 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