ALJDEC

01F-M0718-ROC · Registrar of Contractors · 2001-09-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 6 and September 4, 2001. APPEARANCES: Mike and Peggy Lavin represented themselves. Respondent was represented by its president, Fred Barcon. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________

In this matter, Complainants Mike and Peggy Lavin (hereinafter Complainants) allege that Respondent Barcon Corporation (hereinafter Respondent) violated A.R.S. § 32-1154(A)(2) (departure from or disregard of plans in a material respect without consent of the owner), A.R.S. § 32-1154(A)(3) (failure to comply with any rule promulgated by the registrar, in this case, failure to perform in a workmanlike manner in violation of A.A.C. R4-9-108), A.R.S. § 32-1154(A)(7) (committing a wrongful act that results in substantial harm to another), and A.R.S. § 32-1154(A)(23) (failure to comply with a corrective work order without justification). Based on the evidence adduced at the hearing, the following findings of fact, conclusions of law, and recommended decision are made. FINDINGS OF FACT 1. In August, 1998, Complainants and Respondent entered into a contract whereby Respondent agreed to build a single family residence for Complainants for the sum of $160,566.17. The contract specifically provided that Respondent would construct a masonry fireplace at the price of $3,250.00. The contract also indicated that concrete that was pressure rated at a minimum of 3,500 pounds per square inch (psi) would be used to construct the foundation. The contract also explicitly states:

“Any alteration or deviation from the floor plans and specifications will be executed only upon written orders for same and will be added to or deducted from the amount quoted in this contract. All additional agreements must be in writing.”

2. During the construction, it appears, and Respondent does not contest, that the concrete that was actually used for the foundation was 3000 psi, not 3500 psi as stated in the contract. The undisputed testimony also shows, however, that over time the “psi” rating will go up as the concrete cures. The testimony adduced at the hearing shows that since the concrete is now two years old, it has attained a rating of 3500 psi by simply curing. Complainants do not contend that the concrete has in any way failed or that it will fail due to the difference in the psi rating. 3. The construction plans for the home clearly show that a masonry fireplace was to be installed. The parties have disputed whether the Respondent changed the masonry fireplace to a “zero clearance” type fireplace without the consent of the Complainants. At the hearing, Mr. Robert Bigando, the site supervisor for the construction of Complainants’ home, testified that the change to the fireplace became necessary when it was discovered at the site that Complainants’ desired style of fireplace could not be built using a masonry style of fireplace but instead would have to be constructed using a “zero clearance” in order to accommodate the Complainants’ stylistic preferences. The problem stemmed from the fact that the room measurements would not accommodate the masonry fireplace and there would not be sufficient clearance for the windows which complainants desired to have placed in the room. 4. Mr. Bigando testified that every detail of the fireplace, including the reason for the change, was discussed with Mrs. Lavin and that she agreed with the change. Indeed, Mr. Bigando testified that many meetings were held between he and Mrs. Lavin to discuss the need for the change in the construction of the fireplace and how the changes would be carried out. According to Mr. Bigando, the fireplace mantel and chimney were changed to suit Mrs. Lavin and the fireplace was done “exactly the way Mrs. Lavin wanted it done.” This conforms with the testimony of Respondent’s president who indicated that the style of the chimney, the style of the bancos (bench chairs on either side of the fireplace that are built into the wall of the home), and the style of the mantel were changed in accordance with the wishes of Mrs. Lavin. The undersigned finds Mr. Bigando’s testimony to be credible and finds that in fact Complainants were consulted about the need for the change and agreed to the change. 5. The cabinets which Complainants had ordered, Kraftmade “Laguna” style, were not what was installed. Instead, custom made cabinets were manufactured by a subcontractor for Respondent in a manner which was identical to the “Laguna” style. Respondent’s cost on these cabinets was $5,132.00. According to Mr. Bigando, the need to utilize the custom cabinets came from the Complainants need to move out of their fifth wheel (which was serving as a temporary residence) and to move into the home. Because of this, and the fact that the Kraftmade cabinets would not be finished in time to accommodate the need to move into the home, the decision was made to have the custom cabinets built. Mr. Bigando also testified that Complainants were apprised of the fact that they would be receiving custom cabinets instead of the Kraftmade. 6. It also appears, however, that Complainants were not informed that there would be any additional cost for the cabinetry until after the change had been accomplished and the cabinets installed. Complainants had contracted for cabinets that would cost $3,450.00. Respondent submitted a bill for an additional amount of $1,682.00 to cover the cost of the cabinets which bill was paid by Complainants’ mortgage lender. Complainants were entitled to the benefit of their original bargain and the failure to inform Complainants of the additional cost before proceeding with the purchase and installation of the cabinets constituted wrongful conduct. . . . 7. It is essentially undisputed by Respondent that there are problems with the way in which the sliding Arcadia door was installed, that the self-closing hinge on the solid core door between the garage and the home does not work and needs to be replaced, that the garage service door (exterior door) needs to be adjusted to allow proper fit with the weather- stripping, and that the windows which were replaced to meet county emergency egress requirements need to have the stucco finished and need to be repainted. At the hearing, a representative from the window and door manufacturer testified the door sill and frame were not properly installed. While some progress has been made toward correcting these items, the problems still remain. The testimony at the hearing, as well as Respondent’s candid admissions with respect to these items, demonstrate a violation of the requirement that work be performed in a workmanlike manner pursuant to A.A.C. R4-9-108. 8. With respect to the Arcadia door, it was the testimony of the window and door manufacturer’s representative that the frame and sills of the Arcadia door had been damaged by Respondent’s attempts to repair the leaks that have plagued the door. It was also the witness’ testimony that the existing frame and threshold of the door should be removed and a new, undamaged unit be installed in order to ensure the functionality of the Arcadia door. The undersigned finds this testimony to be credible. 9. It is also undisputed that the registrar’s inspector issued a corrective work order to Respondent to, among other things, correct the fireplace, correct the Arcadia door, correct the weather-stripping on the garage service door, and to adjust the screen door on the Arcadia door. Prior to the time for the hearing, Respondent completed other repairs mandated by the corrective work order which are not now in issue. Between the first and second hearing dates, Respondent completed the repairs to the Arcadia screen door. Of the items listed in the corrective work order, the fireplace, Arcadia door, and garage service door have not been corrected. 10. After first considering and determining which of Complainants’ complaints amounted to violations of the applicable statutes, the undersigned then reviewed Respondent’s two year complainant history in order to determine appropriate sanctions against the license. The undersigned notes that, with the exception of the instant complaint, the registrar’s two year complaint history shows no complaints lodged against Respondent. CONCLUSIONS OF LAW 1. The complainants have 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." 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). 2. 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 or any building codes of the state or any political subdivision…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. * * * (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 a written directive from the registrar. A.A.C. R4-9-108 specifically states that “[a]ll work shall be done in a workmanlike manner.” 3. “The general rule in most jurisdictions is that parties to a written contract may alter or modify its terms by a subsequent oral agreement even though the contract precludes oral modification.” Phoenix Orthopaedic Surgeons v. Peairs, 164 Ariz. 54, 57-58, 790 P.2d 752, 755-56 (App. 1989), quoting Park v. Dealers Transit, Inc., 596 F.2d 203, 204 (7th Cir. 1979). 4. Respondent has violated A.R.S. § 32-1154(A)(3) as demonstrated in Findings of Fact Paragraph Seven. 5. Complainants have failed to demonstrate that Respondent violated A.R.S. § 32-1154(A)(2) by failing to install a masonry fireplace or by installing the custom built cabinetry instead of the Kraftmade cabinets. In this respect, the undersigned finds that the testimony of Mr. Bigando and the Respondent, as discussed in Findings of Fact Paragraphs Three and Four, are credible and that Complainants have failed to show by a preponderance of the evidence that the changes were undertaken without their consent. Accordingly, a requisite of A.R.S. § 32-1154(A)(2), that the change be undertaken without consent, has not been demonstrated in this case with respect to these two issues. 6. Complainants have demonstrated a violation of A.R.S. § 32- 1154(A)(2) in Respondent’s failure to utilize 3500 psi concrete. The mere fact that the concrete provided had a strength test of some 500 pounds less is a material difference within the meaning of the A.R.S. § 32-1154(A)(2). 7. Respondent has violated A.R.S. § 32-1154(A)(23) as demonstrated by Findings of Fact Paragraphs Seven and Nine above. The failure to change the fireplace as directed by the inspector’s letter, however, does not constitute a violation of this statute. The Complainants’ agreement to the change of the fireplace from a masonry unit to a “zero clearance “ unit constitutes valid justification for the Respondent to fail to undertake the directive to change the fireplace to a masonry unit. 8. Respondent’s failure to comply with the corrective work order in a timely fashion also constitutes wrongful conduct within the meaning of A.R.S. § 32-1154(A)(7). This conduct has resulted in substantial harm to the Complainants in that despite the passage of several months, they still have an improperly installed door, and the window units in the two bedrooms that were found not to meet Gila County egress requirements have not been repaired. 9. Furthermore, the failure of Respondent to apprise Complainants of the cost of the change until after the cabinets had been installed amounts to wrongful conduct. Respondent should have informed Complainants of the additional cost before the installation of the cabinets. By failing to do so, Respondent unilaterally forced upon Complainants the loss of the bargain of their original contract price and left them powerless to require that Respondent stick to the terms of the original contract. 10. As part of its policing powers, the registrar’s office has the power to impose a condition of restitution. A.R.S. §32-1156.01. See also, Sun Power v. Arizona Registrar of Contractors, 166 Ariz. 437, 803 P.2d 430 (App. 1990). In this matter, it is appropriate to order that Respondent pay restitution to Complainants in the amount of $1,682 to provide the benefit of their original bargain to Complainants with respect to the cabinets. RECOMMENDED DECISION Based upon the foregoing, it is recommended that Respondent’s Class B license shall be suspended on the effective date of the Order until such time as written proof of the following is submitted to the registrar’s office that: (1) Respondent has accomplished appropriate and effective remedial work as follows: (A) Provide a new Arcadia door frame and threshold and install the entire door in a workmanlike manner; . . . . . . . . . (B) Correct in a workmanlike manner the windows which do not meet county egress requirements so that these windows meet all county requirements and match existing windows in the home; (C) Correct in a workmanlike manner the self closing hinge on the solid core door between the home and the garage; (D) Correct in a workmanlike manner the garage service door so that the door fits properly with the weather stripping;

(2) Respondent has paid or tendered to Complainants the amount of $1,682.00 as restitution. In addition, it is recommended that Respondent be ordered to pay a civil penalty to the registrar pursuant to A.R.S. §32-1154(D) in the amount of $500.00 for failing to comport with the corrective work order by failing to complete repairs to the doors and windows in a timely fashion. In the event that each of the above directives are accomplished on or before the effective date of the Order entered in this matter, then the above-provided license suspension shall not take place and the citation and complaint in this matter should be closed. Done this day, September 21, 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