ALJDEC

01F-P0265-ROC · Registrar of Contractors · 2001-10-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 4, 2001 APPEARANCES: Complainant appeared through its president, Tom Lewis and Respondent appeared through its president, Richard Phillips. 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. Pursuant to contract, Complainant retained Respondent to accomplish specified concrete work on a new home construction project. Complainant alleges certain deficiencies in the work performed by Respondent and same are discussed in the findings below.

2. The following salient facts were adduced at the hearing and are important to note:

a. Complainant and Respondent have a long-standing business relationship, as general contractor and concrete subcontractor. b. Complainant retained Respondent to perform a “place and finish” job for the concrete on a new home construction project. According to Respondent, this type of concrete job merely required it to place the concrete and finish same, while Complainant, the general contractor on the project, would be responsible for accomplishing the grade for said concrete work, prior to placement of the concrete. c. Approximately six (6) to seven (7) months after Respondent accomplished the aforementioned concrete placement work, cracking in the interior of the garage slab became evident. d. A jobsite inspection by the appointed inspector for the Registrar of Contractors was held, pursuant to which that Agency sent Respondent a letter directing it to accomplish specified remedial work within a stated period of time. Notwithstanding the terms of said Agency directive, compliance was not accomplished. e. The Registrar’s inspector appeared at the instant hearing and testified to his findings at the aforementioned jobsite inspection. The inspector indicated that there are four (4) panels of concrete inside the garage that revealed cracking. He stated that the two end panels exhibited spider web type cracking that was excessive and the other two panels in question had cracks which were beyond minimum tolerances, along with vertical displacement. Based on these findings, he issued the above- described Corrective Work Order. f. The Registrar’s inspector further testified that he conducted a pre-hearing jobsite inspection and at that time observed that the concrete in question had been replaced by others hired by Complainant. g. Complainant testified that it discussed the repair of the concrete with Respondent in the fall of 2000 and at time Respondent had agreed to replace same after the winter of 2000/2001. The corrective work was never performed by Respondent in the Spring of 2001, thereby causing Respondent to file the instant complaint with the Registrar of Contractors. h. Evidence of record showed that Complainant allowed Respondent more than adequate opportunity to comply with the above-described assigned inspector’s Corrective Work Order and it was not until almost 60 days after said Corrective Work Order was issued that Complainant sent Respondent a certified letter, indicating that Complainant intended to complete the necessary remedial work through its own efforts. Complainant did not receive any response to this letter. i. Complainant testified that it accomplished the demolition work of Respondent’s concrete with its own employees and then hired a concrete subcontractor to place the new concrete work. The concrete subcontractor billed Complainant the total sum of $2,019.00 for its work on the concrete replacement project. The billing in question was entered into evidence and was not shown to be unreasonable. j. Complainant also claims unspecified monetary damages for the hourly wages that it paid its employees for work on the demolition of Respondent’s concrete. k. Respondent states that it has no responsibility for the failure of the concrete, contending that Complainant had not properly graded the area in and around where the concrete was placed, thereby allowing water to run toward the garage floor. Respondent further contends that there was significant rainfall in the Fall of 2000, which caused the damage to the concrete.

3. Notwithstanding Respondent’s claim that Complainant had accomplished either inadequate or improper grading of the site, prior to the placement of his concrete, by virtue of performing the concrete placement, Respondent is effectively deemed to have accepted the surface and conditions, wherein the concrete was placed, as being sufficient to support a workmanlike result. Therefore, Respondent is estopped to assert that it has no responsibility for the cracking of its concrete due to the grading of the subgrade wherein it accomplished said work.

4. Respondent’s concrete work is found to constitute unacceptable and substandard workmanship and, as such, same is also deemed to constitute a wrongful act within the meaning of the applicable charged section of the State’s Contracting laws.

5. Respondent’s failure to comply with the terms and conditions of the above-described Corrective Work Order is found to constitute a violation of the applicable charged section of the State’s Contracting laws.

6. It is determined and held that payment by Respondent, to Complainant, of the aforementioned $2,019.00, should be required as a reasonable condition to allow Respondent to avoid the imposition of otherwise appropriate disciplinary sanctions. Complainant’s proofs regarding its costs for the demolition of Respondent’s work are too unclear, to warrant using said claimed expenditures as a condition in the instant Order. However, nothing in this Order shall serve to prevent Complainant from seeking any further restitution against Respondent in a civil court of competent jurisdiction.

7. As set forth in the Citation and Complaint issued by the Registrar of Contractors, Respondent was advised that in the event of a finding of a violation against Respondent, Respondent’s prior disciplinary record of final Registrar of Contractors’ orders may be considered in mitigation or aggravation. Accordingly, subsequent to conclusion of the instant hearing, notice was taken of official records of the Registrar of Contractors regarding any prior final disciplinary orders against Respondent and said notice revealed that there are none. Therefore, Respondent’s prior record is properly deemed to be good and thus, is viewed as a matter in mitigation for any disciplinary penalties to be imposed as a direct result of this case.

CONCLUSIONS OF LAW

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

2. The Registrar of Contractors’ authority in matters such as presented herein, includes the ability to impose restitution, in whole or in part, as a reasonable condition to reduce any possible disciplinary action against contractors. The exercise of such authority is deemed appropriate in the instant case. Therefore, based upon all the evidence, a reasonable condition in this case would consist of the payment by Respondent to Complainant of no less than $2,019.00 as partial or full restitution for the cost to complete the replacement of the concrete. Imposing such a condition is more preferable than merely imposing a disciplinary action against Respondent’s license without providing a condition to reduce or eliminate same. 3. The Registrar may order a “restitutionary remedy...as part of the Registrar’s regulatory authority to take appropriate disciplinary action against those who violate the licensing”...laws set forth in A.R.S. § 32- 1154A (1) through (24), inclusive. An administrative award of damages is not an unconstitutional exercise of administrative authority where due process procedural rights are protected, where the authority to prohibit conduct has been well defined as in A.R.S. § 32-1154, and where judicial review is available as provided in A.R.S. § 12-901, et seq. Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 803 P.2nd 430 (App. 1990).

4. In addition to the aforementioned language in the Sunpower case, A.R.S. § 32-1156.01 provides, in pertinent part, that “an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee.”

RECOMMENDED ORDER

In view of the foregoing it is recommended, commencing on the effective date of the Order entered in this matter, that the Class KB-02 license of Respondent shall be suspended until the Registrar of Contractors receives written proof that Respondent has paid or tendered the sum of $2,019.00 to Complainant. It is further recommended that if Respondent pays or tenders the above-described sum of money on or before the effective date of the Order entered in this matter then the aforementioned suspension shall not take place. It is further recommended, in addition to the above-provided penalties, if any, that Respondent pay the sum of $100.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32-1154D. The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 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.

Done this day, October 10, 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