ALJDEC (decisions subject to certification as fin)

02F-A0423-ROC · Registrar of Contractors · 2003-02-04

STATE OF ARIZONA OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 15, 2003 (Prescott, Arizona)

APPEARANCES: Complainant and his wife appeared on their own behalf; Respondent was represented by its President Thomas Walter and Manager Roy Stringer.

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant Joseph Thorbecke brings this action alleging workmanship defects in his custom house built by Respondent Neal Klein Construction Inc. Complainant seeks corrective work and restitution. The parties presented evidence and testimony at the hearing and, based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Decision ordering corrective work only. FINDINGS OF FACT 1. Respondent is the holder of a class B- license (No. 044281) issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform general construction of residential structures and appurtenances, except for certain specialty contracting such as electrical, plumbing, swimming pools, etc. (See, Arizona Administrative Code (A.A.C.) R4-9-103.) Thomas Walter is Respondent’s corporate President. 2. In the year 2000, Respondent built a house for Complainant. The house was based one of Respondent’s model floor plans, but with variations. Thus, it was a “custom home.” The parties completed a walk-through and closed escrow in mid-August 2000. The parties’ relationship had deteriorated even before August 2000. Complainant lost trust in Respondent. Nevertheless, they continued to work together to resolve items for the next few years. 3. Complainant filed a complaint with the ROC in April 2002, complaining about numerous “punch list” workmanship items and several contractual items. On April 30, 2002, ROC Inspector Daniel Lafond issued a Corrective Work Order (“CWO”) after having performed a jobsite inspection. Out of about 45 items, the CWO ordered Respondent to correct 15 of them. The rest were found to be within workmanship standards, unsupported by evidence, or already corrected by Complainant. The evidence shows that Respondent made a good faith, diligent effort to correct the items ordered for correction. 4. Complainant filed an addendum to his complaint in June 2002, raising almost 20 other items. Inspector Lafond performed another inspection and on July 31, 2002, issued a second CWO. The July 2002 CWO ordered Respondent to correct one item and found the others to be within workmanship standards, unsupported by evidence, already corrected by Complainant, or duplications of items on the prior CWO. Again, Respondent made a good faith effort to correct the one item. At that point, however, Complainant was very frustrated and still did not trust Respondent. Items Respondent Will Correct 5. At the hearing, Complainant identified approximately 10 items that were still at issue. Respondent agreed that, if allowed access by Complainant, Respondent would make corrections to the rear patio concrete (item 9E), drywall cracks (item 31), cracks in the kitchen rear door and master bathroom door casing (items 17 and 36), and the bowed wall (item 5). Respondent had tried to correct the bowed wall earlier, but Complainant had rejected Respondent’s worker and excluded him from the house because Complainant did not feel that he was qualified. Thus, Complainant elected not to have Respondent fix the bowed wall in item 5. Respondent is still willing to make the correction if Complainant so chooses. However, so that Respondent does not have to have an indefinite responsibility in the matter, Complainant must choose to have the bowed wall fixed before Respondent completes the corrective work described in this Decision. After that, Respondent bears no more workmanship responsibility for the bowed wall of item 5. Items Not Supported By Evidence 6. Complainant raised two items at hearing that Inspector Lafond had found to be within workmanship standards: items 4 and 18, stucco cracks and shingles. Complainant did not provide sufficient evidence to overturn the Inspector’s impartial finding that those items were within workmanship standards. 7. Complainant also raised an issue with respect to the fill material used at his site (item 8A). Complainant sincerely believes that Respondent used improper fill that has caused an unstable foundation. However, there is no objective evidence to support Complainant’s belief. The evidence does not show, by a preponderance, any impropriety by Respondent concerning the fill material. Indeed, Respondent provided evidence tending to show that the material used is good material. (Exhibits 1 and 2.) There is no evidence proving a problem with the fill material. 8. The remaining items concern contractual matters. One of them concerns an accounting problem in which Complainant’s earnest money deposit was “lost” (item 43). It appears that, without Complainant bringing the matter up, Complainant may not have gotten credit for his $1500 deposit. However, the evidence shows that this was an accounting error by the bank, not by Respondent. Eventually, the money was returned to Complainant. The evidence does not reveal any improper action by Respondent. 9. Finally, Complainant and his wife both testified that when they hired Respondent they agreed with Respondent’s agent that the house would be tiled in certain rooms rather than carpeted. Complainant and his wife apparently thought that the tile was part of the purchase price and not an extra. Respondent did not. There was no meeting of the minds and no written contractual term addressing it, so the parties continued on, each thinking the opposite. This difference of thinking came to the fore in May 2000 when Respondent presented a change order to Complainant that included $1200 for tile. (Exhibit K.) There were discussions and conversations, but Complainant signed the change order on June 6, 2000, thus binding himself. He cannot now change his mind. The change order is Complainant’s acquiescence to Respondent’s position about the tile (item 42). CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant. Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). Further, the standard of proof at hearing is by preponderance of the evidence. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint. Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). Complainant has met that burden in part because Respondent conceded to performing certain workmanship items. 2. The evidence shows that Respondent has violated A.R.S. § 32- 1154(A)(3), violation of a rule, namely Arizona Administrative Code (A.A.C.) R4-9-108, by failing to build the house so that it met minimum workmanship standards. The items described in Finding of Fact 5 above state the items found deficient. 3. The evidence does not show any other violation of statute. 4. In accordance with the Citation and Complaint issued on September 12, 2002, this tribunal has taken administrative notice of and reviewed Respondent’s prior disciplinary record. It shows that Respondent has been licensed in Arizona since August 1976 and has not been disciplined. This is considered an excellent record. 5. The only action that should be taken in this matter is to order Respondent to correct the outstanding items or have its license suspended. No other disciplinary action is warranted.

. . .

DECISION IT IS RECOMMENDED that Class B- license 044281, held by Respondent Neal Klein Construction Inc. be suspended beginning the effective date of the Registrar’s Order until Respondent has completed the corrective work described in Finding of Fact 5. IT IS FURTHER RECOMMENDED that if Respondent completes the corrections before the effective date of the Registrar’s Order, the license suspension shall not take place.

Done this 4th day of February 2003.

Office of Administrative Hearings

______________________________ Eric A. Bryant Administrative Law Judge

Original mailed this ___ day of February 2003, to:

Michael P. Goldwater Registrar of Contractors ATTN: Jennifer Brown 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________ -----------------------

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