ALJDEC (decisions subject to certification as fin)

03F-M0190-ROC · Registrar of Contractors · 2003-02-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 17, 2003. APPEARANCES: The Complainant was represented by its president and qualifying party, Francis J. Hays. The Respondent was represented by its president and qualifying party, Eddie Valdez. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT

1. The Complainant, Hays Roofing, Inc., is the holder of License No. 100770, a Class C-42 residential roofing license, and License No. 100772, a Class L 42 commercial roofing license, issued by the Registrar of Contractors. 2. The Respondent, Valdez & Son Construction, Inc., is the holder of License No. 103733, a Class B-01 general commercial contracting license, issued by the Registrar of Contractors. 3. COBA, L.L.C., is the owner of a newly constructed Famous Sam’s restaurant located at 250 South Phelps Drive, Apache Junction, Arizona. Its agent is Barry R. Jacobs. 4. Mr. Jacobs hired Respondent as the general commercial contractor for the construction of the new restaurant. 5. Complainant submitted a written proposal dated October 3, 2001, to Respondent for the project. Complainant’s proposal included the following:

• Supply and install three ply, Class A GAF built-up specification number I-O-3-M over 1 layer of 3.8” polyisocynanurate insulation and 1 layer of ¾” Perlite insulation (required over ISO insulation) (total R-Value 30.28). • Supply and install polyisocyanurate built-up tapered crickets. • Supply and install four 5” chem. • Curb pitch pockets and pourable sealer at the MAU. • Supply and install standard color-thru Monier Lifetile “S” type tile over 1-30# ASTM felt and 1” x 2” x 4’ battens pursuant to the Plans and the manufacturer’s specifications. • Supply and install metal bird stops, side-wall channel flashing, roof-to-head-wall flashing and Z-bar counter-flashing. • Leave the area clean of all roofing debris • Supply GAF 10-year full value manufacturer’s warranty on the built-up roofing. • Supply the tile manufacturer’s 50-year tile warranty. • Total price: $24,580.00.

6. The Complainant’s written proposal also included the following options with pricing:

• If Staco La Casa standard color tile is used in lieu of the Monier color-thru “S” tile: add $220.00. • If the 4-ply specification is used in lieu of the 3-ply system: add $1,350.00.

7. Respondent accepted Complainant’s proposal but did not do so in writing. 8. Respondent changed the tile selection from the MonierLife “S” tile to the Staco tile selection. The former tile required the use of bird stop metal. At the time of the change in tile, the bird stop for the Staco tile was not being manufactured. 9. On or about December 2, 2001, the roofing material manufacturer, GAFMC, caused an inspection of the roof to be performed for the purpose of issuing the warranty. That inspection resulted in the manufacturer requiring that the following described work be performed prior to the issuance of the warranty:

• “Roof area needs general cleanup.” • “Re-flash all curb corners, others have stepped on…evap. cooler needs to be set – make sure deck is flashed before it is set.” • “1 pipe has metal flashing instead of lead sleeve. This flashing needs a rain collar.” • “Drains [and] overflows too close together. Also gradual sump to drains are needed to flash drains properly – They will be ongoing maintenance items for the owner if not corrected.” • “Grease bin unit base flashing has been damaged when unit was set. This flashing needs to be redone. The curb needs to be higher as it is set in a cricket and which did not allow for the rise in the roof and it appears that the curb is larger than the grease bin cap. Redo this penetration.”

10. Complainant performed the followings punch list items required by the roofing manufacturer:

• 40 storm collars on various size conduits. Complainant subsequently invoiced the Respondent the total amount of $1,280.00 for those materials and labor. • Repair flashings damaged by others on equipment curbs on January 11, 2002. Complainant’s charge for that work was $688.00. • Change on cricket and drain design. The price for those items was $625.00. • Repair base flashing of grease head exhaust and install metal counter-flashing. The price for that work was $314.00.

11. The parties failed to execute a written change order for the punch list work required to be performed in order to obtain the roofing manufacturer’s warranty. 12. There is credible evidence that Respondent “agreed orally to authorize the additional crickets and drains to help provide a better drainage system.”[1] Respondent is determined to be responsible for paying the amount of $625.00 to Complainant for the work performed. Even though Respondent may not have been paid that amount from the owner, Respondent failed to establish that it lacks the capacity to pay that amount. 13. Mr. Jacobs admitted that he agreed to the repair to the base flashing of grease head exhaust and installation of metal counter-flashing. He admits that the repair should have been back-charged to the HVAC subcontractor. Respondent is found to be responsible for paying Complainant the sum of $314.00 for that work. 14. Respondent has retained the sum of $2,480.00 as retention for the roofing subcontract despite Complainant’s request for the release of those funds. Respondent has conditioned the release of the retention funds on receiving the manufacturer’s warranty, which Complainant does not want to deliver until it has received payment of the retention funds. In his letter dated January 3, 2003, Mr. Jacobs admits that the “(r)etention is due and payable by Valdez Construction Company (sic).”[2] Respondent is found to be responsible for paying the roofing subcontract retention funds to Complainant. There is no credible evidence that Complainant will not deliver the manufacturer’s warranty upon payment. If it does not, Respondent may seek redress either legally and/or administratively. 15. There is determined to be a bona fide dispute as to the value of the materials supplied and the work performed for the storm collars. Complainant seeks payment in the amount of $1,280.00 for the 40 storm collars and there installation. Mr. Jacob contends in Respondent’s Exhibit 2 that he purchased 30 storm collars for under $300.00 on another project, although he does not indicate what the labor costs were for those storm collars. That dispute should be resolved in a court of competent jurisdiction if Complainant, Respondent and Mr. Jacobs cannot informally resolve the dispute. 16. Respondent’s failure to pay Complainant monies owed in excess of $750.00 is deemed to be a wrongful act which has substantially injured the Complainant. 17. This tribunal is determined to be the inappropriate forum for the assessment of interest on the outstanding balance owed Complainant as described above. Complainant’s written proposal submitted to Respondent did not mention any potential interest on outstanding balances due and payable. 18. Any issue not specifically addressed above is determined to lack sufficient evidence of record to support a finding of a statutory violation having been committed by Respondent.

CONCLUSIONS OF LAW

1. The Registrar of Contractors has jurisdiction over the Respondent and the subject matter in this case. 2. The evidence of record is adequate to establish that Respondent violated the provisions of Arizona Revised Statutes § 32-1154(A)(7) and (11).

RECOMMENDED ORDER

In view of the foregoing, it is recommended commencing on the effective date of the entered Order in this matter that Respondent’s Class B-01 license be suspended until the Registrar of Contractors receives written proof that Respondent has paid the total amount of $3,819.00 to Complainant. It is further recommended that if Respondent pays the sum of $3,819.00 to Complainant on or before the effective date of the entered Order in this matter, then the above-provided indefinite license suspension shall not take place, and the Citation and Complaint in this matter shall be closed. Done this day, February 4, 2003

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2003, to:

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

By ___________________________ ----------------------- [1] See Complainant’s Exhibit 6. [2] See Complainant’s Exhibit 13.

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