ALJDEC decisions subject to certification as final

05F-2664-ROC-com2 · Registrar of Contractors · 2010-04-14

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

FINAL COMPLIANCE HEARING: Convened on January 7, 2010 and rescheduled Further Final Compliance Hearing convened on April 1, 2010.

APPEARANCES: >The Complainant was represented by its attorney, Craig L. Keller, Esq. >The Respondent was represented by its attorney, David F. Gaona, Esq.

ADMINISTRATIVE LAW JUDGE: Robert I. Worth _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order on Final Compliance Hearing are made.

FINDINGS OF FACT

1. The instant proceeding was the second Compliance Hearing scheduled in the above-entitled matter. As expressly stated in the Registrar’s Order, this was to be the “Final” Compliance Hearing. When the allotted time for the presentation by the

respective parties of all testimony and evidence proved to be insufficient, the hearing session was recessed and set for Further Final Compliance Hearing on a fixed future date and time.

2. John Argo, the owner and principal operating officer of Complainant, had testified on direct examination at the initial Final Compliance Hearing session, but his ensuing cross-examination was interrupted prior to completion so as to enable several other non-party witnesses to testify out of the normal order and to be excused. Mr. Argo’s cross-examination was subsequently resumed but still could not be fully completed by the time that the normal hearing day had ended. His testimony on cross examination was to again resume at the start of the Further Final Compliance Hearing session.

3. Although legal counsel for both parties together with Thomas Swaine, Respondent’s President and qualifying party, were present at the start of the Further Final Compliance Hearing session set for February 23, 2010, Mr. Argo failed to attend although the start of such session was delayed for a significant time duration to enable a late appearance. It was mutually agreed under the circumstances that the Further Final Compliance Hearing would be rescheduled to another date certain in the future.

4. At the start of the rescheduled Further Final Compliance Hearing session, Mr. Argo once again failed to appear after another time delay awaiting a possible late arrival. In point of fact, the Further Final Compliance Hearing session lasted well over five hours and Mr. Argo had still not appeared or otherwise contacted the tribunal or his own counsel. This absence, effectively depriving Respondent of the ability to fully conclude its cross-examination, prompted motions by Respondent’s counsel both to dismiss the prior Motion or request for the convening of the instant Final Compliance Hearing, thereby terminating these administrative disciplinary proceedings without sanctions, and also to strike the entire testimony given by Mr. Argo at the initial Final Compliance Hearing session.

5. Although the undersigned Administrative Law Judge declined to grant or recommend the granting of the Motion to dismiss or otherwise vacate the prior Motion for another Compliance Hearing as well as the proceeding itself, it was determined upon due consideration to grant the Respondent’s separate Motion to strike the incomplete testimony of Mr. Argo in its entirety under all the circumstances. Consequently, no consideration may properly be given or was given to any portion of the stricken testimony of Mr. Argo in the formulation of the within Decision and Recommended Order on Final Compliance hearing.

6. The original Compliance Hearing in this matter was the result of a remand Order by the Superior Court following Respondent’s appeal of the Registrar’s disciplinary Order. No remedial work had been performed by Respondent up until that time, and the Decision and Recommended Order by the Administrative Law Judge following the (initial) Compliance Hearing, submitted and subsequently approved and adopted by the Registrar of Contractors, determined that certain tendered remedial work by Respondent had been justifiably rejected by Complaint.

7. Another opportunity was provided in the aforesaid prior Order on Compliance Hearing for Respondent to comply with the corrective work conditions set forth in the previously entered and affirmed disciplinary Order, all corrective work to be performed in a manner consistent with the parameters expressed within the Order on that Compliance Hearing. Such Order had included the identification of several jobsite areas or locations to be addressed in the performance of appropriate remedial measures and also contained observations and suggestions with respect to the Respondent’s corrective work efforts that were to be undertaken, leading to the successful ultimate accomplishment of remedial measures that would satisfy prevailing industry standards and tolerances.

8. Following the exchange of correspondence between the attorneys for the respective parties who had demonstrated an ongoing inability to effective communicate

with each other directly, Respondent undertook to evaluate and formulate remedial measures primarily to address and rectify drainage problems experienced at several areas on the originally installed parking lot. Despite the express observation in the previously submitted and approved Decision and Order on Compliance Hearing as to the somewhat questionable wisdom of Respondent’s previously express intentions not to seek and obtain advance professional engineering guidance, Respondent’s qualifying party, Thomas Swaine, decided unilaterally, based upon his prior trade experience, to analyze and formulate appropriate solutions without receiving any advance engineering opinions or input.

9. In keeping with Respondent’s above-described communicated intentions that also included a further expressed intention to ultimately have the success of its subsequently performed work confirmed by an engineer, Respondent did subsequently resort to the services of a licensed civil engineer, very shortly before the convening of the initial Final Compliance Hearing session, to examine its competed remedial work after it was performed, and such engineer’s individual testimony given at the second Compliance hearing was generally favorable.

10. With respect to the drainage issues or suspect locations on the installed parking lot installed originally by Respondent, three separate issues or areas were to be addressed, evaluated and rectified by effective remedial work performed at Respondent’s expense. Such issues or locations consisted of (a) certain excessive ponding at or near the Northwest corner of the parking lot at which point most of the surface water that was being deposited and accumulated on the asphalt surface was to exit the parking lot; (b) the parking lot portion that was installed directly behind the leased structure along the East side of the property, the Northern end being occupied by a Bar establishment into which water had been shown to have entered, producing a degree of interior flooding; and (c) the parking lot area in front of three garage bays on the Southern portion of the property that were utilized for an important portion of

Complainant’s trailer manufacturing, assembly and repair operations, customarily performed both inside and immediately outside the garage structure which had also experienced interior water entry or flooding problems.

11. Since the initial Compliance Hearing Order had determined that previously proposed corrective work by Respondent consisting of the installation of a concrete valley gutter directly adjacent to the concrete slabs in the garage bays which would have the potential of unreasonably interfering with or impeding the Complainant’s ongoing business operations, encompassing the manufacturing, repairing and frequent moving of varying sized trailers, would not constitute a valid tender of remedial work, it necessarily follows that any formulated and subsequently performed corrective measures to curtail and rectify all drainage problems must also not adversely impact upon Complainant’s business operations.

12. No portion of the actual subsequent remedial work by Respondent was performed so as to alter or modify the water drainage toward the Northwest corner of the parking lot and the property. Uncontroverted evidence presented at the hearing tended to indicate that Respondent took elevation measurements which served to confirm that all water deposited on the asphalt lot surface was appropriately draining or flowing toward the Northwest corner as intended. Although the moving water was designed to exit the asphalt lot surface onto the abutting dirt, there was a ponding condition that was credibly shown to have been created primarily by an overgrowth of grass or weeds along the edge of the asphalt that in turn blocked the further flow of water off and away from the asphalt lot surface.

13. During the performance by Respondent of corrective work at other locations of the parking lot, Respondent offered to and did assist Complainant with manpower and equipment in removing some portion of the excessive weed or vegetation growth at the edge of the Northwest corner of the lot. Complainant’s ongoing and sporadic

maintenance attempts consisting of periodically cutting back portions of the excessive grass or weed growth was shown by credible testimonial and photographic evidence to have been less than diligent, timely or effective. It is found and determined that the presently experienced excessive ponding condition in that Northwest corner location was not being proximately caused or exacerbated by Respondent’s prior work on the parking lot installation work and its decision not to perform any further remedial work is found to have been adequately supportable. Respondent has effectively addressed the Northwest corner drainage problem as mandated by the terms of the previously entered Order on Compliance Hearing.

14. The corrective work formulated and performed by Respondent to address the drainage problems and previously experienced water entry into both the leased structure housing the Bar establishment and into the garage bays used by Complainant in its business-related work was somewhat similar. Respondent was to and did completely remove and replace significant amounts of the parking lot’s asphalt surface and subsurface aggregate base course (ABC) materials, also providing adequate means to assure that accumulated water would be directed away from both structures and would follow a path enabling it to exit the property either towards the Northwest corner of the lot or towards the abutting gravel surface on the West side. The Registrar’s entered prior Order following the prior Compliance Hearing had incorporated a mandate that the contemplated removal and replacement work should include locations approximately twenty (20) feet in front of such building structures.

15. With respect to the leased structure containing the Bar establishment, Respondent completely removed a section of the existing asphalt lot that measured approximately 20 to 24 away from the concrete sidewalk behind the structure and approximately 80 to 100 feet in length along the rear of the such leased building, replacing the removed asphalt with a surface enabling positive drainage into a pre-existing natural flow line diagonally across the lot proceeding towards the Northwest

corner. No need for a new or different flow line was determined by Respondent to be necessary since, after removal of a raised asphalt lip at the point where the parking lot had met the concrete sidewalk behind the structure, all accumulating surface water was allowed to follow into and through the already existing drainage path. Credible evidence supported a finding that, after the remedial work at this location, the desired drainage result was properly and effectively achieved.

16. To the extent that some relatively minor ponding had been observed at an identified location near the back door to the Bar premises, it was not sufficiently shown that such ponding was excessive or incapable of disappearing within a short time duration, thereby not being violative of any applicable industry standards or tolerances. Respondent’s obligation to rectify the drainage in this area is further found to have been satisfactorily complied with, and no unreasonable or even minimal interference with any of the several tenant-occupants’ intended uses of their respective business premises was demonstrated.

17. With respect to the asphalt lot immediately outside of the three garage bays, Respondent completely removed a section of the existing asphalt lot that measured 24 feet in width by 60 feet in length, replacing the removed asphalt with a surface enabling positive East to West drainage to the West gravel area. This result was achieved by means of a providing a flow line utilizing a “V” depression gradually angled from the surface levels both at the 24-foot replacement location and at the concrete exterior edges of the garage bays, with the middle of such depression being placed at about the half-way point of the replaced asphalt section, or about 11 or 12 feet from the concrete bay edges. The depth of the “V” depression ranged from approximately a bit under 2-inches in front of the East bay garage door to approximately a bit under 8-inches in front of the West bay garage door.

18. It was not effectively disputed that the replaced asphalt parking lot areas both in front of the garage bays, as well as behind the leased structure, are presently

draining all surface water properly. Nor was it disputed that other means and methods to achieve effective drainage results could have been designed and implemented. However, the selections as to the type, dimensions and overall manner of remedial work that was performed by Respondent at all suspect locations cannot be held to have been solely or even dominantly motivated by cost considerations even though many, if not most, of any designed and constructed alternatives might well have resulted in the generation of more expenses.

18. In point of fact, Respondent’s choice of corrective measures was claimed by Respondent to have generated overall labor and materials costs to Respondent of over $11,300.00, a sum approaching the parties’ applicable stated $15,888.00 contract price for the original entire asphalt lot installation work. It must be observed that, even considering the passage of a rather long time period, the total amount of such estimated costs to Respondent does seem to appear surprisingly high especially in light of the documentary showing that several separate bids from competing specialty contractors had been obtained several years earlier in 2004 for substantially the same type and quantum of remediation work at a fraction of the reported cost that was calculated by Respondent shortly after performance of its December, 2008 jobsite remediation work.

20. Respondent’s failure or refusal to seek and obtain advance engineering input and designs that may well have considered and urged performance of another method not only to solve all drainage problems but also that might involve less potential interference or impact upon Complainant’s business use of the premises cannot be and is not condoned under all the circumstances and in light of the overall history of this matter. Remaining mindful of the fact that the lowest part of the constructed flow line, especially in front of the Western-most garage bay, was placed at a location less than only 12 feet in front of the garage bay concrete where a prior refusal by Complainant to allow Respondent to place a concrete valley gutter was upheld as not being

unreasonable, the results of an on-site demonstration attempting to reveal a measure of substantial difficulty in moving Complainant’s trailer-related equipment in and out of one of the garage bays due to the selected location and size of the flow line depression must be held, based upon the evidence of record, to have been inconclusive.

21. Significantly, there was no showing of any substantial or even minor gouging or damage to the asphalt surface traceable to the movement of Complainant’s equipment over the flow line depression either during or prior to the demonstration, and it also appeared that Complainant was able to place work tables and other work-related items on the asphalt surface directly abutting the concrete slabs of all garage bays. The sole indication of any touching of the asphalt surface by Complainant’s equipment was an observation that a jack stand that was never raised during movement of a trailer had made contact with the surface. It should be additionally noted that any other indications of business difficulties or interferences that may have been encompassed within the stricken partial hearing testimony of Complainant’s principal operating officer must not be given any probative weight or other value. It must be found and determined under all the evidence of record herein that no unreasonable or significant interferences, safety dangers or other adverse business impacts resulting from the Respondent’s flow line depression placement and configuration were adequately established hereunder.

22. It is also of some interest to note that, although Complainant had voiced a prompt objection to what it perceived as Respondent’s installation of a valley gutter and not a gradually depressed flow line farther away from the location previously deemed impermissible directly in front of the garage bays, no form of formal or even informal notice was given by Complainant with respect to the ongoing interference with business operations and safety concerns until a pre-hearing inspection held on behalf of the Registrar thirteen months later.

23. If, as a result of the selected manner of remediation, especially in front of the garage bays, any specific or approximate monetary value attributable to diminished or less effective utilization of the premises or more time-consuming and hence more costly operational efforts as part of Complainant’s business endeavors could be established or quantified so as to support and warrant any affirmative claim of damages or any monetary offsets due to not having received the full benefits of its original contractual bargain, Complainant remains free to pursue such claims or offsets in another, more appropriate civil forum.

CONCLUSIONS OF LAW

1. The evidence of record at the second and Final Compliance Hearing sufficiently established that Respondent has achieved substantial compliance with the terms of the previously entered Orders of the Registrar of Contractors.

RECOMMENDED ORDER ON FINAL COMPLIANCE HEARING

In view of the foregoing, it is recommended on Final Compliance Hearing that the entire Citation and Complaint in Case Number 05-2664 be closed.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty (40) days from the date of that certification.

Dated: April 14, 2010 OFFICE OF ADMINISTRATIVE HEARINGS

/s/ Robert I. Worth Administrative Law Judge

Transmitted Electronically to:

William A. Mundell, Director Registrar of Contractors

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