ALJDEC decisions subject to certification as final

06F-F0186-ROC · Registrar of Contractors · 2007-08-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 14, 2007

APPEARANCES: Complainant was represented by its attorney, Whitney Cunningham and Respondent appeared through its general manager, Pete Randall (“Pete”). 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 written contract, Complainant retained Respondent to accomplish specified concrete work on a new shopping center project. Complainant alleges certain deficiencies in the work performed by Respondent and these issues are discussed in the findings below.

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

a. Don Walters (“Walters”) appeared for Complainant and presented testimony. According to Walters, the parties entered into a contract for the price of $131,264.50. He testified that Respondent was only paid $55,640.61 on the contract price but in addition, payments were made on Respondent’s behalf to certain suppliers for materials and supplies which Respondent was obligated to provide. b. According to Walters, Respondent quit working on the project before completion, requiring Complainant to retain the services of others to complete the project. Walters claimed he expended the total sum of $116.928.41 to pay for materials, which Respondent should have provided per the original contract requirement, and for others to complete Respondent’s work. In addition, Walters claims specified backcharges on the original contract including, but not limited to, specified turndowns which Respondent failed to provide. The bottom line is Walters contends that Complainant expended almost $50,000 over and above the original contract price to have the concrete work for the project completed and claims monetary damages against Respondent for this overage. c. Walters testified that Respondent had manpower problems while it was on the jobsite and this problem required Complainant to provide Respondent with additional manpower to get the concrete portion of the project moving. d. Walters also testified to the fact that after the working relationship between the parties had broken down and Respondent had first quit working on the project, they had agreed to continue with the project based on a specified payment. A payment was tendered to Respondent on or about February 13, 2006 and as soon as Respondent picked up the check at the jobsite, Respondent left the jobsite and never returned. e. After the instant Complaint was filed with the Registrar of Contractors, the matter was assigned to the Registrar’s inspector in the Flagstaff office. The inspector appeared at the hearing and testified in regard to his findings at a jobsite inspection, as well as a pre-hearing inspection. f. The inspector’s findings at the jobsite inspection were as follows:

1. Turndown areas were not installed to the proper dimensions, as required by the contract and plans and specifications. 2. He observed several areas where there was a significant degree of lippage between adjacent sections of concrete. 3. There were numerous hairline cracks, which required repair at the sidewalk areas in front of the store fronts. 4. Areas at the edges of concrete were chipped. 5. Specified tool joints were sloppy, as manifested by inconsistent depths, voids, pock marks, and wavy lines or missing lines. 6. Concrete splatter was observed in certain areas of the project. 7. Curb facings were wavy and the finish was not smooth.

g. Based on his findings at the jobsite inspection, the inspector issued a Corrective Work Order (“CWO”), requiring Respondent to accomplish remedial work on the seven (7) areas listed above. At the pre-hearing inspection, the only item that appeared to have been adequately corrected was the area of the lippage on the adjacent concrete slabs. The inspector could not tell if anything had been done on the turndown issue. In regard to the cracks, he observed that more were present and that repairs had been attempted on others. The chipped concrete had been repaired but some of the repairs had failed. The tool joints were still inconsistent, there were still splatters of concrete on certain surfaces and nothing was done in regard to the wavy curb facings. h. The inspector testified that he could not state who or what caused the chipping on the edges of the concrete and that it could have been caused by other trades working on the project after the time that Respondent placed the concrete. i. Pete testified that Respondent had issues with Complainant. Among other things, Respondent would arrive at the jobsite on numerous occasions to find that Complainant was not ready for the concrete placement. Respondent contends that it lost time and money due to delays caused by Complainant. j. According to Pete, Respondent quit work on the project, due to the fact that Complainant was continually late on payments as well as being behind in payments at time work ceased. k. Pete contends that if the turndowns were not built according to plans and specifications, it was because Complainant, who was responsible for preparing the sub-grade, failed to provide adequate depth in the sub- grade preparation. l. Pete testified to Respondent’s attempts to comply with the CWO. He indicates that he advised Complainant’s superintendent at the time to notify him if any other work needed to be performed and she advised that she would check with the owner and get back to him. He never heard from her again. According to Pete, if Complainant would just give him a punch list of what needs to be corrected, Respondent would correct those items regarding work that it performed. m. Pete disagrees with some of Complainant’s claims for backcharges. In addition, he contends that Complainant refused to pay for extras. n. According to Pete some of the work that is on the CWO involves work performed by Respondent and some does not. o. Pete testified that Respondent worked on repairing the hairline cracks. p. In regard to the chipped edges, he believes these problems were caused by others and Respondent should not be held responsible for concrete that has been in place for 1 ½ years. He is only willing to repair any of the remedial work that his company performed which has been shown to have failed. q. In regard to the tooled joints, he claims that Respondent has attempted to work on them several times. r. In regard to the concrete splatter, he only accepts responsibility if it can be shown that it is his concrete work that caused the splatter. s. Regarding the curb facings, he indicates that remedial work cannot be performed at this time to deal with the wavy conditions, since asphalt paving of the parking lots now abuts the curb facings.

3. The weight of the evidence of record was sufficient to support a finding that the following constitute substandard and unacceptable workmanship attributable to Respondent:

a. Turndowns were not constructed to the proper depth. Notwithstanding the fact that Complainant may have prepared the sub-grade, Respondent accepted same as being adequate to comply with the required specification and thus, is effectively estopped to assert that it has no liability for the failure to attain the proper dimensions on the turndowns. Since the commercial project is already occupied, Complainant is not seeking any removal of the concrete in question but merely an acceptable warranty from Respondent, should there be any failure in these areas in the future. As of the date of the instant hearing, there had not been any failure. b. There are hairline cracks in the sidewalk that require proper repair. c. The tool joints fail to provide a consistent pattern, there is unacceptable dimensions in the depth of the joints, joints are wavy, joints are not smooth, joints are missing and there are voids and/or pock marks on joints. d. Respondent is responsible for any of his concrete work that has spattered onto adjacent surfaces and has not been removed. e. There is unacceptable waviness in areas of the curbing.

4. Complainant failed to sustain the requisite burden of proof necessary to establish that the chips along the edge of the concrete were due to any substandard workmanship performed by Respondent.

5. The evidence of record clearly established a complete breakdown in the working relationship and communications between the parties. Although Respondent was shown to have quit work on the project, prior to completion, Respondent contends that it was not being paid in a proper and expeditious manner. On the other hand, Complainant contends that Respondent was failing to perform work on the project in a timely and proper manner. The sharply conflicting testimony from the parties regarding these issues, was such that no basis exists for the disbelief of either side’s contention regarding why the project was not completed. Complainant had the burden of proof and was unable to establish an abandonment under the terms of A.R.S. §32-1154A (1).

6. A good faith money dispute exists between the parties. Respondent contends that it has not received proper and adequate payment for the work that it performed and Complainant contends that it has overpaid for completion of the project. Complainant failed to present any competitive bids for the costs that it incurred to complete the concrete work. The Registrar of Contractors, acting through an administrative license disciplinary hearing, is the inappropriate forum to adjudicate and liquidate the type of monetary claim presented herein and therefore in the event the parties continue to remain unable to resolve this issue, then same will have to be brought before a civil court of competent jurisdiction.

7. In its closing argument Complainant indicated that it did not have any confidence in Respondent and did not want Respondent back on the project. Nevertheless, no adequate basis has been shown to justify a departure form a longstanding policy of the Registrar of Contractors to allow a contractor a reasonable opportunity to correct determined workmanship deficiencies, subsequent to a hearing. In this regard, any corrective work that may be ordered as a result of the Order entered in this matter would only involve work performed by Respondent, not work performed by other contractors.

8. 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 a prior disciplinary suspension. Therefore, Respondent’s prior record is properly deemed to be poor and thus, is viewed as a matter in aggravation for any disciplinary penalties to be imposed as a direct result of this case.

CONCLUSIONS OF LAW

Respondent violated the provisions of A.R.S. § 32-1154A (23), (7), (2) and (3); namely Rule R 4-9-108.

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 complied with either “1” or “2” below:

1. Performed appropriate and effective remedial work on the items set forth in Findings of Fact 3(b) through 3(e). In regard to 3(d), Respondent is only required to clean concrete splatter that it caused and in regard to 3 (e) only required to correct the waviness in the curb facing if Complainant first removes the asphalt paving in said area.[1] Respondent is not responsible for concrete work that was performed by others.

2. Concludes other mutually acceptable arrangements with Complainant.

It is further recommended that if Respondent complies with one of the above-provided conditions on or before the effective date of the Order entered in this matter, then the aforementioned license suspension shall not take place. It is further recommended, in addition to the foregoing license suspension, if any, that Respondent’s Class K-02B license be placed on a period of 120 days disciplinary probation. This additional disciplinary penalty shall commence on the effective date of the Order entered in this matter or the date on which notice of Respondent’s compliance with the terms of this Order is filed with the Registrar, whichever is later. It is further recommended, in addition to the above-provided penalties, if any, that Respondent pay the sum of $175.00 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. 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 in this matter will be forty (40) days from the date of that certification.

Done this day, August 20, 2007.

______________________________________ Mark A. Silver Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2007, to:

Registrar of Contractors Fidelis V. Garcia Legal Department 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

----------------------- [1] In this regard, Complainant is also responsible for putting the asphalt paving back in place after corrective work is accomplished.

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