ALJDEC decisions subject to certification as final

06F-G0255-ROC-com2 · Registrar of Contractors · 2009-08-17

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 30, 2009 APPEARANCES: Complainant: Darlean Sugameli appeared and was represented by counsel, Rick K. Carter. Respondent: Ken Dolren, director of customer care, appeared[1] and was represented by counsel, Zahnie L. Soe Myint. Registrar of Contractors: Inspector Jim Hennessey appeared on behalf of the Registrar of Contractors. ADMINISTRATIVE LAW JUDGE: Brian E. Smith _____________________________________________________________________ Evidence and testimony were presented and, based on the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. The record indicates that the original hearing in this matter took place on May 3 and August 4, 2006, in Docket No. 06F-0255-ROC. Pursuant to a Recommended Decision and Order (“D&O 1”) issued by this tribunal September 20, 2006, and adopted by the Registrar of Contractors (“ROC/Registrar”), Respondent was ordered to perform certain corrective work. 2. Subsequently, on May 22, 2007, a compliance hearing was held in Docket No. 06F-0255-ROC-com. Prior to the presentation of any testimony or evidence, the parties concluded a settlement agreement and stipulated that the matter be closed as settled. The essential terms of that settlement agreement were read into the record and set forth in the undersigned Administrative Law Judge’s Decision and Order Vacating Hearing Based on Settlement Agreement dated June 7, 2007 (“D&O 2”). 3. By the terms of the settlement agreement, the parties agreed as follows: A. Complainant, Darlean Sugameli(“Complainant/Sugameli”), and Respondent, Beazer Homes Holdings Corp. dba Beazer Homes (“Respondent/Beazer”), hereby enter this settlement agreement this 22nd day of May, 2007, and agree as follows:

i. Parties, through their respective consultants/experts, will confer and agree upon an independent third-party licensed plumber/plumbing consultant, or other qualified expert, within three (3) weeks from the date of this settlement agreement.

ii. That the agreed-to independent licensed plumber/plumbing consultant/expert will investigate the plumbing allegations and issues in ROC matter G06-0255. The parties agree that the independent licensed plumber/plumbing consultant/expert will conduct his/her investigation without limits by either party and will do any inspections, testing or any other item he/she deems necessary to investigate the plumbing allegations and issues in this matter to determine any and all repairs, if necessary, to correct the cause, if any, of the allegations made in this matter.

iii. The parties agree that any and all fees, costs and/or expenses of the agreed-to licensed plumber/plumbing consultant/expert will be shared equally among the parties. In the event the licensed plumber/plumbing consultant/expert requires repairs, Respondent will bear the total cost of the third party.

iv. The agreed-to licensed plumber/plumbing consultant/expert will issue, following his/her investigation a written report with diagnosis of all plumbing problems, if any, specific repair recommendations, if any are necessary, and recommended time frame for remediation.

v. If plumbing related repairs are required by the agreed-to licensed plumber/plumbing consultant/expert, Beazer will make the repairs within a reasonable period of time utilizing licensed contractors, as necessary. Complainant will make her home and property available for any and all investigations deemed necessary by the licensed plumber/plumbing consultant/expert.

vi. During any and all investigations and/or visits, the parties agree that only counsel for each party will be present at the home and property.

vii. If the agreed-to licensed plumber/plumbing consultant/expert decides, via his/her written report, that no repairs are required, the matter will be closed with prejudice pursuant to settlement. If repairs were required, the agreed-to licensed plumber/plumbing consultant/expert will inspect the repairs and will approve the repairs or require action by written supplemental report, and such actions will be performed within a reasonable period of time. One approved by the agreed-to licensed plumber/plumbing consultant/expert and reported to the assigned Administrative Law Judge and Registrar of Contractors in writing, the matter shall be closed with prejudice pursuant to settlement.

viii. The parties hereby stipulate in advance that the findings of the licensed plumber/plumbing consultant/expert are final and binding and are hereby accepted by the Administrative Law Judge as such without further evidentiary hearings or the like. (Emphasis added).

ix. This agreement shall not in anyway act to release Beazer from its existing and continuous express or implied warranty obligations, if any, in any respect.

4. Based on the parties’ settlement agreement, the undersigned Administrative Law Judge vacated the May 22, 2007 hearing and remanded the matter to the Registrar for further appropriate action. By Order of Closing dated June 28, 2007, the Registrar approved the settlement agreement and ordered Case No. G06-0255 closed as settled. 5. The Registrar’s file in this matter revealed that on April 7, 2009, the Registrar re-opened Complainant’s Complaint and issued am Order Reopening Complaint and Setting Compliance Hearing as a result of Respondent’s alleged breach of the parties’ settlement agreement. 6. Prior to the compliance hearing, the parties submitted pre- hearing memoranda which set forth their respective positions relative to Respondent’s compliance with the settlement agreement. At the hearing, the parties stipulated to the admission of the memoranda. 7. In her memorandum, Complainant contends, inter alia, that Respondent did not comply with the settlement agreement by failing to cure a defect in Complainant’s sewer line. Relying on a December 17, 2008 Addendum to his original April 10, 2008 report by the parties’ agreed to and retained expert, Robert Ghan (“Ghan”), Complainant asserts that the “permanent solution” to the sewer line defect “so as to bring it within ‘minimum standards of workmanship” is replacement of the sewer line. Complainant further contends that Mr. Ghan’s recommendation in his original report, i.e., to install commercial pressure toilets in the subject premises, is an attempt to “’mitigate’ the effects of the ‘cause’ rather than a ‘repair’ of the cause.’” 8. Conversely, Respondent, citing Ghan’s April 10, 2008 report, argues, inter alia, that “Complainant has been in breach of the Settlement Agreement and the Decision and Order for over 8 months by refusing to allow the toilet replacement work as called for by Mr. Ghan, who specifically recommended the following: (1) that pressure assisted toilets be installed, and (2) not saw cutting and removing the existing floor slab and to remove and replace the existing waste line.” (Emphasis in original). Respondent further asserts, inter alia, that, pursuant to the language of the Settlement Agreement, “[t]he parties hereby stipulate in advance that the findings of the licensed plumber/plumbing consultant/expert are final and binding and are hereby accepted by the Administrative Law Judge as such without further evidentiary hearings or the like.” 9. This matter convened for hearing at the time, date and place set forth in the Registrar’s April 21, 2009 Notice of Compliance Hearing (“Notice”). 10. Pursuant to the Registrar’s Notice, this compliance hearing was being conducted “in order to determine whether or not Respondent has complied with the terms of the Settlement Agreement, absent unreasonable interference or denial of access by Complainant. If it is determined that Respondent has failed to fully comply with the terms of the Settlement Agreement, absent unreasonable interference or denial of access by Complainant, then Respondent’s Class B- License No. 114625 may be subject to the immediate imposition of discipline. If it is determined that Complainant has unreasonably interfered or denied access to Respondent or its representatives to comply with the terms of the Settlement Agreement, then this matter shall be closed without the imposition of any discipline upon Respondent’s Class B- License, and Complainant would not be allowed access to the Residential Contractors’ Recovery Fund, even if otherwise found to be eligible.” 11. At the compliance hearing, Ghan testified telephonically[2] and related that has been a licensed mechanical engineer since 1978 and was retained by both parties to (1) determine if there is a “negative slope/bow” in the project’s sewer line and (2) make recommendations to remedy the plumbing system. Ghan further testified that he found a negative slope in the sewer line and recommended that commercial pressure toilets be installed in the premises to mitigate the effect of the upward or negative slope. Ghan opined that while such remedy does not correct the upward bow/slope, it is “virtually impossible” to saw cut, excavate and replace the sewer line due to the presence of a post-tension slab on the premises. Ghan added that, though it is not literally impossible to perform such remedial excavation, etc., from a practicality standpoint he did not recommend such action as a “viable solution. Ghan further added that, from his experience, he knew of no company in Arizona willing to perform such work due to the inherent danger in attempting to saw cut into a post-tension slab. 12. Ghan also related that Complainant solicited the Addendum to his initial report based upon a hypothetical situation in which she sought a guaranteed remedy to her sewer problem.

CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter pursuant to A.R.S. §32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. §32-1154. 2. Since she alleged non-compliance with the Registrar’s Order, Complainant has the burden of proof and must establish statutory violations by a preponderance of the evidence. A.A.C. R2-19-119. Proof by “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994); Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not. Black’s Law Dictionary 1182 (Rev. 6th ed. 1990). 3. Based on the findings of Mr. Ghan, it is determined and concluded that Complainant failed to establish that Respondent did not complete its obligations under the terms of the parties’ settlement agreement due to Complainant’s unreasonable denial of access to Respondent over the course of approximately eight (8) months to allow Respondent to install the subject commercial pressure toilets as recommended by Ghan. 4. Notwithstanding that the installation of the referenced commercial pressure toilets would not eliminate the negative flow/upward bow of the subject sewer line, it is determined and concluded that it would be economically unfeasible and, apparently, quite dangerous, to order Respondent to correct such defect by means of saw cutting or otherwise interfering with the structural integrity of the post-tension slab. If Complainant believes the negative flow/upward bow of the sewer line causes any diminution in the value of her home, such a claim for damages would necessarily have to be brought before a civil court of competent jurisdiction, since the Registrar, acting through a license disciplinary hearing is the inappropriate forum to adjudicate and liquidate such a claim. 5. In view of Complainant’s unreasonable denial of access to allow Respondent to install the commercial pressure toilets in the premises as recommended by Ghan, it is determined and concluded that Respondent substantially complied with the parties’ Settlement Agreement and no disciplinary sanctions should be imposed against Respondent’s Class B- license in this case. … … RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that the Citation in Case No. G06-G0255, and the Complaint upon which it is based, be closed.[3] Done this day, August 17, 2009.

_______________________ Brian E. Smith Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2009, to:

William A. Mundell, Director Registrar of Contractors c/o Legal Department 3838 N. Central Ave. Phoenix, AZ 85012

By __________________________ ----------------------- [1] At the hearing, Mr. Dolren represented that he was the qualifying party for the license. However, a review of the licensing database maintained by the Registrar indicates that Francios Marcel Gratton is the company’s qualifying party. [2] It should be noted that at the time set for the hearing neither party had arranged to have Mr. Ghan appear and testify. Given that the express terms of the parties’ settlement agreement provided that Mr. Ghan’s findings would be “final and binding” upon the parties, the Administrative Law Judge required that the parties contact Ghan to have him testify telephonically. The Administrative Law Judge further determined that, in light of the above-referenced Settlement Agreement provisions, the testimony of the parties was not warranted. [3] 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.

-----------------------

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