ALJDEC decisions subject to certification as final

06F-L0522-ROC · Registrar of Contractors · 2006-12-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 16, 2006 APPEARANCES: Complainant Gerard Nuskin appeared on his own behalf; Dwight Aalgaard, Respondent’s estimator and authorized representative, appeared on behalf of Respondent D and B of Lake Havasu Inc. dba D and R Excavating ADMINISTRATIVE LAW JUDGE: Marianne T. Bayardi _____________________________________________________________________ The issue presented by this matter is whether Respondent D and B of Lake Havasu Inc. dba D and R Excavating is subject to discipline for acts or omissions in violation of A.R.S. § 32-1154(A). Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order: FINDINGS OF FACT 1. Respondent D and B of Lake Havasu Inc. dba D and R Excavating (“Respondent”) is the holder of a Class C-02 License (No. 197909) issued by the Registrar of Contractors (“ROC”). Dwight Aalgaard is Respondent’s authorized representative and estimator. 2. Complainant Gerard Nuskin (“Complainant”) is the owner of a lot located at 2645 San Juan Drive, Lake Havasu City, Arizona (the “Property”).

3. On April 11, 2006, Complainant entered into a contract with Respondent to grade the lot to the assigned grade. The total contracted cost was $1,866.99. Complainant paid a deposit of $500.00 and has not made any additional payments to Respondent. In addition to the deposit, Complainant provided Respondent the city-approved grading permit with the approved elevation, namely 103.88. 4. On April 12, 2006, Respondent’s employee Chris Weiss went to the Property to do the initial cut for a retaining wall on the Property. Mr. Weiss performed the cut. While Mr. Weiss was still on site, Andre Bivins of Colorado River Masonry arrived at the Property to discuss construction of the retaining wall with Complainant. Mr. Bivins informed Complainant that they would have to revise their contract because, rather than needing two feet of retaining wall and six feet of freestanding wall, four feet of retaining wall would be required. The price of the wall increased substantially as a result of the change, from $18,900.00 to $28,900.00. 5. Mr. Bivins returned to the Property and constructed the block wall. Thereafter, Respondent returned to remove excess dirt created by the digging for the wall footings and to grade the lot. Complainant noticed Respondent was backfilling as much as a foot near the wall. He spoke to Mr. Aalgaard who came to the Property. Mr. Aalgaard and Mr. Weiss each measured the elevation and determined it was 102.5 rather than the required 103.88. Respondent added fill to the grade in order to achieve a final grade of 103.88. Later, Mr. Bivins informed Complainant that it was the elevation discrepancy that had created the need for the second contract (and the corresponding increase in price). 6. On June 14, 2006, Complainant filed the instant Complaint against Respondent with the ROC. The Complaint stated, in pertinent part: A grade of 103.88 was given to us by the Building Department of Lake Havasu City using a lot survey. D & R made an initial cut to the specified grade. Then I had a block retaining wall built. D & R then came back to backfill & finish grade. Upon doing so we found that the initial grade was cut to “102.5.”

7. On June 26, 2006, Complainant requested the instant administrative hearing. On August 10, 2006, the ROC issued Citation and Complaint No. L06- 0522 alleging that Respondent had violated A.R.S. § 32-1154(A)(2), (A)(3), (A)(7), and (A)(13). 8. On August 21, 2006, Respondent filed a written Answer to the Citation and Complaint. 9. The instant administrative hearing took place on November 16, 2006. 10. At hearing, Complainant contended that because Respondent had initially graded the lot to the wrong elevation, Complainant had incurred an additional cost of $10,000.00 for the construction of the retaining wall. 11. Respondent did not dispute the error in grading. Respondent contended, however, that it had graded the lot to the elevation provided by Complainant and, as a result, the error was Complainant’s fault. Additionally, Respondent asserted that it was precluded from correcting the grade problem prior to Complainant incurring the additional retaining wall expense because Complainant failed to notify Respondent about the increase until after the wall was constructed. 12. Complainant testified that he did, in fact, tell Mr. Weiss the elevation at which to make the cut but also testified that he told Mr. Weiss 103.88, not 102.5. Complainant testified that the correct height was listed on the “blue card” and was documented “everywhere.” Complainant did not ask for confirmation from Mr. Weiss but relied on Respondent to make the cut and grade at the proper elevation. Moreover, Complainant testified that he did not realize that the cause for the increase in wall cost was Respondent’s failure to cut and grade properly until he saw Respondent backfilling and spoke to Mr. Bivins and Mr. Aalgaard. 13. Mr. Bivins testified that the change in elevation resulted in material and labor costs. Mr. Bivins also testified that Mr. Weiss was on site when Mr. Bivins arrived to evaluate the wall after Respondent made the initial cut. 14. Mr. Weiss testified that Complainant told him the elevation for the cut and that he performed his work at that elevation. Mr. Weiss could not remember what number Complainant told him for the elevation. 15. The Administrative Law Judge finds that Complainant presented sufficient probative, credible evidence to establish that Respondent did not comport with the elevation specifications when it cut and graded the lot. The Administrative Law Judge also finds that the evidence established that Complainant did not make any inquiry as to the cause of the 50% increase in the cost to build the wall. Had he done so, he would have learned of the error at a time when Respondent could have corrected it without Complainant incurring the added wall construction expense. CONCLUSIONS OF LAW 1. In this administrative proceeding, Complainant bears the burden to prove, by a preponderance of the evidence, that Respondent violated A.R.S. § 32-1154(A)(2), (A)(3), (A)(7), and/or (A)(13) as charged by the ROC in its August 10, 2006 Citation and Complaint. See A.A.C. R2-19-119. 2. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 3. Under A.R.S. § 32-1154(A)(2), a contractor is subject to discipline for “departure from or disregard of plans or specifications or any building codes of the state . . . in any material respect which is prejudicial to another without consent of the owner . . . and without consent of the person entitled to have the particular construction project or operation completed in accordance with such plans or specifications . . . .” In the instant case, Complainant presented credible evidence that Respondent departed from the applicable specifications in a material respect. Therefore, the Administrative Law Judge concludes that Respondent has violated A.R.S. § 32-1154(A)(2). 4. Under A.R.S. § 32-1154(A)(3), a contractor is subject to discipline for ”violation of any rule adopted by the Registrar.” In this case, the ROC charged Respondent with violating A.A.C. R4-9-108, which, among other things, requires contractors to perform work in a professional and workmanlike manner and in accordance with professional industry standards. The Administrative Law Judge concludes that Complainant present credible evidence that Respondent performed work that was not at the right elevation but failed to present sufficient credible evidence that Respondent violated workmanship standards. Based on the foregoing, the Administrative Law Judge concludes that Respondent has not violated A.R.S. § 32-1154(A)(3). 5. Under A.R.S. § 32-1154(A)(7), a contractor is subject to discipline for “the doing of a wrongful or fraudulent act . . . resulting in another person being substantially injured.” The Administrative Law Judge concludes that Complainant present credible evidence that Respondent committed a wrongful act as demonstrated in Conclusions of Law Paragraph 3. However, Complainant failed to make even a cursory inquiry into the substantial increase in the cost to construct the wall prior to actual wall construction. Consequently, any substantial injury related to the increased cost of wall construction falls at the feet of Complainant rather than Respondent. Therefore, the Administrative Law Judge concludes that Respondent has not violated A.R.S. § 32-1154(A)(7). 6. Under A.R.S. § 32-1154(A)(13), a contractor is subject to discipline for “failing in any material respect to comply with the provisions of this chapter.” The Administrative Law Judge concludes that Complainant failed to present sufficient credible evidence that Respondent failed to comply with the provisions of the applicable chapter. Based on the foregoing, the Administrative Law Judge concludes that Respondent has not violated A.R.S. § 32-1154(A)(13). 7. Upon consideration of the foregoing, the Administrative Law Judge concludes that it is appropriate for the ROC to impose discipline against Respondent’s Class C-02 License (No. 197909). 8. Complainant requested an award in the amount of $10,000.00 totaling the additional amount he paid Colorado River Masonry for construction of the retaining wall. Having considered Complainant’s request, and the evidence of record, the Administrative Law Judge concludes that Complainant is not entitled to such an award as Complainant could have, with reasonable inquiry, obviated the need for a larger retaining wall and increased costs associated therewith. 9. Based on the conclusions herein that Respondent violated A.R.S. § 32-1154(A)(2), the Administrative Law Judge finds that a disciplinary remedy of 30 days probation is warranted. RECOMMENDED ORDER On the effective date of the Order entered in this matter, Respondent’s Class C-02 License (No. 197909) shall be placed on disciplinary probation for a period of thirty (30) days. In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative hearings, the effective date of the Order will be 40 days from the date of that certification. Done this day, December 4, 2006

______________________________________ Marianne T. Bayardi Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2006, to:

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

By ___________________________

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