ALJDEC decisions subject to certification as final

06F-M1953-ROC-com · Registrar of Contractors · 2008-03-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 26, 2008. APPEARANCES: Leonard and Darian Caccavale appeared personally. Caliber Holdings Company, LLC, Caliber Holdings Company, LLC, doing business as M J L Homes, and J K Homebuilders, Inc. were represented by their attorney, David P. Brooks. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ The above-entitled matters came on for a consolidated compliance hearing. Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order:

FINDINGS OF FACT

1. J K Home Builders, Inc. (“J K”) is the holder of License No. 143663, a Class KB-01 contracting license, issued by the Registrar of Contractors (“Registrar”). 2. Caliber Holding Company, LLC (“Caliber”) is the holder of License No. 181417, a Class B- contracting license, issued by the Registrar. 3. Caliber Holding Company, LLC, doing business as M J L Homes (“M J L”), is the holder of License No. 211034, a Class B- contracting license, issued by the Registrar. 4. Leonard and Darian Caccavale (“Complainants”) filed a Complaint with the Registrar against J K. That Complaint was designated Case No. M06- 1953. 5. At the commencement of the scheduled hearing in Case No. M06-1953 before the Office of Administrative Hearings on September 21, 2006, the parties announced that they had reached a settlement agreement. The hearing was then vacated and remanded to the Registrar. 6. On or about December 21, 2006, Complainants and J K entered into a written agreement pertaining to Case No. M06-1953. J K agreed to pay Complainants the sum of $11,000.00, to provide them with a 2-10 warranty, to provide and install a 65-gallon hot water heater, to ensure all floors throughout their home are level within minimum workmanship standards, to repair all squeaks in floors where necessary, to repair all cracked grout in floors where necessary, address splits and gaps at oven cabinet, to move the double oven so that it is flush with cabinet, to level floor tile at foyer, and to correct unlevel area at laundry entrance. In return, Complainants agreed to dismiss Case No. M06-1953. 7. Complainants also filed a Complaint against Caliber with the Registrar, which was designated as Case No. M06-1654. 8. Complainants also filed a Complaint against M J L with the Registrar, which was designated as Case No. M06-1654W. 9. Case Nos. M06-1654 and M06-1654W were consolidated for hearing before the Office of Administrative Hearings. 10. On or about February 13, 2007, Suncoast Pools & Spas, Inc., Complainants, Caliber, First American Title Insurance Co. and J K entered into a written agreement. Pursuant to the terms of that agreement, Caliber agreed to deposit the sum of $13,000.00 and First American Title Insurance Co. agreed to deposit the sum of $1,000.00 into the Ayers & Brown, PC Trust Account. Ayers & Brown, PC were Complainants’ legal counsel at the time. Those funds were deposited into the trust account. 11. Caliber and J K agreed to perform all corrective work on or before March 31, 2007. 12. Pursuant to the terms of the latter agreement, the sum of $10,000.00 was to be released from the Ayers & Brown, PC Trust Account to pay for Complainants’ attorney fees in a civil litigation involving the parties, and the balance of $4,000.00 to be held pending further action of the civil Court. 13. On February 14, 2007, Case Nos. M06-1654 and M06-1654W came on for further hearing before the Office of Administrative Hearings. At the further hearing, the parties announced that they had reached a settlement agreement, the essential terms of which were read into the record. The hearing was then vacated and remanded to the Registrar of further action. 14. By letter dated April 5, 2007, Complainants informed the Registrar that Caliber, M J L and J K had failed to comply with the settlement agreements by the March 31, 2007 deadline date. Complainants requested that the cases against those Respondents be reopened. 15. The Registrar issued Notices of Compliance Hearing in the above- entitled matters, which were referred to the Office of Administrative Hearings for a consolidated compliance hearing. 16. On or about May 22, 2006, Caliber issued a Service Order Request to its flooring subcontractor, Western Wholesale Flooring, to correct the following items: “1. Ensure all floors throughout are level within minimum standards. 2. Repair all squeaks in floors where necessary. 3. Level floor tile at foyer. 4. Correct uneven area at laundry entrance.” 17. Western Wholesale Flooring attempted to perform the corrective work, but Complainants would not let them do so until they received an engineer’s report. 18. On or about June 22, 2006, Rhonda Woodward, Caliber’s vice-president of operations, sent a letter to Complainants with a Notification of Construction & Inspection, a Builder Application for Home Enrollment, and a Builder/Buyer Letter which were required to be completed to process Complainants’ 2-10 extended home warranty. The letter and attachments were sent to Complainants at their residential street mailing address. 19. Ms. Woodward’s June 22, 2006 mailing was sent by U.S. certified mail to their street mailing address. It was returned to her as unclaimed by Complainants. 20. Complainants contend that they did not receive Ms. Woodward’s mailing because they receive mail at a post office box address. However, the evidence at the hearing established that they do have access to receiving mail at their street mailing address. 21. Complainants were required to complete the submitted documentation for the 2-10 extended home warranty because they needed to confirm that there were “no unresolved problems” known to either party. 22. Due to the corrective work necessary to be completed, the 2-10 extended home warranty could not be issued due to the unresolved problems on Complainants’ project. 23. On or about December 28, 2006, J K’s plumbing subcontractor installed an 80-gallon hot water heater instead of the specified 65-gallon hot water heater. Complainants’ signed off on the installation on December 28, 2007 indicating their acceptance of that work. 24. Caliber hired F. Daniel Bingham, P.E., of Bingham Engineering Consultants, LLC to inspect Complainants’ floor. 25. On December 19, 2006, Mr. Bingham met with Caliber’s counsel at the time, Jay Graif, Esq. and representatives of Caliber at Complainants’ residence. 26. On or about January 24, 2007, Complainants only wanted subcontractors from J K to perform remedial work, not subcontractors from Caliber. 27. J K, M J L and Caliber had an agreement that Caliber would be responsible for the remedial repairs to Complainants’ residence. 28. As a result of his inspection, Mr. Bingham issued a report dated February 7, 2007, which noted, among other things, the following:

A review of the truss calculation did not reveal any under design of the floor trusses for this plan. It appears that the out of level floor is most likely due to placement of the bearing locations of the trusses and the heights of the basement walls. This condition is more of a cosmetic issue than a structural concern.

29. In his February 7, 2007 report, Mr. Bingham made the following recommendation:

It is my recommendation that we perform a floor elevation survey for the main floor and the basement floor to locate areas that are out of level with respect to the truss bearing locations. We can schedule this work for the week of February 12th-15th.

30. On March 21, 2007, Mr. Bingham met with Mr. Caccavale at his residence “to perform a manometer survey of the main floor and basement floors [sic].” Mr. Bingham wanted to perform the survey “to determine why there are high and low spots in the main floor and to make recommendations for corrective action.” 31. On or about March 27, 2007, Complainants informed Ms. Woodward that no work would be permitted until they received the engineer’s report. 32. By requesting that no work be performed until they received the engineer’s report, Complainants are found to have waived the March 31, 2007 deadline to complete the required remedial repairs. 33. Mr. Bingham issued a report dated April 30, 2007. That report made the following recommendations:

1. Remove furniture and carpet from master bedroom. Remove the carpet from in front of the linen closet and along the living room side of the bedroom wall. Remove the floor tile and cement board in the laundry room and kitchen. 2. Sawcut along the south wall of the master bedroom from the basement wall to the west exterior wall. Remove the floor slab in the master bedroom. 3. Chisel and grind along the top of the Basement wall in the master bedroom, hall and entrance to the laundry room. Bring the top of the wall down to elevation “0.” Use the zero reading at the northwest corner of the master bedroom for a benchmark. 4. Drill and epoxy #4 bars at 18” on center along the sawcut slab edge in the master bedroom. The bars shall extend 18” into the new slab. 5. Re-grade the master bedroom floor and repour the slab. Use the northwest corner “0” reading as a benchmark. 6. Use a floor leveling compound (“Ardex,” or Equal) to raise the wood floor between the new slab and the east wall of the master bedroom. Extend the floor leveling compound to the edge of the linen closet and along the east side of the bedroom wall on the living room side. 7. Use a floor leveling compound to level the laundry room floor to the basement wall. 8. Remove any existing “Ardex” from along the east, south and west sides of the kitchen. “Ardex” the low areas in the kitchen to create a level surface for the tile. 9. Install cement board and tile in the kitchen.

34. Mr. Bingham’s report concluded by noting the following:

These recommendations are intended to provide a more level floor condition in the master bedroom, hall, laundry room and kitchen…Since there are no structural concerns involving the floor trusses, these recommendations are at the option of the builder.

35. Mr. Bingham’s inspection and report were delayed due a medical condition that required him to undergo surgery and convalescence. 36. By letter dated June 20, 2007, Caliber wrote to Complainants trying to schedule repairs pursuant to Mr. Bingham’s recommendations. Caliber noted that it had tried numerous times to perform the repairs, but Complainants refused access until they received the engineer’s report. By the date of this letter, Complainants had received the report. 37. Each of the above-named Respondents is jointly and severally liable in these matters. 38. A review of the Registrar’s official records reveals that Caliber’s License No. 181417 was revoked on April 16, 2004. As a result of that revocation, Caliber could not perform, or cause to be performed, any of the required remedial repairs in these matters. 39. The Registrar’s records further reveal that M J L’s License No. 211034 was suspended by operation of law on March 4, 2008 for lack of bond. As a result of that suspension, M J L cannot legally perform any of the required remedial repairs in these matters. 40. The Registrar’s records also reflect that J K’s License No. 143663 was suspended by operation of law for nonrenewal on April 1, 2007. As a result of that suspension, J K cannot legally perform any of the required repairs in these matters. That license was also suspended on March 7, 2008 until J K complied with the Order issued in Case No. M07- 0682. 41. J K and M J L did not comply with the terms of their settlement agreements with Complainants. They relied upon Caliber to accomplish the required repairs, but Caliber could not legally do so due to the prior revocation of its license.

CONCLUSIONS OF LAW

1. The Registrar has jurisdiction over Respondents and the subject matters in these consolidated cases. 2. As a result of Caliber’s license revocation on April 16, 2004, it could not legally comply with the settlement agreement in Case No. M06- 1654. Complainants were within their rights not to permit Caliber, its employees or its subcontractors to attempt the remedial repairs agreed upon in the parties’ settlement agreements. 3. J K and M J L wrongfully relied upon Caliber to perform the required remedial repairs under the parties’ settlement agreements. They both failed to comply with the settlement agreements.

RECOMMENDED ORDERS ON COMPLIANCE Case No. M06-1654 Caliber’s License No. 181417 shall be revoked in Case No. M06-1654.

Case No. M06-1654W M J L’s License No. 181417 shall be revoked in Case No. M06-1654W.

Case No. M06-1953 J K’s License No. 143663 shall be revoked in Case No. M06-1953.

In the event of certification of the Administrative Law Judge Decision On Compliance 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, March 17, 2008

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Fidelis V. Garcia, Director Registrar of Contractors 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________ -----------------------

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