ALJDEC decisions subject to certification as final

07F-2702-ROC · Registrar of Contractors · 2008-06-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 4, 2008 APPEARANCES: Complainant Sophia Southwood appeared on her own behalf. Marc Nassos appeared on behalf of Respondent Amberwood Development, Inc., doing business as Amberwood Homes. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ The issue presented by this matter is whether Respondent Amberwood Development, Inc., doing business as Amberwood Homes (“Amberwood”), 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 Amberwood is the holder of a Class B- license (No. 077948) issued by the Registrar of Contractors (“ROC”). Marc Nassos is Amberwood’s Vice- president.

In October 2004, Complainant Sophia Southwood and her husband, John, moved into their home located at 3847 East El Sendero in Cave Creek, Arizona. Amberwood is the general contractor that constructed the home. On May 4, 2007, Mrs. Southwood filed a complaint against Amberwood with the ROC alleging the following: Cracked tile in the kitchen was replaced by Flyn’s (sic) Flooring but the problem is actually underneath the tile (concrete) which Amberwood refuses to acknowledge and repair. Amberwood wants to do a “bandaid” treatment. Flyn’s (sic) Flooring want[s] to do it right and we’re cought (sic) in the middle.

ROC Inspector Scott Deering investigated Mrs. Southwood’s complaint. On June 28, 2007, Inspector Deering conducted a jobsite inspection. Present for the inspection were Mr. and Mrs. Southwood, Brian Gibson, Vice- president of Operations for Amberwood, and Dale Evans, Amberwood’s Project Manager. On July 26, 2007, following the jobsite inspection, Inspector Deering issued a letter to the parties advising of the following: Upon filing a complaint with this agency it is incumbent upon the complainant to show proof of violation by a contractor. This agency cannot request a citation against a contractor’s license unless sufficient evidence is submitted or otherwise obtained to justify such action. Therefore, it appears appropriate that we close your complaint for the following reason(s):

The ROC has a 2 year jurisdiction from the last work performed at this area of occupancy of the home. No documentation was provided by complainant confirming work was performed within 2 years of the filing of this complaint.

Inspector Deering testified that he conducted a pre-hearing inspection on June 3, 2008, and the nine tiles in the kitchen area pointed out by the Southwoods at the initial jobsite inspection, which took place a year ago, appeared to be in similar condition. Inspector Deering further testified that because the Southwoods moved into their home in October 2004, and did not file their complaint until May 4, 2007, the subject of the complaint is not within the two year jurisdiction of the ROC. Mrs. Southwood testified that Flynn’s Floor Covering, Inc. (“Flynn’s), Amberwood’s flooring subcontractor, replaced tile in her home within the first year and a half of the Southwoods moving in. Mrs. Southwood did not present any documentation as to when this work was performed or which areas of tile were replaced within the home. In contrast, Mr. Nassos presented into evidence as Exhibit D, a copy of Flynn’s Customer Order Notes for the Southwood residence which indicates that all work performed by Flynn’s was done in September 2004, prior to when the Southwoods moved into the home, with the exception of the one year grout touch-up service performed by Flynn’s on January 24, 2006, when Flynn’s also replaced five tiles. Mr. Evans credibly testified that the tiles that were replaced were in the master bath and in the hallway. Mrs. Southwood contended that the problem with the tile is due to expansive soil. Mrs. Southwood submitted into evidence copies of portions of a report by Arizona Ramjack based upon an inspection of the property on May 23, 2008. The portions of the report submitted into evidence are: i) a Summary of the Site Investigation and Scope of Services (Exhibit 6); ii) a Discussion recommending further evaluation by a structural engineer and a geotechnical engineer, and a Topographical Map (Exhibit 3); and iii) one page of a Photograph Appendix, with one photograph of the kitchen tile (Exhibit 4). The Administrative Law Judge finds none of these exhibits to be persuasive evidence, as the individual who performed the evaluation was not present to testify as to his findings, and further, the findings are inconclusive as Arizona Ramjack recommended further evaluation by a structural engineer and a geotechnical engineer. Mrs. Southwood presented into evidence a bid dated May 16, 2008, from Jeff Stump of ESSL, for the chemical injection of an ionic soil stabilizer, that appears to be at the request of the Southwoods. See Exhibit 5. The bid specifically excludes testing, re-testing, engineering, and surveying, and no reasons for the described scope of work were included in the bid. Id. Mr. Stump was not present to testify at hearing. Mrs. Southwood acknowledged when cross-examined by Mr. Nassos at hearing that she took part in a Building Confidence Inspection with the ROC on May 16, 2006, and that tile issues and the underlying concrete were not a subject of the inspection. See Exhibit C. Mrs. Southwood further acknowledged selecting the tile to be installed in the home and signing a Ceramic Tile Flooring Installation Waiver on November 8, 2003, that states in pertinent part the following: Due to potential unpredictable problems of normal movement and cracking of the concrete slab, Flynn’s Floor Covering, Inc. and [Amberwood] cannot warranty Ceramic tile installations to be free from tile and grout cracks in the future.

See Exhibit E. The Southwoods testified that all communications between them and Amberwood have been verbal, and that no written correspondence exists regarding the tile flooring. The Southwoods acknowledged that they do not have any knowledge as to whether Amberwood addressed the expansive soil issue because they have not read any of the soils reports on file with the local building authority. Mr. Evans testified that he was the Project Manager for the construction of the Southwoods’ home and that Amberwood followed the recommendations in the soils reports, taking into account the expansive soils in the area. Mr. Evans credibly testified that the areas of tile referred to in the complaint had never been brought to Amberwood’s attention until Mrs. Southwood filed the complaint. Mr. Evans further testified that according to Arizona Ramjack’s topographical map, the differential in the floor height in the kitchen is less than 1/20”, which is basically flat, and therefore, no heaving is occurring. See Exhibit 3. Inspector Deering observed and Amberwood asserted at hearing that Mrs. Southwood’s complaint is barred by the statute of limitations because it was filed beyond the two year statutorily required timeframe for filing complaints with the ROC pursuant to A.R.S. § 32-1155(A), which provides for “the filing of a written complaint with the registrar charging a licensee with the commission, within two years prior to the date of filing the complaint, of an act which is cause for suspension or revocation of a license . . . ” (emphasis added). This section, like any statute of limitation, is a statute enacted as a matter of public policy in Arizona to fix a timeframe within which complaints must be filed. On April 25, 1979, the Arizona Attorney General’s Office issued an opinion (Op. Att’y Gen. I79-119) based on the Arizona Court of Appeals’ decision in Lyon v. Great American Insurance Co., 4 Ariz. App. 596, 422 P.2d 724 (1967). In Lyon, the Court of Appeals held that the limitations period ran from the earlier of occupancy or discovery of the defect. Mrs. Southwood filed this complaint on May 4, 2007. The Southwoods moved into their home in October 2004. The credible and undisputed evidence of record is that this is Mrs. Southwood’s first filed complaint regarding the kitchen tile. The credible and probative evidence of record further established that Amberwood has not performed any work to this area of tile flooring. The Southwoods testified that they had complained in the past to Amberwood regarding the tile and the substrate, however, Mrs. Southwood did not present any substantial or probative evidence establishing that she had complained of the kitchen tile and the underlying concrete prior to May 2007, at which time, more than two years had elapsed since Amberwood had performed any work on the kitchen floor. Because Mrs. Southwood filed the complaint regarding the kitchen floor beyond the two year jurisdiction of the ROC, the Administrative Law Judge finds that Mrs. Southwood is precluded from litigating, in this administrative forum, this issue.[1] CONCLUSIONS OF LAW A.R.S. § 32-1155(A) requires that complaints be filed within two years from the earlier of occupancy or discovery of the defect. Because Mrs. Southwood’s complaint is barred by the statute of limitations, the complaint must be dismissed. RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge makes the following Recommended Order: It is recommended that no discipline be imposed against Amberwood’s license, and that the Citation issued in Case Number 07-2702, together with the Complaint upon which it is based, be dismissed. 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 40 days from the date of that certification. Done this day, June 16, 2008.

______________________________________ Sondra J. Vanella Administrative Law Judge

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

Fidelis V. Garcia, Director Registrar of Contractors 3838 North Central Avenue Phoenix, AZ 85012

By ___________________________

----------------------- [1] The Administrative Law Judge further finds that even if Mrs. Southwood had timely filed her complaint, she would have failed to meet her burden of proof in this administrative hearing.

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