ALJDEC decisions subject to certification as final

07F-A0263-ROC · Registrar of Contractors · 2008-03-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: Oct 1, 2007, January 28, 29, and March 5, 2008, the record remained open until March 14, 2008, for submission of written closing arguments. APPEARANCES: Robert and Angie Luna for Complainant; Randy Wahl, Esq., for Respondent ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact 1. On January 25, 2005, the parties entered a contract whereby the Respondent general contractor would build the Complainants a residence in Clarkdale, Arizona for $300,000.00. 2. According to the terms of the contract (Exhibit C-1), construction was to be completed six months from excavation for the foundation. The Respondent could construct the home “in substantial conformance with the Plans…subject to such changes in the Plans as may be required by any … local governmental authority.” The contract may only be modified by written agreement. 3. According to the Respondent’s Qualifying Party, William Strickland, construction began in approximately July, 2005. 4. In March, 2006, due to then current problems between the parties[1], the Complainants had the Respondent cease work at the home. On May 1, 2006, Registrar of Contractors (ROC) Inspector, John Prince (Prince) performed a Building Confidence Inspection (Exhibit C-15) at the Complainant’s home. The home was not completed. Prince advised the parties that if necessary repairs were not made, the Complainants could file a Complaint with the ROC. 5. By memorandum dated June 9, 2006, the parties agreed the Respondent would renew work and complete the project by June 30, 2006 (Exhibit C- 17). 6. Exhibit C-21 is the home inspection results dated August 23, 2006, by All Valley Home Inspections. The report is extensive covering almost every aspect of the construction. The report was not addressed with any particularity during the hearing and is therefore given limited consideration. What is noted is that problems were identified for the Complainants and the problems were wide-ranging three months after the Building Confidence Inspection by Prince. 7. On November 27, 2006, the Complainants filed their Complaint with the Registrar of Contractors (ROC).The Complainants attached a list of numerous asserted construction defects in the bedrooms, bathrooms, hall, great room, kitchen, family room, foundation, stucco and roof.[2] 8. On November 28, 2006, the City of Clarkdale issued a Certificate of Occupancy for the Complainants’ home. 9. ROC Inspector Prince, performed a jobsite inspection and as a result, issued a Corrective Work Order (CWO), dated January 29, 2007. 10. The CWO required the Respondent to determine the cause and correct by appropriate means: a. Item 1A, the out of square closet in bedroom 2; b. Item 2A, the out of square bedroom door in bedroom 3; c. Item 2D, water damaged carpet in bedroom 3; d. Item 3A, the out of square northern wall in the bathroom; e. Item 3C, drywall chips and nicks in the bathroom need repair; f. Item 6B, glass doors need to be installed in the great room; g. Item 6D, the ceiling crack in the great room needs repair; h. Item 6E, French doors in the great room are not secure and do not operate properly; i. Item 7A, the back of the sink cabinet housing must be replaced in the kitchen; j. Exterior 2, drywall behind master bedroom door needs to be replaced. k. Exterior 4, cracks in exterior stucco (various locations specified); l. Exterior 5C, A/C hoses and housing for one of the units needs repair and covering. m. Added Item 13 ROC Attachment (Exhibit C-37), relates to loose false fronts in hall bath cabinets. 11. According to the CWO, Prince found that approximately 41 items set forth by the Complainants in their Complaint, had been corrected, and nine items did not require corrective work. 12. On February 21, 2007 the Complainants submitted a facsimile of additional Complaint items[3] to Inspector Prince. 13. On May 1, 2007, the ROC issued its Citation and Complaint alleging violations of A.R.S. §32-1154(A)(2), prejudicial deviation from plans and specifications, (A)(3)/A.A.C. R4-9-108, workmanship, (A)(7), a wrongful act with substantial injury, (A)(11), failure to pay for materials or services in excess of $750.00, (A) (13), failure to comply with the chapter (a particular statute is not specified), and (A)(23), failure to take appropriate corrective action. 14. On May 4, 2007, the Complainants requested the addition of alleged violations of A.R.S. §32-1154(A)(10), aiding and abetting an unlicensed person evade the provisions of the chapter, and (A)(22), new single family residential construction with inconsistent or no pretreatment for wood destroying pests. In the facsimile, the Complainants stated they did not understand why ROC charged a violation of (A)(11). 15. By Order dated June 7, 2007 the ROC amended the Citation and Complaint to also charge violations of (A)(10) and (A)(22), as requested by the Complainants. 16. In general terms and as part of the opening statement, the Complainants asserted the Respondent used deceptive practices and had constructed a structurally unsafe and unlivable home because of poor workmanship, an unauthorized change in the floor plan, backward trusses, unlicensed electrical work, and contracting with a suspended plumber who failed to pay a subcontractor[4]. 17. The Respondent in its opening answered that the issues are narrow and concern electrical and plumbing lines, and that the Complainants owe the Respondent $43,000.00. The Respondent filed an initial lien against the Complainant’s property on April 5, 2006. Another (renewed) lien is dated May 11, 2007 (Exhibit C-56)[5]. 18. Anthony Palin (Palin) testified on behalf of the Complainants. Palin worked as a framer for a subcontractor hired by the Respondent, on the Complainant’s home. Palin testified the Respondent had altered the plans by changing the location of the kitchen and front walls by five feet because the house was too wide for the lot due to setback issues. The problems regarding the setbacks became known in June, 2005 (Exhibit C-62). When the walls of the home were moved, the bearing point of the trusses changed, and some of the trusses (A-02) were too short. Palin informed the Respondent’s Qualifying Party, Dean Strickland (Strickland), of the problem. Strickland told Palin to install the common trusses as well as cut off part of the scissor trusses[6]. Palin testified he installed the master bedroom (A-02) trusses backwards and informed Strickland[7] of this. According to Palin, Strickland said no correction was necessary. 19. William Jensen (Jensen) a Commercial Plans Examiner for the City of Flagstaff, prepared a Home Inspection Report (Exhibit 21) for the Complainants based on his inspection of the home on February 17, 2007. He inspected the trusses and took photographs (Pictures 060-107, Exhibit C-39). Jensen testified concerning his inspection report. He concluded the scissor trusses are missing gussets on two sides which is what was required by the engineer’s detail sheets. (Photograph 063). Photograph 067 shows a gusset partially restricting ductwork. Other gussets have been notched to provide air conditioning and heating ductwork access. The notching was not part of the engineer’s drawings. Photographs 072, 073, 074, and 079 show missing plywood on the top chord of trusses as well as various other problems set forth in the identification of the photographs. Photograph 076 indicates “there is no plate under the valley over framing” and the rafters don’t appear to have been nailed to the ridge board. Photograph 078 shows gussets on only one side of the truss when gussets should have been on both sides of the truss according to the engineering drawings. Jensen went on to testify the trusses and poorly cut rafters showed poor workmanship. Narrative included with the photographic evidence (Photos 080, 081, through 107) includes, “no plywood over truss top chords as required by the design and for roof diaphragm continuity, rafters do not bear on plate… roof sheathing is not bearing on rafters…no plywood gussets installed as required by truss engineer to fix the trusses…”. According to Jensen, he returned to the home in June, 2007, and saw no significant corrections in the attic but noted that wires and gas lines had been cut. 20. A Structural Report dated November 25, 2006 by W.S. Kantor, Civil Engineer (Exhibit C-33), asserts the roof trusses as well as other framing are incomplete and installed improperly, and that the house should not be accepted as habitable due to the possible inability of the roof to support loads (wind /snow). The report supports Jensen’s testimony that gussets are required on both sides of the backward trusses, improper framing at the north side gables would require roof tile and sheathing removal , west side over framing has sagged, and in conclusion, the report asserts the Respondent should not continue the work because of a lack of attention, expertise, and unwillingness or inability to make proper repairs. 21. Roger Chee (Chee), Operations Manager for Western Truss and Components (Western) testified that based on his inspection, the A-02 trusses were installed backwards and were not “hitting the correct bearing spot” and there were no repairs on the A-03 (vaulted ceiling-scissor) trusses. Chee also testified the gusset repair was not done according to the structural engineer’s design. In summary, Chee considers the trusses in their current state to be structurally inadequate and not according to the structural engineer’s drawings. Chee disagrees with a letter from Jerry Queener (Queener) (Exhibit R-3), a field representative formerly with Western, which asserts that Clarkdale issued a Certificate of Occupancy (CO) and that his inspection of the trusses showed the repair was in accordance with the engineer’s guidelines. According to Chee, Queener was a field representative and not authorized to inspect trusses or qualified to comment on the engineer’s guidelines. Queener has since been “let go” by Western. Chee authored a letter dated September 22, 2007 wherein he specified the additional corrective work required on the A-02 and A-03 trusses based on his March 20, 2007 inspection. He concludes with “Western Truss does not know if the two items above were ever corrected or completed after our inspection on March 20, 2007”. 22. By letter date May 31, 2006 (Exhibit R-5 should be dated 2007), the Complainants’ attorney informed the Respondent no further repairs would be allowed because of damage to the electric, water, sprinkler, and gas lines in the attempt to correct the trusses. This is four months after the initial CWO. 23. Michael Baker (Baker), the Clarkdale building inspector testified regarding the submission of the revised floor plan for the Complainants’ home because of the need to comply with setback requirements. Baker also testified the roof initially failed inspection because of a nailing problem with “gaps in the valleys too wide”. Baker believes a temporary replacement inspector performed the truss and truss correction inspection[8]. After the final inspection in September 2005, the CO was issued (November 28, 2006) because Baker believed the truss engineering fix was adequate and there were no problems in occupying the home. 24. However, by letter dated October 19, 2007 (Exhibit 58) , Baker listed eight items which at that time required correction. These included the disconnected electric lines in the attic, replace insulation, cracked outlet and switch covers, repair open water lines in attic, add strap to furnace duct make larger access opening, complete grading, inspection of electrical, plumbing, mechanical, fire sprinkler/smoke detector, and fuel gas system, before the home could be occupied. 25. Rodney Fielitz (Fielitz), realtor, testified the plans for the Luna’s home were altered and this resulted among other things, in the kitchen island being made smaller. In addition, Fielitz testified a person identified as Goodell stated he was a plumber working for the Respondent but was performing electrical work[9]. 26. Ed Tortorello (Tortorello), is a general contractor. He testified that he inspected the Luna home January 23, 2008. He concluded the roof and truss corrections were improperly done and consisted of poor workmanship. Rafter framing was incorrect, rafters were not on plates, improperly cut, and did not properly contact plywood sheathing, nails in the gusset correction were not sunk all the way, the nail pattern was not followed, some gussets were notched, gussets were not configured correctly, rafters were cut too short and did not contact plates, there were too many (12) electric junction boxes, these boxes were covered by insulation and had cracked or missing covers, Romex cable was exposed, the wiring pattern was haphazard (randomly crisscrossed). Other items identified by Tortorello include no molding on linoleum, problems with the “cocked” sill nosing at the rear patio door, out of level master bath tub, master vanity, kitchen island and kitchen counter, missing and non galvanized roof tile nails, out of plumb garage door, beveled or rippled roof, inadequate flashing, gaps in facia board miter joints, poor patching of stucco, inadequate drainage away from the house on one side, excessive slope on the other side of the house. According to Tortorello, future problems with the home would possibly involve roof framing and truss movement resulting in sagging trusses, cracked drywall, sticking windows and doors, cracked glass and other structural problems[10]. Tortorello testified the trusses and framing need to be corrected including removal of part of the ceilings, roof and some of the walls. 27. Prince testified that Goodell, the plumber, admitted to performing electrical work on the Complainants’ home and that there was no prehearing inspection in this case. 28. Goodell testified he was the superintendent on the Luna job[11] and performed electrical work (wiring) on the Luna home although he is not licensed as an electrician. His claim that he was working as an individual under someone else’s electrician’s license is without merit. Goodell also testified he cut the sprinkler pipes in the attic because of the need to perform truss repairs. The sprinkler pipes were not reinstalled nor were the water lines reconnected.[12] According to Goodell, a firm identified as Borden Electric cut the electric wiring and broke various electric boxes[13]. 29. The Respondent’s Q.P., Dean Strickland, testified the last work performed on the Luna’s home was in June of 2007. He also testified that according to the representative from Western (Queener), the truss repairs were correct. Strickland testified that CWO item 2D, the carpet, did not require replacement but only cleaning; 6B, the fire place doors had been installed; exterior 2, the stucco paint now matched; and exterior 4, the air conditioning cover was replaced (the unit was replaced). According to Strickland, no further corrective work has been done at the Complainants’ home because the Complainants won’t allow it and other contractors are working at the home[14]. 30. The Complainant, Angelina Luna (Mrs. Luna) testified she agreed to the plan modifications in writing and that the truss issue was not part of the original Complaint. Mrs. Luna went on to testify the truss problems were unknown at the time of the original walk through which led to the Complaint. However, at the present time, the Complainants consider the home unlivable and it cannot be occupied because of the conditions currently existing (see Baker’s letter Exhibit 58). The home has been unoccupied now for well over a year since the CO. The evidence on the grading around the home is unclear. The Complainants offered photographic evidence (Exhibit C-49) from August of 2006. These photographs show water pooling close to the house. The Complainant, (Mrs. Luna), testified the conditions were the same at the current time but that the Complainants had not experienced any drainage problems since August 2006. 31. According to William Strickland, problems arose with the Complainants in getting answers to questions such as what type of cabinets and colors they desired and that once the Complainants’ attorney became involved in September, 2005, very little could be accomplished because everything needed to pass through the attorney. This testimony in no way addresses the significant structural and workmanship issues or the ill fated and unsuccessful attempt to correct the trusses, plus the cutting of wires, pipes, water lines and in general wreaking havoc in the attic. In the Spring of 2007, Strickland was made aware that the truss corrections were inadequate. He went on to testify the gussets were installed according to the engineer’s drawings. This latter testimony is contrary to the weight of the credible evidence and there is no competent foundation or support for Strickland’s testimony on that issue.

Conclusions of Law The allegations in the Citation and Complaint are A.R.S. §32- 1154(A)(2), departure from plans and specifications with prejudice to another, (A)(3)/A.A.C. R4-9-108, workmanship standards, (A)(7), a wrongful act with substantial injury, (A)(11), failure to pay for materials or services in excess of $750.00, (A)(13) violation of the chapter (unspecified violation), (A)(23), failure to take appropriate corrective action. By amendment of the Citation and Complaint by ROC, A.R.S. §32- 1154(A)(10), aiding and abetting an unlicensed person evade the chapter, and (A)(22), new single family residential construction with non or inconsistent pretreatment for wood destroying pests, were added to the Citation and Complaint. By amendment during the course of the hearing, the issues of the trusses, grading, and the plumber-electrician were submitted for resolution[15]. 1. The Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Vazzano v. Superior Court, 74 Ariz. 369, 249 P.2d 837 (Ariz. 1952); Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). 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). 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 (6th ed. 1990). 2. The evidence in an administrative hearing must be “substantial, reliable and probative” (A.R.S. §41-1092.07(F)(1). This means the Complainant has the affirmative responsibility to present sufficient competent evidence to meet the preponderance standard. The less demanding evidentiary standard in the administrative hearing does not mean that any type of evidence is entitled to serious consideration or significant weight. 3. “Substantial evidence is evidence possessing something of substance and relevant consequence and which furnishes substantial basis of fact from which issues tendered can be reasonably resolved.” Black’s Law Dictionary, Special Deluxe Fifth Edition, (St. Paul Minn.: West Publishing Co., 1979) p. 1281, citing State v. Green, 218 Kan. 438, 544 P. 2d 356, 362. 4. Based on the clear preponderance of the substantial evidence, it is concluded that over a year after the initial CO was issued and approximately two and half years after construction began, the home is not habitable because of problems created by the Respondent’s deviation in plans, the consequent workmanship problems with the trusses and gussets, and the unprofessional, unsuccessful and destructive attempts to address (correct) the problems which are attributable to the Respondent. 5. The purported delays caused by the Complainants or their attorney are irrelevant to the major construction problems which are at issue in the hearing. The attempt to lay the problems in this case at the Complainants feet is simply an attempt at misdirection. 6. The evidence as set forth in the Findings of Fact clearly supports violations of A.R.S. §32-1154(A)(2), the deviation in plans even if acceded to in principal by the Complainants, did not include the deviation of installing trusses backwards or cutting the scissor trusses. The failure to follow the engineering instructions when installing the gussets is also a violation. The prejudice to the Complainants is apparent. They cannot live in their home. The violation of (A)(3)/A.A.C. R4-9-108, is proven by the improper installation of the trusses, inadequate and incomplete installation of the gussets and the unsuccessful and destructive attempts to correct the truss and related gusset problems. The (A)(7) violation is proven in that the Respondents deleterious actions were egregious, knowing, and the evidence shows a lack of a good faith effort to properly correct the significant errors. The substantial harm to the Complainants is evident. The Complainants do not have use of their home[16]. The amended allegation (A)(10), is clearly proven by the testimony of Goodell who performed electrical work on behalf of the Respondent when not properly licensed. 7. A.R.S. §32-1154 (A)(13) is recommended for dismissal because no specific or independent action or inaction constituting a failure to comply with the chapter, was cited in the Citation and Complaint. A.R.S. §32-1154 (A)(11), and (A)(22), are recommended for dismissal because there was no specific evidence presented on those issues. With respect to (A)(23), the Complainants in their closing argument asserted that the truss problems created out of plumb walls, counters, island, crooked French Door, and tub. These items are similar to some of the items set forth by the CWO and were in part testified to by Tortorello. However, the evidence during the hearing was insufficiently specific to conclude that the evidence presented by Tortorello related to the same items set forth in the CWO. The general reference in closing argument cannot be considered as a substitute for the specific substantial evidence required during the hearing and (A)(23) is recommended for dismissal. 8. The serious nature and extent of the violations show a clear failure by the Respondent to take the reasonable and necessary steps for remedying the problems created by the Respondent. In view of the construction errors, the failure to properly remedy those errors, and the time that has passed, there is little indication that the Respondent can be relied on to make satisfactory corrections at the present time. Based on all the pertinent evidence and the conclusions in this case, the following recommendation is submitted. Recommended Order It is recommended commencing the effective date of the Order issued in this matter[17] that the Respondent’s Class B-license No. 202443, shall be revoked.

Done this day, March 31, 2008

______________________________________ Allen Reed 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 ___________________________

----------------------- [1] Some of which continue to the present. [2] For the sake of succinctness, only those items still at issue which are set forth by the Corrective Work Order and specifically addressed during the hearing, as well as those items which were amended during the hearing, will be discussed in this decision. [3] These items will be specified in the discussion of proven or unproven violations as presented during the hearing. [4] And also performed electrical work without the proper license. [5] According to the Complainants there have been three liens filed by the Respondent. In their closing argument, the Complainants request removal of any current lien. That issue will have to be left to the court. [6] These are the A-03 scissor trusses over the living room and kitchen (Picture 063, Exhibit C-39) [7] These are the A-02 trusses common trusses over the garage and bedrooms (Picture 061, Exhibit C-39). [8] In light of the potentially critical nature of the truss issue, it would seem the identity of the person inspecting the trusses would be more readily available. [9] This hearsay is substantiated by later testimony from Goodell. [10] It is understood the possible damage is speculative. However, the evidence regarding the potential for harm may be considered in light of the totality of evidence of deviation from plans and specifications and poor workmanship. [11] Until succeeded by an Ed McGowan [12] According to Goodell, he sent his partner to the home to perform some work but other contractors were working there. This testimony is highly suspect (specifically that other contractors were at the home and would presumptively have impeded the Respondent’s work). [13] The foundation that Borden is responsible was not well laid. Apparently the Complainant filed a claim under her homeowner’s insurance for the cut wiring. [14] This testimony (almost a restatement of Goodell’s) is given no serious consideration because of what appears to be a lack of good faith efforts over an extended time within which to address and correct the items remaining in this case. In addition, Strickland testified the trusses were properly corrected. This testimony is also considered not credible in light of the extensive evidence to the contrary. [15] There is no surprise or denial of due process in light of the fact that the hearing took place over a period of five months and this allowed ample time for the Respondent to prepare and defend against the amendments. A second complaint is pending at the Registrar of Contractors. It is apparently awaiting disposition of the instant Complaint. [16] The fact that Complainants may owe $41,000.00 does not alter any of the conclusions. The evidence indicates that necessary competent correction of the structural and other defects caused by the Respondent may possibly exceed that amount. In addition, the Complainants have had to rent a residence while their home sits unoccupied. [17] Forty (40) days from the date of the Order or from the date of certification if certified by the Director of the Office of Administrative Hearings

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