ALJDEC decisions subject to certification as final

07F-F0225-ROC · Registrar of Contractors · 2008-12-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 16, October 27, October 28, and October 29, 2008

APPEARANCES: Complainant was represented by its attorney, Mike Lessler and Respondent[1] appeared through its vice-president and qualifying party, Harold Smith (“Smith”). ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________ Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. The above-referenced matters were consolidated for the purpose of hearing by direction of the Registrar of Contractors. All of the matters involved the same parties, involve similar issues and entailed the use of many of the same witnesses.

2. Originally, there were five (5) matters consolidated for hearing. However, at the outset of the scheduled hearing, Complainant averred that it was withdrawing the entire Complaint in case no. F07-0227/0227W.[2]

3. All of the above-referenced matters involve health and safety home rehabilitation projects, wherein Complainant provided the initial funding for private individuals within its jurisdiction. Complainant alleges certain deficiencies in the work performed and/or materials provided by Respondent and same are discussed in the findings below.

4. All of the homes at issue involve the same form contract, which provided in section 3.4 that Respondent was required to obtain all permits, “whether or not specified in the scope of work or specifications.”

5. Verna Fischer (“Fischer”), director of Complainant, appeared at the instant hearing and provided testimony. She explained the process through which money is allocated for the rehabilitation project and how the individuals who receive the work on their homes, must sign a zero interest promissory note to eventually pay back the money to Complainant.

6. According to Fischer, Complainant retained the services of a construction consultant to review the issues requiring remedial work on the individual homes. Jeff Burdick (“Burdick”) was the consultant, hired by Complainant that worked on the plan to rehabilitate the homes in question. Burdick prepared scope of work documents, which allowed Respondent, and others, to bid on the projects in question. Respondent merely filled in the cost for each portion of the scope of work and then Complainant made its decision to accept the bids provided by Respondent. Neither Respondent, nor its agent, prepared the scope of work documents for the various projects.

7. Fischer testified that on or about March 2007, she began to hear reports from homeowners, regarding issues with the work performed by Respondent. She investigated these issues, along with Burdick, and brought them to the attention of Smith. According to Fischer, Smith advised her that the issues in question were not Respondent’s responsibility under the terms of the contracts. Ultimately, Fisher filed the instant Complainants with the Registrar of Contractors. She admits that she gave Respondent no written notice of intent to file with the Registrar of Contractors, before filing the Complaints.

KLATZKER HOME (F07-0225)

8. John Farnol (“Farnol”), the chief building official for Coconino County, appeared at the hearing and presented testimony. On or about June 5, 2007, he went to the Klatzker residence and issued a Correction Notice (“Notice”) to Respondent. One of the main issues on the Notice was his finding that Respondent had failed to obtain the required permits for the job.

9. Farnol described the project as a major remodel, which required specified permits due to, among other things, electrical re-wire of the home, rebuilding the gable end, insulation installation, drywall installation, and a new dryer vent. According to Farnol, Respondent was required to seek the necessary permits and should have provided the building authority with detailed plans and specifications for the work to be performed. Once the permit or permits were obtained and construction commenced, the building authority would have caused numerous inspections to have taken place during the course of construction.

10. The following represent the salient findings made by Farnol during his inspection of Respondent’s work on the Klatzker residence:

a. Drywall was installed contrary to applicable code, in that the material was installed on four (4) foot centers, instead of the required two (2) foot on center. This caused the drywall to sag and/or bow in many areas. b. Dryer duct to the outside was installed with a corrugated duct material, instead of the required smooth metal duct material. Respondent’s installation is deemed to be a fire hazard. c. In light of the fact that the project was an extensive remodel, Farnol emphasized that Respondent needed a permit to replace windows, despite the fact that the replacement windows are the same size as the existing windows. d. Farnol had a jobsite meeting with Smith, wherein he advised Smith of the need for the permits.

11. After receiving the filed Complaints, the assigned inspector for the Registrar of Contractors conducted jobsite inspections at all of the homes. The inspector appeared at the instant hearing and provided testimony regarding his findings. The salient portions of his testimony on the Klatzker residence included the following:

a. Work was performed without the required permits. b. Paint on the trim and siding fails to match. c. Excessive gapping was observed on the corner miters of window frames. d. A specified window frame was not properly sealed. e. Tar like material was oozing out of windows. f. A large gap was present in an area wherein a window frame meets the window. g. Threshold for the front door reveals excessive movement. There is a bulge on the latch side of the door frame and overall the margins around the door are inconsistent. The sidelight windows fail to open and close smoothly, due to deficiencies in the front door installation. h. Dryer vent duct was not installed in accordance with applicable code requirements. i. There was excessive movement in the drywall installation, due to the fact that it was not installed with framing members two (2) feet on center. j. Skylights were not installed plumb and level. In addition, no cranks were provided to open the skylights. Mastic applied to seal around the skylights was uneven and indicative of sloppy workmanship. k. If Respondent observed that additional work, over and above what he specifically bid to perform, was required to comply with code, then Respondent was required to get a signed written change order, before proceeding with the work. Due to the fact that Respondent failed to obtain any such change orders and proceeded with the work anyway, it was deemed to have accepted the surface and conditions, upon which it performed its work, as being adequate to accomplish a workmanlike result. l. After concluding his jobsite inspection, the inspector issued a Corrective Work Order (“CWO”), directing Respondent to obtain the required permits for the project and to complete specified remedial work within a stated period of time. Notwithstanding the terms of said CWO, Respondent failed to comply with same.

12. Farnol testified that after the issuance of the above-described CWO, Respondent failed to obtain the required permits, despite the fact that he advised Smith what would be required for the necessary permits. He advised Smith that he would not be able to perform any further work on the project without the permits.

13. Burdick appeared at the hearing and presented testimony. According to Burdick, he was hired by Complainant to act as the administrator for the various projects. He admitted that he was the person that prepared the applicable scope of work for the various projects, thereby providing contractors with the information necessary to bid on the jobs.

14. The salient portions of Burdick’s testimony on the Klatzker residence included the following:

a. The scope of work did not call for any re-framing of the interior walls for the home, before installation of the new drywall. b. The applicable contract required Respondent to obtain all necessary permits. c. The only permit that Respondent obtained was for an electrical panel.

15. Smith testified for Respondent. The salient portions of his testimony included the following:

a. He went to the building department and he supplied a rough drawing in regard to what he was going to perform at the Klatzker residence, along with the Burdick prepared scope of work. The only permit he was told that he needed was for the electrical panel. b. If he had known that he needed to install more studs on the interior wall, prior to the installation of the drywall, or if the scope of work had called for the addition of framing studs, then he would have added additional costs to his bid. The scope of work does not mention anything about adding necessary framing members prior to install of interior drywall. c. Section 3.3 of the applicable contract provides, in pertinent part, that Respondent “shall not make any changes in the scope of work or the specifications without the prior written approval…” and “no change shall be effective unless set forth in a change order...” properly executed. d. He is willing to install the necessary studs, but under all of the circumstances, he believes he should be paid extra for such work. e. He agrees that the windows require an appropriate adjustment to operate properly. f. He does not dispute the issue of the dryer duct. g. On the issue of the sagging front entry threshold, he would agree to fix same, as long as it does not involve any major failure of the foundation. h. If the skylights don’t operate properly, he agrees they need to be adjusted.

16. It is determined and held that the weight of the credible evidence of record supports a finding that the following constitute substandard and unacceptable workmanship attributable to Respondent on the Klatzker project:

a. The failure to obtain all of the necessary permits and inspections for the project. b. The excessive gap on the window frame corner miters, failure to properly seal one of the window frames, the tar-like material oozing out of windows, and the large gap in the area wherein a window frame abuts the window. c. The dryer duct installation does not meet applicable code requirements. d. The side lights on the front entry door area fail to operate smoothly. e. The front entry door threshold has excessive movement and there are inconsistent margins around the door. f. No mechanism was provided to open and close the skylights. The skylights are not installed plumb and level and the mastic around the edges is sloppy. g. Respondent failed to provide a proper color match on the paint application for the siding and trim areas of the exterior of the home.

17. It is determined and held that although there are sags in the drywall installation, the applicable scope of work, prepared by Complainant’s agent, did not require Respondent to install additional framing members in order to achieve drywall installation that would be installed two (2) feet on center. In the event Complainant continues to demand that the additional framing members be installed, they will need to sign a proper change order and pay Respondent for such additional work.

18. Respondent failed to comply with the CWO issued in this matter.

HOWELL HOME (F07-0223)

19. Farnol testified on this project. Once again, he indicated that Respondent failed to take out all of the necessary permits and thus, also failed to have all of the required construction inspections performed by the local building authority. In regard to the scope of work on this project, he admitted that there was no requirement for Respondent to rebuild or alter the existing support piers for an upper deck balcony walk deck.

20. The assigned inspector for the Registrar of Contractors also testified on this residence and the salient portions of his testimony included the following:

a. He performed a jobsite inspection on this residence and issued another CWO, requiring Respondent to obtain the required permits and to accomplish specified remedial work within a stated period of time. b. Upper level wood deck boards installed by Respondent are not properly staggered. c. A guardrail specified to be oak wood, was instead installed with pine wood. d. The dishwasher was not hooked up in the kitchen area wherein it was placed. Nevertheless, he testified that the scope of work did not call for a dishwasher to be provided. However, according to the inspector, if you supply a dishwasher it needs to function as such. e. There were problems with the window trim, as manifested by excessive gapping, lack of paint, and siding that had been damaged during the window installation. Respondent agreed to correct this issue. f. Respondent commenced installation of the tile floor in the upstairs bathroom but never completed the project. The scope of work required the homeowner to supply the necessary tile for the project. g. There is a gap in the roof drip edge metal. Respondent agreed to correct this item. h. The kitchen sink does not sit flat to the countertop and the seal is split. Respondent agreed to correct this issue. i. There are no baseboards installed on the second floor, however, the scope of work for this home, does not show any baseboards to be installed.

21. Joanne Howell testified at the hearing and the salient portions of her testimony included the following:

a. There are cracks in the areas wherein Respondent screwed-down the deck boards. b. Respondent installed new kitchen cabinets and was supposed to install a cabinet in the area where there had previously been a dishwasher. There was a problem installing the cabinet in the old dishwasher area and thus, Respondent offered her a new dishwasher for this area, which he did supply. However, he never hooked up the new dishwasher to the existing plumbing or electric. c. Complainant prefers to have a cabinet in the area where the dishwasher is located. On this issue, Respondent agreed to remove the dishwasher and install a cabinet. This will be accomplished on or before the effective date of the Order entered in this matter. d. She did supply the tile for the upstairs bathroom but purchased two different size tiles. She claims that Respondent refused to deal with the installation of the two different size tiles and told her that there were enough larger tiles to complete the job. As it turned out, there were not enough of the larger size tiles. e. She admits that the scope of work for her project did not require Respondent to supply and install baseboards. f. She testified that she never gave consent to change from oak wood on the rail in question and moreover, that the rail is not redwood, but pine.

22. Burdick testified regarding the work on the Howell residence. The salient portions of his testimony included the following:

a. On the scope of work, he indicated that he assumed that when Howell supplied the tile, that all of the tile would be the same size. He did not contemplate that she would obtain two (2) different size tiles. b. In regard to the upper deck balcony, he only contemplated that Respondent would change out the wood boards. He did not expect Respondent to do anything with the existing footers for the piers or the existing support beam.

23. Smith’s testimony on this home included the following:

a. The deck boards supplied by Howell were not long enough to span the balcony and that is the reason the boards were cut. b. On the oak rail issue, he claims that Howell said she wanted redwood. Thus, he gave her redwood. c. The scope of work did not require Respondent to install baseboards. d. Howell failed to supply Respondent with enough tile material to complete the installation in the bathroom. e. He agreed to install the missing oak handrails. f. There is some type of block of wood at the junction of a specified pillar and the support beam. He testified that Respondent did not place this block of wood in said area.

24. It is determined and held that the weight of the credible evidence of record supports a finding that the following constitute substandard and unacceptable workmanship attributable to Respondent on the Howell project:

a. The failure to obtain all of the necessary permits and inspections for the project. b. Replacement balcony deck boards are not properly staggered and there are cracks in the areas wherein the boards were screwed-down. c. Pine material was used for a certain guardrail, whereas oak was specified. d. Window trim work is deficient, as shown by excessive gapping, lack of paint, and siding that had been damaged during the window installation. e. Respondent was provided sufficient tile, albeit two sizes, to complete the work on the bathroom floor. This should have been completed. Respondent remains responsible to complete this project, even if it is required to now purchase all of the necessary replacement tile. f. There is a gap in the roof drip edge metal. g. The kitchen sink does not sit flat on the countertop and the seal has split.

25. Regarding the issue of the dishwasher, Respondent agreed to remove same and install a new cabinet in said area. This needs to be accomplished on or before the effective date of the Order entered herein.

26. The applicable scope of work did not call for the installation of baseboards and thus, it is determined and held that Respondent has no responsibility in this regard, unless a proper change order providing additional money for Respondent is executed.

27. The scope of work merely required Respondent to replace wood members of the existing balcony, it did not require it to accomplish any work on the existing footers or piers. Complainant failed to sustain the requisite burden of proof on this issue. Respondent has no responsibility on the structural support issues of the deck unless a change order is executed between the parties.

28. Respondent failed to comply with the CWO in this matter. NORLIN-NIGG (F07-0224)

29. A CWO was issued in this matter on July 11, 2007. At the outset of the hearing, Complainant indicated that item no. 7 on said document was taken out of consideration. On item no. 3, the electrical work performed by Respondent, it was agreed that Respondent would take the necessary steps to open the area and have it inspected. However, Smith did not agree to make any corrections if deficiencies were found.

30. The salient portions of Farnol’s testimony on this home included the following:

a. Once again, Respondent did not take out all of the required permits for this project. b. Although he examined the roof, he is not sure whether or not the proper gage for the metal sheeting was utilized.

31. The assigned inspector for the Registrar of Contractors testified and the salient portions of his testimony included the following:

a. A specified seam wherein the new roofing material covered existing clear story windows is highly visible and indicative of sloppy workmanship.

b. The new drywall texture applied to the areas adjacent to specified electric cover plates failed to properly match the existing texture. Other areas of the drywall work were incomplete. c. Skylight has some type of debris on the lens and the drywall work is not complete on the interior side. d. A specified gas line was not tested and inspected prior to being covered-up. e. Although the applicable scope of work did not address the installation of a gas line into the bathroom, both Smith and Norlin-Nigg advised him, during the jobsite inspection, that such a gas line had been installed in the bathroom

32. Christina Norlin-Nigg appeared at the hearing and provided testimony. The salient portions of her testimony included the following:

a. She has installed a major addition onto her existing home, subsequent to the time that Respondent worked on her project. In this regard, a major portion of Respondent’s metal roof was removed and replaced with another type of roof. b. She never wanted her clear story windows covered-up. However, she admits that Respondent advised her it was not possible to avoid covering these areas with the new roof system. c. She wanted to install a clothes dryer in her bathroom. She hooked up her new appliance to the new gas line, which was stubbed-out in said area by Respondent, and she had no gas. d. The debris on the skylight was not present prior to the time that Respondent worked on the roof. e. Respondent failed to remove the existing roof before the new roof was installed. The applicable scope of work required the roof to be removed down to the decking. f. She has had others complete all the drywall work that was not installed. g. Debris on the cover plates has been cleaned off but the texturing in said area has not been corrected. h. She admits that there is no provision in the scope of work requiring Respondent to install a new gas line.

33. Burdick’s testimony on this home included the following:

a. He also discussed the covering of the clear story windows with the homeowner and she agreed to it.

34. The salient portions of Smith’s testimony on this home included the following:

a. There was a signed change order on this home that removed many of the items from the scope of work. b. The reason the clear story windows were covered was due to the fact that providing a water tight roof required that the windows be covered with roof material.

35. It is determined and held that the weight of the credible evidence of record supports a finding that the following constitute substandard and unacceptable workmanship attributable to Respondent on the Norlin-Nigg project:

a. All of the required permits were not issued. b. Respondent failed to remove the existing roofing system, prior to the installation of the new roof. Although the record is unclear regarding whether or not the proper gage material was utilized for the new roof surface, Respondent remains responsible for the removal of the existing roof and any new roof application will require the proper permit. c. The seam for the roof material covering the clear story windows is indicative of substandard workmanship. d. Specified areas of new drywall texture fail to adequately match the rest of the wall. e. There is debris on a skylight lens and the interior side drywall has not been finished in said area. f. Respondent installed a gas line in the bathroom that does not provide any gas. g. The electrical work which has been covered needs to be exposed and any deficiencies in Respondent’s electrical work will need correction by Respondent. h. Although Respondent failed to complete all of the required drywall work, the homeowner has retained others to finish all of the drywall.

36. Respondent failed to comply with the CWO issued in this matter.

COLLINS (F07-0230)

37. At the outset of the hearing on this property, Complainant averred that it was withdrawing all issues, except for issues on the roof edging and soffit.

38. The assigned Registrar of Contractors’ inspector testified on this property and the salient portions of his testimony included the following:

a. The roof fascia was loose at the northeast section of the roof. In addition, portions of the soffit were hanging down. He opined that this damage could have occurred as a result of Respondent’s installation of the new drip edge for the roof. However, he was not present when Respondent performed the work on this project. b. The applicable scope of work did not provide for Respondent to replace or repair the soffit or fascia and the areas in question are not new. c. The homeowner advised the inspector that she had no problems with the soffit and fascia areas, prior to the time that Respondent performed work on the home. If a contractor damages other areas of the home, while performing its contracted work, it is responsible for such damage. d. The areas in question have been corrected by other contractors.

39. Evidence of record showed that Complainant paid $625.00 to have these roof related issues repaired by others.

40. Smith testified that the applicable scope of work did not include fixing the fascia or soffit area. Furthermore, he indicated that Respondent had requested a change order to accomplish repairs in these areas and was denied a change order.

41. According to Smith, the problems with the fascia and the soffit were due to damaged wood framing underneath these areas and not related to anything that Respondent did on the rest of the roof work.

42. It is determined and held that Respondent was not required to perform work on the existing fascia and soffit on this home. Moreover, the record was inadequate to support a finding that while working on the project, Respondent actually caused any damage to these already deteriorated areas of the home. Complainant failed to sustain the requisite burden of proof on this issue.

43. At the conclusion of the hearing, the parties agreed that Respondent’s C-39R license had nothing to do with the work on the Collins home or the Howell home.

CONCLUSIONS OF LAW

Respondent violated the provisions of A.R.S. § 32-1154A (23), (9), (7), (2), and (3); namely Rule R 4-9-108.

RECOMMENDED ORDER

In view of the foregoing it is recommended, commencing on the effective date of the Order entered in this matter, that the Class B and Class C-39R l licenses of Respondent shall be suspended until the Registrar of Contractors receives written proof that Respondent has either accomplished appropriate and effective remedial work on the items set forth in Findings of Fact 16(a) through 16(g), 24(a) through 24 (g), 25, and 35 (a) through (g) or concludes other mutually acceptable arrangements with Complainant. It is further recommended that if Respondent complies with the above- described condition, on or before the effective date of the Order entered in this matter, then the aforementioned license suspension shall not take place. It is further recommended, in addition to the above-provided penalties, if any, that Respondent pay the singular sum of $250.00 to the Registrar of Contractors by way of a civil penalty, pursuant to A.R.S. §32- 1154D. The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s contractor’s licenses, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent , as defined in A.R.S. §32-1101A(5), unless payment of any outstanding prior civil penalty is tendered. 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.

Done this day, December 2, 2008.

______________________________________ Mark A. Silver Administrative Law Judge

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

Registrar of Contractors Armando Contreras 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________

----------------------- [1] For the purpose of this Decision and Order the term Respondent shall be used to apply to both licenses cited herein since they appear to have common ownership. [2] An Order to vacate this matter has previously been issued by this Tribunal.

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