ALJDEC decisions subject to certification as final

07F-M2202-ROC · Registrar of Contractors · 2008-04-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 18, 2008 APPEARANCES: Complainants Jeff and Delia Milkey appeared on their own behalf. Rick Sherman, Esq. represented Respondent Jackson Properties Development, Inc. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ The issue presented by this matter is whether Respondent Jackson Properties Development, Inc. (“Jackson”) 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. Jackson is the holder of a Class B- license (No. 136563) issued by the Registrar of Contractors (“ROC”). 2. According to the complaint filed herein, Complainants Jeff and Delia Milkey purchased their home from Jackson on June 26, 2004, and moved into the home on July 1, 2004. 3. On May 17, 2007, the Milkeys filed a complaint against Jackson with the ROC. In their complaint, the Milkeys alleged the following: 1. We have reported sewage back up in our home to Jackson Properties for a couple of years now. We have had plumbers out who cleared blockage and ran a camera into the sewer pipe leading from the home. They concluded that the slope of the pipe was towards the house causing a reverse flow back into the house . . .This was reported to Jackson Properties who has done nothing to resolve the problem. Today the problem has happened again and we need this repaired immediately.

2. We also have reported that one of the windows on the East Side of our home leaks water into the house when we have a strong rain coming in from the East. This was previously reported to the ROC. The problem was mis-diagnosed and in the next storm the window leaked as bad as ever into the house.

We spent some time out on the building site when the home was being built and know for a fact that there was (sic) issues with the original window install. We know the Front Windows and the Back windows were installed in reverse. The contractor had to pull out both sets of windows and reinstall them. We believe on our rear window one of the windows was not installed properly the second time (Perhaps this slipped by the inspectors if the window install was inspected and then switched out AFTER?)

We have submitted bills to Jackson Properties for compensation for plumbers and have not been compensated for those either. Jackson Properties is lucky we have been home when these incidents occurred so we could do flood/sewage control in the house and minimized the damage.

4. ROC Inspector Beau Cruz investigated the Milkeys’ complaint. 5. Inspector Cruz scheduled a jobsite inspection for June 21, 2007. Mr. and Mrs. Milkey and Eric Wilde, Jackson’s Warranty Manager, were present for that inspection. 6. On June 21, 2007, following the jobsite inspection, Inspector Cruz 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):

See Attach (sic)

Complaint 1) Plumbers inspected sewage system by camera due to sewage backups and conclude incorrect slope: Only documentation availavable (sic), is a H/O printed sheet to Jackson Properties for reimbursement for plumbing work done by “The Plumber” and an invoice from “The Plumber” without a stamped or written date that was apparently for clearing main drain and video main with camera on May 11, 2006. The invoice states “standing water at bullhorn’s” and reverse and negative flow. No videos or invoice for last back up alleged on 5/11/07. Ran all cold-water faucets in the structure with the exception of laundry room for approximately 10 to 15 minutes and all drains disposed of water properly.

Complaint 2) H/O states that has reported sewage problem [to] Jackson Properties and Jackson Properties has not corrected: Jackson Properties supplied to this inspector and H/O’s warranty orders that provide a timeline for digging up trench for sewer main at the front yard of house with statements on where responsibility rests. No statements as to work performed. Eric stated [that] Jackson Properties had also hired [a] plumbing company to video snake line and all that was observed was a low area with about ½ inch of standing water. No video or written documentation provided by Jackson Properties regarding plumbing company. No documentation provided by H/O stating that Jackson Properties agreed to such.

Complaint 3) East side window leaks water and H/O believes were incorrectly installed: H/O states that front slider window for the dining room and the left slider window for the family room were reversed and that builder had to remove and switch and believes that family room left slider or fixed window above slider window were installed incorrectly. H/O did not present documentation to substantiate. Eric stated that no documentation on file regarding this issue, although stated that Jackson Properties did stucco work on pop out of said window but no drywall work on the interior. Observed what looked to be water damage in the upper fixed window enclosure, but upon close inspection with ladder it was determined not to be and no evidence of past water staining or repairs evident. Inspected said areas from the exterior and did note some gaps between the frame and stucco on the lower slider sill (homeowner maintenance issue), although H/O states water infiltrates from above slider and fixed window during driving rains. Ran water on said windows from the exterior for approximately for (sic) 15 minutes and checked inside for any evidence of water infiltration and no water evident visually or tactfully (sic).

Complaint 4) Homeowners have submitted bills from plumbers to Jackson Properties for compensation and have not been compensated: Only bill presented was for $150.00 and the ROC has no jurisdiction involving disputed money amount.

Notes: Both homeowners present although, Mrs. Milkey was representing complaint views thru (sic) most of the jobsite process. Mr. Milkey did provide input on three separate occasions, once to emphasize waste blockage problem, twice to emphasize window leakage issue and upon departure. A ladder that was provided by the homeowner was used to view the window from the exterior and the interior, facilitated the inspection of the windows issue. Water test on the exterior of the windows was facilitated by a wind up hose assembly connected to the rear spigot located at the rear of the property. This inspector did not observe recent evidence that a water infiltration problem was occurring at the rear window unit and no evidence of past drywall damage or repairs evident. This is not to say that it did not occur, but only an observation. Weather at the beginning of the jobsite ant (sic) thru (sic) the remainder of the jobsite was sunny, clear and warm.

7. Inspector Cruz testified consistently with the findings contained in his June 21, 2007 letter, and stated that the Milkeys presented insufficient evidence to him at the jobsite inspection to warrant the issuance of a Corrective Work Order. Inspector Cruz testified that if an issue exists, he would have expected to see a blockage. Inspector Cruz also testified that Jackson had filed ROC complaints against the subcontractors who performed the work on the sewer lines and the window installation and that the ROC determined that the subcontractors were not at fault. Sewer Line 8. Mr. Milkey testified that on May 14, 2006, he contacted The Plumber, a plumbing contractor, after the sewer system began to back up into his home. See Exhibit P1. According to the invoice from The Plumber, the main drain was snaked and a camera was inserted. Id. The Plumber found standing water at the bullhorns, and determined “got reverse negative flow”. Id. 9. On May 16, 2006, the Milkeys faxed to Jackson, to the attention of Eric Wilde, correspondence requesting reimbursement for the $150.00 charge the Milkeys paid to The Plumber. See Exhibit P2. 10. On May 22, 2006, Jackson issued a Warranty Order to SAK Electric & Plumbing (“SAK”), Jackson’s subcontractor. See Exhibit P3. The Warranty Order indicates the service request as “sewer pipe between the house and the road is backed up ~ all toilets were backed up and overflowing. Back flow issue. Meeting May 22, 2006. H/o is going to go to the ROC if not corrected.” Id. The Warranty Order specifies the action taken as follows: “scheduled for June 5, 6, and 7 to dig up and fix the issue per Lynn 5/31/06. Follow up with Lynn. I spoke with the Manager Mike @ 9:15 a.m. on 6-8-09. This has been blue staked and ready to go for about 1 week. H/o will contact me as soon as the job begins.” Id. 11. On June 13, 2006, Jackson issued a Warranty Order to SCP Construction, Inc. (“SCP”), another of Jackson’s subcontractors. See Exhibit P4. The Warranty Order indicates the service request as “Sewer pipe between the house and the road is backed up ~ all toilets were backed up and overflowing. Back flow issue. SAK plumbing states that it is not there (sic) responsibility, that it is the responsibility of the trade that did the back fill. The homeowner is ready to ROC. Please advise. . . .” Id. 12. Jackson’s notes on the Warranty Order to SCP indicate, “SCP – does backfill as a courtesy for plumbers – It is there (sic) responsibility to check & test all lines before home closes. – Please contact your plumber to handle this problem. – No action to be taken by SCP Construction.” See Exhibit P5. 13. Jackson took no further action regarding the sewer back up issue. 14. On February 27, 2008, the Milkeys hired Freedom Air Conditioning, Plumbing & Heating, Inc. (“Freedom”). Freedom’s technician performed a “video pipe inspection with Precision Locating of main line inside the house to city tap. A large belly was found outside which was marked with green paint, it was approx. 4’ deep at the cleanouts to approx 3’4” deep 7’ away. The line was marked with green paint. Video was given to homeowner and also recommend hydrojet after repair of sewer line.” See Exhibit P6. At hearing, Mr. Milkey showed the video filmed by Freedom and submitted the photographs taken by Freedom into evidence. See Exhibits P7b, P7a, and P9. Mr. Milkey testified that there is an area of 19 feet of standing sewage in the sewer line. 15. Mr. Milkey testified that the sewer line issue has been an intermittent problem for the Milkeys and that Jackson has been on notice of the issue. Mr. Milkey further testified that Jackson acknowledged the problem and scheduled repair work, however, failed to follow through with the necessary repairs. 16. Ralph Pursell, Jackson’s Project Manager, testified that according to the City of Mesa’s Building Safety Department’s Inspection Record, the sewer to building passed inspection on January 5, 2004. See Exhibit A. Mr. Pursell testified that the inspector would have inspected for elevation and connection to the house. Mr. Pursell further testified that it would have failed inspection if the sewer pipe to the city main had been running uphill 8 inches in a 12’ span as alleged by Mr. Milkey. Mr. Pursell acknowledged that the building inspectors do not use any measuring equipment during their inspections and only eye the area they are inspecting. Mr. Pursell opined that the Milkeys would be experiencing a constant problem, rather than an intermittent one if reverse flow exists. Mr. Pursell further opined water may be remaining in the pipe due to a clog caused by foreign material such as “a tampon”. Mr. Pursell testified that Jackson filed an ROC complaint against SAK when SAK refused to perform corrective work, and that after inspection, the ROC determined that the issuance of a Corrective Work Order was not warranted. Leaking Window 17. Mr. Milkey submitted into evidence a portion of a Warranty Service Request Form dated August 18, 2005, indicating in pertinent part that there is “water leaking inside house through top of east windows”. See Exhibit W1. Mr. Milkey submitted into evidence several photographs depicting water intrusion through the window. See Exhibits W2a, W2b, and W2c. 18. Mr. Milkey also submitted into evidence correspondence dated March 7, 2008 from Erik Briggs of BEL Southwest that states the following: My Name is Erik Briggs, I am a Licensed Contractor, ROC218277. The Milkeys contacted me to evaluate a window that they told me leaked rain on their home purchased from Jackson Properties.

After observing the damaged drywall on the interior of the house where the Milkeys showed me the entry point of the water, I determined the only way to really tell if the window had been installed correctly was to cut a hole in the outside of the house where the window is attached to the framing.

After cutting a hole through the exterior stucco wall, here are my observations.

The flashing was installed on the outside of the window, but I was able to tear a section of the flashing up to clearly see that no sealant was used. The Milkeys informed me that the window vendor was Atrium. I requested a cut sheet to compare the installation instructions with my observations and knowledge of proper window installations. I confirmed that a 3/8 inch bead of sealant is required when the window is installed between the exterior fin of the window and the flashing. This is a minimum installation requirement and clearly explains why in a hard rain, the water coming down that wall would find its way eventually inside the house between the window and the flashing.

From my experience as a licensed contractor the installation of this window does not meet the minimum requirements as defined by Atrium for the installation of their windows.

See Exhibit W3.

19. Mr. Briggs was not present for the hearing. As such, he did not testify regarding his findings, nor was he subject to cross examination. Mr. Milkey submitted into evidence Atrium’s Installation Procedures for Atrium Windows in a New Construction, Stud Frame Application. See Exhibit W4. Mr. Milkey also submitted into evidence photographs depicting the hole installed by Mr. Briggs and Mr. Briggs findings. See Exhibits W5a through W5c and W6a through W6c. 20. Mr. Milkey testified, regarding Inspector Cruz’s water test, that in his opinion one cannot simulate the conditions of a severe monsoon storm with driving rain and wind, with a garden hose. Mr. Milkey further testified that the window does not immediately leak, but rather only leaks well into a storm after water accumulates and saturates the area. 21. Mr. Pursell testified that the windows passed inspection during the drywall, shear & nail inspection on March 21, 2004. See Exhibit A. Mr. Pursell further testified that wood exposed to water would begin to rot and have black markings and that the wood exposed by Mr. Briggs does not appear to have been exposed to water. Mr. Pursell testified that the lath would have become yellow and brittle if exposed to water and in the photos, the lath remains white. Mr. Pursell further testified that the water test would have shown water intrusion if a problem exists, and that he believes the water is coming through the gable vents above the windows. These vents are necessary for ventilation of the attic. Mr. Pursell testified that Jackson cannot warrant against Mother Nature. 22. Mr. Pursell testified that both the window and stucco subcontractors could not produce conditions for the leak when they were sent out by Jackson, that Jackson filed complaints against both subcontractors, and the ROC performed inspections and determined that the issuance of a Corrective Work Order was not warranted against either subcontractor. 23. The Administrative Law Judge finds that the mere fact that the ROC investigated all of Jackson’s complaints against its subcontractors and found the issuance of Corrective Work Orders unwarranted, is not probative evidence of Jackson’s lack of liability, and further, no evidence was presented establishing that any of the cases were adjudicated. Moreover, Jackson, as the general contractor for the project, bears the ultimate responsibility for the construction of the home. 24. In its closing argument, Jackson asserted the affirmative defense of the statute of limitations, contending that the Milkeys filed their ROC complaint beyond the two year jurisdiction of the ROC. While Jackson is correct that the Milkeys did not file their complaint until a date more than two years after having taken occupancy of their home, the Administrative Law Judge finds that the limitations period was tolled during Jackson’s investigation of and response to the Milkeys claims regarding the sewer line and the leaking window, and that Jackson failed to present sufficient evidence regarding the relevant time periods to demonstrate that the limitations period had expired prior to the filing of the Milkeys’ complaint. Accordingly, the Administrative Law Judge concludes that Jackson failed to establish that the Milkeys’ complaint is time barred. CONCLUSIONS OF LAW In this proceeding, the Milkeys bear the burden to prove, by a preponderance of the evidence, that Jackson is subject to discipline for violations of A.R.S. § 32-1154(A)(3) and/or (A)(7) as charged by the ROC in its October 31, 2007 Citation and Complaint. See Arizona Administrative Code (“A.A.C”) R2-19-119. 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). The Administrative Law Judge concludes that the Milkeys have failed to meet their burden of proof as to both of the ROC’s charges. 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 Jackson with a violation of 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 any applicable building codes and professional industry standards. Having carefully considered all of the evidence presented, the Administrative Law Judge concludes that the Milkeys did not meet their burden of proof because they failed to present sufficiently substantial evidence to support their claims. Specifically, the Administrative Law Judge is unable to assign any significant probative value to the various letters and reports submitted by the Milkeys because the authors of these documents were not present at hearing to testify directly to their findings, nor were they subject to cross examination by Jackson, and the remaining evidence is insufficient to prove that Jackson failed to comply with applicable building codes and professional industry standards. Consequently the Administrative Law Judge concludes that Jackson did not violate A.R.S. § 32-1154(A)(3). Under A.R.S. § 32-1154(A)(7), a contractor is subject to discipline for “the doing of a wrongful or fraudulent act . . . as a contractor resulting in another person being substantially injured.” The Administrative Law Judge concludes, based on the weight of the evidence presented at hearing, that the Milkeys failed to establish that Jackson committed wrongful acts that substantially injured the Milkeys. Therefore, the Administrative Law Judge concludes that Jackson did not violate A.R.S. § 32-1154(A)(7). In view of the foregoing, no grounds exist to impose discipline against Jackson’s license. The ROC’s Citation in Case Number M07-2202, and the Complaint upon which it is based, should be dismissed. RECOMMENDED ORDER It is recommended that no discipline be imposed against Jackson’s license, and that the Citation issued in Case Number M07-2202, 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, April 2, 2008.

______________________________________ Sondra J. Vanella Administrative Law Judge

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

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

By ___________________________

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