ALJDEC decisions subject to certification as final

07F-T0019-ROC · Registrar of Contractors · 2007-07-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 21st, 2007; 9:00 a.m. APPEARANCES: Complainant, Mr. Kevin Haller, was represented by Mr. Michael S. Woodlock, Attorney-at-Law. Respondent, Ducati Development Group, LLC, was represented by Mr. Terry P. Esser Attorney-at- Law. ADMINISTRATIVE LAW JUDGE: Grant Winston _____________________________________________________________________ The administrative hearing of this matter was held in the Office of Administrative Hearings, Tucson. Testimony was heard and other evidence admitted to the record, and, based on the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made.

FINDINGS OF FACT 1. Respondent, Ducati Development, LLC, is, and during all time material hereto was, a contractor licensed by and doing business in the State of Arizona, holding Class KB-01 License number 154649. 2. Complainant, Mr. Kevin Haller, and his wife, Ms. Megan Haller, purchased a home in Vail, Arizona, in late 2004, which was constructed by Respondent. Construction was substantially completed in late 2005, at which time Complainant took possession.

3. Complainant’s home is situated on a lot at the end of a cul-de-sac in a residential development. The subdivision itself ( roads, and such ( was not the work of Respondent, but Respondent constructed homes in the development, including Complainant’s. 4. The grade of the subdivision, specifically at the area of the cul- de-sac, slopes downward, and Complainant’s lot and house, being at the end of the cul-de-sac, is at the lowest point. Thus any rainfall will naturally flow in a general direction down the cul- de-sac in the direction of, onto, and across Complainant’s lot and house. 5. After the Complainant had closed on the purchase of the home, but during its construction, more than one heavy monsoon rain inundated the neighborhood. The amount of rainfall and the course it took down the cul-de-sac and across Complainant’s lot, proved beyond any doubt that the lot had not been properly graded and prepared to adequately divert monsoon rain. This is especially true when considered in light of the fact that Complainant’s lot is at the downward end of the natural grade, where rainwater runoff will travel. 6. After one particularly heavy monsoon rain flooded the Complainant’s lot during the construction, Respondent came on site and attempted remediation of the poor grading. A berm was built using some dirt from the next-door neighbor’s lot. Additionally, a swale was dug, a drainage ditch with an 18” pipe installed, the terminus of which was covered with a metal grate. The metal grate proved to be a mistake when the rains came and debris washed up to the grate and clogged it, thereby rendering the pipe useless.

7. The testimonies of Ms. Haller and the Hallers’ next-door neighbor, Ms. Claire Gates, and the photographic evidence proved that the June, 2006 monsoon rain caused severe flooding of the lot. 8. After Complainant took possession of the home another severe monsoon rain came around June 26th, 2006. By this time the Complainant had added a swimming pool and two wing walls. The wing walls were 5’ masonry walls with a metal fence with wooden slats, and weep holes at the bottom of the fences for drainage. When this flood came the measures Respondent had taken to assure proper drainage failed again. At one point the water at the front door was three-feet deep. The rainwater entering the lot from the front could not be diverted adequately by the measures taken by Respondent to date. The water flooded into the house, penetrating every room except the master bedroom, causing extensive damage to the walls and carpeting. 9. That evening the Complainant called Abracadabra, a water-damage restoration company to help with emergency repairs. Abracadabra workers arrived around 9:00 p.m. that evening and immediately began damage control and restoration measures. Complainant and his wife themselves performed some labor to restore their home, including the cutting out of drywall and carpet removal to save money. Still, Abracadabra submitted a bill to Complainant for $12,519.18. Complainant submitted the bill to Respondent, and Respondent refused to pay it. Complainant’s homeowners’ insurance carrier refused to pay any amount being of the opinion that the damage was a drainage issue, not covered by their policy. 10. Eventually, Abracadabra sued the Complainant for the bill, and placed a mechanic’s lien on their property. In order to remove the lien, and settle the case, Complainant paid Abracadabra $13,441.50 which includes an interest amount that accrued while the bill was unpaid. 11. Around June 29th, 2006, Respondent came to the house and placed filled sandbags around the front perimeter of the lot. Respondent has now performed other corrective measures which it and its registered professional civil engineer who oversaw the final corrective work, Mr. Chris Rod, say is now adequate to prevent further flooding problems. There have been no significant rains since the latest remedial work. 12. Complainant’s wife filed the instant Complaint with the Registrar of Contractors on or about July 10th, 2006. The assigned agency Inspector, Mr. James R. Morris inspected the premises and issued a written Corrective Order dated October 16th, 2006, noting the positions of both parties and ordering the Respondent to properly complete the project. However, on November 27th, 2006, Inspector Morris issued a letter entitled “REVISED” in which he merely noted the parties’ respective positions, and that he could not confirm the cause of the drainage problem. He advised that the Registrar would be closing the Complaint unless a request for an administrative hearing was made. Complainant did request a hearing. Inspector Morris testified that he conducted a pre- hearing inspection shortly before the hearing and that the drainage did not meet minimum workmanship standards, and that the house pad elevation was too low. However, he deferred to the opinions of the professional engineers on these points. 13. Complainant seeks restitution for the Abracadabra bill, plus an order directing the Respondent to provide them with an engineer’s certification that the final corrective measures taken by Respondent are sound, and proof that they are approved by Pima County building authorities since they amount to a deviation from the original plan that was approved by Pima County. They also seek an engineer’s written approval that the slab on lot elevation is adequately high. 14. Respondent places much emphasis on the fact of the wing walls added by Complainant and his wife themselves. The walls were not permitted by the county, says Respondent. This much is true, but there is no substantial evidence that the county required a permit for their construction. The licensed contractor who constructed the walls, Mr. Steve Carlson, testified he verified with the responsible county building employees that no flood plain issues were present, and no permit was required for the 5’ walls which did not alter the existing grade of the lot. Weep holes at the swales built by Respondent were added to accommodate a normal amount of rainwater runoff, and after the first flood, the wood slats to the gate were removed and a more open wrought iron gate design was installed. Mr. Carlson testified that he would not have constructed the walls without a permit if the Pima County employees had told him one was needed. Mr. Carlson presented himself as a credible witness. 15. Respondent has some testimony that the walls should have been permitted, coming from the civil engineer it hired, Mr. Chris Rod. He testified that the front of the lot is not on a flood plain, however, the rear of the lot is on a flood plain. Mr. Rod is a credentialed and credible witness also. 16. Respondent takes the affirmative in the issue of a required permit for the wing walls, and there is no substantial evidence either way as to the permit issue for the wing walls. They were built without a permit. It also bears mentioning that there is no evidence of any citation from the county stating that the walls are in violation of county code. 17. Respondent’s civil engineer, Mr. Chris Rod, testified. He performed an inspection of the premises and performed calculations about the water volume and its performance as it entered and crossed over the Complainant’s lot. He testified that the Respondent’s poor drainage design was mostly responsible for the flooding. However, he continued to opine that the wing walls and solid gate Complainants had had constructed contributed between 20% and 30% of the flood waters penetrating the home, by diverting what would have been the flow course of the water. 18. Complainant had his own civil engineer inspect the premises, view the photos of the flood which are in evidence, and testify. He is Mr. Blaine Reely. Mr. Reely did not perform any calculations, but did read Mr. Rod’s report. He testified that the wing walls as constructed were adequate to accommodate the existing swale when a normal amount of water would course through it. The wing walls and weep holes were adequate for the intended purpose of allowing normal drainage. However, Mr. Reely also testified that the wing walls were not intended to accommodate the abnormal amount of water that reached it after having overflowed the front of the lot due to the Respondent’s defective drainage. 19. That is at the heart of the matter. When Mr. Rod testified that the wing walls were between 20% to 30% at fault for the water penetrating the Complainant’s home, he fails to anywhere account for the fact that if the Respondent’s overall drainage design had been proper in the first instance, the volume of water that invaded at the front of the lot and then reached the wing walls would have been far less. It was, in short, the Respondent’s drainage system that failed; not the wing walls. 20. Respondent should make restitution to Complainant in the full amount of the settlement with Abracadabra, an amount stipulated by the parties to be $13,441.50. Respondent argues that in addition to the 20% to 30% reduction in this amount, some reduction also should be made for the work Respondent has already performed to correct the problem and repair damage to Complainant’s house. Respondent submitted as evidence an itemized list of these repairs and corrections. Complainant had submitted into evidence the itemized bill form Abracadabra. No offset should be allowed for the correction of the drainage problem which was of Respondent’s own making. As to the other items on the Respondent’s list in evidence, the repairs it made do not seem to overlap, or be the same repairs for which Abracadabra submitted its bill. Moreover, it must also be taken into account that Complainant and his wife themselves performed some hands-on labor to remediate and repair the water damage caused by Respondent’s defective drainage system.

21. In addition to the restitution for the Abracadabra bill, Complainant seeks an order directing the Respondent to provide a stamped set of engineer plans for the drainage system now existing, which are approved by the county. Inspector Morris could only defer to the engineer’s on this issue. Complainant’s engineer testified that the design must be engineered and approved by the county. Respondent’s engineer testified that the current drainage system is effective and adequate, and there is nothing requiring the system to be approved by the county. However, when testifying as to the wing walls and the county’s requirement that they be approved, Mr. Rod testified quite simply that as the back of the lot was on a flood plain, virtually anything built on the lot needed to be approved by the county. It would seem then, assuming that Mr. Rod is correct, that if a mere 5’ block wing wall requires county approval, the extensive drainage system now existing throughout the whole of Complainant’s lot, front end to back, would require the same. 22. Notice is taken of Respondent’s prior license record with the Arizona Registrar of Contractors.

CONCLUSIONS OF LAW 1. This administrative hearing was held under authority of and pursuant to A.R.S. 32-1156, and A.R.S. 41-1092. 2. Respondent is charged in the instant Citation and complaint with possible violations of A.R.S. 32-1154.A.7, 23, and 3 (namely A.A.C. R4-9-108, Workmanship Standards). 3. There is insufficient evidence to conclude that Respondent violated A.R.S. 32-1154.A.23. The only written orders from the Registrar of Contractors are the Corrective Work Order and the “REVISED” letter from Inspector Morris. Taken together, these do not seem to actually direct the Respondent to do anything. 4. Respondent’s design and installation of the drainage system was unprofessional and in violation of A.A.C. R4-9-108, and therefore in violation of A.R.S. 32-1154.A.3. 5. Respondent has failed to provide Complainant with either a county- approved set of engineered plans for the current drainage system, or verification that the system need not be county-approved. This is a wrongful act in violation of A.R.S. 32-1154.A.7 independent of the other violation. 6. An Administrative Law Judge, after a hearing, may order a licensed contractor to make restitution to a person who has been injured by the actions of the licensed contractor. A.R.S. 32-1156.01.

RECOMMENDED ORDER In view of the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that Respondent’s Class KB-01 License number 154649 be suspended until such time as the Registrar receives written proof that Respondent has made restitution to Complainant in the sum of $13,441.50, and provided engineer-stamped, county-approved plans for the existing drainage structure and system on Complainant’s lot, or written verification from Pima County that the structures and system do not require county approval. It is further recommended that in the event the Registrar receives written proof that the Respondent has accomplished the above- provided corrective action on or before the effective date of this Order (40 days after the date of service appearing on the Registrar’s certification on the Order), then the above provided license suspension shall not occur, and Citation and Complaint No. T07-0019 shall be closed. In the event of certification of the Administrative Law Judge’s Decision and Order by the Director of the Office of Administrative Hearings, then the effective date of the Order shall be 40 days after the date of that certification. Done this day, July 5th, 2007.

______________________________________ Grant Winston Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2007, to:

Registrar of Contractors Fidelis V. Garcia Legal Department 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

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Office of Administrative Hearings 100 N. Stone Ave., Suite 704 Tucson, Arizona 85701 (520) 628-5488