ALJDEC decisions subject to certification as final

08F-2074-ROC · Registrar of Contractors · 2009-04-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 23, 2009 APPEARANCES: Complainant Robert Christensen appeared on his own behalf. David Martinez, Esq. represented Respondent Perfection Mechanical, L.L.C., doing business as Royal Wall Systems Stucco. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ The question presented by this matter is whether Respondent Perfection Mechanical, L.L.C., doing business as Royal Wall Systems Stucco (“Royal”), 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: Procedural Matter At the conclusion of the presentation of Complainant Robert Christensen’s case, Royal made a motion to dismiss. The Administrative Law Judge denied Royal’s motion to dismiss, ruling that a full evidentiary hearing was warranted in order to adjudicate the matter on its merits. FINDINGS OF FACT Royal is the holder of a Class K-36 license (No. 179767) issued by the Registrar of Contractors (“ROC”).[1] Richard Arguijo is a member of Royal. On April 11, 2006, Mr. Christensen contracted with Royal for Royal to install a one coat stucco system with an elastomeric finish on his home on which he had recently constructed an addition. See Exhibit A. The contract price was $22,350.00. Id. Mr. Christensen has paid Royal in full. Royal performed the work it was contracted to perform. However, shortly thereafter, after heavy rain, the stucco began to fail. Mr. Christensen contacted Royal, and Royal advised that the reason for the failure was due to improperly sealed vigas and windows. Mr. Christensen contended that he had personally sealed the wood throughout the exterior of the home, and that Royal had caulked the windows. On January 30, 2008, Mr. Christensen filed a complaint against Royal with the ROC alleging, “Stucco cracking, bubbling off, color discoloration due to cracks and water penetration”. ROC Inspector Beau Cruz investigated Mr. Christensen’s complaint. On February 29, 2008, Inspector Cruz conducted a jobsite inspection. Present for the inspection were Mr. Christensen, Mr. Arguijo, Andres Vega, an employee of Royal, and Tony Parker, a sales manager for InCide Technologies. On February 29, 2008, following the jobsite inspection, Inspector Cruz issued a Corrective Work Order (“CWO”) under which the ROC gave Royal days to take corrective action with respect to the complaint items as follows: The contractor is to repair/correct the following by the appropriate means:

Complaint 1) Stucco cracking: Observed excessive cracking on the synthetic stucco surface of the addition and also in the areas where it adjoins with the original structure. Evidence of water intrusion in between the scratch coat and synthetic coat of the stucco with visible efflorescence on the stucco surface as well as slats leaching thru (sic) the synthetic coat on the additions (sic) surface. The contractor is to correct by the appropriate means.

Complaint 2) Stucco is bubbling off: Observed excessive bubbling on the synthetic stucco surface of the addition with evidence of water intrusion in between the scratch coat and synthetic coat of the stucco as well as numerous areas of exposed and deteriorating scratch coat. The contractor is to correct by the appropriate means.

Complaint 3) Color discoloration due to cracks and water penetration: Observed excessive color discoloration which I attributed to the excessive cracking and water intrusion. The contractor is to correct by the appropriate means.

This corrective work order is to correct the issues noted on the surface of the addition only. No issues found on the finished surface of the original structure.

8. Inspector Cruz testified at hearing consistently with the directives contained in the CWO. Inspector Cruz further testified that he conducted a pre-hearing inspection on March 20, 2009. Inspector Cruz testified that contrary to Royal’s assertions that the stucco was failing due to water penetration of the wood, he observed stucco failure in areas where there is no wood, such as above the parapet walls of the garage and on the upper elevations of the home. Inspector Cruz testified that he observed cracks in the parapet walls where water could penetrate, and efflorescence coming through the brown coat that could contribute to the failure of the synthetic material. Inspector Cruz testified that he did not observe any failures of the stucco on the older portion of the home where wood vigas are also present. Inspector Cruz testified that he is “100% certain that the sealing of the vigas is not the only problem” with the stucco. 9. Inspector Cruz testified that Royal complied with the CWO in that Royal re-applied the stucco to the addition of the home, however, failures in the stucco are re-occurring. The failures are “not as severe” compared to the initial jobsite inspection. Inspector Cruz testified that the failures are again occurring in areas where there is wood and areas where there is no wood present. Inspector Cruz testified that Royal informed him that it instructed Mr. Christensen to seal the vigas and wood around the windows, and that Mr. Christensen advised him that he had done so with Minwax. Inspector Cruz testified that the product utilized by Mr. Christensen is acceptable for the purpose for which it was used. Inspector Cruz further testified that he does not have any personal knowledge as to whether Mr. Christensen properly performed the sealing of the wood, however, Inspector Cruz observed that the product was evenly applied to the wood that was stained. Inspector Cruz testified that it appeared that the wood on the upper portion of the home had not been stained. 10. Helen Christensen, Mr. Christensen’s wife and co-owner of the home, testified that she video recorded Mr. Christensen applying three coats of sealer to the wood. Mr. Christensen did not request to show the video at hearing. Mrs. Christensen asserted that Royal, as the licensed stucco contractor, should have inspected the wood prior to applying the stucco, and advised the Christensens if Royal believed the wood was not sealed sufficiently. Instead, Royal advised its crew that the wood was sealed and “ready to go.” 11. Mr. Arguijo testified that in 2006 he was contacted by Mr. Christensen to perform the lathe and stucco work to Mr. Christensen’s home. Mr. Arguijo measured the home to ensure that he ordered enough material for the project. Mr. Arguijo further inspected the home prior to lathe to ensure that all penetrations were sealed and flashing was complete. Thereafter, Royal performed the lathe work. The drywall was then installed by others. After the drywall as installed, Royal installed the “brown coat”. Mr. Arguijo testified that most brown coats cure within 48 hours, however, the brown coat that was installed on Mr. Christensen’s home cured for one and a half to two and a half weeks. After the brown coat cured, Royal installed the colored, smooth finish stucco. 12. Mr. Arguijo testified that the wood was sealed prior to Royal performing the corrective work ordered by the ROC, and that such corrective work was performed at an expense of $8,500.00 to Royal. Mr. Arguijo further testified that Royal was not contracted to perform the sealing of the wood, and that such work is usually performed by painting contractors. Mr. Arguijo testified that he recommended to Mr. Christensen that he use Dryflex sealer to seal the wood. Mr. Arguijo contended that the problem with the stucco delaminating will continue to occur unless all the wood is properly sealed. 13. Mr. Arguijo acknowledged that the vigas are properly flashed and that the proper protective paper was installed in the window frames during the window installation to prevent moisture from penetrating the window frames, and therefore, the windows are properly sealed. Mr. Arguijo further testified that Royal bridged every penetration with caulk. Mr. Arguijo further acknowledged that he was not present when the brown coat was applied and therefore did not witness it being wet down completely, as is required by manufacturer’s specifications. Mr. Arguijo testified that improper curing of the brown coat could result in the failure of the stucco. 14. Mark Norgaard, a Henry Products, Inc. (“HPI”) representative, testified that he has been employed by HPI since 1986 and has general expertise in stucco. Mr. Norgaard testified that he inspected the jobsite and that the product used by Royal has cured. Mr. Norgaard opined that the stucco is “fine”, but that the vigas had not been sealed as they “looked dried.” Mr. Norgaard opined that the main issue the Christensens are experiencing is due to water wicking through the vigas. Mr. Norgaard testified that water finds its way to the black paper used to flash the vigas, and that because it is “five minute paper”, if it is continually wet, it will deteriorate. However, Mr. Norgaard acknowledged that he does not know whether the paper used to flash the vigas is five minute paper or sixty minute paper. 15. The Administrative Law Judge finds that the condition of the wood on the exterior of Mr. Christensen’s home was pre-existing and that Royal, by proceeding to install the stucco system on the home, had effectively accepted the surface/condition of the exterior of the home as being adequate to support its work, especially in light of the fact that Royal was aware of the existing vigas and wood trim, as attested to by Mr. Arguijo. Upon contracting to install stucco, and in conjunction therewith guarantee its workmanship, a contractor accepts the surface as being adequate to support its work. Royal claimed that the deficiencies are due to a lack of sealer on the wood. The Administrative Law Judge finds based upon the credible evidence of record, that the wood was properly sealed, and further, that the deficiencies in the stucco are not wholly attributable to water penetration through the wood. CONCLUSIONS OF LAW In this proceeding, Mr. Christensen bears the burden to prove, by a preponderance of the evidence, that Royal is subject to discipline for violations of A.R.S. § 32-1154(A)(3), (A)(7), and/or (A)(23) as charged by the ROC in its October 28, 2008 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 Mr. Christensen met his burden of proof as to all three of the ROC’s charges against Royal. 4. 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 Royal 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. The Administrative Law Judge concludes, based upon the evidence of record, including Inspector Cruz’s and Mr. and Mrs. Christensens’ testimony, that Royal failed to perform its work at Mr. Christensen’s home in a professional and workmanlike manner as evidenced by the failure of the stucco notwithstanding Mr. Christensen’s sealing of the wood. Therefore, the Administrative Law Judge concludes that Royal violated A.R.S. § 32-1154(A)(3). 5. Under A.R.S. § 32-1154(A)(23), a contractor is subject to discipline for “failure to take appropriate corrective action . . . without valid justification within a reasonable period of time after receiving a written directive from the registrar.” The evidence demonstrated that a jobsite inspection by the appointed inspector for the ROC was held, pursuant to which the ROC issued Royal a CWO directing it to accomplish specified remedial work within a stated period of time. The credible evidence of record established that Royal attempted to comply with the directives contained in the CWO. However, the corrective work has also failed, and thus was inadequate. Therefore, the Administrative Law Judge concludes that Royal violated A.R.S. § 32-1154(A)(23). 6. 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 credible evidence presented at hearing, that Royal committed a wrongful act that substantially injured Mr. Christensen by failing to perform its work at Mr. Christensen’s home in a professional and workmanlike manner. Therefore, the Administrative Law Judge concludes that Royal violated A.R.S. § 32- 1154(A)(7). 7. Upon consideration of all of the facts and circumstances presented by this case, including Royal’s canceled license status, the Administrative Law Judge concludes that the ROC should suspend Royal’s Class K-36 license.

8. The ROC’s authority in disciplinary matters such as the one presented herein includes the ability to impose reasonable conditions that allow the disciplined contractor to reduce the scope of the disciplinary action taken against it. The Administrative Law Judge deems the exercise of such authority to be appropriate in the instant case, and preferable to imposing discipline against Royal’s license without providing a condition to reduce or eliminate same. 9. Upon consideration of all of the facts and circumstances presented by this case, the Administrative Law Judge concludes that the ROC should suspend Royal’s Class K-36 license subject to the condition that Royal can avoid such suspension by paying for Mr. Christensen to hire a properly licensed contractor to remedy the deficiencies in the stucco, such remedy to be in the sole discretion of the contractor performing the work. RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge makes the following Recommended Order: Within 30 days of the effective date of the Order entered in this matter, Royal’s Class K-36 license (No. 179767) shall be suspended until the ROC receives written proof that Royal has paid for Mr. Christensen to hire a properly licensed contractor to remedy the deficiencies in the stucco, such remedy to be in the sole discretion of the contractor performing the work. If the ROC receives written proof that Royal has complied with the foregoing condition on or before the date specified above, then the above provided license suspension shall not take place and the Citation and Complaint in Case No. 08-2074 shall be closed. 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 13, 2009.

______________________________________ Sondra J. Vanella Administrative Law Judge

Original transmitted by mail this ____ day of April, 2009, to:

William A. Mundell, Director Registrar of Contractors c/o Legal Department 3838 North Central Avenue Phoenix, AZ 85012

By ___________________________

----------------------- [1] A review of the ROC’s official records revealed that Royal’s contracting license was canceled on June 9, 2008. Such canceled license status does not preclude this tribunal from conducting these administrative proceedings. A.R.S. § 32-1154(C).

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