ALJDEC decisions subject to certification as final

08F-3208-ROC · Registrar of Contractors · 2009-05-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 18, 2009

APPEARANCES: Complainant was represented by its attorney, Michael Lamb, and Respondent was represented by its attorney, Richard Murphy. 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. Respondent was retained by the developer of Complainant’s commercial condominium complex to complete the site work for the complex, including concrete, grading, and drainage. Complainant alleges certain deficiencies in the work performed and/or materials provided by Respondent and same are discussed in the findings below.

2. At the outset of the scheduled hearing, Respondent made a motion to dismiss, asserting that the instant matter should be barred by the applicable statute of limitations. The motion was treated as a threshold issue. The following salient facts were adduced on this issue and are important to note:

a. Stipulation of record established that the concrete for the decorative circle drive was placed by Respondent in 2004. Respondent did not perform any repair work on said area after the installation was completed. Further stipulation of record showed that the majority of the site work was completed by Respondent in 2005; b. The instant Complaint was filed on March 20, 2008; c. The project in question involves eighteen (18) shell office condominiums which were constructed without slabs. As the shell buildings were purchased, it would be the decision of the individual owners regarding who they hired to complete the improvements to their respective buildings. Respondent performed the improvements on several of the buildings and this work was completed in 2005 and 2006; d. Many of the eighteen (18) buildings were occupied by 2006; e. Ginniann Brown (“Brown”) is Complainant’s president. She appeared at the hearing and presented testimony; f. According to Brown, the developer of the project did not turn over control of the complex to Complainant until March 29, 2007; g. Brown took occupancy of her building on March 17, 2006. She contends that when she took occupancy of her building site work by Respondent was still ongoing; h. According to Brown, the local building authority did not issue a final approval for the project until June 2008; and i. The assigned inspector for the Registrar of Contractors appeared at the hearing and provided testimony. He indicated the Registrar of Contractors’ interpretation of the law is that the statute of limitation for filing a Compliant by a condominium association does not begin to run until the date that the developer turns over control of the project to the association. j. There was no evidence presented at the hearing to show that Complainant had discovered any of the claimed construction defects prior to the time that control of the complex was turned over from the developer.

3. Based on the foregoing findings of fact, along with the conclusions of law set forth below, it was determined and held that the Complaint was filed in a timely manner and therefore, not barred by the applicable statute of limitations.

4. Further testimony from the Registrar of Contractors’ inspector demonstrated that he found the following deficiencies in Respondent’s work:

a. Specified areas of the complex reveal cracks that are either excessive in dimension or compound cracking. b. Specified areas of the curbing also reveal excessive cracks. Although he could not say what caused these cracks, it did not appear to be cracks that were caused by being struck by heavy construction trucks. c. The decorative concrete circle reveals extensive cracking, as well as significant spalling. d. There are areas of the landscape that are lower than one inch below the grade of the sidewalk.

5. After concluding his original jobsite inspection, the Registrar of Contractors’ inspector issued a Corrective Work Order (“CWO”), directing Respondent to accomplish specified remedial work within a stated period of time.

6. The above-described unacceptable cracks in the sidewalks and curbing are found to constitute substandard workmanship attributable to Respondent. These areas were included in the CWO and not repaired by Respondent.

7. Regarding the decorative concrete circle, Respondent asserts that it constructed same according to the design set forth in the applicable plans and specifications provided to it by the developer of the project and claims that there is a defect in the design, which it should not be held responsible for. In addition, Respondent further asserts that usage over time, with all types of vehicles driving over the area, has caused the failure of this area of the concrete.

8. It is determined and held that Respondent accepted the plans and on site conditions as being adequate to support a workmanlike result on the decorative concrete circle and, as such, is now estopped to claim that it has no responsibility for the cracking in said area. Although Respondent may have its own claims against the designer and/or the developer for the project, that is of no concern to Complainant.

9. Although water was shown to occasionally stand (pond) longer than hours in a specified water retention area adjacent to Brown’s building, the evidence of record was sufficient to support a finding that the applicable plans and specifications called for water run off from rainstorms to flow into said area and stand there until the water can fully dissipate into the ground. Moreover, nothing in the applicable contract or plans and specifications required Respondent to install any type of drain system, such as a French drain, in this water retention area. This area is serving its intended purpose and if Complainant desires to have any type of drain system installed in said area that is entirely Complainant’s responsibility. The evidence of record was inadequate to support any finding of substandard workmanship by Respondent in regard to this issue.

10. Regarding the issue of specified exterior electrical conduit, the evidence of record supports a finding that the local building authority did not have any issue with this installation and allowed same to pass final inspection. The Registrar of Contractors’ inspector testified that if the local building authority passed this type of item than he would accept that as being sufficient proof that the item was indicative of acceptable workmanship.

11. Respondent asserts that the city had passed the grading and drainage installed on the site and therefore, Respondent concludes that those areas wherein the landscape material has sunk more than one inch below the grade of the sidewalk was likely due to lack of proper maintenance of the area by Complainant. It is determined and held that Complainant failed to sustain the requisite burden of proof on this issue.

12. As set forth in the Citation and Complaint issued by the Registrar of Contractors, Respondent was advised that in the event of a finding of a violation against Respondent, Respondent’s prior disciplinary record of final Registrar of Contractors’ orders may be considered in mitigation or aggravation. Accordingly, subsequent to conclusion of the instant hearing, notice was taken of official records of the Registrar of Contractors regarding any prior final disciplinary orders against Respondent and although said notice did not reveal any prior disciplinary sanctions against the license, the record revealed three (3) other open Complaints, along with one matter that was listed as resolved/settled/withdrawn. Therefore, Respondent’s prior record is properly deemed to be fair and thus, is viewed as neither a matter in mitigation or aggravation for any disciplinary penalties to be imposed as a direct result of this case.

CONCLUSIONS OF LAW

1. A.R.S. § 32-1155 (A) provides for the “the filing of a written complaint with the Registrar charging a licensee with the commission, within two years prior to the date of filing the Complaint, of an act which is cause for suspension or revocation of a license…” This section, like any statute of limitation, is a statute enacted as a matter of public policy in Arizona to fix a time within which Complaints must be filed.

2. The applicable statute of limitation, in effect at the time Complainant received control of the complex from the developer, was derived from the language of the Court of Appeals in Lyon v. Great American Insurance Company, 4 Ariz. App. 596, 422 P.2d 724 (1967), and confirmed in Op. Assistant Attorney General. No. I-79-119 (April 25, 1979), which provided that the time to file a Complaint ran from the date of occupancy of the structure or discovery of the defect, whichever first occurs. The fact that the statute has been amended, since the time that Complainant received control of the complex, does not affect the application of the law that was in effect at the time Complainant received control of the complex.

3. The time in which Complainant obtained control of the complex from the developer is viewed as being similar to the concept of date of occupancy. Therefore, since there was no evidence that any of the claimed defects were discovered by Complainant prior to the date of the turnover from the developer, the two year period for filing a Complaint with the Registrar of Contractors did not begin to run until March 29, 2007 (the date of the turnover from the developer). Since the Complaint was filed on March 20, 2008, the Complaint was filed in a timely manner.

4. Respondent violated the provisions of A.R.S. § 32-1154A (23), (7), 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-01 license of Respondent shall be suspended until the Registrar of Contractors receives written proof that Respondent has accomplished appropriate and effective remedial work on the cracks in the sidewalks and curbing, as well as correcting the cracking and spalling condition on the decorative concrete circle. It is further recommended that if Respondent accomplishes the above- described corrective work 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 foregoing license suspension, if any, that Respondent’s Class B-01 license be placed on a period of 60 days disciplinary probation. This additional disciplinary penalty shall commence on the effective date of the Order entered in this matter or the date on which notice of Respondent’s compliance with the terms of this Order is filed with the Registrar, whichever is later. It is further recommended, in addition to the above-provided penalties, if any, that Respondent pay the sum of $150.00 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 license, 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, May 27, 2009.

______________________________________ Mark A. Silver Administrative Law Judge

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

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

By ___________________________

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