ALJDEC decisions subject to certification as final

08F-4209-ROC · Registrar of Contractors · 2009-06-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 10, 2009. APPEARANCES: Focus General Contractors Corporation was represented by its attorney, James Palacek, Esq. Son Valley Plastering, Inc. was represented by its president and qualifying party, James Gainer. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order: FINDINGS OF FACT 1. Son Valley Plastering, Inc. (“Respondent”) is the holder of License No. 089848, a Class C-36 contracting license issued by the Registrar of Contractors (“Registrar”). 2. Focus General Contractors Corporation (“Complainant”) is the holder of License No. 182196 issued by the Registrar. 3. Complainant contracted with Robert and Rose Prescott to serve as the general contractor for the construction of a new residence located at 2630 West Mesquite Street, Chandler, Arizona. 4. On December 12, 2006, the Roses and Complainant entered into Change Order 100, which provided for the following scope of work: This change order is subject to the same terms and conditions of the Original Contract.

Remove all existing 3 coat stucco system Install full shear panel to entire residence Install Synthetic Stucco system with intrical [sic] color with new parapet detail.

Notes: This system is covered under normal stucco warrantees. Repainting will not be necessary frequently as regular stucco system.

5. The contract between the Roses and Complainant had a contract price in the amount of $20,500.00. 6. On November 6, 2007, Complainant accepted Respondent’s proposal to perform the stucco system work. 7. The original stucco system was installed by an unlicensed contractor. Respondent removed the unlicensed contractor’s work and installed its integrally colored stucco system. 8. The integrally colored stucco system was presented to the Roses as a system that would require less frequent painting than a regular stucco system. That point was important to the Roses, who paid an additional sum for the integrally colored stucco system. 9. After Respondent performed its scope of work, the integrally colored stucco system failed to retain the specified color in the finished surface. 10. The Roses filed a Complaint against Complainant in Case No. M08-0304 regarding the integrally colored stucco system. After formal hearing, the Registrar ordered Complainant to provide the Roses with a synthetic stucco system with integrated color pursuant to Change Order 100 and not a repainting of the existing deficient system as recommended by the manufacturer. 11. Complainant filed a Complaint with the Registrar alleging deficient workmanship by Respondent regarding the stucco system. The Registrar designated that Complaint as Case No. 08-4209. 12. In response to the Complaint filed in Case No. 08-4209, the Registrar’s assigned inspector, Ted Gerold, performed a jobsite inspection to view Respondent’s alleged deficient workmanship. That inspection resulted in the issuance of a Corrective Work Order dated June 13, 2008 requiring Respondent to timely perform remedial work to “[t]he mismatched color areas of the applied integrally colored stucco where necessary.” 13. The Registrar forwarded Case No. 08-4209 to the Office of Administrative Hearings, an independent agency, for formal hearing. 14. James Gainer is Respondent’s president and qualifying party. At the hearing, Mr. Gainer testified that there was a product failure that caused the color variance in the integrally colored stucco. He claimed that the manufacturer’s suggested remedy is to paint the stucco with an acrylic paint, rather than remove and replace the existing stucco system. 15. It is determined that the manufacturer’s recommended solution to paint the integrally colored stucco system rather than replace it is self- serving. The integrally colored stucco system has maintenance benefits for homeowners, such as the Roses, by requiring less maintenance, such a less frequent need for repainting the stucco. A homeowner contracting for such a product is paying a higher price for such a product. In this case, the Roses and Complainant did not obtain the integrally colored stucco system that was contracted to be constructed. 16. After receiving the Registrar’s Corrective Work Order, Respondent did seek access to the Roses’ residence. Due to their schedules and the July 4, 2008 holiday, they requested that any remedial work be delayed until after the holiday. Respondent scheduled the remedial work for July 8, 2008. However, prior to that date Respondent received a telephone call from Complainant, who instructed Respondent not to perform any work due to the administrative hearing in Complaint No. M08-0304 between the Roses and Complainant. 17. Respondent is found not to have timely complied with the Registrar’s written directive. While the delay in compliance due to the Roses’ above-described holiday schedule was reasonable, Respondent’s failure to commence proper remedial repairs on July 8, 2008 due to Complainant’s directive was not reasonable. The Registrar’s Corrective Work Order is found to trump Complainant’s directive given to Respondent. 18. Respondent failed to construct an integrally colored stucco system pursuant to the specifications set forth in its agreement with Complainant. If there was a product defect, then Respondent should have looked to the manufacturer for recourse. 19. Respondent failed to properly list its Registrar-issued contracting license number on various documents admitted into evidence. 20. There is evidence that Respondent eventually did repaint the Roses’ stucco system. There is credible evidence that the repainting was performed so that the Roses could obtain re-financing for their residence. However, there is no credible evidence that they accepted such work in lieu of receiving a new integrally colored stucco system which they had paid to receive. 21. Respondent’s failure to construct the integrally colored stucco system pursuant to its contract with Complainant and its failure to perform proper remedial repairs pursuant to the Registrar’s Corrective Work Order consistent with the specifications set forth in the parties’ contract are wrongful acts that substantially injured Complainant. Although both Complainant and Respondent are jointly responsible for the deficient stucco system with respect to the Roses, Respondent is ultimately responsible to Complainant for constructing the system in a workmanlike manner and consistent with the specifications. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.A.C. R2-19-119(B), Complainant has the burden of proof in this matter. The standard of proof is preponderance of the evidence. A.A.C. R2-19-119(A). 3. Respondent violated the provisions of A.R.S. § 32-1154(A) (2), as cited in the Citation and Complaint issued by the Registrar. Respondent failed to construct an integrally colored stucco system in a workmanlike manner pursuant to the specifications set forth in the parties’ agreement. 4. Respondent violated the provisions of A.R.S. § 32-1154(A) (3), specifically A.A.C. R4-9-108, as cited in the Citation and Complaint issued by the Registrar. The above Findings of Fact support this conclusion. 5. Respondent violated the provisions of A.R.S. § 32-1154(A) (23), as cited in the Citation and Complaint issued by the Registrar. Respondent failed to comply with the Registrar’s written directive without legal justification. 6. Respondent violated the provisions of A.R.S. § 32-1154(A) (7), as cited in the Citation and Complaint issued by the Registrar. The above Findings of Fact support this conclusion. 7. Respondent violated the provisions of A.R.S. § 32-1154(A) (13), specifically A.R.S. § 32-1124(B), as cited in the Citation and Complaint issued by the Registrar. Documents admitted into evidence reflect that Respondent either listed its contracting license number without the required “ROC” prefix, which would reflect that it was a license issued by the Registrar rather than some other regulatory body, or failed to list the license at all. RECOMMENDED ORDER Respondent’s License No. 089848 shall be suspended on the effective date of the Order entered in Case No. 08-4209, unless the Registrar receives written proof that Respondent has complied with the following requirements and the Registrar approves such proof: 1. That Respondent has repaired its integrally colored stucco system constructed at the Roses’ residence by removing and replacing the system pursuant to the specifications of the parties’ agreement, or provided written proof that both Complainant and the Roses waive such repairs in lieu of the stucco painting previously performed by Respondent. 2. That Respondent provides evidence to the Registrar that it is in full compliance with the requirements of A.R.S. § 32-1124(B).

In addition to the foregoing license suspension, if any, Respondent’s contracting license shall be placed on disciplinary probation for a period of 90 days commencing on the effective date of the Order entered in Case No. 08-4209 or the date on which notice of Respondent’s proper compliance with the terms of this Order is filed with, and approved by, the Registrar, whichever is later. In addition to the above-provided penalties, if any, Respondent shall pay the sum of $500.00 to the Registrar by way of a civil penalty pursuant to A.R.S. § 32-1154(D). The failure by Respondent to pay the entire amount of the aforesaid civil penalty on or before 30 days following the effective Order entered in Case No. 08-4209 shall result in the automatic revocation of Respondent’s contracting 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. § 32-1101(A) (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 will be 40 days from the date of that certification.

Done this day, June 30, 2009

______________________________________ Brian Brendan Tully 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