ALJDEC decisions subject to certification as final

08F-M0197-ROC · Registrar of Contractors · 2008-08-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 23 and July 29, 2008

APPEARANCES: Complainant was represented by its attorney, Richard Gramlich and Respondent was represented by its attorney, Kim Lough. 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. Pursuant to contract, Complainant retained Respondent to accomplish specified tenant improvements on a “shell” commercial building. Complainant alleges certain deficiencies in the work provided by Respondent and same are discussed in the findings below.

2. Respondent did not construct the “shell” of the building, as it was constructed by others, prior to the time that Respondent entered into the contract for the tenant improvements.

3. Evidence of record demonstrated that Complainant has experienced drywall cracking, interior concrete cracking and ceiling tile movement, subsequent to the time that Respondent performed the tenant improvements. Complainant contends that these construction deficiencies are attributable to the work performed by Respondent. Respondent asserts that these issues are attributable to the contractor that installed the building pad.

4. Subsequent to filing the instant Complaint, the matter was assigned to one of the Registrar’s inspectors. The inspector appeared at the instant hearing and provided testimony. The salient portions of his testimony included the following:

a. Complainant had filed a previous Complaint against Respondent, in Registrar of Contractors’ case no. M06-1457. The issues in the prior Complaint were identical to the issues in the instant matter. In the prior Complaint, the inspector conducted a jobsite inspection. Subsequent to concluding the jobsite inspection, he issued a Corrective Work Order (“CWO”), directing Respondent to accomplish appropriate and effective remedial work to correct the issues of the uneven floor, wall movement, cracks in the tile grout, and the out of alignment ceiling grid. b. Apparently, Respondent made repairs pursuant to the CWO and there was no request for a hearing in case no. M06-1457. Thus, the matter was ultimately closed. c. The inspector did not conduct an original jobsite inspection in the instant matter but did conduct a prehearing inspection. Thus, no CWO was issued in the instant matter and Respondent has not been charged with any violation of A.R.S. §32-1154A (23). d. Soils reports are necessary to construct a commercial building and it is the responsibility of a general contractor to obtain such a report. If Respondent was not provided with such a report, then he should have requested one before he performed its work. e. Respondent had trenched out areas of the existing pad, in order to install the plumbing. Once you trench out an area of the pad, you need to reinstall the soil over the trenches with the same type of compaction methods used in the construction of the pad. f. Although he generally saw interior cracking in the same places as he had observed in the original Complaint, he felt the overall condition of the interior was better than what he had viewed in the original Complaint. Most of the cracking had been repaired and it appeared to be an effective repair. A number of ceiling tiles remained displaced out of the ceiling grid. g. At the original jobsite inspection on the prior Registrar of Contractors’ Complaint, he believed the slab had been heaving. He could see no cracks on the exterior of the building, as all of the damage was confined to the interior. h. There is a slab crack under a specified area of carpeting, wherein he believes there is a differential in height on either side of said crack.

5. Lauri Leadley, (“Lauri”), one of the owners of Complainant appeared at the hearing and presented testimony. The salient portions of her testimony included the following:

a. The shell was completed on or about September 2003. b. The cracking in question is confined to the interior walls and concrete slab. c. She first observed the cracking within six (6) to eight (8) months after Complainant received the certificate of occupancy, subsequent to Respondent’s completion of the tenant improvements. d. The cracking appeared to be mostly in the areas wherein the plumbing work had been trenched. e. After filing her initial Complaint with the Registrar of Contractors, Respondent did perform remedial work. Most of this remedial work involved caulking and filling the cracks in the walls and in the slab. In her opinion, the remedial work performed by Respondent was a mere “band aid” type fix. f. Sometime after Respondent completed the initial remedial work, cracks began to reappear on the south wall, along with the tile and tile grout. She also continued to observe displacement in concrete cracks at various areas throughout the interior of the building. g. She testified regarding an inspection by TLCP Structural Inc. (“TLCP”), a consulting engineer firm that was hired, by the architect for the building, to investigate the cracking. A January 13, 2006 report from this firm was entered into evidence. h. The TLCP report noted that there were numerous areas of the interior slab that showed differential settlement and there were no signs of movement on the exterior of the building. TLCP found that the differential settlement areas were consistent with the areas where the plumbing was installed under the existing pad. They opined that the “sub base below the slab may not have been properly compacted after installation of the drainage system during the tenant improvement.” i. She admitted that the applicable contract between Complainant and Respondent does not mention a soils report and Respondent never requested to see such a report. The contract was prepared by Respondent.

6. Brett Creaser (“Creaser”) was called as a witness by Complainant. Crieser is a geo-technical engineer, employed by Speedee and Associates (“Speedee”), a geotechnical engineering firm. The salient portions of Crieser’s testimony included the following:

a. Speedee did the testing for the building pad and prepared the original soils report. The Speedee report showed that the soil in the area was expansive. Among other things, the original soils report required that twelve (12) inches of native soil needed to be removed in the construction of the building pad and replaced with twelve (12) inches of non-expansive fill material. b. He observed the differential cracking in the slab, what appeared to be cupping of the edges of the slab, and curling in the control joints. According to Creaser, the curling could be due to a lack of “ABC” in the pad below said areas. c. Speedee performed some core testing of the problem areas. One half of the core samples were from areas where the plumbing trenching had taken place and the other half were taken from non damaged areas of the slab. Speedee found two of the cores in the previously trenched areas not to have any “ABC.” d. Creaser opined that a careful contractor would check compaction of a pad before commencement of any construction work on said pad. In this regard, he feels it is important for a contractor, who did not construct the building pad, to obtain a soils report to determine the necessary compaction in said area. e. According to Creaser, the original pad that was completed by the first contractor was found by Speedee to have been constructed properly, in accordance with the relevant soils report. f. He testified that Respondent’s plumber had stated that he did not test the compaction of the trenches, after refilling same. According to Creaser, good workmanship requires that the areas be retested. g. There was no evidence of any wrongdoing by the original contractor that constructed the pad and the building shell.

7. Dustin Vehan (“Dustin”), Respondent’s project superintendant, appeared at the hearing and presented testimony. The salient portions of his testimony included the following:

a. He dealt with Complainant’s architect for the project. The architect never mentioned anything to him about a soils report. b. Due to certain onsite conditions, the underground plumbing had to be moved from the precise location where it was shown on the applicable plan. He does not believe that the significant floor cracking is related to the areas wherein the plumbing trenching was performed by Respondent. c. According to Dustin, the plumbing trenches were dug out with a small bobcat and the architect was on the site while said excavation was taking place. d. The ceiling grid is attached to the existing wood ceiling trusses. e. After completing the installation of the plumbing lines, the trenches were backfilled with the same material that had been removed and the area was compacted with water and a jumping jack. No testing was performed on these re-compacted areas, to determine if the areas were in compliance with the original compaction requirements for the engineered pad. f. Dustin was twenty-eight (28) years old at the time of this project and he had no prior experience with engineered pads or placement of concrete slabs. g. He never viewed the soils report prior to completing the placement of the concrete slab. In this regard, he indicated that he did not feel it was necessary to view a soils report for a tenant improvement project.

8. Larry Hansen (“Hansen”), a geotechnical engineer, appeared and testified for Respondent. Among other things, he testified to the following:

a. He reviewed the soils report and the two forensic reports, along with the building in question. b. He does not believe that the plumbing trenching is the causal basis for the cracking. c. The engineered pad sat for one year, before Respondent came on the scene. According to Hansen, it is necessary to re-certify a pad that has sat for such a period of time and it would have been prudent for Respondent to have checked the pad condition before placing the concrete. d. He does not know what has caused the cracks in the concrete and the vertical displacement. The cracks in the drywall may be related to movement in the slab. The movement of the ceiling tiles is related to the wood ceiling joists that were supplied by the original contractor. e. The bottom line is that he found no definite answer for the cause of the distress on the interior of the building.

9. Thom Vehan (“Thom”), Respondent’s president, also appeared and presented testimony. Among other things, his testimony included the following:

a. Respondent has never been required to obtain a soils report on past tenant improvement projects. Thus, Respondent never requested or received such a report on this project. b. Respondent assumed the project was construction ready when they arrived on the scene. c. On or about January 2004 Respondent completed its work on the project. Approximately, seven (7) months later he heard about the first report of cracking in the building. d. On or about August 2006, Respondent completed remedial work to deal with the issues. Although a portion of the remedial work performed at that time involved floating out the floor to even it out, he admits that the work was not performed properly. He claims he has wanted to correct this situation but has been denied access. In addition, he contends that he wanted to retain his own expert to examine the situation and Complainant denied his request. e. Respondent did perform corrective work in response to the Corrective Work Order issued in the prior case. f. He has no idea what is causing the problems inside the building.

10. The cracking in the floor slab, the drywall, and the displacement of the ceiling tiles are all unacceptable conditions that have occurred inside Complainant’s building, creating not only a breach of the implied warranty of fitness for aesthetic purposes but also an unworkmanlike result. It is a well established principle in construction law, and one generally applied by the Registrar of Contractors, that a contractor who places his work over prior work completed by another contractor, accepts the surface and/or conditions as being acceptable to accomplish a workmanlike result and, as such Respondent is effectively estopped to assert that it has no responsibility for the cracking of its walls and concrete, along with the displacement of its tile installation, based on the fact that it did not build the shell or construct the building pad.

11. 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 said notice revealed that the instant complaint was the only complaint on the Registrar of Contractors’ current record regarding Respondent. Therefore, Respondent’s prior record is properly deemed to be excellent and thus, is viewed as a matter in mitigation for any disciplinary penalties to be imposed as a direct result of this case.

CONCLUSIONS OF LAW

Respondent violated the provisions of A.R.S. § 32-1154A (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 one of the following:

a. Performs appropriate and effective remedial work to repair all of the cracking inside the building and to fix the ceiling tile displacement. In the event that Respondent selects this condition to accomplish compliance, Complainant will be required to provide reasonable access to perform the corrective work and/or to allow Respondent’s experts to perform testing and examination of the building during normal business hours (i.e. Monday through Friday, 8:00 am to 5:00pm). b. Concludes other mutually satisfactory arrangements with Complainant.

It is further recommended that if Respondent complies with one of the two above-described conditions, on or before the effective date of the Order entered in this matter, then the aforementioned license suspension shall not take place and in that event this Citation (no. M08-0197), together with the Complaint upon which it is based 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 in this matter will be forty (40) days from the date of that certification.

Done this day, August 27, 2008.

______________________________________ Mark A. Silver Administrative Law Judge

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

Registrar of Contractors Fidelis V. Garcia 3838 N. Central Ave., Ste. 400 Phoenix, AZ 85012-1906

By ___________________________

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