ALJDEC decisions subject to certification as final

08F-M0230-ROC · Registrar of Contractors · 2008-09-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 2, 2008 APPEARANCES: Complainants Quitman and Renee Warren appeared on their own behalf. Respondent Crescendo Design Build Develop, L.L.C. failed to appear. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ The issue presented by this matter is whether Respondent Crescendo Design Build Develop, L.L.C. 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 Background On July 16, 2008, the Registrar of Contractors issued a Notice of Hearing advising the parties that the scheduled hearing of this matter would convene on September 2, 2008 at 9:00 a.m. On the date and at the time scheduled for the hearing, Complainants Quitman and Renee Warren were present. No one appeared on behalf of Respondent Crescendo Design Build Develop, L.L.C. (“Crescendo”). The Administrative Law Judge delayed the commencement of the hearing for approximately fifteen minutes to allow for the appearance of Crescendo, or the receipt of any information that would constitute good cause for Crescendo’s absence or delay. No such information was received. Therefore, the hearing proceeded in Crescendo’s absence. FINDINGS OF FACT Crescendo is the holder of a Class KB-02 license (No. 171373) issued by the Registrar of Contractors (“ROC”).[1] In December 2005, Complainants Quitman and Renee Warren purchased from Crescendo a lot located at 1217 South Larkspur Court in Gilbert, Arizona. The purchase price for the lot was $150,000.00. On or about February 1, 2006, the Warrens contracted with Crescendo for the construction of a custom home on the lot. The total contract price for the lot and construction of the home upon the lot, was $812,000.00. The Warrens have paid Crescendo $512,000.00. Crescendo began construction of the home in March or April 2006. In or about August 2007, after months of delays, Crescendo abandoned the project. On August 17, 2007, the Warrens filed a complaint against Crescendo with the ROC. In their complaint, the Warrens generally alleged that Crescendo has failed to complete the project. The Warrens enumerated specific items for which Crescendo received construction draws, yet failed to complete, including the following: cabinetry; interior doors; electrical; fencing; garage doors; HVAC; cleaning; mirrors; paint; plumbing and fixtures; street lamp; pool; grading; pavers; stair rail; insurance; termite treatment; and closet trim. 5. On November 27, 2007, the Warrens filed an addendum to the complaint alleging the following: a) The fire doors leading into both garages bowed and the exterior doors in the garage are rippled; b) The chimney flutes and shrouds on roof were not built to spec per City of Gilbert (UL), and had to be removed to pass inspection and need to be replaced; c) The back (east) block wall in jeopardy of falling, and is a safety hazard; d) The HVAC slab not fully built out to adequately allow free air flow between three 14 Seer HVAC; e) There is a cracked window in basement by theater room; and f) The frame on the kitchen hood was built incorrectly and has yet to be corrected.

See Exhibit 1. 6. ROC Inspector Dennis Cook investigated the Warrens’ complaint. 7. On October 3, 2007, Inspector Cook conducted a jobsite inspection. Present for the inspection were Mr. and Mrs. Warren. A representative from Crescendo did not attend. 8. On October 11, 2007, following the jobsite inspection, Inspector Cook issued a Corrective Work Order (“CWO”) under which the ROC gave Crescendo 15 days to take corrective action as follows: The contractor should properly complete the construction of the home as per the contract documents. The contractor should correct the tiled steps near the front entry that do not meet standards. (Too much variation in the riser height)

9. Inspector Cook testified at hearing consistent with the directives contained in the CWO. Inspector Cook specifically testified that the steps into the dining room are not level and vary by as much as two inches. The Warrens submitted into evidence photographs depicting the height difference in the steps. See Exhibits 3 through 5, 8 and 9. Inspector Cook also testified that the cabinetry is incomplete, as well as many other items, including the block fence, the columns and faux painting, the street lamp was not installed, the clean up was not performed, termite treatment documentation was not provided, and the HVAC units were not located per local code requirements. Inspector Cook explained that the HVAC units are not properly supported as the units are hanging over the edge of the pad by almost six inches. Inspector Cook also testified that the shrouds over the chimneys were not constructed per UL specifications and had to be removed by the Warrens in order for them to obtain their Certificate of Occupancy. Inspector Cook further testified that the block fence was not properly completed as there is inadequate foundation under a pilaster, it is not properly prepared for stucco, nor is it stuccoed. 10. Inspector Cook conducted a pre-hearing inspection on August 28, 2008, at which only the Warrens were present. Inspector Cook testified that much of the work had been completed by the Warrens. 11. Mr. Warren testified that Crescendo’s work was of poor quality, and he illustrated this by the submission into evidence of a photograph of a gap in one of the columns in the dining room. See Exhibit 6. Mr. Warren also testified regarding the improper placement of the HVAC units, in that they are spaced too close together for proper air flow, and that the pad they are placed upon is too small to accommodate the units. Mr. Warren submitted into evidence a photograph of the units placed on the pad, illustrating its inadequate size. See Exhibit 7. Mr. Warren further testified that there are missing and misaligned cabinets, as well as a lack of hardware. Mr. Warren testified that notwithstanding the fact that the construction contract was for $812,000.00, he and his wife have paid a total of $967,000.00 to complete the construction of the home. CONCLUSIONS OF LAW In this proceeding, the Warrens bear the burden to prove, by a preponderance of the evidence, that Crescendo is subject to discipline for violations of A.R.S. § 32-1154(A)(1), (A)(3), (A)(7), and/or (A)(23) as charged by the ROC in its March 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 the Warrens met their burden of proof as to all four of the ROC’s charges. Under A.R.S. § 32-1154(A)(1), a contractor is subject to discipline for “abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” The Administrative Law Judge concludes, based on the weight of the credible evidence of record, that Crescendo failed to complete the project that it contracted to perform without legal excuse for such failure. Therefore, the Administrative Law Judge concludes that Crescendo violated A.R.S. § 32- 1154(A)(1). 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 Crescendo 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 credible evidence of record, that Crescendo failed to perform all of its work at the Warrens’ home in a professional and workmanlike manner, as evidenced by the improper placement of the HVAC units, the failure to construct the chimney shrouds in accordance with building codes, and its failure to properly construct the dining room steps and columns. Therefore, the Administrative Law Judge concludes that Crescendo violated A.R.S. § 32-1154(A)(3). 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 Crescendo a CWO directing it to accomplish specified remedial work within a stated period of time. The credible evidence of record established that Crescendo failed to perform the required corrective work without valid justification. Therefore, the Administrative Law Judge concludes that Crescendo violated A.R.S. § 32-1154(A)(23). 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 Crescendo committed wrongful acts that substantially injured the Warrens by failing to complete the project, by failing to perform portions of its work at the Warrens’ home in a professional and workmanlike manner, and by failing to comply with the CWO. Therefore, the Administrative Law Judge concludes that the Warrens established that Crescendo violated A.R.S. § 32-1154(A)(7). Based on the foregoing, it is appropriate for the ROC to impose discipline against Crescendo’s Class KB-02 license. Upon consideration of all of the facts and circumstances presented by this case, including Crescendo’s failure to appear for hearing and Crescendo’s suspended and revoked license status, the Administrative Law Judge concludes that the ROC should revoke Crescendo’s Class KB-02 license. RECOMMENDED ORDER In view of the foregoing, it is recommended that Crescendo’s Class KB- license shall be revoked on the effective date of the Order entered in this matter. 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, September 15, 2008.

______________________________________ Sondra J. Vanella Administrative Law Judge

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

Armando Contreras, Acting Director Registrar of Contractors 3838 North Central Avenue Phoenix, AZ 85012

By ___________________________

----------------------- [1] A review of the ROC’s official records revealed that Crescendo’s contracting license was suspended on December 9, 2007 for lack of bond, suspended on February 13, 2008 in Case No. M07-2313, and revoked on August 25, 2008 in Case No. M08-0305. Such suspended and revoked license status does not preclude this tribunal from conducting these administrative proceedings. A.R.S. § 32-1154(C).

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