ALJDEC decisions subject to certification as final

2009A-2468337-ROC · Registrar of Contractors · 2011-11-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

COMPLIANCE HEARING: November 10, 2011, at 8:15 a.m. APPEARANCES: Complainants Jack Maloof and Joan Maloof appeared telephonically; Ken Smirke, Respondent’s qualifying party and member, appeared telephonically on Respondent Ken Smirke Development, L.L.C.’s behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In April 2003, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC184703, Class B for residential general contracting to Ken Smirke Development, L.L.C. (“Respondent”). On or about December 22, 2008, Jack Maloof and Joan Maloof (“Complainants”) filed a complaint to the Registrar concerning Respondent’s construction of a custom home at 1500 Cougar Trail, Prescott, Arizona, including the specific complaint that “Hardieplank ColorPlus siding installed incorrectly; entire home.”[1] The Registrar designated Complainants’ complaint as Case No. A09-0246 and assigned it to Inspector Cliff Frandsen for investigation. Inspector Frandsen performed two jobsite inspections in Case No. A09-0246 and issued two Corrective Work Orders (“CWOs”) to Respondent, requiring it to correct by appropriate means certain items, including the HardiePlank siding. The Registrar issued a Citation and Complaint in Case No. A09-0246 and referred it to the Office of Administrative Hearings (“the OAH”), an independent state agency, for an evidentiary hearing. On April 28, 2010, a videoconference hearing was held in Case No. A09-0246 before the undersigned Administrative Law Judge (“ALJ”). One of the issues at the hearing was whether the contract required Respondent to install HardiePlank ColorPlus siding. On or about May 5, 2010, the undersigned ALJ issued a recommended decision in Case No. A09-0246. The recommended decision included two findings regarding the HardiePlank siding on Complainants’ house: (1) “The plans called for ‘painted Hardi [sic] Plank siding over Bldg. wrap over ½” sheathing over 2x6 frame at 16” O.C.-brace as required’”;[2] and (2) Inspector Frandsen’s second CWO had stated that “‘[t]here is no contractual document that specified the HardiePlank [sic] lap siding should be Color Plus [sic].’”[3] The recommended decision in Case No. A09-0246 concluded that Complainants did not establish “that correction of the deficiencies in Respondent’s Hardie Plank installation requires removal and replacement of the siding.”[4] Nonetheless, the recommended decision concluded that Complainants established “that Respondent violated A.R.S. § 32-1154(A)(2), (7), (3), and (23) by failing to fully and properly caulk the entire house and to repair or to replace all damaged areas where it had installed HardiePlank siding.”[5] As a result of the proven violations, the ALJ recommended in Case No. A09- 0246 that the Registrar suspend Respondent’s license until Respondent paid a civil penalty and submitted written proof to the Registrar that it had corrected its workmanship deficiencies. On May 16, 2008, the Registrar issued a final Order, adopting the recommended decision in Case No. A09-0246. The Registrar redesignated Case No. A09-0246 as Case No. 2009-2468337. On August 5, 2011, the Registrar issued an Order Setting Compliance Hearing in Case No. 2009-2468337, summarizing the history of the dispute after the Registrar issued the final Order in Case No. A09-0246 in relevant part as follows: On June 9, 2010, the Registrar issued an Order in this matter providing that Respondent’s B.184703-R License would be suspended on the effective date of the Order and remain suspended until Respondent provided the Registrar with written proof that it had properly corrected the caulking of the entire home and repaired or replaced all damaged areas where it had installed Hardie Plank [sic] siding. The Order further provided that Respondent pay the Registrar a civil penalty in the amount of $250.00 on or before the expiration of thirty (30) days after the effective date of the Order or risk the automatic revocation of its license. If Respondent provided such written proof on or before the effective date of the Order, then its B.184703-R License would not be suspended and the matter would be closed. The effective date of the Order was July 19, 2010.

On or about June 15, 2010, Respondent submitted payment to the Registrar in the amount of $250.00 for payment [of] the civil penalty in accordance with the terms of the Registrar’s June 9, 2010 Order.

On or about July 12, 2010, Respondent submitted written correspondence with the Registrar maintaining, among other things, that “[Respondent] is hereby in full compliance with the [Registrar’s] Order….”

On or about July 13, 2010, Complainants submitted a Request for Rehearing with the Registrar.

On or about July14 [sic], 2010, Complainants submitted electronic correspondence to the Registrar requesting a Compliance Inspection.

On or about August 5, 2010, Respondent submitted a Response in objection to Complainants’ Request for Rehearing.

On October 6, 2010, the Registrar issued an Order Denying Complainants’ Request for Rehearing as Complainants failed to establish any grounds under A.A.C. R4-9-120 (C) to warrant a rehearing.

On or about March 16, 2011, and May 11, 2011, Complainants submitted written correspondence in this matter directed to the attention of William Mundell, Director of the Arizona Registrar of Contractors, providing, among other things, that Complainants were disappointed with the Compliant [sic] process and that the assigned Registrar Inspector demonstrated bias towards Respondent.

Upon review and consideration of Respondent’s Notice of Compliance, Complainants’ Request for Compliance Inspection, as well as the entire file in this matter, and with good cause appearing, IT IS ORDERED that a Compliance Hearing be scheduled in the expedited course of docketing in the Flagstaff area. At the Compliance Hearing, the parties’ [sic] may offer evidence and testimony as to whether or not Respondent has complied with the terms and conditions of the Registrar’s June 9, 2010 Order issued in this matter. If it is determined that Respondent has failed to fully comply with the Registrar’s written directives, absent unreasonable interference or denial of access by Complainants, then Respondent’s B.184703-R License shall be subject to the immediate imposition of discipline. If it is determined that Complainants have unreasonably interfered or denied access to Respondent or its representatives in their attempt to comply with the Registrar’s June 9, 2010 Order, then Respondent’s license shall not be disciplined and the matter shall be closed as Respondent having fully complied with the terms of the Registrar’s Order.

A Notice of Compliance Hearing shall be issued in due course.

IT IS FURTHER ORDERED that prior to the date and time set for the Compliance Hearing, an assigned Registrar Inspector shall perform a pre-hearing Compliance Inspection and be prepared to testify as to his findings and observations at the Compliance Hearing.

(Emphasis in original.) The Registrar referred Case No. 2009-2468337 to the OAH for an evidentiary hearing on the issue of whether Respondent has complied with the Registrar’s Order in former Case No. A09-0246. On November 10, 2011, a compliance hearing was held in Case No. 2009- 2468337. Inspector Frandsen testified. Respondent’s qualifying party and managing member, Ken Smirke, testified on its behalf. Complainants submitted eight exhibits and testified on their own behalf. Compliance Hearing Evidence Inspector Frandsen testified that he performed a compliance inspection on September 29, 2011. Inspector Frandsen testified that after he notified the parties of the date of the compliance inspection, Complainant Mrs. Maloof informed him that she was ill and could not attend the inspection. Inspector Frandsen testified that although he told Mrs. Maloof that he could delay the compliance inspection, she never contacted him to reschedule the inspection. Therefore, only Mr. Smirke attended Inspector Frandsen’s compliance inspection. Inspector Frandsen testified that at the compliance inspection, the HardiePlank on Complainants’ house had been fully caulked and painted. Inspector Frandsen testified that the house looked “brand-new” and was a “good representation of fine workmanship.” Inspector Frandsen testified that in his opinion, Respondent had fully complied with the Registrar’s final Order. Complainants submitted a technical bulletin dated January 2010, from James Hardie, the manufacturer of the HardiePlank siding that Respondent had installed on Complainants’ house, that provided in relevant part as follows: Summary of James Hardie’s position: • HardiePlank lap siding with ColorPlus technology – Joint flashing behind field butt joints is required, the use of caulk will not be warranted. • HardiePlank lap siding Primed – Recommend the use of joint flashing, but the use of caulk will not void the warranty.

The reasons for this announcement are: . . . .

2. Reduced maintenance required by the homeowner – It is recognized by James Hardie, several caulking manufacturers, experts across the industry, and experienced home owner [sic] that when caulking is used at field butt joints, maintenance will be required. Depending on the specific product and the application, caulked field butt joints will need to be maintained to guarantee continued performance over the life of the building. In addition, several sealant/caulking manufacturers recommend against using their products at butt joints in fiber cement siding for many of the reasons discussed here.

3. Improved appearance – When installed properly, flashing at a field butt joint can create a better looking joint. James Hardie recommends butting field joints together in moderate contact which achieves a more continuous looking joint. When utilizing a caulked butt joint, a gap specified by the caulk manufacturer must be left at the joint. Over time as the caulk ages, this joint can become pronounced on the wall and stand out.

(Emphasis in original.) Mrs. Maloof testified that over her objections, Respondent’s workman had used caulk on the butt joints of the HardiePlank when he performed repairs to comply with the Registrar’s final Order. Complainants submitted an addendum to the parties’ contract dated June 6, 2008, under which Respondent “agree[d] that specifications for installation of all products and materials will be followed by all sub-contractors,” and the Registrar’s Workmanship Standards for Licensed Contractors at 33 (February 2009) for siding, that requires that “[s]iding should be properly caulked as required by manufacturer or code.” Inspector Frandsen testified that the Registrar’s final Order required Respondent to caulk the entire house, including butt joints, and that Respondent had complied with the Registrar’s order. Inspector Frandsen testified that over time, caulking becomes a homeowner’s maintenance responsibility. Mr. Smirke testified that the HardiePlank technical bulletin recommended that caulking not be used in lieu of flashing at butt joints but made no recommendation about whether caulking could be used in addition to flashing at the butt joints. Mr. Smirke testified that Respondent in its repairs had used caulking in addition to flashing at the butt joints and that Complainants had asked him to caulk the butt joints. Mr. Smirke also testified that the HardiePlank siding that Respondent installed was not ColorPlus, but had been painted, and that the manufacturer’s recommendations for ColorPlus siding did not apply. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[6] Respondent bears the burden of proof to establish by a preponderance of the evidence that it either complied with the Registrar’s final order in former Case No. A09-0246 or that Complainants failed to provide reasonable access for it to do so.[7] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[8] Respondent established that it complied with the Registrar’s final Order in Case No. A09-0246 that required Respondent to caulk the entire house in a professional and workmanlike manner and in compliance with the Registrar’s and manufacturer’s standards. Complainants’ evidence on the use of caulk in the installation of HardiePlank ColorPlus siding does not apply because, as noted in the Registrar’s final Order on Complainants’ workmanship complaint, the contract did not require Respondent to install HardiePlank ColorPlus siding and Respondent painted the HardiePlank siding that it installed. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order in this matter, the Registrar close Complainants Jack Maloof and Joan Maloof’s complaint in Case No. 2009- 2468337, formerly Case No. A09-0246, against Respondent Ken Smirke Development, L.L.C.’s License No. B.184703-R. 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, November 23, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] HardiePlank and ColorPlus are James Hardie’s trademarked names for the products it manufactures.

[2] Recommended decision, Finding of Fact No. 39 (quoting parties’ contract). [3] Recommended decision, Finding of Fact No. 8 (quoting second CWO). [4] Recommended decision, Conclusion of Law No. 12. [5] Recommended decision, Conclusion of Law No. 13 (footnote omitted). [6] See 32-1101 et seq. [7] See A.A.C. R2-19-119(B)(2); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [8] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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