ALJDEC decisions subject to certification as final

2010A-207995-ROC-rf · Registrar of Contractors · 2012-07-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 22, 2012

APPEARANCES: Complainants are represented by Joseph M. O’Connor, Esq., O’Connor & Durfield, PLLC, who appeared and was accompanied by Complainant Ronald Bingham; Respondent is represented by Stephen Bergsten, Esq., who appeared and was accompanied by Edward Eugene Kartmann; the Residential Contractors’ Recovery Fund did not intervene in this matter and did not appear.

WITNESSES: Cliff Myrick, Myrick Construction LLC Ed Kartmann

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Respondent challenges a proposed payout by the Residential Contractors’ Recovery Fund (“the Fund”). The Fund has issued notice that it intends to make a payout to Complainant for the statutory maximum amount of $30,000.00. Respondent requested a hearing, challenging the proposed payout amount as too high. This tribunal entered the Fund claim file received from the Registrar of Contractors (“ROC”) into the record. The claim file includes the underlying complaint file, designated as ROC Complaint Number 2010-207995 (formerly P10-0020), which is the basis for the payout. The parties presented evidence, including testimony from the witnesses listed above and Complainant’s Exhibits A through L and Respondent’s Exhibits 1, 2, and 3. Based upon the record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order for payout in the amount of $30,000.00. FINDINGS OF FACT 1. Respondent was the holder of License No: B-3.219681-R issued by the ROC. On June 25, 2011, the license was suspended for failure to comply with an ROC Order and on January 10, 2012, the license was revoked for failure to pay a civil penalty.[1] 2. Complainant filed the underlying complaint against Respondent in August 2009, complaining about many workmanship issues. A Corrective Work Order (“CWO”) was issued on August 13, 2009, ordering correction of many, but not all, items that were in the complaint as follows: Item 1—Shower stall installation.

Item 2C—Support for shower door was missing and there is a large gap.

Item 5—Cost of leach pipe laid by Complainants was to be reimbursed by Respondent.

Item 7—There was not enough hot water to fill the Jacuzzi tub. Respondent was ordered to determine the cause and correct it.

Item 8—Respondent was ordered to correct the access to the Jacuzzi tub pump.

Complainants then filed amendments to the complaint, adding many more workmanship items. At a hearing held March 29, 2011, the Administrative Law Judge found the following: Credible testimony and evidence established that the Respondent failed to comply with the terms of the Corrective Work Order.

The Administrative Law Judge also found: Credible testimony and evidence established that the following items set forth in the Amended Complaint, that were not previously addressed in the Corrective Work Order, fail to comply with applicable workmanship and industry standards and require appropriate corrective action. A. The window in the commode room is not centered. The location of the window shall be properly corrected. B. The roof overhang at the peak of the roof is soft and sagging. The roof overhang shall be properly corrected. C. There is a bulge or ripple on the outside wall of the new bathroom. The bulge or ripple shall be properly corrected. D. There is an unacceptable gap between the old roof and the new roof. The gap between the two roofs shall be properly corrected. E. The main electric lines are located in a roof valley. The location of the main electric lines shall be properly corrected. F. A seam in the interior drywall is visible beyond applicable workmanship and industry standards. The seam in the interior drywall shall be properly corrected. G. Drywall screws were used in the installation of the shower enclosure. The drywall screws shall be properly removed and replaced with the manufacturer’s specified construction material. H. The new roof leaks. The leaking roof shall be properly corrected. I. Water penetration is occurring through the floor and walls of the master bedroom addition. The water penetration through the floor and walls of the new addition shall be properly corrected. J. The water penetration through the floor and wall of the master bedroom addition has caused water damage, including mold, in the surrounding areas. The water damage, including mold, shall be properly corrected. K. The fiberglass master shower was not installed in accordance with the manufacturer’s recommendations and fails to comply with applicable workmanship and industry standards and mold exists behind the shower installation. The installation of the shower and all water damage and mold caused by the improperly installed shower shall be properly corrected. L. The construction of the crawl space ventilation under the new addition fails to comply with applicable code requirements, workmanship and industry standards. The crawl space ventilation shall be properly corrected. M. The grading around the new addition fails to comply with applicable code requirements and workmanship and industry standards. The grading around the new addition shall be properly corrected. N. The vapor barrier under the addition is broken and not properly sealed. The vapor barrier shall be properly corrected. O. The plumbing under the addition is not properly secured in violation of code requirements and applicable workmanship and industry standards. The plumbing under the addition shall be properly corrected. P. There is excessive defection [sic] in the roof and valley pan area where the old roof and new roof join. The excessive deflection shall be properly corrected.

Finally, the Administrative Law Judge found that the listed corrections should be made by a contractor of Complainants’ choice at Respondent’s expense. 3. The Administrative Law Judge Decision was adopted by the ROC. 4. Complainants filed a claim with the Fund in January 2012. They provided one bid from Myrick Construction, LLC.[2] The total of that bid is over $34,000.00. 5. Cliff Myrick testified for Complainants. He is the Managing Member of Myrick Construction, LLC (“Myrick”), a licensed general contractor. Myrick submitted a bid and performed work on Complainants’ home after reviewing the CWO and Administrative Law Judge Decision. The bid total is $34,4494.35. Although the bid is itemized with regard to work items, it is not itemized with regard to price. For the hearing, Mr. Myrick created an itemized price list, admitted as Exhibit B. He then testified in support of Exhibit B. Items 1 and 2C—Shower Stall Installation and Shower Support 6. Mr. Myrick testified that Myrick removed the shower stall and installed a new one correctly. He testified that this corrected Items 1 and 2C. The cost was $625.00. This tribunal finds that amount to be reasonable. Item 5—Leach Pipe Reimbursement 7. The CWO reflects a “jobsite agreement” between the parties that called for Respondent to reimburse Complainants the cost of leach pipe. The evidence does not reflect the cost of the leach pipe. Therefore, the evidence fails to show a reasonable amount for this item. Item 7—Hot Water 8. Myrick determined that the problem with the hot water was that the water heater was not large enough. Myrick installed a larger water heater for a cost of $825.00. This tribunal finds that amount to be reasonable. Item 8—Access to Jacuzzi Tub Pump Motor 9. Mr. Myrick testified that the access panel to the Jacuzzi tub motor, which allows access for maintenance and repair, was on the side of the tub that abutted the bathroom wall. This made it useless. He testified that the tubs are made with the access on either side. Therefore, Myrick removed the “right-handed” tub and replaced it with a “left-handed” tub so that the access faced the open bathroom area. The cost was $3,700.00. This tribunal finds that Myrick’s means of correction was appropriate and that the amount is reasonable. Item 13(A)—Toilet Room Window 10. The window in the small toilet room was not centered. Myrick had to reframe the window at a cost of $1,600.00. This tribunal finds that amount to be reasonable. Item 13(B)—Roof Overhang 11. Myrick corrected the roof overhang problem by adding a jack brace for the cost of $250.00.[3] This tribunal finds that amount to be reasonable. Item 13(C)—Exterior Siding 12. To correct the exterior siding bulge, Myrick removed it, determined that the cause was the OSB, and corrected it for $850.00. Item 13(D)—Roof Gap 13. Where the roofs for the existing house and addition met, there was a gap that caused excessive water accumulation and drainage problems. In conjunction with correction of the roof leak in Item 13(H), Myrick corrected the issue and added gutters for $800.00. This tribunal finds Myrick’s means of correction to be appropriate and the amount to be reasonable. Item 13(E)—Electric Line Mast Relocation 14. Myrick relocated the electrical line mast to an appropriate location for $950.00. This tribunal finds that amount to be reasonable. Item 13(F)—Visible Drywall Seam 15. Myrick corrected the visible drywall seam for $420.00. This tribunal finds that amount to be reasonable. Item 13(G)—Shower Installation 16. This item was included in Item 1 above, Finding of Fact 6. Item 13(H) and 13(P)—Roof Leaks and Excessive Roof Deflection 17. Myrick corrected the roof leakage issues by moving the roof valley, adding flashing, and sealing it for $2,900.00. This also corrected the problem with excessive deflection in the roof and valley pan area. This tribunal finds that amount to be reasonable. Items 13(I), 13(J), and 13(K)—Water Penetration through Floor and Walls; Water Damage and Mold 18. Myrick performed removal and replacement of water damaged material and mold remediation of areas that had been penetrated by water. The cost was $4,950.00. This tribunal finds that amount to be reasonable. Item 13(L)—Crawl Space Ventilation 19. Correction of this item required that the crawl space underneath the addition be dried out and that window boxes be installed at the ends to prevent dirt from blocking them. The price was $400.00. This tribunal finds that amount to be reasonable. Item 13(M)—Grading 20. To correct grading and drainage issues, Myrick performed excavation and installed leach lines and two French drains for a price of $11,500.00. This tribunal finds that amount to be reasonable for correction of the grading and drainage issues. Item 13(N)—Vapor Barrier 21. When Myrick checked the walls for moisture and mold, it was discovered that condensation was occurring within the walls due to a lack of a vapor barrier. Therefore, a vapor barrier was installed in the walls and the floor. This tribunal finds that means of correction to be appropriate to address the moisture intrusion issue. The cost was $2,360.00, which this tribunal finds to be reasonable. Item 13(O)—Plumbing 21. Plumbing under the addition was not properly insulated or secured. Myrick performed those corrections. The cost was $320.00, which this tribunal finds to be reasonable. 22. Ed Kartmann testified for Respondent. He testified in disagreement of the amounts charged by Myrick. However, his testimony was based on the cost for which Respondent could do the corrections. This tribunal finds that testimony to be irrelevant to establishing the amount of Complainants’ damages, especially due to the fact that the original ROC Order required another contractor of Complainants’ choosing to do the work at Respondent’s expense. 23. In summary, the record shows the following reasonable and appropriate amounts: Items 1 and 2C $625.00 Item 5 0.00 Item 7 $825.00 Item 8 $3,700.00 Item 13(A) $1,600.00 Item 13(B) $250.00 Item 13(C) $850.00 Item 13(D) $800.00 Item 13(E) $950.00 Item 13(F) $420.00 Item 13(G) $0.00 Item 13(H) and 13(P) $2,900.00 Item 13(I), !3(J), 13(K) $4,950.00 Item 13(L) $400.00 Item 13(M) $11,500.00 Item 13(N) $2,360.00 Item 13(O) $320.00 Tax $2,044.35 Total: $34,494.35

CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the person who brings the action.[4] Further, the standard of proof at hearing is by preponderance of the evidence.[5] The Notice of Claim for Administrative Payout states that Complainants bear the burden of proof to show entitlement to the amount in the Notice. Therefore, Complainants bear the burden of showing, by a preponderance of the evidence, that the proposed payout amount at the statutory maximum is reasonable and proper. Complainants have met that burden. 2. Complainants are injured persons within the definition in A.R.S. § 32-1131(3) and are, therefore, entitled to recovery from the Fund. 3. According to A.R.S. § 32-1132(A), the statutory maximum amount of payout from the Fund is $30,000.00. 4. Under the facts and circumstances of this case, the ROC is empowered to determine and award, based on actual damages, an appropriate payment to Complainants from the Fund pursuant to A.R.S. § 32-1132 and A.R.S. § 32-1154(F). 5. The evidence of record supports an award to Complainants in the maximum amount of $30,000.00, all of which shall be chargeable against Respondent and persons on the license as set forth in A.R.S. § 32-1139(B). RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors make payment from the Residential Contractors’ Recovery Fund to Complainants in the amount of $30,000.00.

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 Decision will be 40 days from the date of that certification.

Done this day, July 12, 2012.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] This information was verified by taking administrative notice of the information on the ROC website on July 11, 2012. [2] Exhibit A. [3] Exhibit C. [4] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949); A.A.C. R2-19-119(B). [5] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2-19-119(A).

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