ALJDEC decisions subject to certification as final

2010A-373373-ROC · Registrar of Contractors · 2010-05-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 10, 2010 (Videoconference) APPEARANCES: The Complainant represented himself. Robert Neff, Officer, represented the Respondent. ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact 1. In 2006, the Respondent contracted to build a home in Shumway, Arizona[1] under a contract with a person identified as Michael Daggett (Daggett). The home was essentially completed in October 2006. 2. Navajo County issued the Certificate of Occupancy (C. of O.) for the home on June 27, 2007. The delay in issuance of the C. of O. was because another contractor had not completed the septic system. It appears Daggett did not occupy the home. 3. The Complainant agreed to purchase the home from Daggett. He began furnishing the home in late September of 2007, although the Complainant’s escrow did not close until January 31, 2008. 4. The home is situated at an elevated and somewhat unprotected location with unique exposure to intense winds from the southwest.[2] 5. According to the Complainant, the home was already in need of exterior painting (staining)[3] or re-staining in January of 2008. The Respondent supplied stain-paint to the Complainant but did not undertake or commit to completing the staining of the exterior. The Complainant testified he was able to complete half of the staining of the exterior, but he cannot obtain additional matching stain to finish the job. 6. The Complainant experienced roof problems with a number of shingles blowing off at various times.[4] The Respondent arranged for roof repairs, which were performed, but shingles continue to detach. It appears the nature and strength of the wind at the location of the Complainant’s home is of such intensity at times that portions of the exposed side of the shingle roof cannot long withstand those intense wind conditions. 7. The Complainant has had an independent roofing company, Liberty Roofing (Liberty), perform further shingle repairs. He has not been charged for those repairs. According to the Complainant, Liberty stated that the Complainant’s home requires a more wind resistant roof. The quoted cost for a new roof was $13,000.00. 8. According to the Respondent, he recommended an upgraded roof for the construction of the home to Daggett, who declined to follow the recommendation. 9. The windows of the home leaked. High winds caused or contributed to water penetration. The windows were supplied by a company identified as Pro Build, and were identified as MI Home windows.[5] In April of 2008, after unsuccessful efforts to correct the leakage problem, Pro Build gave a credit of $4,200.00 of the cost of the windows to the Respondent, who paid that amount to the Complainant.[6] 10. The Complainant testified he purchased three replacement windows for $5,000.00 and spent another $1,000.00 for installation. According to the Complainant, eight windows still require replacement because they continue to leak. 11. The Respondent testified he told the Complainant not to accept the Pro Build proposal because it would deprive the Complainant of further relief for the windows. 12. The Complainant testified he was never informed that acceptance of the Pro Build proposal would preclude him from further relief for continuing window problems. Presumably, if the Complainant had anticipated additional remedies for the condition of the windows, then he would have obtained a commitment in writing or prepared a writing to show that he was not accepting the payment as a final settlement.[7] 13. On August 7, 2009, the Complainant filed his Complaint with the Registrar of Contractors (ROC). According to the Complainant, he delayed in his filing because the Respondent is a neighbor and a “good man.” 14. The Complaint contains a number of items in addition to those referenced above. However, the Complainant only pursued the roof, windows, and stain issues during the course of the instant hearing. 15. On August 24, 2009, ROC Inspector Thomas Sandoval (Sandoval) performed a jobsite inspection. Sandoval determined that the Respondent was only required to take appropriate corrective action for the shingle problem.[8] He issued a Corrective Work Order (CWO) on September 3, 2009. 16. According to the Complainant, the Respondent did not perform the corrective work. After waiting three weeks, the Complainant had Liberty replace four shingles and nail down others. 17. The Respondent submitted Exhibit R-11, which is letter from All Custom Exteriors (All Custom). The letter asserts that All Custom has corrected the same area of the roof 5 to 6 times over the past four years because of the high winds in the area. 18. In its answer to the Citation and Complaint, the Respondent claimed the shingle repair was completed two days after the receiving the CWO. However, in light of the Complainant’s testimony, there was no clear evidence of record that the Respondent had timely complied with the CWO within the allotted 15 day time period. 19. Sandoval did not require correction of the problems related to the windows or the staining of the exterior. According to Sandoval, the Complainant’s acceptance of the Pro Build proposal and Respondent’s payout showed the Complainant had settled the window issue. 20. Sandoval did not require correction of the stain issue because the 2009 ROC Workmanship Standards for Licensed Contractors [9] (Workmanship Standards) provide, under the general heading of “Painting” and the subheading of “Deterioration of stains, varnish or lacquer finishes” that finishes on interior woodwork should not deteriorate during the first year of ownership. The Workmanship Standards further state “[h]owever, varnish type finishes used on exterior will deteriorate rapidly.” The Workmanship Standards specifically speak of “varnish type” finishes which may include oil based paints.[10] This implies that exterior varnish-paint may deteriorate in less than a year. Although this standard appears rather vague with respect to the rate and extent of deterioration, it is difficult for the Administrative Law Judge (ALJ) to make a clear finding on the issue because there is no specific evidence of what type of stain-paint was used on the exterior, or the extent of deterioration. According to the Complainant, the exterior was deteriorating when he closed on the home in late January of 2008. The home was essentially completed in October of 2006 and the C. of O. issued in June of 2007. The Complainant’s close of escrow is significantly less than a year after the initial C. of O., and the matter could have been addressed at the time of closing, depending on the extent and state of deterioration. Instead, the Complainant accepted some stain-paint from the Respondent and did not pursue the issue in a formal Complaint until over a year and a half after he noted the problem, and almost two years after he began to furnish the home.[11] The reason given for the Complainant’s delay is that the Respondent is the Complainant’s neighbor and the Complainant thought the issue could be resolved. Under the facts as presented above, and in light of the Complainant’s failure to take timely action, it appears Sandoval’s decision was appropriate. 21. Sandoval testified he performed a prehearing inspection on May 7, 2010. The fact that roof shingles had been replaced with non matching shingles was apparent. It was also clear that some shingles were pulling up and would fail upon renewal of sustained high winds. Sandoval testified that wind conditions in the area have changed (increased) somewhat since the Rodeo-Chediski fire in 2002. According to Sandoval, the current Navajo County code standard for roofs is that a roof should resist winds of up to 80 miles an hour. The prior standard was 70 miles per hour. In the instant case, winds of over 70 miles an hour have occurred and Sandoval believes that the roof meets the applicable Navajo County standards.

Conclusions of Law The Citation and Complaint alleges violations of A.R.S. §32-1154: (A)(3)/A.A.C R4-9-108, failure to meet workmanship standards; and (A)(23), failure to take appropriate corrective action. 1. The Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Vazzano v. Superior Court, 74 Ariz. 369, 249 P.2d 837 (Ariz. 1952); Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). 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). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary, 1182 (6th ed. 1990). 2. The evidence in an administrative hearing must be “substantial reliable and probative” (A.R.S. §41-1092.07(F)(1)). This means the Complainant has the affirmative responsibility to present sufficient competent evidence to meet the preponderance standard. 3. “Substantial evidence” is evidence possessing something of substance and relevant consequence and which furnishes substantial basis of fact from which issues tendered can be reasonably resolved.” Black’s Law Dictionary Special Deluxe Fifth Edition, (St. Paul Minn.: West Publishing Co., 1979) p. 1281, citing State v. Green, 218 Kan. 438, 544 P. 2d 356, 362. 4. For the reasons stated in the Findings of Fact, there is no violation with respect to the stain-paint issues. 5. It is evident that the windows leaked to the extent that credit was given by Pro Build and accepted by the Complainant, who used the money from the Respondent to replace three windows. However, there are eight other windows which continue to leak. Generally, if payment is made to settle a disputed matter, the agreement should be put in writing. In this case both the Complainant and Respondent had a responsibility to protect their respective interests. Neither party executed a writing, leaving the matter to be determined to the conflicting testimony submitted at the hearing. The Complainant has failed to show that his acceptance of the settlement for the windows was not a final settlement. Nevertheless, it is concluded that the settlement, whether partial or final, does not affect the conclusion regarding workmanship. Eight of the remaining windows leak, although the severity of the leakage is unclear. This evidence is sufficient to establish a violation of (A)(3)/A.A.C. R4-9-108, but it does not entitle the Complainant to additional remedies through the ROC.[12] 6. It is evident that the roof shingle problems have been ongoing over a period of time and that the problem will continue whenever high winds are active. The structure is over three years old. The issue is whether the conclusion of Sandoval, that the roof meets county standards, should be dispositive or whether the Respondent has continuing responsibilities for a roof which is exposed to what must be described as extreme conditions. 7. It is understood that a contractor has a responsibility to construct to code and industry standards. In addition, a contractor may also have a duty to build to standards required by known extreme circumstances.[13] In the instant case, the Respondent testified he wanted Daggett to install a better roof but Daggett refused. Is this sufficient to conclude the Respondent knew or should have known of the roof problems that would ensue? A final consideration is whether the loss of a small number of shingles as a consequence of extreme winds is justification for requiring a new roof. Based on the evidence in this case, this Administrative Law Judge (ALJ) cannot answer in the affirmative in either case. Based on the evidence, the home was essentially completed in October of 2006, and the Respondent did not close on it until January of 2008. There is no evidence of record with respect to the roof problems during the approximately 15 month interim, or whether the Complainant had any notice of the problems prior to closing escrow. 8. There are certain cases which have no clear resolution. Based on the entirety of the record, it is concluded the instant case falls into that class. Although the evidence supports the violation of (A)(23) for failure to timely repair the four to six roof shingles, it does not support a conclusion that the Complainant is entitled to a new roof. The Complainant’s roof shingles are hostage to nature’s extreme elemental forces for which the Respondent can no longer be reasonably held responsible in this venue. Recommended Order Based on the foregoing, the Administrative Law Judge makes the following Recommended Order: On the effective date of the Order entered in this matter, Respondent Spring Valley Builders, Inc.’s Class B- license (No. 130501) shall be placed on disciplinary probation for a period of sixty (60) days. . 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, May 25, 2010.

/s/ Allen Reed Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The high country near Show Low, Arizona. [2] Based on the evidence, winds of over 70 miles per hour may be experienced at or in the vicinity of the home site. The most intense winds are in April and May. [3] The terms paint and stain were used somewhat interchangeably during the hearing. [4] The evidence does not show that the roof is structurally unsound but only that it loses some shingles during intense wind conditions. [5] Exhibit R-6, page 2. [6] The Complainant testified that he thought he received $4,000.00 from the Respondent. [7] The Complainant testified he worked in real estate and normally commits all consequential matters to writing. He argued that if the payment was to have been final it would have been in writing. Conversely, it can be argued that if it was not to be final, the Complainant should have stated this in a writing to be signed by the paying parties. [8] The CWO provided that the problem consisted of four to six shingles. [9] The same standard applied in the 2007 Workmanship Standards for Licensed Contractors. [10] See the definition of “varnish” in the American Heritage Dictionary, 2nd. ed. (Boston: Houghton Mifflin Company, 1982). [11] In determining any Statute of Limitations issues under A.R.S. §32- 1155, the date that Complainant started to furnish the home in September of 2007 precedes the date that Complainant closed escrow. Absent clear evidence to the contrary, the fact that the Complainant began furnishing the home in September of 2007 is considered as occupancy with respect to actual notice of various problems which were, or should have been, apparent to the Complainant. The Complainant had notice of the stain issue prior to closing and failed to adequately address it with Daggett as part of the sale. [12] The conclusion does not deprive the Complainant from seeking other avenues of recourse. [13] A “knew or should have known standard” is applicable. If a contractor knows or reasonably anticipates a construction project or portion thereof may fail because of unique circumstances even though the construction itself may meet code, the contractor has an obligation to fully inform the client of this likelihood or potentiality, and obtain a clear waiver before continuing a project. If health and safety are involved, a client’s waiver cannot be given any consideration.

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