ALJDEC decisions subject to certification as final

2011A-5603-ROC · Registrar of Contractors · 2012-03-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 8, 2012, at 8:00 a.m. APPEARANCES: Complainant Madera Component Systems, Inc. appeared through Robert Singh, President; Respondent View Builders, L.L.C., An Arizona Limited Liability Company, appeared through Matthew Brady, Construction Manager. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure The Arizona Registrar of Contractors (“the Registrar”) issued License No. KB-1.257543-D for dual building contracting to View Builders, L.L.C., An Arizona Limited Liability Company (“Respondent”). Madera Component Systems, Inc. (“Complainant”) is a materialman that fabricates roof and floor trusses for installation into residential and commercial construction projects. The Registrar received a complaint from Complainant that alleged that Respondent failed to pay Complainant $5,823.50 for wooden roof and floor trusses that it had supplied for Respondent’s construction of the View Point Senior Community project at 3845 North View Point Drive in Prescott Valley, Arizona (“the project”). The Registrar issued a Citation and Complaint against Respondent, charging a violation of A.R.S. § 32-1154(A)(11). Respondent timely answered the Citation and Complaint, denying any statutory violation and affirmatively alleging that the trusses that Complainant supplied had numerous defects and that as a result, Respondent had incurred expenses that it back-charged to Complainant. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. A hearing was held on March 8, 2012. Complainant submitted nine exhibits and presented the testimony of its president, Robert Singh. Respondent submitted 13 exhibits and presented the testimony of its construction manager, Matthew Brady. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on March 26, 2012. Such prior License record reflected that Respondent’s license was current and in good standing and that Complainant’s complaint was the only one pending against the license. Hearing Evidence The parties agreed at the hearing that the amount of the parties’ contract was $103,215.00, consisting of Complainant’s original proposal in the amount of $102,315.00 and a $900.00 change order to repair roof truss R16 after Respondent’s framing subcontractor damaged it. Although the back of the proposal form provided that Respondent agreed to waive any claim for defects in the materials if it did not notify Complainant of the defects in writing within five days of delivery, Respondent did not sign the proposal. Instead, on or about May 5, 2011, Respondent issued a purchase order to Complainant in the amount of Complainant’s proposal. The purchase order did not incorporate Complainant’s notice requirement. Respondent provided the project’s architect’s plans to Complainant, and Complainant provided the plans to its engineering firm, Mii Mitek, to prepare shop drawings for the trusses. Mii Mitek prepared shop drawings based on Respondent’s architect’s plans. However, with respect to the girder trusses for the roof, Mii Mitek determined that a single girder could not carry the entire load as drawn and would fail. Therefore, Mii Mitek changed the girder trusses to split trusses that each carried one side of the load. Complainant did not call its engineer’s design change to Respondent’s attention when Complainant submitted Mii Mitek’s shop drawings for Respondent’s engineer, Simply Structural, Inc., to review. On or about May 28, 2011, Palmer S. Tingey, an engineer employed by Simply Structural, Inc., placed his seal on the Mii Mitek’s shop drawings to “indicate acceptance of professional engineering responsibility solely for the truss components shown. The suitability and use of this component for any particular building is the responsibility of the building designer . . . .” Complainant fabricated the trusses according to the shop drawings that Respondent’s engineer had approved and delivered them to the jobsite. The parties agreed that Respondent paid in full Complainant’s invoice in the amount of $53,080.00 for the second and third floors. The parties also agreed that Respondent paid Complainant a total of $44,311.50 for the roof trusses and other materials, leaving a balance due of $5,823.50. All of Respondent’s back-charges to Complainant were based on its framing subcontractor’s additional charges to Respondent to modify in the field certain roof trusses that Complainant supplied for the project, to repair roof truss R16, or to install roof truss S1 a second time. Mr. Brady alleged four deficiencies in the roof trusses to support the remaining back-charges: (1) Seven to ten roof trusses were too tall and had to be modified in the field so that the top of the trusses lined up for the roof line; (2) The bottom chords of the modified tall trusses did not form a level ceiling plane and had to be modified in the field; (3) Roof truss S1 had to be installed twice, due to improper design; and (4) The roof trusses over the third-story windows required modification of the headers to accommodate the windows. Mr. Singh responded to Mr. Brady’s four alleged deficiencies, as follows: (1) Although the girder trusses were split at the design stage and approved by Respondent’s engineer, as noted above, and although the trusses were designed to hanger into the wall, Respondent’s framing contractor did not modify construction to incorporate the design change; (2) The repair to roof truss R16 caused it to stick into the ceiling plane and required every truss forming the ceiling plane to be modified; (3) Although the S1 roof truss initially was designed improperly, Complainant provided a replacement at no additional charge and Respondent’s framing subcontractor would have had to remove roof truss S1 to repair roof truss R16; and (4) The modification of the roof trusses over the windows resulted from Respondent’s architect’s and framer’s failure to note the design change to the split girder trusses. Respondent submitted a chain of e-mail correspondence between the parties that concluded with the following amounts that Respondent paid to its framing subcontractor to repair the four deficiencies that were alleged at the hearing, and which formed the basis of the disputed back-charges: (1) $1,937.50 to repair the roof trusses that were too tall; (2) $1,390.00 to modify the trusses for a level ceiling plane on the third floor; (3) $1,440.00 to install roof truss S1 a second time; and (4) $990.00 to install headers over the third-floor windows.[1] CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[2] Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence.[3] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[4] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] A.R.S. § 32-1154(A)(11) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure by a licensee . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor . . . .” Respondent acknowledged at the hearing that it did not pay Complainant $5,823.50 under the parties’ contract for the roof trusses that Complainant supplied for the project. A general contractor’s back-charges to a supplier for alleged deficiencies in the materials supplied to a job are affirmative defenses that the general contractor bears the burden to establish. With respect to the remaining amounts that Complainant alleged were owed, Respondent established that Complainant was responsible for the additional costs to modify the bottom chords of the trusses to form a level ceiling plane, alleged deficiency (2). Even if Respondent’s framing subcontractor’s failure to accommodate Complainant’s repair to truss R16 caused the bottom chords on the other trusses to be out of alignment, Complainant should have anticipated the effect of its repair on the other trusses and advised Respondent. Complainant acknowledged deficiencies in its fabrication of roof truss S1. Because Complainant’s argument that Respondent would have had to install roof truss S1 twice is speculative, Respondent established that Complainant was responsible for additional costs associated with Respondent’s framing subcontractor’s charges for installing roof truss S1 twice, deficiency (3).

Respondent did not establish that Complainant was responsible for alleged deficiencies (1) and (4), the framing subcontractor’s truss modifications to achieve a straight roof line and to install headers for third floor windows. These alleged truss deficiencies resulted from Complainant’s engineer’s modification of the trusses to make them split. Respondent’s engineer approved and took responsibility for the modification and should have advised it of the design change so that it could advise its framing subcontractor. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(11). The record establishes that the amounts of Respondent’s inappropriate back- charges to Complainant for perceived deficiencies caused by Respondent’s engineer’s failure to note Complainant’s engineer’s modification of the roof trusses was $1,937.50 for alleged deficiency (1) and $990.00 for alleged deficiency (4), for a total of $2,927.50. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order in this matter, Respondent View Builders, L.L.C., An Arizona Limited Liability Company’s License No. KB-1.257543-D be suspended until Respondent has paid $2,927.50 to Complainant Madera Component Systems, Inc. It is further recommended that if prior to the effective date of the Registrar’s final order, the Registrar receives satisfactory proof in writing from Respondent that it has paid Complainant $2,927.50 by certified or cashier’s check, the Registrar not suspend Respondent’s license but, instead, close Case No. 2011-5603. 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, March 26, 2012.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The total of these amounts is $5,757.50, $66.00 less that the total back-charges of $5,823.50. See Respondent’s Ex. 4. The record does not explain this small discrepancy. [2] See 32-1101 et seq. [3] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] See A.A.C. R2-19-119(B)(2). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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