ALJDEC decisions subject to certification as final

2011A-6885-ROC · Registrar of Contractors · 2012-08-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 9, 2012, at 8:15 a.m. APPEARANCES: Complainant Zachary Richardson was represented by Linda Wallace, Esq., Linda Wallace, P.L.L.C.; Respondent Builder Services Group, Inc. dba Gale Contractor Services was represented by Edward Rubacha, Esq., Jennings, Haug & Cunningham, L.L.P. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure The Arizona Registrar of Contractors (“the Registrar”) issued License No. K- 40.189642-D to Builder Services Group, Inc. doing business as (“dba”) Gale Contractor Services (“Respondent”). The Registrar received a complaint from Zachary Richardson (“Complainant”) regarding Respondent’s installation of insulation at his house at 140 Calle Del Viento, Sedona, Arizona. The gravamen of Complainant’s complaint was that the insulation that Respondent installed in the floor between the two levels of his house did not provide sound-proofing. The Registrar assigned Complainant’s complaint to its inspector, Cliff Frandsen, for investigation. On February 11, 2012, after Inspector Frandsen performed a jobsite inspection, he sent a letter to the parties informing them that a citation would not be issued against Respondent because “[t]he contractor performed per contract and per the specifications provided. The floor was not engineered for or constructed in a manner that would prevent sound from migrating through the floors or walls.” Inspector Frandsen informed Complainant that if he disagreed, he could request further review of his complaint. Complainant requested further review of his complaint. The Registrar issued a Citation and Complaint against Respondent, charging potential violations of A.R.S. § 32-1154(A)(2) and A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. Respondent filed a timely written answer to the Citation and Complaint, denying any statutory violations. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. A hearing was held on August 9, 2012. Inspector Frandsen testified telephonically. Complainant submitted nine exhibits and presented the testimony of three witnesses: (1) Complainant; (2) Bill Brann, the qualifying party and member of Creekside Enterprises, LLC (“Creekside”),[1] the general contractor on the project when Respondent installed the insulation; and (3) Art Lyons, Respondent’s salesman who submitted its proposal to Complainant on Respondent’s behalf.[2] Respondent submitted 24 exhibits and presented the testimony of three witnesses: (1) Jim Young, who prepared a proposal on behalf of Advanced Insulation, Inc. (“Advanced”)[3] that Complainant provided to Respondent for the scope of work on its proposal;[4] (2) Joe Clark, Respondent’s Sales Manager and Mr. Lyons’s former supervisor; and (3) Shane Burginger, Respondent’s Division Manager in Prescott, Arizona, who oversaw Respondent’s installation of the insulation. / / / / / / / / Additional Evidence Complainant retired from the United States Navy as an officer and currently owns an art gallery in Sedona. After living in rentals for seven years, Complainant and his wife decided to construct their 5,000 square foot dream house in Sedona. The house would have two stories with a walk-out basement and crawl space. The first general contractor on the project was Kirkwood Builders, Inc. (“Kirkwood”).[5] Complainant testified that Steven Adams of Kirkwood referred him to Eric Seitz, a draftsman, to prepare plans for the project. Mr. Seitz is not an architect and is not licensed by the Arizona Board of Technical Registration or any other state agency. The specifications that Complainant and his wife submitted to the City of Sedona on November 12, 2009, to obtain a permit to build the house included as an option in the Walls, Surfaces, and Ceilings section the following, “PROVIDE BID FOR OPTIONAL “QUIET ROCK” QR-530 DRYWALL ON CEILINGS OF BEDROOM-2 AND BEDROOM-3.”[6] Complainant testified that Mr. Seitz prepared the specifications without any input from him and that the house was constructed without the “quiet rock” option. After the plans were prepared, Complainant through his company, Zero Carbon Construction Group, LLC (“Zero Carbon”),[7] solicited bids from subcontractors for construction of the house. Complainant testified that he formed Zero Carbon when Arizona Public Service Company was giving out rebates, but that the business never got off the ground. Complainant testified that Zero Carbon had nothing to do with the design or construction of his house. Complainant testified that Mr. Adams told him that Kirkwood usually used fiberglass batt insulation in floors between levels and instructed him to go look at other houses that Kirkwood had constructed. Complainant testified that he went to the houses and that they did not have any problem with noise being transmitted between levels. Complainant through Zero Carbon provided partial plans and a “wish list” of additional features to Mr. Young at Advanced. The first item on Complainant’s “wish list” for “Floor Framing Plan” was the following: No squeaks in floor — a. Glue and screw. b. Spray foam insulation under floor[.][8]

On or about July 3, 2009, Mr. Young on behalf of Advanced submitted a proposal to Zero Carbon to install insulation in Complainant’s house. Advanced proposed to “[i]nsulate floor between levels with R-11unfaced batts for sound.”[9] Advanced’s July 3, 2009 proposal included the option of installing 1” R6.6 two-pound high density foam above the batts for an additional cost.[10] Mr. Young testified that “R” refers to the thermal value of insulation. Mr. Young testified that he proposed batt insulation between floors because he knew that Complainant was concerned about cost. Mr. Young testified that the proposal referred to “sound” and provided the option of R6.6 high density foam, which is closed cell foam, because it would tighten the floor and prevent squeaks. Mr. Young testified that the batts and closed cell foam insulation in the proposal were intended to dampen sound, not to provide sound proofing. Mr. Young testified that he does not know of any insulation that will provide sound proofing. Over the next eighteen months, at Complainant’s request, Mr. Young on behalf of Advanced submitted six more proposals to Zero Carbon to install insulation at Complainant’s house. All of the proposals repeated the words, “for sound,” after the various proposed insulation for the floor between the two levels.[11] None of the proposals included resilient metal channels or an engineered sound attenuation system. Mr. Young testified that he based all seven of Advanced’s proposals on his discussions with Complainant. Mr. Young testified that over the year and a half that he was engaged in these discussions, Complainant was primarily concerned with cost. Mr. Young testified that sound attenuation was not a highlight of his conversations with Complainant, and that Complainant was only concerned that insulation in the exterior walls should dampen outside noises, not that the insulation in the floor between the two levels should prevent transmission of sound between the levels. Complainant testified that he understood that foam insulation was technically superior to fiberglass batt insulation. At some point, Creekside replaced Kirkwood as the general contractor on the project. Creekside frequently uses Banker Insulation of Northern Arizona, Inc. (“Banker”)[12] as a subcontractor. On or about October 26, 2010, Banker submitted a proposal to Creekside to install insulation at the project. Banker’s proposal did not mention sound, but included installation of R-13 open cell foam insulation in the floor between the upper and lower living areas.[13] While Mr. Lyons was working at Home Depot in Cottonwood, he met Complainant through Mr. Brann when they were selecting windows for Complainant’s house. In September 2010, Mr. Lyons became an outside salesman and estimator for Respondent. After Mr. Lyons called Mr. Brann to see if he would allow Respondent to bid on insulation at Complainant’s house, Mr. Brann invited Mr. Lyons to submit a bid on Respondent’s behalf. Complainant provided Advanced’s January 29, 2010 proposal to Respondent[14] and requested that Respondent provide a proposal that followed Advanced’s proposal exactly. Because Mr. Lyons had never before worked for a company that installed insulation, Mr. Clark accompanied him to Complainant’s house to take measurements for Respondent’s proposal. Mr. Clark testified that because Mr. Brann requested an “apples to apples” bid, Respondent did not deviate at all from Advanced’s proposal. Mr. Clark testified that after he and Mr. Lyons took measurements, he gave Mr. Lyons directions on how to put the measurements into Respondent’s software system to generate a proposal. Complainant testified that he spoke on the telephone to Mr. Lyons in December 2010, and January 2011. Complainant testified that although Mr. Lyons did not know much about insulation, he said that Respondent would install high-end insulation and that Complainant’s house would be “as quiet as a cave.” Mr. Lyons testified that although he did not remember his phone conversations with Complainant, he doubted that he ever told Complainant that the house would be “as quiet as a cave” because he did not know much about insulation. On or about February 5, 2011, Respondent submitted a proposal (“Work Agreement”) to Mr. Brann and Creekside in the amount of $14,756.00 to install insulation on the project, including the following insulation in the floor between the levels of Complainant’s house: R-13 = 3.4 NOMINAL INCHES OPEN CELL FOAM R-6.7 = 1 NOMINAL INCH CLOSED CELL FOAM[15]

Complainant and Mr. Brann both signed the Work Agreement to accept Respondent’s proposal. Respondent’s Work Agreement does not mention the word, “sound.” Complainant testified that based on Mr. Lyons’s assurances, he elected to install wood and tile floors in the house, rather than carpet. Complainant and Creekside hired Respondent, rather than Advanced or Banker, to install insulation at Complainant’s house because Respondent’s Work Agreement had a lower cost than its competitors’ proposals. Respondent installed the insulation in Complainant’s house according to the scope of work on its February 5, 2011 Work Agreement. Mr. Burginger testified that on the second day that Respondent was installing the insulation at Complainant’s house, he went to the jobsite and met with Complainant. Mr. Burginger testified that Complainant’s concerns did not include sound attenuation and that he seemed somewhat knowledgeable about foam insulation. Complainant initially accepted Respondent’s installation of insulation on the project and paid it in full using his credit card. In the latter part of June 2011, Complainant and his family moved into the house. Within a week of moving into the house, Complainant noticed that sound was transmitted between levels of the house. Complainant testified that from the master bedroom, he could hear faucets being turned on and off and drawers opening in his son’s bedroom directly below. Complainant testified that his daughter can hear her mother talking on the telephone in her office above his daughter’s bedroom. Complainant testified that when he has guests, he cannot watch television in the master bedroom because it would disturb guests in the guestroom below. Complainant complained to Mr. Lyons, who conveyed the complaint to Mr. Clark. On August 9, 2011, a meeting was held at the house that was attended by Complainant, Mr. Burginger on behalf of Respondent, and Joseph Lewis, on behalf of Demilec (USA), LLC (“Demilec”), the manufacturer of the foam insulation that Respondent installed in the floor between the levels of Complainant’s house. The meeting did not resolve Complainant’s complaint. After Respondent did not resolve Complainant’s complaint, he successfully disputed the charge to his credit card for Respondent’s work. As a result, at the time of the hearing, Respondent had not been paid anything for its work on Complainant’s house. Complainant submitted a letter from Adam J. Ginsburg, P.E., dated August 23, 2011, that concluded as follows: Because polyurethane foam is effective at sealing air transmissions in thermal insulation applications, I was surprised that I was able to hear voices transmit from the upper level to the lower level of your house and vice versa. It was also surprising that the compressor of the refrigerator in your garage could be heard throughout your house. That being said, again, other insulation products would have minimized the [Sound Transmission Class (“STC”)] sounds from traveling through the structure.

In conclusion, it is our position that the insulation system chosen for your residence, although beneficial for other energy/heat loss reasons, should not have been recommended as the insulation of choice considering your noise transmission criteria. Other, less expensive insulation materials such as blown cellulose and fiberglass batts have documented soundproofing characteristics and would have been much more effective in your home for soundproofing as well as the obvious primary insulating characteristics.[16]

Complainant also submitted a printout of an e-mail to him from Marilyn Myers at Acoustiblok dated July 20, 2012, in relevant part as follows: Per previous conversations, please be advised that our Acoustiblok membrane will not perform as designed when installed in a wall assembly that contains closed cell foam insulation within the stud cavities.

We have worked with a couple of manufacturers and performed several tests with independent laboratories. The results were always disappointing. The closed cell foam apparently hardens or stiffens the stud cavity making it conducive to noise transmission.[17]

Complainant testified that to provide sound attenuation at his house, the closed cell product needed to be removed from the floor, which could affect wiring for lighting, electrical outlets, and the home theater, that the floor or ceiling would need to be removed to provide access to the insulation, and that after the closed cell foam was replaced with open cell foam, drywall and paint would need to be done to complete the repair. Complainant testified that he has obtained an estimate for the work that exceeds $90,000.00. Mr. Burginger testified that the thickness of insulation determines its R- value and that closed cell foam insulation may increase the R-value because it provides a vapor barrier. Mr. Burginger testified that STC measures how well an insulation material blocks sound. Mr. Burginger testified that although insulation materials may have an STC rating, if sound attenuation is a concern, the insulation should be a component in an engineered system. Mr. Burginger testified that Demilec manufactures a sound suppression system for floors that consists of 3½“ Sealection™ 500 spray foam insulation, 2’ x 12’ yellow pine floor joists, and RC-1 resilient metal channels perpendicular to the joists between the joints and the sheetrock on the ceiling of the level beneath the floor.[18] Mr. Burginger testified that the floor joists in Complainant’s house were not the kind that would be used in a sound suppression system. Mr. Young testified that foam is only one component of a residential sound attenuation system and that without all the other components, sound transmission between floors would not be substantially reduced by replacement of foam insulation.[19] Complainant acknowledged that the house was not designed with any engineered sound attenuation or suppression system. Inspector Frandsen’s notes of his jobsite inspection stated in relevant part as follows: Respondent was hired to provide interior and exterior insulation for this new home. Part of the scope of the contract was to provide open and closed cell spray foam insulation between the floors of the home as a sound attenuation aid.

At this insp., it was revealed that the respondent was presented with bids from two competitors by the H/O and was asked to give a bid on the insulation job in a like for like basis. There was no attempt made at this time to require a sound proof condition. The floor was not engineered for or constructed in a manner that would prevent sound from migrating through the floors or walls. There are various engineered construction methods available to alleviate the transfer of sound between floors. These were not noted in the plans or specifications.

There are wood floors and tile in the kitchen/dining area. There are no rugs or fabric draperies that aid in muting the acoustical challenges.

The scope of this job was performed per contract and specifications provided.[20]

Inspector Frandsen testified consistently with his jobsite inspection notes and February 11, 2012 letter informing the parties that a citation would not be issued against Respondent based on the evidence that the parties had submitted. Inspector Frandsen acknowledged at the hearing that Complainant’s house had a sound issue between the two levels and that when he was on one level, he could hear people walking and dragging chairs on the other level. Complainant testified that at the jobsite inspection, Inspector Frandsen asked Respondent to provide the work order. Complainant testified that Mr. Burginger produced a document and that Mr. Burginger and Inspector Frandsen both noted that the document included the word, “sound.” Complainant testified that although he requested a copy of the document, it was not provided. Inspector Frandsen testified that he remembered seeing the word, “sound,” mentioned on a document, but that he did not remember which contractor prepared the document. Mr. Burginger testified that at the jobsite inspection, he handed Inspector Frandsen a copy of Respondent’s February 5, 2011 Work Agreement. Mr. Burginger testified that Inspector Frandsen kept the document and that he does not remember any discussion concerning any document that Respondent prepared that included the word, “sound.” CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[21] Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[22] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[23] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[24] Complainant did not establish that Respondent failed to install insulation at Complainant’s house in accordance with plans, specifications, applicable code, and the February 5, 2011 Work Agreement. Therefore, Complainant failed to establish that Respondent violated A.R.S. § 32-1154(A)(2).[25] Respondent established that Complainant through his extensive negotiations with Advanced dictated the terms of the proposal that Complainant and Creekside asked Respondent to replicate. The Registrar’s standards do not require insulation contractors to provide sound attenuation or sound proofing measures whenever a property owner concludes in hindsight that he should have required such measures. Therefore, Complainant failed to establish that Respondent violated A.R.S. § 32-1154(A)(3), namely, A.A.C. R4-9-108.[26] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order, the Registrar dismiss Complainant Zachary Richardson’s complaint in Case No. 2011-6885 against Respondent Builder Services Group, Inc. dba Gale Contractor Services’ License No. K-40.189642- D. 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, August 27, 2012.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] According to the Registrar’s public website, Creekside holds License No. B.205785-R. [2] At the time of the hearing, Mr. Lyons no longer worked for Respondent. [3] According to the Registrar’s public website, Advanced is the former holder of License No. B.124883-R. Advantage Home Performance, Inc. is the current holder of that license. [4] Mr. Young had worked for Respondent before he worked for Advanced and at the time of the hearing, was again working for Respondent. [5] According to the Registrar’s public website, Kirkwood holds License No. B.065308-R. [6] Exhibit R-2 at 5. [7] Zero Carbon does not have a contractor’s license. [8] Exhibit R-13 at 2. [9] Exhibit R-15 at 1, No. 11. [10] See id. at 2, No. 21. [11] See Exhibit R-16 at 1, No. 10 (January 14, 2010 proposal); Exhibit R- at 1, No. 10 (January 18, 2010 proposal); Exhibit R-18 at 1, No. 10 (January 29, 2010 proposal); Exhibit R-19 at 1, No. 10 (October 7, 2010 proposal); Exhibit R-20 at 2, No. 12 (October 19, 2010 proposal); Exhibit R- at 2, No. 13 (October 25, 2010 proposal). [12] According to the Registrar’s public website, Banker holds License No. K-40.151295.D. [13] See Exhibit R-22 at 2. [14] See Exhibit C-1. Complainant and Creekside redacted the price on the copy of Advanced’s proposal that they gave to Respondent. [15] Exhibits C-3 and R-23. [16] Exhibit C-7 at 2. [17] Exhibit C-8. [18] See Exhibit R-25 at 7. Respondent also submitted brochures from other manufacturers of engineered sound attenuation systems for floors. See Exhibit R-3 (“Certainteed Noise Control for Buildings”); Exhibit R-4 (“STC 64”); Exhibit R-5 (“Soundeater Sound Seal”). All of these systems include resilient channels and/or layers of special sound-absorbing concrete materials. [19] Complainant’s attention was drawn to Exhibit R-6, a article published by the National Research Council Canada entitled, “Controlling the Transmission of Airborne Sound through Floors,” dated May 1999, that stated as follows: The research demonstrated that, as for stud-wall systems, the key factor in increasing sound isolation in joist floors is the independent or resilient support of the gypsum board ceiling from the joists. If the gypsum board is not supported in this way, sound-absorbing material in the floor cavity is rendered ineffective. In practice, independent supports (separate ceiling joists) are seldom used in North America and the most common way of resiliently supporting gypsum board ceilings is to use 25 ga. resilient metal channels. [20] Exhibit R-11. [21] See A.R.S. § 32-1151 to A.R.S. § 32-1169. [22] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19- 119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [23] See A.A.C. R2-19-119(B)(2). [24] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [25] A.R.S. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications or any building codes of any state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner’s duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.” [26] A.R.S. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.” A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”

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