ALJDEC decisions subject to certification as final

2011A-6961-ROC · Registrar of Contractors · 2012-07-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 11, 2012, at 8:00 a.m. APPEARANCES: Complainant Kenneth P. Rawlins appeared on his own behalf; Respondent Rodriguez Remodeling LLC appeared through Roland Hinton, its Project Manager. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT 1. The Arizona Registrar of Contractors (“the Registrar”) issued License No. B-3.259603-R to Rodriguez Remodeling LLC (“Respondent”). 2. The Registrar received a complaint from Kenneth P. Rawlins (“Complainant”) against Respondent regarding its performance of work in the backyard of Complainant’s property at 8733 East Sells Drive, Scottsdale, Arizona. 3. The Registrar assigned the complaint to its inspector, Jeff Fleetham, for investigation. After Inspector Fleetham inspected the jobsite, he issued a Corrective Work Order (“CWO”) to Respondent that required it to perform certain corrective action within thirty days, in relevant part as follows: Respondent shall complete project per original contract agreement, properly executed change orders, AND local building codes.

1. Ground fill for removed pool was not compacted properly. • Unable to determine at time of inspection[.] • No action required by the Respondent.

2. Patio slab is cracking and buckl[ing] substantially from improper soil compaction[.] • Cracking in excess of ½” in slab at time of inspection. • Respondent shall correct by appropriate means.

3. Wall block[s] that were removed during the work have cracked and separated. • Respondent shall provide written documentation from the City of Scottsdale that the retaining wall portion of this project meets local building codes. • Respondent shall correct by appropriate means.

4. Block wall column [to which] a wood gate is attached needs soil repair to level column. • Respondent shall correct by appropriate means.

4. After Respondent did not resolve Complainant’s complaint, the Registrar issued a Citation and Complaint charging Respondent with violating A.R.S. § 32-1154(A)(2), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, A.R.S. § 32-1154(A)(13), namely A.R.S. §§ 32-1124(B) and 32-1158, and A.R.S. § 32-1154(A)(23). 5. Respondent filed a timely written answer to the Citation and Complaint that affirmatively alleged that preexisting conditions at the jobsite caused its work to fail. 6. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 7. A hearing was held on July 11, 2012. Inspector Fleetham testified. Complainant submitted numerous photographs of his backyard, testified on his own behalf, and presented the testimony of Curt R. Peterson, P.E., the owner of Peterson Geotechnical Group, LLC (“PGG”). Respondent submitted one photograph and presented the testimony of Roland Hinton, its Project Manager. 8. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on July 24, 2012. Such prior License record shows that Respondent’s License was current and only one complaint was pending against the license. Hearing Evidence 9. Complainant’s property is on the southwest corner of East Sells Drive, with the house facing north. The block wall on the east side of Complainant’s back yard was built on a retaining wall because Complainant’s backyard is several feet higher than the sidewalk and street on the east side of the wall. A municipal storm drain is located on the street on the east side of Complainant’s property. 10. On or about February 8, 2010, Respondent submitted an estimate to Complainant to perform the following scope of work: (a) To demolish one section of the block wall and retaining wall on the east side of the property to gain access to the backyard; (b) To demolish and remove a diving pool and haul away the pool shell and equipment; (c) To remove pavers that had been laid between the house and pool deck; (d) To bring in dirt and to level and compact the area of the yard from which the pool and pavers had been removed; (e) To extend the concrete patio at the back of the house onto the area from which the pavers had been removed; and (f) To rebuild the block wall and retaining wall.[1] 11. The estimate did not show Respondent’s license number preceded by the acronym, “ROC.” 12. On or about March 16, 2010, Respondent’s qualifying party and member, Alfonso M. Rodriguez, and Complainant entered into the written contract that Respondent had drafted for the scope of work described on the estimate for the lump sum of $12,327.83. Although Respondent’s contract showed its license number preceded by the acronym, “ROC,” the contract did not inform Complainant of his right to file a complaint to the Registrar or provide the Registrar’s telephone number and website address. 13. Respondent submitted a photograph of Complainant’s backyard before it performed any work. The photograph showed that the pavers were very uneven and that the block column or pilaster from which the gate was hung was leaning away from the house. 14. Respondent subsequently performed the scope of work described in the estimate and contract. 15. After the patio extension and section of the block wall and retaining wall that Respondent had demolished and rebuilt started cracking, Complainant requested that his homeowner’s insurer determine whether any of the damage was covered by his homeowner’s insurance policy. 16. On or about October 11, 2011, Daryl E. Young, P.E. of EFI Global submitted a report to Complainant’s homeowner’s insurer. Mr. Young noted evidence of a drainage problem on Complainant’s property that had been progressing for many years, in relevant part as follows: The stair step and horizontal cracking in the exterior masonry walls and the underlying foundation at the southeast corner of the dwelling are characteristic of damage caused by differential settlement of the concrete foundation. The paint and debris found within the cracking indicates [sic] the damage did not occur recently. The leaning and separation of the masonry fence pilaster, prior to the installation of the steel bracket, indicates [sic] that the differential settlement has been an ongoing phenomenon at this location.[2]

17. Mr. Young in the EFI Global report noted that Respondent had extended the patio to within two feet of the block wall on the east side of Complainant’s property, decreasing the area where water could be absorbed into the ground to a narrow strip along the wall. Mr. Young noted that “[t]he repeated increase of groundwater along the east edge of the patio slab has caused the edge of the slab to drop and vertical displacement to occur along the cracking in the first parallel control joint.”[3] 18. Based on the EFI Global report, Complainant’s homeowner’s insurer declined to provide coverage for the preexisting conditions at Complainant’s property. 19. Complainant then hired PGG to perform a limited geotechnical study of his backyard and to render an opinion on the cause of the cracking in the patio extension, block wall, and retaining wall. On or about January 11, 2012, Bryan E. Peltzer, P.E. of PGG issued a report that included the following recommendations to remediate the problems in Respondent’s work caused by the drainage problem in Complainant’s backyard: 1. To redirect runoff and prevent it from ponding in the narrow strip of ground in front of the block wall and retention wall, including possibly installing an additional section of concrete patio in the strip, installing drain blocks at the base of the block wall, and installing splash pads at the base of the retaining wall to divert surface runoff into the storm drain on the east side of the retaining wall; and 2. To obtain information on the results of compaction tests from Respondent and if such results were not available, to obtain soil testing within the footprint of the former pool that was adjacent to the patio slab.[4] 20. Mr. Hinton testified that Respondent compacted the soil in Complainant’s backyard by repeatedly driving a bobcat that weighed approximately 5,000 pounds and an excavator that weighed between 10,000 and 14,000 pounds over the area. Mr. Peterson acknowledged that if such equipment passed over the ground enough times, it should achieved adequate compaction. 21. PGG’s report concluded that although “[t]he geotechnical services described in this report have been conducted in general accordance with the standard of care exercised by local geotechnical consultants . . ., [n]o warranty, expressed or implied, is made regarding the conclusions and recommendations presented in this report.”[5] 22. Inspector Fleetham testified that the patio extension that Respondent poured was an impermeable surface that significantly decreased the area in Complainant’s backyard that could absorb water. Inspector Fleetham also testified that the portion of the patio extension that was located in front of the gate formed a barrier that kept water from draining through the gate. 23. Inspector Fleetham testified that he believed Respondent’s work worsened the tilt of the block column from which the gate was hung because the concrete that Respondent had poured at the base of the column had cracked. 24. Inspector Fleetham testified that the Registrar requires a contractor to warrant that a substrate or soil is adequate for work that the contractor proposes to perform on it. 25. Mr. Hinton acknowledged that Respondent should have identified the preexisting drainage problems on Complainant’s property and either modified the project to take into account the poor drainage or obtained an engineer’s report to minimize the impact of the project on drainage at the site. 26. Mr. Hinton testified that Respondent offered to remove and reconstruct the cracked portions of the patio extension, block wall, and retaining wall, but that it was not willing to accept responsibility for the preexisting drainage problem on Complainant’s property. Mr. Hinton testified that Complainant rejected Respondent’s offer because he was unwilling to obtain additional engineering work to remedy the preexisting drainage problem that caused Respondent’s work to fail. 27. Inspector Fleetham testified that contractors are responsible for correcting their work, but that contractors are not responsible for correcting preexisting conditions at jobsites that caused their work to fail. Inspector Fleetham testified that if a contractor’s work exacerbates a preexisting condition, however, it is responsible for the exacerbation. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[6] Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[7] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[8] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[9] Respondent acknowledged that it violated A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32-1124(B), because its estimate did not show its license number preceded by the acronym, “ROC.”[10] Respondent acknowledged that it violated A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1158, because its contract did not inform Complainant of his right to file a complaint with the Registrar and provide the Registrar’s telephone number and website address.[11] Respondent acknowledged that the cracks in the patio extension and section of the block wall and retaining wall that it had removed and rebuilt did not comply with the Registrar’s workmanship standards, in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.[12] Complainant established that Respondent’s work around the block column or pilaster from which the gate was hung caused the gate to lean further away from the house. Therefore, Respondent also violated A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108, by worsening of the column’s condition.

Complainant did not establish that Respondent violated A.R.S. § 32- 1154(A)(2).[13] However, if the City of Scottsdale requires a permit to rebuild that portion of the retaining wall that was removed to provide access, Respondent must obtain such permit before it performs corrective work to comply with the Registrar’s Order. Complainant did not establish that Respondent failed to adequately compact the soil it brought onto the areas from which it had removed the pool and pavers or that its failure to compact the soil caused the patio extension, block wall, or retaining wall to crack. EFI Global’s report and Respondent’s photograph established that the preexisting drainage problem on Complainant’s property caused the project to fail in the areas described on the CWO. PGG’s report established that the conditions at the property will cause the project to fail again unless the project is modified to address the preexisting drainage problem on the site. Complainant must obtain a written report from an engineer that describes the modifications to the project that would address the drainage problem and provides a warranty that the modifications, if followed, would allow Respondent to successfully repair and complete the project.[14] Respondent established that it was willing to perform work to comply with the CWO but that Complainant refused to have the additional engineering analysis performed that would allow Respondent to perform work that would comply with the Registrar’s standards. Because Complainant’s refusal provides a valid justification for Respondent’s failure to comply with the CWO, Complainant did not establish that Respondent violated A.R.S. § 32- 1154(A)(23).[15] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order, Respondent Rodriguez Remodeling LLC’s License No. B-3.259603-R be suspended until Respondent has remedied the statutory violations established in this case. It is further recommended that the Registrar not suspend Respondent’s license but, instead, close Complainant Kenneth P. Rawlins’ complaint in Case No. 2011-6961 if on or before the effective date of the Registrar’s Order, Respondent provides written proof to the Registrar that satisfies the Registrar that one of the series of events described in either (1) or (2) below have occurred: 1) That Respondent has remedied its statutory violations by doing the following: (a) Modifying its estimate form and all other documents used in its contracting business to comply with A.R.S. § 32- 1124(B); (b) Modifying its contract form to comply fully with the requirements of A.R.S. § 32-1158(B); (c) Removing from Complainant’s property the portions of the patio extension, block wall, and retaining wall that have cracked excessively; and (d) Rebuilding according to Complainant’s engineer’s recommended modifications to the project, in a professional and workmanlike manner, and in compliance with all applicable building codes, the damaged portions of the patio extension, the block wall, the retaining wall, and the block column; or 2) That Respondent completed items (1)(a) through (1)(c) above, but that Complainant failed to obtain a written report from an engineer that described the modifications to the project that would address the drainage problem and provided a warranty that the modifications, if followed, would allow Respondent to successfully repair and complete the project. 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, July 24, 2012.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The parties did not submit the estimate or the contract at the hearing. However, both documents were included in the Registrar’s electronic file. [2] EFI Global report at 6. Although neither party submitted the EFI report into evidence, it was included in the Registrar’s electronic file and both parties referred to the report at the hearing. [3] Id. [4] See PGG report at 3. Although neither party submitted the PGG report into evidence, it was included in the Registrar’s electronic file and both parties referred to the report at the hearing. [5] Id. [6] See A.R.S. §§ 32-1151 to 32-1169. [7] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [8] See A.A.C. R2-19-119(B)(2). [9] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [10] A.R.S. § 32-1154(A)(13) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” A.R.S. § 32-1124(B) requires that licensed contractors include their license number “preceded by the acronym ‘ROC’” on “all written bids submitted by the licensee and . . . on all advertising, loan forms, lending institution forms, letterheads and other documents used by the licensee in the conduct of business regulated by this chapter.” [11] A.R.S. § 32-1158(B)(9) requires any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved after December 31, 2007 to be in writing and to include the following information: That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in ten point bold type. . . . [12] 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.” [13] 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.” [14] Because the scope of PGG’s engagement did not include providing a warranty for its engineering recommendations, Complainant will need to obtain an additional report from PGG or another engineer that provides such a warranty. [15] A.R.S. § 32-1154(A)(23) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.”

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