ALJDEC decisions subject to certification as final

2013A-5937-ROC · Registrar of Contractors · 2014-04-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 1, 2014, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (hereinafter “Registrar”) was represented by Assistant Attorney General, John Tellier. Last Call Install LLC (hereinafter “Last Call”) was represented by its qualifying party and officer, Marc Allen James (hereinafter “Mr. James”). ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law, and Recommended Order are made: FINDINGS OF FACT Background Last Call is the holder of License No. K-21.216759-D issued by the Registrar.[1] Last Call’s License No. K-21.216759-D allows it to perform the scope of work permitted by the commercial A-21 Landscaping and Irrigation Systems and the residential C-21 Landscaping and Irrigation Systems licenses.[2] On or about August 30, 2013, the Registrar received a Complaint against Last Call from Gregory Gasch (hereinafter “Mr. Gasch”) alleging that Last Call had failed to perform landscaping work in a professional and workmanlike manner at Mr. Gasch’s residence located at 1404 West Brangus Way, San Tan Valley, Arizona 85143.[3] On or about October 21 2013, the Registrar conducted a jobsite inspection at the construction project at 1404 West Brangus Way, San Tan Valley, Arizona 85143. The Registrar subsequently issued a Corrective Work Order, directing Last Call to remedy its deficient workmanship on the construction project.[4] The Corrective Work Order provided, in pertinent part, as follows: In this Inspector’s opinion, this contractor did not include a plan or provisions in their contract addressing any drainage issues that would arise in the design of the rear yard.

This contractor is to provide and ensure proper drainage for the Complainant’s rear yard by checking the grade and drainage plans for the community and or obtaining permission from the HOA to drain out the rear portion of the yard into the wash area.

Contractor is to ensure that water flows away from the patio and does not excessively pond against the patio concrete. NOTE: It is ok for some ponding to occur in the gravel areas as long as it is dry between irrigation times. It is not acceptable to drill holes in the rear block wall above gravel line unless the gravel line is below the top of the patio concrete in elevation, AND only if the HOA approves of drainage into the wash. The drainage plans may show drainage from rear yard to exit both sides of the house to the street. Contractor is responsible for this to occur in part by installing either French drains or by using culverts or knock outs in the brick-like border.

If contractor insists that the conditions of the soil prior to start of the project are the cause of the excessive ponding in the grass area, then Contractor should have addressed that prior to start of project. It is now the responsibility of the contractor to ensure that when the irrigation system is properly timed the grass area is not excessively ponding.

Testimony of Jessica Elaine Gasch Jessica Gasch (hereinafter “Ms. Gasch”) testified that she lives at 1404 West Brangus Way, San Tan Valley, Arizona 85143. Ms. Gasch stated that she entered into a contract with Last Call for landscape design and installation at her residence for the sum of $3,612.29.[5] Ms. Gasch testified that water in her back yard ponds instead of draining, that her lawn is constantly saturated, and that water is directed towards her residence rather than away from it. Ms. Gasch stated that Last Call performed no corrective work at her residence as directed by the Corrective Work Order. Ms. Gasch testified that she had one existing ash tree in her backyard before Last Call began its landscaping work at her residence. Ms. Gasch stated that the rest of her backyard was covered with gravel. Ms. Gasch testified that Last Call “moved everything” but the tree in her backyard. Ms. Gasch testified that Last Call put in boulders, mounding, and contouring. Ms. Gasch acknowledged that there was some existing water ponding in her backyard where an above-ground pool had once been located. Ms. Gasch stated that when it rained, there would be a ring of water of where the above ground pool had been. Ms. Gasch testified that the there were no other areas in her backyard where water ponded before Last Call altered the drainage in her backyard. Ms. Gasch testified that she noticed water ponding in her backyard as soon as Last Call completed its landscaping work. Ms. Gasch stated that Last Call informed her that it would resolve the drainage problem in her backyard. Ms. Gasch testified that Last Call informed her that it would take time for the new grass in the backyard to take root. Ms. Gasch stated that Last Call assured her that once the grass had taken root that her backyard would drain properly. Ms. Gasch testified that the grass did not resolve the drainage issues in her backyard. Ms. Gasch testified that there are areas of erosion in her backyard that now contain water channels. Ms. Gasch stated that the concrete curbing in her backyard has buckled due to the erosion. Ms. Gasch testified that Last Call “knocked” holes in her block wall to direct water from her backyard into a community area. Ms. Gasch stated that there is now soil erosion from her block wall into the community wash area. Ms. Gasch testified that Last Call did not have the permission of her Homeowners’ Association (hereinafter “HOA”) to create the holes in her block wall and direct water from her residence to the community wash area. Ms. Gasch testified that the holes in her block wall did little to resolve the water drainage problem in her backyard. Ms. Gasch testified that the block around her backyard has been saturated with water. Ms. Gasch stated that white lines can be observed on the block wall from where water has soaked into the block wall and left mineral deposits in the block. Ms. Gasch’s testimony is found to be credible. Testimony of Registrar Investigator Theodore William Gerold Investigator Theodore William Gerold (hereinafter “Investigator Gerold”) testified that the Corrective Work Order was issued on October 23, 2013. Investigator Gerold stated that he had been an Investigator with the Registrar for over thirteen years. Investigator Gerold testified that he been involved in the homebuilding industry for over twenty one years before he became an investigator for the Registrar. Investigator Gerold testified that he performed his first inspection at the Gasch residence on October 21, 2013. Investigator Gerold stated that he saw several areas of the yard where water was ponding excessively. Investigator Gerold testified that he observed that Last Call had installed a concrete curb around the grass area in the backyard. Investigator Gerold stated that Last Call had failed to put any knock-outs or any other way of allowing water in the concrete curb to drain from the yard. Investigator Gerold testified that he observed water going apparently underneath the block wall into the common area, causing erosion in the common area. Investigator Gerold testified that he observed erosion in the backyard and in the common area. Investigator Gerold stated that the applicable workmanship standard for water drainage is that landscaping should not interfere with water drainage.[6] Investigator Gerold testified that the landscaping in the Gasch backyard that was installed by Last Call was interfering with the drainage from the backyard. Investigator Gerold testified that he issued a Corrective Work Order as a result of his first onsite inspection at the Gasch residence. Investigator Gerold stated that he was sure that Last Call did not have the HOA’s permission to install holes in the block wall. Investigator Gerold testified that Last Call should have resolved any apparent drainage issues in the Gasches’ backyard either before or after its landscaping work. Investigator Gerold stated that the alternative would have been for Last Call to have refused to perform any work in the backyard until the drainage issues were resolved by the homeowner. Investigator Gerold testified that he took photographs of the drainage problems that he observed at his first onsite inspection. Investigator Gerold reviewed the photographs and testified as to their content. Investigator Gerold stated that the grass area in the backyard was very “squishy.” Investigator Gerold testified that everything flowed towards the patio. Investigator Gerold stated that the Registrar’s minimum standards require drainage to flow away from the residence, not towards it.[7] Investigator Gerold testified that he performed a prehearing inspection at 1404 West Brangus Way, San Tan Valley, Arizona 85143, on March 26, 2014, at 10:00 a.m. Investigator Gerold stated that he confirmed that the items set forth in the Corrective Work Order had not been corrected. Investigator Gerold testified that the erosion was continuing to worsen. Investigator Gerold opined that Last Call failed to comply with the terms of the Corrective Work Order. Investigator Gerold’s testimony is found to be credible. Testimony of Marc Allen James Mr. James testified that in April or May of 2013, Last Call was contacted about performing landscaping work at the Gasches’ residence. Mr. James stated that on his initial walk-through, he observed excessive water flowing throughout the yard. Mr. James testified that Mr. and Ms. Gasch referred to their yard as “Lake Gasch.” Mr. James testified that he reviewed the drainage issues with Mr. and Ms. Gasch and informed them that the drainage issues should be resolved before landscaping was installed in their backyard. Mr. James stated that Mr. and Ms. Gasch refused to correct the drainage problem in their backyard. Mr. James testified that Last Call then installed the agreed-upon landscaping in the backyard, despite the fact that the drainage problems had not been resolved. Mr. James stated that Last Call possessed paperwork in which Mr. and Ms. Gasch acknowledged that they had existing drainage issues in the backyard and that they were not willing to correct the drainage issues.[8]

Mr. James testified that Mr. and Ms. Gasch were initially happy with the landscaping work performed by Last Call. Mr. James stated that Mr. and Ms. Gasch were repeatedly informed that the drainage problem was a preexisting condition that was not caused by the landscaping work performed by Last Call. Mr. James denied that he had informed Mr. and Ms. Gasch that Last Call would take care of the drainage problems as part of the landscape installation. Mr. James denied that he had ever sent Ms. Gasch a text promising her that Last Call would take care of the drainage issues in her backyard. Mr. James acknowledged that Last Call’s invoice for the agreed-upon landscaping work required Last Call to perform mounding and contouring work. Mr. James denied that the performance of contouring and mounding work would alter the existing drainage in the Gasches’ backyard. Mr. James acknowledged that Last Call moved rock in the Gasches’ backyard so that Last Call could install sod. Mr. James denied that moving the rock altered the drainage in the backyard. Mr. James stated that the ground provided the drainage and that the rock was simply on top of the ground. Mr. James denied that Mr. or Ms. Gasch contacted Last Call to complain about drainage problems as soon as the landscaping work was completed. Mr. James testified that the initial complaint submitted to the Registrar had nothing to do with drainage. Mr. James stated that Mr. and Ms. Gasch never complained about drainage before Investigator Gerold conducted his inspection. Mr. James testified that he performed no corrective action in response to the Corrective Work Order because Last Call “was not contracted to do that work.” Testimony of Jessica Elaine Gasch Ms. Gasch was recalled as a rebuttal witness. Ms. Gasch testified that she received a text message at 12:10 p.m. on August 22, 2013, from Last Call indicating that it would take care of her drainage problems. Ms. Gasch read the following text message from Last Call into the record: We want to make it right. Also we will do a drain for free of charge. Thank you for understanding. We will make it right. Talk to you soon.

Ms. Gasch testified that she received a second text message that she read for the record that again promised that Last Call would “make it right.” Ms. Gasch stated that Last Call did not perform any corrective work on the drainage problem. Administrative notice is taken of Last Call’s prior license record for License No. K-21.216759-D as reflected on the Registrar’s public website on April 4, 2014. Such prior license record reflects that License No. K- 21.216759-D is current with three open complaints. License No. K-21.216759- D was suspended for lack of qualifying party from May 7, 2012, through September 13, 2012, and suspended for lack of bond from February 23, 2012, through February 24, 2012. CONCLUSIONS OF LAW The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119.[9] 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). Last Call did not include a plan or provisions in its contract with the Gasches addressing any drainage issues that would arise from the design of their back yard. Last Call failed to provide and ensure proper drainage for the Gasches’ back yard by checking the grade and drainage plans for the community and/or obtaining permission from the HOA to drain the rear portion of the yard into the common wash area. This Tribunal concludes that Last Call violated the charged provision of A.R.S. § 32-1154(A)(3),[10] namely, A.A.C. R4-9-108.[11] The invoice prepared by Last Call and utilized as the parties’ construction agreement did not inform the Gasches that they had a right to file a complaint with the Registrar for alleged violations of A.R.S. § 32-1154(A), did not contain the Registrar’s telephone number and website address, and did not state that complaints must be made within the applicable time period as set forth in A.R.S. § 32-1155(A).[12] This Tribunal concludes that Last Call violated the charged provision of A.R.S. § 32- 1154(A)(13),[13] namely, A.R.S. § 32-1158(B).[14] Investigator Gerold performed a prehearing inspection at 1404 West Brangus Way, San Tan Valley, Arizona 85143, on March 26, 2014, at 10:00 a.m. Investigator Gerold confirmed that the items set forth in the Corrective Work Order had not been corrected. Investigator Gerold testified that the erosion was continuing. Last Call failed to comply with the terms of the Corrective Work Order. Last Call did not establish that the Gasches had refused reasonable access to Last Call. Mr. James acknowledged that Last Call performed no corrective work in response to the Corrective Work Order. This Tribunal concludes that Last Call violated the charged provision of A.R.S. § 32-1154(A)(23).[15] RECOMMENDed order In view of the foregoing, it is recommended that Last Call’s License No. K-21.216759-D shall be suspended for a period of five (5) days. It is further recommended that Last Call be ordered to provide written proof satisfactory to the Registrar before the conclusion of the above five day suspension that Last Call’s contracts fully comply with A.R.S. § 32- 1158(B). It is further recommended that if Last Call fails to provide said written proof or if the Registrar rejects said written proof, then Last Call’s license shall be suspended and remain suspended until the Registrar receives and accepts written proof that Last Call’s contracts fully comply with A.R.S. § 32-1158(B). It is further recommended, in addition to the above-provided penalties, if any, that Last Call pay the sum of $500.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. § 32-1154(D). The failure by Last Call to pay the entire amount of the aforesaid civil penalty on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Last Call’s contractors’ licenses, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Last Call, as defined in A.R.S. § 32-1101(A)(5), unless payment of any outstanding prior civil penalty is tendered. In the event of certification of this 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 the certification.

Done this day, April 11, 2014.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit No. 2 (Application for Contractor’s license and license). [2] See A.A.C. R4-9-104. [3] See Exhibit No. 3 (Complaint and attachments). [4] See Exhibit No. 4 (10/23/13 Corrective Work Order with attached photographs). [5] See Exhibit No. 3 (Complaint with attachments). [6] See Workmanship Standards for Licensed Contractors, June 2009, page 18 “Landscaping should not interfere with established drainage.” [7] See Exhibit No. 5 (Photographs). [8] See Exhibit No. R-1 (Written Answer to Citation and Notice of Hearing). [9] A.A.C. R2-19-119 provides as follows: A. Standard of proof. Unless otherwise provided by law, the standard of proof is a preponderance of the evidence. B. Burden of proof. Unless otherwise provided by law: 1. The party asserting a claim, right, or entitlement has the burden of proof; 2. A party asserting an affirmative defense has the burden of establishing the affirmative defense; and 3. The proponent of a motion shall establish the grounds to support the motion.

[10] 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.” [11] A.A.C. R4-9-108 provides, in pertinent part, as follows: A. A contractor shall perform all work in a professional and workmanlike manner. B. A contractor shall perform all work in accordance with any applicable building codes and professional industry standards. C. All work performed by a contractor in a county, city, or town that has not adopted building codes or where any adopted building codes do not contain specific provisions applicable to that aspect of construction work shall be performed in accordance with professional industry standards.

[12] See Exhibit No. 3 (Complaint and attached invoice). [13] 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.” [14] A.R.S. § 32-1158 provides, in pertinent part, as follows: B. From and after December 31, 2007, 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 shall contain in writing at least the following information: 1. The name of the contractor and the contractor's business address and license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract. 9. 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 at least ten point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative. This paragraph does not apply to a person who is subject to and complies with section 12-1365. C. At the time of signing a contract the owner shall be provided a legible copy of all documents signed and a written and signed receipt for and in the true amount of any cash paid to the contractor by the owner.

[15] A.R.S. § 32-1154(A)(23) provides as follows:

Failure 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. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held.

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