ALJDEC decisions subject to certification as final

2014A-3258-ROC · Registrar of Contractors · 2015-10-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 29, 2015, at 8:00 a.m. APPEARANCES: Tina Deeb (“Complainant”) appeared on her own behalf; Checks Epoxy LLC (“Respondent”) was represented by Jared M. Scarbrough, Esq., Holm, Wright, Hyde & Hays, PLC. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On June 29, 2014, the Arizona Registrar of Contractors (“the Registrar”) issued License No. CR34.293068-D for painting and wall covering to Respondent. 2. On August 13, 2014, Complainant filed a complaint with the Registrar about the metallic epoxy floor coating that Respondent had applied in her residence at 860 W. Rhonda View Rd., San Tan Valley, Arizona 85013. 3. Specifically, Complainant alleged that Respondent had left areas where epoxy was missing in the hallway, bathroom, living room, kitchen, and game room, mop lines in some areas, tool marks in the coating in multiple rooms, drip lines of dirty water over an open wall, and areas where epoxy was missing near the walls of her residence. In an attached letter, Complainant stated that she was a single mother of three daughters and that the family had to live in a camper because Respondent had not left the residence in a habitable condition. 4. The Registrar assigned the complaint to its Investigator Randy Cason for investigation. Investigator Cason performed a jobsite inspection and on November 7, 2014, issued a directive that required Respondent to correct all five items of the complaint by appropriate means on or before 5:00 p.m. on November 26, 2014. 5. Investigator Cason’s directive noted areas of deficiencies in all the areas where the metallic epoxy floor had been applied except for the front bedroom on the west side of the house. 6. Investigator Cason’s directive also noted that in the kitchen, “the epoxy finish floor surface has bubbled up and cracked.” 7. Respondent elected to reapply the metallic epoxy coating to all areas of the floor in the residence where Inspector Cason had found deficiencies, but not to the floor of the front bedroom, to comply with the November 7, 2014 directive. 8. On December 4, 2014, Investigator Cason performed a compliance inspection at Complainant’s residence. Investigator Cason’s notes of his December 4, 2014 compliance inspection describe the following remaining deficiencies in the metallic epoxy floor coating: I found areas throughout the residence [where] debris is imbedded into the clear coat finish. Some of these areas give off a white ring (bubble appearance) around the debris. Also found debris under the epoxy color coat which looks like pumps. (Pic’s 2, 7, 8, 11, 12, 13, 15, 16, 18 and 21)

Found areas throughout the residence [where] the respondent had got the epoxy color material and clear coat material on the walls, baseboards, doors, door casings and door jambs. I also found epoxy material on the base of the hallway bath tub. (Pic’s 3, 4 6, 9, 10, 14, 19 and 20)

Picture 17 shows [where] the respondent had put tape on the wall. The respondent said during this inspection, when he removed the tape the paint came off with it.

The complainant took us up to the front of the house to the west bedroom. In this room the respondent did not install the new epoxy color material. The respondent had left the original color. The respondent stated he did this because he was not directed to make any corrections in this room. The respondent had stopped the new epoxy color under the door just at the end of the door jamb on the inside of the room (Pic 5) now the epoxy floor color is not uniform[] at this location. When the respondent determined to apply a new epoxy floor color finish throughout the residence, he should have also completed this room with the new color.

9. Complainant requested a hearing. On May 15, 2015, the Registrar issued a Citation for Alleged Violation of Rule 4-9-108[1] and A.R.S. § 32-1154(A)(3).[2] Respondent filed a timely written answer to the Citation, denying any violation. 10. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 11. An evidentiary hearing was held on September 29, 2015. Complainant presented Investigator Cason’s testimony and testified on her own behalf. Respondent submitted eight exhibits that each had numerous subparts and for the most part consisted of photographs taken at various stages of the construction project. Respondent also presented the testimony of three witnesses: (1) Stephen William Klingler, a forensic expert in construction; (2) Douglas Keith Check, Respondent’s qualifying party and managing member; and (3) Dale Breese, an epoxy floor covering contractor. Hearing Evidence 12. Investigator Cason testified that four defects remain in the corrective work that Respondent performed at Complainant’s residence: (1) There is a crack around the kitchen island that Respondent filled to apply the epoxy floor coating; (2) The epoxy floor coating in the front bedroom does not match the coating in the rest of the residence; (3) There is debris in the clear coat finish of the epoxy floor coating throughout the residence; and (4) There is epoxy floor coating on some of the doors, door jambs, door casings, walls, and baseboards. The Crack in the Slab around the Kitchen Island 13. Investigator Cason testified that there was a crack in the slab around the kitchen island that was at least ¼” wide. The top of the epoxy floor coating showed a slight indentation. Investigator Cason stated that Mr. Check said that Respondent had prepared the surface of the crack before applying the epoxy finish. 14. Investigator Cason opined that by filling in the crack before applying the epoxy floor coating, Respondent had accepted the surface and thereby became responsible for any deficiencies that caused the concrete slab to crack. 15. Mr. Klingler has worked as a forensic expert in construction since 1995, and has been in construction since the early 1970’s. Mr. Klingler testified that he has hands-on experience in all kinds of concrete work and has provided expert opinions in dozens of cases involving alleged concrete deficiencies. Mr. Klingler testified that he held contractor’s licenses in Arizona, California, and New Mexico.[3] 16. In December 2013, Complainant began constructing a 2,000 square foot addition onto her residence, which previously had been only 1,650 square feet. All the areas where Investigator Cason noted deficiencies in the metallic epoxy floor coating were in the addition, including the bedroom, game room, hallway, and kitchen. 17. Complainant testified that she acted as owner/general contractor in the construction of the addition. Complainant testified that for fifteen years, she was employed as the district manager for True Blue, a construction company in California that was based in Washington, where she supervised employees and performed site inspections to evaluate the overall performance of subcontractors and their compliance with OSHA regulations. 18. Complainant testified that her husband and neighbor Dave hired the contractors who performed grading and who poured the slab for the addition because she was working in California at the time. Complainant did not know who performed the grading or poured the slab or whether they were licensed contractors. 19. Mr. Check testified that the slab for the addition was 2” or 3” higher than the original slab. Because Complainant’s contractor did not show up, she asked him to grind the hump between the two slabs.[4] Mr. Check testified that Dave performed the plumbing and electrical and filling all the cracks except in the one in the kitchen in the slab for the new addition. 20. Mr. Check testified that he helped out Dave by filling the crack around the kitchen island as a favor, that at that time, he told Complainant that Respondent was not responsible if the crack reappeared because it did not warranty cracks, and that she agreed to his conditions. Mr. Check testified that Respondent did not fill any other cracks. 21. Mr. Check pointed out that on July 13, 2014, Complainant signed Respondent’s proposal to perform samples, which included the limitation that “[d]ue to many variables associated with concrete[,] [t]his warranty does not warranty any cracks, cracking or crack repair of any nature whatsoever.”[5] Respondent’s proposal to apply the metallic epoxy coating included the same limitation, but Complainant did not sign the proposal.[6] 22. Investigator Cason opined that Respondent’s warranty limitation was not sufficiently specific to allow it to escape liability for the crack in the slab. 23. Respondent submitted aerial photographs from Google Earth of Complainant’s residence before and after the construction of the addition, which showed the lot to be very flat.[7] Mr. Klingler testified that the elevations on Google Earth showed that the elevations on the west side of Complainant’s back yard where the addition is located was 9’, on the east side of the back yard was 8’, on the lot next door on the west side was 10’, and on the front yard was 9’. 24. Mr. Klingler testified that the post-construction aerial photograph showed an L-shaped path or depression that appeared to be muddy. Mr. Klingler testified that poor drainage frequently is the cause of concrete cracking or distress. Mr. Klingler testified that Complainant’s back yard is now dish-shaped and that water will not drain away from the slab for the addition. Mr. Klingler opined that, therefore, the grading for the addition did not meet code. 25. Mr. Klingler testified that water will find a path, which for Complainant’s residence appears to be the break point between the original slab and the slab for the addition. Water will wick into the foundation and when the soil absorbs the moisture, it will either expand or collapse. The movement of the soil has caused the slab for the addition to crack. 26. Investigator Cason acknowledged that at the prehearing inspection, he saw four new areas where the epoxy floor coating showed bubbles and evidence of cracks in the surface of the slab of the addition. Investigator Cason testified that the area where the new slab for the addition tied in to the existing slab also showed bubbling in the epoxy floor coating.[8] 27. Mr. Klingler testified that Investigator Cason’s testimony about and photographs of bubbling in the epoxy floor coating along new cracks in the slab of the addition and along the tie in between the new and old slabs indicated moisture and water infiltration in the new slab. 28. Investigator Cason acknowledged that he did not see any control joints in the slab for the addition and that most governmental authorities required in their construction codes control joints every 10 or 20 feet. 29. Mr. Klingler testified that even if there is proper drainage, a slab must have control joints to allow it to crack in predetermined areas. Mr. Klingler testified that the slab for the addition did not meet code because it lacked control joints. 30. Mr. Klingler testified that Respondent performed a cosmetic repair that consisted of merely smoothing the crack to prevent broadcasting of the crack through the metallic epoxy floor coating. Repair of the crack would be beyond Respondent’s expertise and the scope of its license. Mr. Klingler testified that there were too many unknowns for Respondent to thereby become responsible for the slab, including the depth of the crack and whether there was reinforcement on the slab. Mr. Klingler stated that making Respondent responsible for the slab under the circumstances was akin to making a painter who puts spackle in a crack responsible for major structural deficiencies in a wall. 31. Mr. Klingler testified that a general contractor has a duty to call subcontractors’ attention to any known deficiencies. Mr. Klingler testified that under his understanding of the accepting the surface doctrine, a subcontractor is responsible if he tries to fix an underlying deficiency or if the general contractor or homeowner is unaware of the deficiency and the subcontractor knew or should have known that the underlying surface was not adequate to allow the subcontractor’s work to meet applicable standards. The Debris in the Clear Coat on the Epoxy Floor Coating 32. The aerial photographs of Complainant’s residence show that it is on a dirt road surrounded by a dirt yard that does not have any landscaping and that there is a dirt lot across the road.[9] 33. Mr. Check testified that because epoxy stays gooey for at least 10 or 12 hours after it is applied, it is hard to completely keep dust out of the finished product. The clear coat is the same chemical composition as the color coat. Mr. Check testified that dust is more noticeable in the clear coat. 34. Mr. Check testified that he instructs clients not to open their windows or to run their HVAC systems while the floor is drying. He testified that, in addition, he attempted to seal at least some of Complainant’s windows and the bottom of some of the doors with painters or other tape while the second floor was drying.[10] Mr. Check testified that he asked Complainant for the key to the front door to make sure that no one opened the door while the floor was drying, but she refused. Mr. Check testified that most of the dust particles in the epoxy floor were near the front door. 35. Mr. Check testified that because Complainant does not have landscaping and lives on a dirt road, there is more dust that comes into the house. There is nothing that anyone can do that will completely prevent dust from settling into an epoxy floor coating. 36. Mr. Check brought in as demonstrative exhibits sample boards that he made on previous jobs to show prospective clients. The sample boards were not totally smooth and showed bumps from dust settling in the epoxy coating. Mr. Check testified that he told Complainant that her floor would be similar to what was on the sample boards. 37. Complainant testified that she did not remember seeing the same sample boards, that she thought the samples were smaller, and that she was never informed that the floor would not be perfectly smooth. 38. Investigator Cason testified that although he has never applied or witnessed the application of an epoxy floor coating, he has inspected two or three such coatings a year for the nine years that he has been employed as one of the Registrar’s investigators. Investigator Cason testified that some of the debris in the epoxy floor coating at Complainant’s house was similar to Respondent’s sample boards and some was not much worse, but definitely worse. 39. Mr. Breese testified that he has been selling epoxy floor coating materials and applying epoxy floor coatings for 23 years. He was first licensed to apply epoxy floor coatings in Arizona in 2001.[11] Mr. Breese testified that he gives regular seminars on the application of epoxy floors and represents many manufacturers of epoxy floor coatings. Mr. Breese testified that he has undertaken similarly sized jobs and used similar products to what Respondent used for Complainant’s floor at least 150 times. 40. Mr. Breese testified that there are always dust particles in finished epoxy floor coatings, even in a clean room with positive air flow. Mr. Breese testified that a contractor does what he can to keep dust out of the area and then hopes for the best. Because epoxy floors stay wet so long, however, there is always some dust in the finish. 41. Mr. Breese opined that the finish on Complainant’s floor met applicable industry standards.[12] The Floor Coating in the Front Bedroom 42. Between the first and second application of the metallic epoxy floor coating, Investigator Cason told Respondent that it could leave a seam between the front bedroom and the rest of the house. Complainant agreed that Respondent could leave a seam at the entrance to the front bedroom. 43. Investigator Cason testified that the front bedroom floor was a different color from the rest of the floor and did not comply with the Registrar’s or industry standards. Investigator Cason opined that if Respondent could not match the color and pattern, it should have replaced the entire epoxy floor coating. 44. Mr. Check testified that Complainant selected butterscotch and cappuccino for the colors in her floor. Mr. Check testified that after the primer coat, the two colors of the metallic color coat are mixed in buckets, stirred, and applied in a single process going down rows over the floor from one end of the house to the other. The result of the process is that the colors are random and the patterns in every job are unique. 45. Mr. Check testified that he used the same paint product and colors in both applications. 46. The photograph that Investigator Cason took at the compliance inspection shows very similar colors but very different patterns at the seam in the doorway between the floor in the front bedroom and the floor just outside the front bedroom.[13] The Epoxy Floor Coating on the Doors, Door Jambs, Door Casings, Walls, and Baseboards

47. Mr. Check testified that Respondent would have taken care of the epoxy on the doors, door jambs, door casings, walls, and baseboards if Complainant had allowed him access. Mr. Check testified that touchup would take about an hour. 48. Mr. Check testified that Respondent was delayed for a week from starting corrective action to comply with the Registrar’s November 7, 2014 directive because other subcontractors were installing drywall and removing a toilet to fix a leak at Complainant’s residence. Mr. Check testified that when Respondent finished reapplying the epoxy coating, it still had one day left of the time that the directive had allowed. Mr. Check testified that, nonetheless, Complainant did not allow Respondent to return to perform cleanup to finish its repairs. 49. Administrative notice is taken of the Registrar’s public website, which shows that as of this date, Respondent’s license is current and in good standing. This appears to be the only complaint that is pending against Respondent’s license. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[14] 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[15] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[16] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[17] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[18] 4. Complainant was not a credible witness because her statements at various times are not consistent. For example, Complainant in the complaint that she filed with the Registrar grossly exaggerated the deficiencies in the epoxy floor coating and minimized her own role and construction expertise. At the hearing, she claimed to be competent to act as her own general contractor in the construction of the addition. In the complaint, Complainant claimed to be a single mother but at the hearing, testified that her husband had hired and supervised subcontractors to help her, as general contractor, construct the addition. 5. Mr. Check’s and Mr. Breese’s testimony established that the application of epoxy floor coatings is a very specialized and arcane area of contracting. Investigator Cason acknowledged that his expertise in the application of epoxy floor coatings was limited. Investigator Cason did not know or take into account Complainant’s role of general contractor on the project. Respondent established that Mr. Check and Mr. Breese had better qualifications and greater expertise than Investigator Cason in the area of application of epoxy floor coatings. 6. As a general principle in construction, a subcontractor who performs work on top of a surface prepared by another accepts the surface. The subcontractor should have inspected the surface for any flaws or defects that would affect the work he proposes before performing the work. If he found the surface to be unacceptable, he should have called any defects to the owner’s or general contractor’s attention so that the owner can choose whether to pay for the defective surface to be corrected or if the owner is not willing to pay to correct the surface, the contractor may obtain an explicit warranty disclaimer.[19] 7. In this case, Complainant acted as her own general contractor. By so doing, Complainant took responsibility for coordinating trades and for providing adequate grading, drainage, and a proper foundation on which following trades could perform their work. Respondent only filled the crack by the island in the kitchen as an accommodation to Complainant. Complainant signed a document that informed her that Respondent would not be responsible for repairs of concrete cracks. Under the circumstances of this case, Complainant did not establish that Respondent accepted the surface of the slab or that its cosmetic repair of the crack near the kitchen island furnishes cause to discipline its license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4- 9-108. 8. Respondent established that the amount of the dust in the epoxy floor coating at Complainant’s house is very similar to the samples that she was shown when she selected the floor, that a certain amount of dust in the clear coat is expected and unavoidable, and that the finish of the second epoxy floor coating that Respondent applied complies with industry standards for metallic epoxy floor coatings. Therefore, Complainant did not establish that the finish of the metallic epoxy floor furnishes cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. 9. The patterns on the epoxy on either side of the seam in the doorway between the front bedroom and the rest of house are different, even though the colors are very similar. Inspector Cason told Mr. Check that Respondent could leave a seam in its repairs and Complainant accepted a seam. Nonetheless, the difference in patterns is very noticeable. Mr. Check knew that when Respondent applied the second coating, it would not be possible to match the color or pattern due to the method of applying the two colors of the epoxy. Therefore, Complainant established that the two different patterns on each side of seam in the doorway to the front bedroom furnish cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. 10. Complainant established that the metallic epoxy floor coating on the doors, door jambs, door casings, walls, and baseboards furnishes cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the order in this matter, License No. CR34-293068-D of Respondent Checks Epoxy LLC shall be suspended for a period of one day. 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 five days from the date of that certification. Done this day, October 15, 2015.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] 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.” [2] 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.” [3] According to the Registrar’s public website, Mr. Klinger does business as Klingler Construction and is the qualifying party for License Nos. B.162212-R for residential general contracting, B-1.219430-C for commercial general contracting, and CR42.241518-D for dual roofing. [4] See Respondent’s Exhibit 4 (Photograph). [5] Respondent’s Exhibit 2 at 8 (Contract attached to Complainant’s Complaint filed with the Registrar). [6] See id. at 8. [7] See Respondent’s Exhibit 6a and 6b. [8] See Respondent’s Exhibit 1a and 1b. [9] See Respondent’s Exhibit 6a and 6b. [10] Mr. Check identified the tape in some of the exhibits that Respondent submitted. See Exhibit 8a, 8c, and 8g. [11] According to the Registrar’s public website, Mr. Breeze is a member of Southwest Coating Solutions, LLC, to whom the Registrar issued License No. CR-5.234619-D for dual epoxy floor covering on June 18, 2007. Southwest Coating Solutions, LLC is exempt from the requirement for a qualifying party. [12] Because Complainant would not allow Respondent to attend the prehearing inspection or for its experts to inspect the floor, however, Mr. Breese did not have an opportunity to inspect the floor and his opinion was based on the photographs. [13] See Respondent’s Exhibit 5e. [14] See A.R.S. § 32-1154(A). [15] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [16] See A.A.C. R2-19-119(B)(2). [17] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [18] Black’s Law Dictionary at page 1220 (8th ed. 1999). [19] No Arizona authority addresses the Registrar’s policy that a subsequent contractor who accepts a surface prepared by an earlier contractor also accepts full responsibility for the outcome. The policy is supported by case law from other jurisdictions. See generally cases cited at “Duty of Contractor to Warn Owner of Defects in Subsurface Conditions,” A.L.R.3d 1213 (1976). A contractor who knew or should have known of a defect in the surface does not perform construction in a workmanlike manner if the contractor fails to notify the owner of the defect and the construction later fails due to the defective surface. See, e.g., Parker v. Thornton, 596 So. 2d 854, 858 (Miss. 1992); Lewis v. Anchorage Asphalt Paving Co., 535 P.2d 1188, 1199 (Alaska 1975). The principle is based on common sense and a need for fair dealings between contractors and property owners: For the requirements of public order and the obligation implicit in every contract that the work will be done in a good and workmanlike manner would compel us to reject a contention that an undertaker is not responsible for building upon a site which he knows to be defective. In such a case, the barest standards of care would require him to bring the defect to the attention of the owner before proceeding. The owner would then have an opportunity to make the indicated adjustment in the contract to provide against the defective soil condition of which he had no prior knowledge. . . . Wurst v. Pruyn, 202 So. 2d 268, 271-72 (La. 1967) (citation omitted).

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