ALJDEC decisions subject to certification as final

2014A-47-ROC · Registrar of Contractors · 2016-05-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 20, 2016 APPEARANCES: Amir Ephraim Harari (Complainant) appeared on his own behalf. Pinnacle Peak Plastering Inc. (Respondent) was represented by its owner, qualifying party and authorized representative, Fernando Rojo. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ Hearing was convened to determine whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors (Registrar). Evidence and testimony were presented, and based on the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made: FINDINGS OF FACT 1. Complainant is the owner/occupant of a residence located at 27308 North 152th Street, Scottsdale, Arizona 85262. 2. Respondent holds Arizona Contractor’s License No. 231759. 3. On August 16, 2012, Complainant hired Respondent to install the stucco of the new home he was constructing. The contract entered into by the parties specified that Respondent would utilize Western One as the brown coat and a top coat with elastomeric or stretching properties. See Bid Confirmation (specifying “Western One Coat with Elastometric Synthetic Finish”). 4. Respondent agreed that it did not use Western One as a brown coat and instead used Pro Wall. Respondent also acknowledged that it used Ultra Kote UltraFlex as a synthetic top coat, which is an acrylic lacking elastomeric properties. 5. In March 2013, Complainant noted that the stucco had cracked in excess of what he thought was the norm so he contacted his construction consultant Kirk McFarland and they spoke to Fernando Rojo of Respondent about the matter. 6. Because the cracking was under the top coat and difficult to see in daylight without shade, McFarland wet the finished stucco to show Respondent the cracking. Respondent then had a representative of Ultra Kote come to Complainant’s home. Thereafter, some elastomeric paint was applied to one wall to see if that would cover the cracking. 7. That attempted fix was not successful as the cracks appeared through the paint. 8. In April 2013, Complainant hired Quent Augspurger, a mechanical engineer, to perform engineering tests on the stucco and determine the cause of the cracking. During the course of his testing, Augspurger saw hundreds of hair line cracks throughout the surface of the stucco that were more apparent when the weather was cool. He confirmed that Western One coat was not used and that Ultra Kote had practically no elastomeric properties. In December 2013, he authored a report of his findings that contained the following analysis: The thermal testing showed that the most probable sequence is that the cracks occurred first in the “Brown Coat” after the UltraFlex was applied, and because the UltraFlex had insufficient elasticity, the cracks in the “Brown Coat” telegraphed through the UltraFlex. Yes it was cold in December of 2012. However the cold weather is a condition that would be anticipated for normal installations and should not have been a significant factor. In other words, adequate products and adequate application techniques should have resulted in a stucco system capable of being applied without the subsequent cracking.

It is known that in field preparation of the “Brown Coat” mixture, improper ratios of sand and water can cause cracking greater than normal. We will never know exactly what happened during this process at the jobsite. Additionally the use of a “Brown Coat” mixture that did not contain fiberglass reinforcing would weaken the “Brown Coat” substrate and increase the propensity for cracking. Something went wrong with this process: either the wrong product or improper preparation and mixing or a combination.

There do not appear to be any signs of poor adhesion of the “Brown Coat” /Primer /UltraFlex system and there are no signs of crack damage on the Venetian plaster on the interior side of these exterior walls within the residence. The cracking defect is confined to the exterior stucco system.

9. The report concluded in pertinent part: Based on my engineering education, experience in the building industry, my field examination, product research and physical testing performed that was specific to this investigation, it is my expert opinion to a reasonable degree of engineering certainty, that the stucco system fails to meet the June 2009 ROC Workmanship Standard for Stucco and is defective. Because of the failure of Contractor Pinnacle Peak Plastering Inc. to comply with the cited Standard, Contractor was negligent and did not meet the Standard of Care for an Arizona K-36 Plastering Contractor.

10. On January 3, 2014, Complainant filed a complaint with the Registrar. The complaint noted the cracking of the stucco, Ultra Kote’s and Respondent’s attempt to repair one wall without success and the conclusion of the engineering report. On January 28, 2014, Complainant forwarded the Registrar a copy of the engineering report. 11. The Registrar assigned one of its investigators, Steve Klein, to conduct a jobsite inspection on April 8, 2014. Both Complainant and Respondent attended the inspection. 12. During that inspection, Klein testified that both parties agreed the cracking was caused by an issue with the material and wanted to correct it. Klein noted in his view the cracks were hidden beneath the overcoat but ghosting could be seen though the paint. Klein also indicated that there was a crack over the front porch that exceeded 1/16th of an inch that required correction. 13. On April 16, 2014, Klein sent Respondent a Directive from the Registrar. The Directive stated in pertinent part as follows: After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). You are hereby directed to remedy the following violations by the appropriate means:

Complaint #1) Contractor applied stucco to house. Shortly after application was complete, numerous cracks appeared on all sides of the house. This was brought to the attention of the subcontractor and the manufacturer of the stucco product. A. polymer-like paint was applied to one wall to see if it would seal the cracks, but cracks came through and are clearly visible. We have had forensic tests done on the stucco and it has more acrylic properties than the flexible properties that it was advertised to have. There have been no other corrective actions taken.

• All parties agreed, that there’s an issue with the material. • Respondent shall correct by the appropriate means.

The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action.

14. The Directive stated that the above work had to be completed by 5:00 p.m. on May 5, 2015. Klein testified that he extended the deadline for the Directive because both Complainant and Respondent were attempting to settle the matter. 15. On April 10, 2014, Augspurger prepared a supplemental report again concluding that Respondent breached its standard of care as a contractor by (1) failing to follow the contract that specified Western One Coat; and (2) “fail[ing] to repair all cracks in the Brown Coat before priming and applying the UltraFlex as required by the UltraFlex Product Data sheet Exhibit 2 at 3. That product data sheet states that the contractor should “[r]epair all cracks with a patching compound and prime the entire surface before application to avoid telegraphing...” Id. at 5. Finally, the report stated that “[t]he finished application contains excessive hairline cracks thereby failing to meet the [Registrar’s] Workmanship Standards.” Id. at 3. 16. Settlement negotiations were unsuccessful. 17. On October 30, 2014, Klein performed a compliance inspection at Complainant’s home and found the condition of the stucco unchanged from the time of his original inspection. Klein therefore forwarded the matter to the Registrar’s legal department for review. 18. Due to a change in the Registrar’s administration, the case was closed and then reopened some months later. An original Citation was issued and then quashed. 19. On September 22, 2015, the Registrar issued Respondent a Citation. That Citation contained two charges. Charge 1 referenced “[a] violation of Rule 4-9-108, titled ‘Minimum Construction Standards,’ in the Arizona Administrative Code, and thereby of A.R.S. § 32-1154(A)(3).” Charge 2 specified a violation of A.R.S. § 32-1154(A)(22), namely “[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.” 20. Respondent filed a timely answer to the Citation, which stated in pertinent part: We feel that our license[] should not be revoked or suspended nor any other penalties be imposed on Pinnacle Peak Plastering Inc., for the reason indicated. The homeowner and the general contractor would constantly be wetting the walls (exterior residence). We had several meeting with both the homeowner and general contractor. And every time that we would have these meeting they would be wetting the walls, even after being asked and told not to wet the walls d[ue] to the extreme hot weather in the summer time here in Arizona.

21. Complainant, Klein and Augspurger all testified consistent with the facts detailed above. Klein also testified that he agreed the hairline cracking was excessive. 22. Gary Lionberger testified that he is a manufacturer of Western One Coat. He indicated that he visited Complainant’s residence two years ago but left once he determined that Western One Coat had not been used after looking at a sample he collected from the trash. He noted that he also telephoned Rojo and confirmed that Respondent did not use Western One Coat. Lionberger said that overall, “it looked like a good job to me.” He noted that there was a crack over the garage that exceeded 1/16th of an inch and was repairable. 23. Kirk McFarland testified that he only watered the stucco after it was complete with an overcoat when attempting to show Respondent the cracks more clearly. He believed the watering was less significant than rain that would be expected to fall on a house. 24. John Kingery testified that he worked as a painter on the interior of Complainants home and that Complainant’s wife showed him the cracks in the stucco. He noted the cracks were diamond shaped on the stucco and could be seen clearly when the weather was cloudy. Kingery opined that he had never seen that level of cracking in the stucco of a new home. 25. Rojo testified that Complainant and McFarland continued to water the stucco even after Respondent asked them to stop. He believed this was the source of the cracking. He maintained that Complainant and McFarland were both aware that he used UltraFlex as an overcoat. He said this was the first time he had used that product, but that he had never had any problems with an Ultra Kote product before. 26. Elaine Rojo, vice president of Respondent, testified that every time Respondent would meet with Complainant and McFarland after the stucco installation was complete, McFarland and Complainant would water the stucco and that Respondent requested that they stop doing so. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154. 2. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (Rev. 6th ed. 1990). 3. Undisputed credible testimony established Respondent performed substandard work in installing stucco Complainant’s home, including, failing to use the products specified in Respondent’s bid confirmation, leading to both excessive hairline cracking and at least some cracking in excessive of 1/16th of an inch. Thus, Complainant established Respondent’s work on the exterior stucco was not done in a professional and workmanlike manner in violation of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3).[1] 4. An A.R.S. § 32-1154(A)(22)[2] violation is warranted given that Respondent did not complete corrective work on the stucco. Respondent took some corrective action before the complaint was filed, but when that proved unsuccessful did nothing else to correct the problem. Respondent choose instead to blame the problem on Complainant and McFarland and to absolve itself of any responsibility it may have as a contractor. This deliberate inaction is the essence of an A.R.S. § 32-1154(A)(22) violation. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 231759 for a period of seven (7) days. It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(E). It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty. 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, May 6, 2016.

/s/ Suzanne Marwil 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.” 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.” [2] A.R.S. § 32-1154(A)(22) 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.” Emphasis added.

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