ALJDEC decisions subject to certification as final

2014A-5166-ROC · Registrar of Contractors · 2016-07-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 21, 2016 APPEARANCES: John D. Poole (Complainant) appeared on his own behalf along with his wife Katherine Poole. Exterior Coating Solutions LLC dba Rhino Shield of Arizona (Respondent) was represented by its qualifying party and managing member, Christian Giovanello. 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 425 East Thorne Ridge, Cottonwood, Arizona 86326. 2. Respondent holds Arizona Contractor’s License No. 250232. 3. On December 23, 2015, Complainant filed a complaint with the Registrar alleging that Respondent had performed substandard work when painting the exterior of his home in September 2009. 4. The Registrar assigned investigator Jim Diamond to investigate the complaint. 5. Due to the passage of time, Diamond had to determine whether the Registrar still had jurisdiction over the Complaint. Diamond discovered that Respondent had returned to Complainant’s home every year since 2009 to attempt to resolve the problems with the paint, and had done work on Complainant’s home within two years of the filing of the Complaint. Accordingly, the Registrar determined that it had jurisdiction over the Complaint pursuant to A.R.S. §32-1155(A).[1] 6. Diamond scheduled a jobsite inspection for April 5, 2015, which both Complainant and Respondent attended. Diamond testified that he substantiated that the paint on the exterior of Complainant’s house was cracking and blistering. 7. On April 29, 2015, Pennington 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:

The paint applied to the home and the garage is blistering, cracking and peeling.

The respondent is to correct the condition in an appropriate manner.

8. The Directive contained a completion date of May 13, 2015, at 5:00 pm. During the time period specified in the Directive, Respondent attempted corrective work, but the problem persisted. Diamond indicated in his jobsite inspection notes that he believed that both Complainant and Respondent had been diligent in their efforts to fix the problem. 9. On December 9, 2015, Diamond returned to Complainant’s home, learned that Complainant had performed roof repair and work on the parapets to address possible moisture issues and that Respondent had again attempted corrective work without success. Because the matter was not resolved, he forwarded the file to the Registrar’s Legal Department for review. 10. On January 26, 2016, 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.” 11. Christian Giovanello admitted on the record that paint was “blistering off the project.” He indicated that he was at a loss for why this occurred as Respondent had painted hundreds of homes in the same fashion with the Rhino Shield product without any problems. He said that only a handful of the other homes had contained Rastra Block. He speculated that the difficulty with the adherence of the product stemmed from the porous nature of the Rastra Block on Complainant’s home, along with cracks in the parapets and roof issues that allowed moisture to enter Complainant’s home. Giovanello emphasized that Respondent applied the Rhino Shield product used in the painting of Complainant’s home according to the manufacturer’s specifications. 12. Katherine Poole testified that she believed Respondent’s crew caused the problem by power-washing the house and then painting it before it had adequate time to dry. She indicated that the prior paint used on the house had never had this problem. Poole said it was disheartening to see paint blistering, cracking and falling off every day and Complainant just wanted it fixed. 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 evidence established that Respondent painted Complainant’s home in such a way that the paint blistered. Respondent admitted that this workmanship deficiency existed. Thus, Complainant established Respondent’s painting job 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).[2] 4. Respondent attempts to blame the blistering paint on the porous nature of the Rastra Block and on several, now fixed issues with the Complainant’s parapets and roof. The record is undisputed that Respondent accepted the Rastra Block surface when painting the exterior of Complainant’s home. 5. As a general principle in construction, a contractor who performs work on top of a surface prepared by another contractor accepts the surface. The second contractor should inspect the surface for any flaws or defects that would affect the work he proposes before performing the work. If he finds the surface to be unacceptable, he should call any defects to the owner’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 subsequent contractor may obtain an explicit warranty disclaimer.[3] 6. Regarding an A.R.S. §32-1154(A)(22) violation[4], while its clear that Respondent was not able to fix the problem with the paint blisters and cracks within the time specified in the directive, it is equally evident that Respondent made numerous, good faith and diligent efforts to perform corrective work. On these facts, imposing a civil penalty is unwarranted and would not serve any regulatory purpose. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Exterior Coating Solutions LLC dba Rhino Shield of Arizona’s License No. 250232 for a period of one (1) 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 40 days from the date of that certification. Done this day, July 25, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] A.R.S. § 32-1155(A) provides in pertinent part that “On the filing of a written complaint with the registrar charging a licensee with the commission, within two years before the date of filing the complaint, of an act that is cause for suspension or revocation of a license, the registrar after investigation, in its sole discretion, may issue a citation directing the licensee, within ten days after service of the citation on the licensee, to appear by filing with the registrar the licensee's written answer to the citation and complaint showing cause, if any, why the licensee's license should not be suspended or revoked.” (Emphasis added). [2] 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.” [3]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,” 73 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).

[4] 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.”

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