ALJDEC decisions subject to certification as final

2015A-2959-ROC · Registrar of Contractors · 2016-03-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 17, 2016 APPEARANCES: Tammy Morse Ory and James Ory (Complainants) appeared on their own behalf. Fosdick Enterprises Inc. dba, K F Builders (Respondent) was represented by its qualifying party Karl Fosdick. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ Hearing was convened to determine whether Respondent violated state law as alleged by Complainants 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. Complainants Tammy Morse Ory and James Ory are the owners/occupants of a residence located at 6736 West Camino De Oro, Peoria, Arizona 85383. 2. Respondent holds Arizona Contractor’s License No. 093472. 3. On November 21, 2014, Complainant James Ory filed a complaint with the Registrar alleging that Respondent had performed substandard work when constructing his new home. All told, the complaint contained 18 items. 4. The Registrar assigned investigator Timothy Pennington to investigate the complaint. 5. Pennington scheduled a jobsite inspection for January 28, 2015, which only Complainant James Ory attended because Respondent was in the hospital. Pennington testified that he substantiated 15 of the 18 of the workmanship issues. 6. On January 28, 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:

Guest bathroom: Peeling paint on top of door Crack in grout that runs from the bathroom into the guest bed room.

Man [sic] room: Crack above window that runs up to ceiling and on ceiling to bathroom

Living room ceiling: Every drywall seam is visible. Cracks in ceiling where ceiling was repaired from A/C water damage

Powder room: Door frame gap between wall and door Blue paint and scratches on white door frame

Living room: Flooring – Areas throughout where grout is missing and/or cracks

Main garage: Drywall crack in ceiling Patio Cracks in ceiling

Guest house: Two back doors stucco patch and paint looks unfinished[.] Stucco around door texture is different[.] Driveway pavers have high and low spots causing lots of water to back up in the garage when water is on driveway. Electrical-Paid $230 for electrical change orders (3 way & fan switches) and never received work[.] One Switch operates nothing and there are no three way switches in Guest house[.] Ceiling drywall damage from A/C leak was repaired and drywall cracked out Living room base board separating from wall

Correct by the appropriate means

7. The Directive contained a completion date of February 28, 2015, at 5:00 pm. During the time period specified in the complaint, Respondent performed some corrective work. 8. On March 16, 2015, Pennington performed a compliance inspection at Complainants’ home. At that time, he found that Respondent had not corrected various items such as peeling paint on the door of the guest bathroom, visible stains/seams on the drywall of the living room ceiling, cracks in the ceiling from water damage and lack of a three-way electrical switch. 9. On March 17, 2015, Complainant James Ory filed an amended complaint, which led to Pennington performing a jobsite inspection for those items on April 7, 2015. Pennington substantiated issues concerning water draining to the garage and garage doors not closing properly. 10. On April 7, 2015, Pennington issued another Directive to Respondent which stated: 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:

Both items on Guest House 1. Paver driveway and garage floor foundation causing water to run In [sic] the garage. The last foot or two of the garage floor is higher than the inside floor, causing it to direct water into, instead of away from the garage. Entire garage floor needs to be pitched so that it directs all water away from the garage. This might also require the pavers to be lowered more so that they will also direct the water down the driveway and away from the garage. 2. Garage shop door does not work properly. The door is not square, there are uneven gaps, left side jam is deranged/broken near the upper hinge from previous attempts to fix door. It appears warped and in places you can’t even put a piece of paper between the door and the jam, which during rain and humidity cause it to swell and you can’t open it. On a normal day this door does not operate properly. The door is so tight that the hatch bolt beveled face cannot strike the striker properly. The only way to close the door is to turn the door handle.

Correct by the appropriate means

11. The Directive contained a completion date of April 17, 2015, at 5:00 pm. During the time period specified in the complaint, Respondent complied with this Directive, but still did not correct the items that were outstanding from the January 28, 2015 Directive. Pennington therefore reviewed the matter to the Registrar’s legal department for review. 12. On July 10, 2015, the Registrar issued a Citation containing two charges. Charge 1 reflected “[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.”

13. On July 10, 2015, Complainant Tammy Morse Ory filed another amendment to the complaint, which was processed under a new case number because a Citation had already been issued in the prior case. This complaint addressed issues regarding the guest house drain line, failure to seal duct work and the fact that half of the house did not cool properly due to an undersized air conditioning unit being installed. 14. Pennington testified that he performed a jobsite inspection to address these issues and substantiated the complaint items. He explained that the parties’ agreement called for a 3.5 ton air conditioning unit, but the unit installed by Respondent’s subcontractor was only 3 tons, without a change order authorizing a different size. Pennington spoke with the supplier of the air conditioning unit and discovered that no modifications could be done to bring the existing unit up to 3.5 tons. 15. On July 30, 2015, Pennington issued a third Directive from the Registrar, which stated: 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:

1. Guesthouse drain lines half in and half out of stucco 2. Guesthouse drain lines -Rusty water and stains in less than a year 3. Guesthouse seams on duct work and handler not properly sealed 4. The invoice stated 3.5 ton unit to be installed and the unit installed is a 3 ton. The room in the south west corner of the home appears to be substantially hotter than the rest of the home.

Correct by the appropriate means

16. This Directive contained a completion date of August 24, 2015, at 5:00 pm. During the time period specified in the complaint, Respondent corrected most of the items in this Directive, but did not address the size of the air conditioning unit. Pennington therefore reviewed the matter to the Registrar’s legal department for review. On September 28, 2015, the Registrar issued a Citation, containing three charges. Charge 1 referenced “Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect that 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. Charge 2 reflected “[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 3 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.” 17. At hearing, Karl Fosdick testified that he had attempted to correct all the issues identified by the Registrar except for the undersized air conditioning unit. He noted that he had used his air conditioning subcontractor before and understood the size of the unit agreed upon in a proposal was subject to change after the subcontractor performed his Manual J measurements. Fosdick emphasized that Respondent had never had any problem with air conditioning units the subcontractor had installed previously. Fosdick also suggested that Respondent had credited Complainants the amount of the three-way switch toward other amounts owed, but provided no documentation of the credit. 18. Complainants introduced a mechanical engineering report dated December 14, 2015, which calculated that their guesthouse “requires 4.5 tons of cooling capacity” and recommends using a 5 ton unit with associated ducts. Exhibit A. 19. Pennington testified that the basis of the Registrar’s A.R.S. §32-1154(A)(2) violation was Respondent’s departure from the proposal by its air conditioning subcontractor, which was accepted by parties and called for a 3.5 ton unit. 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, Complainants 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. Respondent conceded that its subcontractor installed a 3 ton air conditioning unit in Complainants’ guesthouse rather than the 3.5 ton unit the parties had agreed upon. Undisputed credible evidence in the file and confirmed by Pennington at hearing established that the unit installed was too small for the guesthouse and failed to adequately cool a room on the southwest side of the guesthouse. Accordingly, Complainants have met their burden to prove a violation of A.R.S. § 32-1154(A)(2).[1] The Tribunal takes no position on whether the guesthouse required an air conditioning unit that was larger than the 3.5 ton unit proposed by Respondent’s subcontractor and agreed to by Complainants. 4. Undisputed credible evidence contained in the Registrar’s file established Respondent did work of questionable quality in Complainants’ home leading to the issuance of three separate Directives from the Registrar concerning poor workmanship. Thus, Complainants established Respondent’s work on the above items 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] 5. Regarding a violation of A.R.S. § 32-1154(A)(22), although Respondent did correct most issues found by the Registrar, the following issues relative to the January 28, 2015 Directive were not corrected to a minimum standard: peeling paint on the door of the guest bathroom, visible stains/seams on the drywall of the living room ceiling, cracks in the ceiling from water damage and lack of a three-way electrical switch.[3] An A.R.S. § 32- 1154(A)(22) violation is thus appropriate here given Respondent did not correct all workmanship issues or address the air-conditioning issue. A general contractor is responsible for work done by its subcontractors. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Fosdick Enterprises Inc. dba, K F Builders, License No: 093472 for a period of five (5) 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(D). 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, March 4, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] 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 the state or any political subdivision of the state in any material respect that 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.” [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] 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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