ALJDEC decisions subject to certification as final

2018A-05141-ROC · Registrar of Contractors · 2019-04-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 25, 2019, at 8:30 a.m. APPEARANCES: Deborah Manika (“Complainant”) appeared on her own behalf; Luebkin & Walker Enterprises Inc., DBA: Salt River Irrigation (“Respondent”) appeared through Andrew Walker, its officer/qualifying party. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. According to the Arizona Registrar of Contractors’ (“the Registrar’s”) public website,[1] on June 12, 2015, the Registrar issued License No. ROC 299331, Class CR-21 for Dual Specialty Hardscaping and Irrigation Systems contracting to Respondent. Respondent’s officer/qualifying party is Andrew Lee Walker. 2. On October 30, 2018, Complainant filed a complaint with the Registrar, alleging that Respondent had damaged Complainant’s property at 5109 E. Osborn Rd., Phoenix, Arizona 85018, in 20 itemized respects when it repaired an irrigation line that ran across the property pursuant to a contract with her neighbors. 3. The Registrar obtained a copy of Respondent’s contract with Complainant’s neighbors, the Orange Valley Irrigation Group (“OVI”), which by the time of the hearing had obtained the status of a special water district. The contract did not include the address where the damage to the irrigation line would be repaired, an estimated date of completion, or the Registrar’s telephone number and website address, and did not apprise OVI of its right to file a complaint with the Registrar against Respondent for violations of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A). 4. The complaint was assigned to the Registrar’s Investigator Randy Morris for investigation. Investigator Morris performed a jobsite inspection on November 14, 2018, which Respondent did not attend. On December 6, 2018, Investigator Morris on behalf of the Registrar issued a Directive that required Respondent to perform certain corrective work on or before December 26, 2018, at 5:00 p.m., in relevant part as follows: Complaint Item 8: “Ditch E-W in yard was not filled with enough soil for adequate compaction to safely cushion pipe below for upcoming monsoon rains or flood waters”. Substantiated that the soil where the pipe has been run has settled. The allegation has been verified.

Complaint Item 11: “The 2 foot concrete sloped canopy which surrounded the irrigation valve was removed and has not been replaced as before.” Per the invoice provided by the Respondent, the Respondent was responsible for the installation of a concrete collar around the valve outlet. The allegation is substantiated.

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

5. On January 10, 2019, Investigator Morris performed a compliance inspection. Investigator Morris’ Compliance Jobsite Inspection Notes provide in relevant part as follows: The Respondent did not attend the Compliance Job Site Inspection.

The Complainant wanted to re-open the metal edging complaint issue and the leaks at the east and west sides of the front yard. I could not find any evidence to substantiate the metal edging damage issue during the CJSI. I also could not find any evidence of past or active leaks at the east or west sides of the front yard. I advised the Complainant that once flood irrigation is scheduled to advise me at least one week in advance of the date so that I could observe the yard for any evidence of water leaks. I informed the Complainant that if water leaks were found as a result of the replacement of the irrigation piping through her yard, I would re-open the case, if not, the case would not be re-opened for that one issue.

Compliance Findings: The Respondent did fill in the settled soil within the original pipe trench, however, the sod was not removed, the soil was not properly compacted and the sod replaced to approximately the same visual condition as prior to the directive work. Verified that the directive work does not meet the minimum workmanship standards. Referring to Legal for further action.

6. On January 15, 2019, the Registrar issued a Citation against Respondent’s contractor’s license, charging cause to suspend or revoke the license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158(A), and 32- 1154(A)(22). 7. Mr. Walker on behalf of Respondent filed a timely written answer to the Citation, denying any statutory violation. 8. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 9. A hearing was held on March 25, 2019. Complainant submitted thirteen exhibits, including numerous photographs, and testified on her own behalf. Respondent submitted five exhibits and presented the testimony of two witnesses: (1) Mr. Walker; and (2) Erin Campbell, the president of OVI. Investigator Morris also testified. / / / / Additional Hearing Evidence 10. Complainant and Ms. Erin Campbell live in an older neighborhood that has historic water rights because, when the neighborhood was developed, the original owner conveyed water rights in the form of flood irrigation delivered by Salt River Project (“SRP”). The neighborhood receives its allotted water for flood irrigation from the canal system through a system of underground pipes that users are responsible for maintaining. 11. Although at one time Complainant and her husband took flood irrigation, at some point, Complainant converted her lot to having sprinklers for grass and drip lines for her citrus trees. Complainant’s husband passed away, but she still maintains her own yard, but without flood irrigation. An irrigation pipe that is part of the neighborhood system crosses Complainant’s property. 12. Complainant’s neighbors who were interested in maintaining their irrigation system consulted an attorney to determine how to best repair and maintain the system. A.R.S. § 45-112(A)(8) makes Complainant criminally liable if she does not allow her downstream neighbors who have continued to take flood irrigation to have access to the irrigation line that crosses her property to maintain and repair the line.[2] 13. Respondent submitted a letter from Leigh Campbell of SRP’s Consumer Affairs Ombudsman’s Office, dated January 21, 2019, that chronicled Complainant’s interactions with her neighbors and Respondent about their access to the irrigation pipes on her land over the last two and a half years, that provided in relevant part as follows: As requested, below is a brief summary and timeline of SRP Consumer Affairs (CA) Ombudsman’s involvement with [Complainant] and her neighbors in the [OVI irrigation] district.

• 6/2016: OVI customers contacted CA for help after irrigation was suspended due to [Complainant’s] complaint of flooding in her yard. With CA’s involvement, the suspension was lifted after a test run showed no evident irrigation leaks on [Complainant’s] property. Thereafter, [Complainant] agreed to talk with CA about possible irrigation line repairs.

• 7/2016 – 8/2016: OVI obtained a bid from Premier (irrigation contractor) for irrigation repairs on [Complainant’s] property, all work to be paid by OVI at no cost to [Complainant]. On 8/8/16, OVI advised CA there was a massive root ball and dead raccoon found in the irrigation line causing back pressure & slow flow. After the obstructions were removed, water ran fine and no repairs were needed at that time.

• 6/2017: OVI’s irrigation was suspended again due to [Complainant’s] complaints of flooding. OVI asked for CA’s help to mediate the situation with [Complainant] so she would allow for repairs on her property.

• 7/2017 – 8/2017: With CA’s involvement, flooding was mitigated by SRP running irrigation at a reduced (half) head size. During this time, [Complainant] was insistent on another competitive contractor bid, which was obtained from [Respondent]. After [Complainant] made multiple revision requests to [Respondent’s] contract (termite protection, rich top soil, extended warranties beyond 5 years, special concrete treatment) the deal dissolved and no repairs were made. OVI’s irrigation continued to run at a reduced head size.

• 12/2017 – 1/2018: [Complainant] contacted CA to discuss options to fix the line while there was no water running for winter dry-up. During this time, [Complainant] independently excavated her yard to expose the pipe and locate the break. CA also facilitated scoping the irrigation line with SRP resources to help verify the exact location of the break.

• 2/2018 – 3/2018: [Complainant] made attempts to secure a contractor, but ultimately [Respondent] was the only company willing to perform the work.

• 3/7/2018: [Complainant] signed [Respondent’s] contract and self-created personal liability waiver. To restore OVI’s irrigation and seek closure for a 2 year old issue, CA offered to help repair the concrete in [Complainant’s] yard and provide money for incidentals that were not covered in [Respondent’s] contract. [Complainant] agreed and [Respondent] completed their contract work on 3/13/2018.

º CA took pictures of the work (both in progress and completed).

• 3/14/2018: [Complainant] called CA to report that [Respondent] had removed her yard valve and it was not replaced. Upon CA’s review, all work was completed as stated in [Respondent’s] contract. However, as a customer service gesture and to keep the relations peaceful among neighbors here, CA paid [Respondent] to reinstall another yard valve.

º SRP retains copy of the yard valve contract.

• 3/16/2018: Yard valve re-installed. Scope of work included, “Hand dig and expose main irrigation line. Saw cut pipe and install proper plastic adaption for valve riser. Install new 8” pasture valve with 24” concrete splash pad. Soils will be compacted on all trenches to prevent settlement. Surface areas of the work to be left graded to original surface level. All work related debris to be hauled offsite.”

• 3/19/2018: CA and SRP Water staff went to [Complainant’s] home to check yard valve status, then fully charged the irrigation line and irrigated her yard to ensure yard valve working correctly.

• 3/21/2018: CA emailed [Complainant] in regards to her concern about the yard valve and missing “concrete bowl.” CA advised the “bowl” is outdated. Per [Respondent], “The purpose of a splash pad is to 1) help prevent erosion around a valve and valve riser and 2) Help with water dispersion. [Respondent] installed a 24” diameter pad on an 8” valve. This is a standard size employed for anything smaller than a 10”. The 24” pad leaves 8” of concrete around the valve. A much larger splash pad is unnecessary and can put the infrastructure at risk. The valve riser has minimal stability as it is a vertical pipe with sediment as its lateral support. This can easily create a pendulum effect with much greater top weight than what the riser can support.” Additionally, [Respondent] advised against any homeowner increasing the pad size on an 8” valve.

• 3/23/2018: Per [Complainant’s] insistence and CA’s request, [Respondent] returned to [Complainant’s] property to pack and level and soil. To avoid damaging the sprinkler system just underneath the soil, [Respondent] used hand tapping in some areas and a gas driven packing device in other areas.

• 4/1/2018: [Complainant] called SRP’s Water Contact Center and CA to report her yard flooded again, this time due to leak in the line east of the yard valve, at neighbor’s home.

• 9/25/2018: After nearly 5 months of no contact, [Complainant] called CA to report a “missing concrete collar” from her irrigation valve and various other issues. [Complainant] indicated in a follow-up email that she had been gone the . . . summer.

• 9/26/2018: CA met with [Complainant], at which time nothing was amiss in her yard (irrigation valve intact just buried beneath dirt).

The Consumer Affairs Ombudsman, Leigh Campbell, appreciates [Respondent’s] response and diligence to this matter. . . .[3]

14. Complainant complained at the hearing that Respondent had not left her yard in the condition in which Respondent had found it. In particular, Complainant complained that Respondent had damaged metal edging that was in Complainant’s yard and that it had replaced a 48” splash pad with an 24” splash pad around the valve that it had installed at Complainant’s request. 15. Investigator Morris testified that the metal edging that he saw in Complainant’s yard was old, rusty, and in poor condition. He did not see any damage that was attributable to Respondent’s work. 16. Investigator Morris testified, consistently with his compliance inspection report, that after the initial jobsite inspection, he was later able to find the collar around the irrigation valve and that the collar did not need to be replaced or enlarged. His only criticism of Respondent’s work was its failure to install sod on the backfill that it brought to better compact the soil in Complainant’s yard to comply with the directive. 17. Mr. Walker testified consistently with Ms. Campbell’s account of the statement that she attributed to him in her January 21, 2019 letter. Because a large splash pad can act as a fulcrum and de-stabilize the irrigation system, a 24” splash pad around an 8” valve is standard in the industry. 18. Mr. Walker also testified that it is not standard in the industry to lay sod on backfill that is placed on an excavation to avoid subsidence because the native grasses will quickly grow into the topsoil that Respondent uses for backfill. 19. OVI president Erin Campbell testified that she sees Complainant’s yard every day and that the scar from the backfill has disappeared. Complainant’s yard presently has a uniform appearance. 20. Pursuant to A.A.C. R4-9-117, administrative notice is taken of Respondent’s license history as shown on the Registrar’s public website on this date. Respondent’s license was current and in good standing. No previous discipline has ever been taken against the license and Complainant’s appears to be the only complaint pending against the license. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[4] 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s license by a preponderance of the evidence.[5] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[6] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[7] 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.”[8] 4. The evidence establishes that Respondent’s form contract does not contain all the elements required by A.R.S. § 32-1158(A),[9] especially the jobsite address or location, an estimated date of completion, the Registrar’s website and telephone number, and advice to consumers of their right to file a complaint with the Registrar for a violation of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A). Grounds therefore exist to suspend or revoke Respondent’s license under A.R.S. § 32-1154(A)(12).[10] 5. Complainant did not establish that Respondent committed poor workmanship that could establish grounds to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(3),[11] namely, A.A.C. R4-9-108,[12] with the exception of its failure to properly compact the soil above its repair to the irrigation line in Complainant’s yard. 6. Because construction is not a perfect art, normally a contractor must be allowed an opportunity to remedy poor workmanship before the Registrar will suspend or revoke the contractor’s license. A.R.S. § 32-1154(A)(22) includes among the grounds to suspend or revoke 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.” 7. Respondent established that it provided sufficient fill dirt to address the subsidence over the pipe that it repaired in Complainant’s yard. Respondent also established it is not standard in the irrigation industry to install sod over the topsoil that Respondent uses to backfill its excavation and that the current appearance of Complainant’s yard is that it has been restored to its former condition. 8. Therefore, Complainant did not establish cause to suspend or revoke Respondent’s residential contractor’s license under A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108, or A.R.S. § 32-1154(A)(22). RECOMMENDED ORDER Based on the foregoing, it is ordered that thirty days after the effective date of the final order in this matter, Respondent Luebkin & Walker Enterprises Inc. DBA: Salt River Irrigation’s License No. ROC 299331 shall be suspended. It is further ordered that if, on or before 30 days after the effective date of the final order in this matter, Respondent has provided satisfactory written proof to the Registrar that it has revised its form proposals and contracts to reflect the terms required by A.R.S. § 32- 1158(A), the Registrar shall not suspend Respondent’s license but, instead, shall dismiss Complainant Deborah Manika’s complaint in Case No. 2018- 05141. 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, April 15, 2019.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See A.A.C. R4-9-117 (“In any disciplinary proceeding conducted by the registrar, the licensee’s entire license file including the record of prior citations and decisions may be considered by the registrar in making a decision and order in the case.”). [2] A.R.S. § 45-112(A)(8) makes it a Class 2 misdemeanor if a person “[p]laces or maintains an obstruction interfering with the use of works, or prevents convenient access thereto, when an appropriator of water has the lawful right of way for the storage, diversion or carriage of such water.” [3] Respondent’s Exhibit 1. [4] See A.R.S. § 32-1154(A). [5] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [6] See A.A.C. R2-19-119(B)(2). [7] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [8] Black’s Law Dictionary at page 1220 (8th ed. 1999). [9] A.R.S. § 32-1158(B) provides that 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 after December 31, 2007 must be in writing and must include the following minimum terms: 1. The name of the contractor and the contractor’s business address and the 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 ten point bold type. . . . [10] A.R.S. § 32-1154(A)(12) 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.” [11] 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.” [12] 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.”

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