ALJDEC decisions subject to certification as final

2018A-05710-ROC · Registrar of Contractors · 2019-05-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 06, 2019 at 8:30 AM.[1] APPEARANCES: Nicholas Favia appeared on behalf of Nicholas Development Group LLC (“Complainant”) with Steve Lawton and Joshua Champion as witnesses. Brian Davidson appeared on behalf of Riggs Companies LLC (“Respondent”). ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar of Contractors (“ROC”). FINDINGS OF FACT Background and Procedure 1. Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior License record as reflected on the ROC’s public website on May 06, 2019. According to the site, on October 24, 2017, the ROC issued License No. 316374 Specialty Dual CR-9 Concrete contracting license to Respondent.[2] The license is currently active and renewed through October 31, 2019.[3] Carl Wayne Riggs is the Qualifying Party on this license.[4] Respondent’s address of record for the license is 118 W Hatcher Rd. Phoenix, AZ 85021-0285.[5] Respondent has an active $57,500.00 surety bond on the licensed issued by Platte River Insurance Company effective October 16, 2017.[6] There is no prior discipline noted for the license, save one open complaint which is presumably Complainant’s. 2. Champs Family Automotive Center (“Champs”) is commercial property located at 17141 N Dysart Rd., Surprise, Arizona 85378 and is the customer involved in the underlying project. Complainant is the general contractor and Respondent is a subcontractor on the project. The project itself was for the construction of a new commercial vehicle repair shop. 3. On or about February 12, 2018, Complainant and Respondent entered into a $127,900.00 contract to surface the interior of Champs with new concrete.[7] 4. On March 29, 2018, Complainant obtained a building permit from the City of Surprise for the project.[8] 5. Per the complaint, work on the project commenced on April 10, 2018, and ceased on October 02, 2018.[9] 6. On December 02, 2018, Complainant submitted a complaint to the ROC against Respondent’s License No. 316374 alleging poor workmanship on their project.[10] The ROC received the complaint on December 03, 2018, whereby it was designated Complaint No. 2018-05710 and assigned to Senior Construction Investigator Steve Lawton. 7. On December 14, 2018, Investigator Lawton issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on January 18, 2019, at 11:00 a.m.[11] 8. On January 18, 2019, Investigator Lawton presented to the project site for his inspection. Both parties were present. Investigator Lawton conducted a review of the contract executed between the parties and inspected the work that had been performed on the project to date. He also took photographs of the project site.[12] When he was finished, Investigator Lawton drafted his Inspection Notes.[13] 9. On February 04, 2019, Investigator Lawton issued a Directive from the Registrar to Respondent because he substantiated Complainant’s allegation that Respondent’s workmanship on the project did not meet the ROC’s minimum workmanship standards.[14] Respondent was put on notice that it had until 5:00 p.m. on February 22, 2019, to notify the ROC of its compliance with the Directive or face discipline pursuant to Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22), and 32-1154(E).[15] 10. Respondent made no remediation efforts between February 04, 2019, and February 22, 2019, nor did Respondent request that its compliance deadline be extended. 11. On March 05, 2019, Investigator Lawton forwarded the matter to the ROC’s legal department whereby he suggested that Respondent be cited under Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32- 1154(A)(3) and 32-1154(A)(22).[16] 12. On March 07, 2019, the ROC issued a Citation and Complaint to Respondent under Ariz. Rev. Stat. § 32-1155(A).[17] Respondent was given until March 22, 2019, to respond with its Answer.[18] 13. The ROC received Respondent’s Answer on February 21, 2019.[19] 14. On March 12, 2019, the ROC referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on May 06, 2019. Per the Notice of Hearing the issue to be determined is whether the ROC has cause to discipline Respondent’s license based on the following charges: Charge 1: A violation of Rule 4-9-108, titled “Minimum Construction Standards,” in the Arizona Administrative Code, and thereby a violation of A.R.S. § 32-1154(A)(3). Charge 2: A violation of A.R.S. § 32-1154(A)(22) (“Failure 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. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive.”). Hearing Evidence 15. Complainant called Steve Lawton, Nick Favia and Joshua Champion as witnesses, and submitted thirty exhibits into the record. Respondent called Brian Davidson as a witness and submitted nine exhibits. The ROC’s electronic hearing file and Notice of Hearing were also admitted into the record. Steve Lawton’s testimony 16. Investigator Lawton testified that when he reported for his jobsite inspection of the project on January 18, 2019, it had rained the prior evening and he observed visible amounts of water pooling inside Complainant’s garage. No drainage was observed. 17. Per Investigator Lawton, remediation for the concrete work on the project was within the scope of Respondent’s and no additional permits would have been required. 18. Investigator Lawton testified that he spoke with Respondent regarding compliance with the Directive prior to its deadline, and was told that Respondent preferred to move forward with a hearing instead of addressing the action items outlined in the ROC’s Directive. Nick Favia’s testimony 19. Per Mr. Favia, Complainant and Respondent had a preconstruction meeting with Complainant’s architect to discuss building use and reiterate the importance of avoiding curling. 20. Mr. Favia testified that the concrete Respondent poured had to be cured for twenty-eight days. It was after this period that his customer reported the pooling issue, which he reported to Respondent sometime in June 2018. 21. Mr. Favia testified that Respondent reported to Champs’ with him sometime in early-August 2018. A crack in the concrete was observed and he was told to “keep an eye on it” but no remediation efforts were ever made by Respondent. 22. Mr. Favia played three short video clips depicting water being sprayed directly into the center of the slab and pooling, water retaining after being squeegeed, and rain falling down over the garage and pooling on the shop floor. Mr. Favia specifically noted that the pooling issues are only being experienced in the back half of the shop. Joshua Champion’s testimony 23. Mr. Champion testified that he is the owner of Champs. 24. Per Mr. Champion, in early-November 2018, he had a meeting with Respondent whereby he was told, “We’re going to fix it.” After multiple attempts to follow-up after the meeting, however, none of his calls were returned. 25. Mr. Champion testified that his employees mop the shop floor weekly, and it takes ten employees approximately one and a half hours to squeegee the garage. Mr. Champion further testified that when it rains additional water is blown into the garage by the wind. 26. Mr. Champion shared that even though his staff is diligent about squeegeeing, he has growing concerns regarding mold and mildew. 27. Per Mr. Champion, the constant pooling water has pulled up sealant. Brian Davidson’s testimony 28. Mr. Davidson argued that his company’s workmanship was not the cause for the pooling water issue Champs is experiencing, rather there an inherent design flaw. Mr. Davidson testified that his company did not design the layout of Champs garage, Complainant’s architect did.[20] Mr. Davidson argued that Complainant’s architect was aware, or should have been aware, of the alleged flaw prior to Respondent laying the concrete as designed.[21] 29. Per Mr. Davidson, his company was responsible for following the design plans as issued by Complainant’s architect, which they did. To that end, Mr. Davidson testified that on March 07, 2018, he confirmed and verified with Complainant that the slab that was to be placed was to be flat and have no slope or pitch in any direction.[22] 30. Mr. Davidson testified that his company adheres to American Concrete Institute (“ACI”) and American Society of Concrete Contractors (“ASCC”) standards as it relates to commercial pouring of concrete on construction projects, and that his contract with Complainant specifically referenced ACI adherence.[23] 31. Per Mr. Davidson, on April 10, 2018, the slab was installed. Mr. Davidson alleged that Complainant failed to test for flatness within seventy-two hours per ACI guidelines. Mr. Davidson argued that Complainant’s failure added to the slab’s loss in hydration and contributed to its shrinkage. 32. Mr. Davidson testified that the exposed exterior slab had untreated sawcut joint with no caulking, per design, which resulting in curling at all joint locations and created low spots.[24] Mr. Davidson opined that the pooling of water occurred because the slab had no pitches to create drainage. 33. Mr. Davidson testified that Complainant’s architect’s design could have taken steps to reduce curling and pooling through design specifications, but did not. Mr. Davidson argued that if a slab is not sloped to drain water that water will collect. 34. Mr. Davidson argued that had his company not followed Complainant’s design plan that they would have been in violation of Ariz. Rev. Stat. § 32-1154(A)(2). Mr. Davidson further argued that there was no violation of Ariz. Rev. Stat. § 32-1154(A)(22) as no action was required on Respondent’s part because the action items outlined in the ROC’s Directive were not Respondent’s fault or responsibility to remediate. CONCLUSIONS OF LAW 1. This matter lies within the ROC’s jurisdiction and has been properly brought before the Office of Administrative Hearings for adjudication.[25] 2. The ROC may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.[26] 3. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[27] Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.[28] 4. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[29] 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.”[30] 5. Ariz. Admin. Code R4-9-108 holds, in pertinent part, that a contractor shall perform all work in a professional and workmanlike manner and that a contractor shall perform all work in accordance with any applicable building codes and professional industry standards. 6. Ariz. Rev. Stat. § 32-1154(A)(22) holds, in pertinent part, that a holder of a license may not fail to take appropriate corrective action to comply with this chapter or rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. The ROC has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award. 7. Ariz. Rev. Stat. § 32-1154(E) holds, in pertinent parts, that the ROC may impose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. It also holds that no future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered. 8. The evidence of record establishes that Respondent adhered to the design plans for the underlying project, did not deviate from them, and performed the work in compliance with ASCC and ACI standards. Neither Mr. Favia nor Mr. Champion presented any evidence to overcome Respondent’s denials of wrongdoing, nor did either allege that Respondent failed to complete the project as designed by Complainant’s architect. While the record clearly establishes that there are resulting water pooling issues, the preponderance of the evidence does not support a finding that Respondent’s workmanship is to blame. 9. Because the record reflects that Respondent met the ROC’s minimum workmanship standards as required by Ariz. Admin. Code R4-9-108, Complainant has not established a violation of Ariz. Rev. Stat. § 32- 1154(A)(3). 10. Because Respondent was not responsible for the issues resulting from the work performed on the underlying project, Respondent was not required to take any corrective action after the issuance of the Directive by the ROC. As such, Complainant has not established a violation of Ariz. Rev. Stat. § 32-1154(A)(22). 11. Because Complainant has not established the above-captioned statutory violations by a preponderance of the evidence, Complainant has failed to establish cause for a civil penalty to be assessed against Respondent and/or for Respondent’s license to be disciplined by the ROC. RECOMMENDED ORDER In light of the foregoing, IT IS RECOMMENDED that this matter be dismissed. 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, May 31, 2019.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] Per stipulation of the parties, the record was held open until May 22, 2019; extending the deadline for the transmission of the Recommended Order in this matter to June 11, 2019. [2] See https://roc.az.gov/contractor-search?Id=a0Yt000000ACWocEAH. [3] Id. [4] Id. [5] Id. [6] Id. [7] See the ROC’s electronic file at pages 126-129 and 131-133. [8] See the ROC’s electronic file at pages 123 and 141-142. [9] Id. [10] Id. [11] See the ROC’s electronic file at pages 34-36. [12] See the ROC’s electronic file at pages 22-33. [13] See the ROC’s electronic file at pages 19-21. [14] See the ROC’s electronic file at pages 17-18. [15] Id. [16] See the ROC’s electronic file at page 9. [17] See the ROC’s electronic file at pages 27-33. [18] Id. [19] See the ROC’s electronic file at pages 4-7. [20] See Respondent Exhibits 3, 5, and 9. [21] See the ROC’s electronic file at pages 92-113. [22] See the ROC’s electronic file at page 87 and 90. [23] See the ROC’s electronic file at pages 67-69. [24] See Respondent Exhibits 7-8. [25] See Ariz. Rev. Stat. §§ 32-1101 et seq., 32-1154(A), and 41-1092 et seq. [26] See Ariz. Rev. Stat. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990). [27] Ariz. Rev. Stat. § 41-1092.07(G)(2); Ariz. Admin. Code R2-19- 119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [28] See Ariz. Admin. Code R2-19-119(B)(2). [29] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [30] Black’s Law Dictionary at page 1220 (8th ed. 1999).

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826