ALJDEC decisions subject to certification as final

2018A-1638-CHC-ROC · Registrar of Contractors · 2018-10-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 27, 2018, 8:30 A.M. APPEARANCES: Complainant Brian Gibson appeared on his own behalf; Lori Gunner, Esq., appeared on behalf of Respondent ADMINISTRATIVE LAW JUDGE: Roger A. Geddes _____________________________________________________________________ FINDINGS OF FACT Background and Procedure 1. Epicure Builders, LLC (Respondent), is the holder of License Number 177458 issued by the Registrar of Contractors (Registrar). 2. On or about April 9, 2018, Brian Gibson (Complainant) filed a Complaint against Respondent with the Registrar alleging poor work in connection with the construction of a residence for Complainant in Mormon Lake, Arizona. 3. After an inspection of the job site on April 27, 2018, the Registrar issued a Directive dated May 7, 2018, requiring Respondent to remedy various alleged violations by May 23, 2018, as follows: Complaint Item 1-3: Remodel of the upstairs 2 bedrooms and bathroom was completed without contractor getting permit from Coconino County. (Prior to any work beginning all applicable permits shall be obtained. Unpermitted work shall be inspected by the local building inspector and any building code deficiencies identified or code violations caused by the Respondent shall be corrected. All required inspections shall be scheduled and passed.) Complaint Item 4: TV room – Cable not wired correctly Complaint Item 5: Grading around house is too close to siding.

5. After being informed that Complaint Items 1 - 3 had not been resolved, the Registrar then issued a Citation to Respondent, dated May 25, 2018, for the alleged violation of the following: a. A.R.S. § 32-1154(A)(2) (departure from or disregard of plans or specifications or any building code standards); b. A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108 for failure to meet minimum workmanship standards); c. A.R.S. § 32-1154(A)(22) (failure to perform corrective action without valid justification). 6. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. The Registrar issued a Notice of Hearing setting a hearing for September 27, 2018, at 8:30 A.M. At the hearing, Complainant Brian Gibson testified on his own behalf; Respondent presented the testimony of Rusty Swann, owner, and Ashley Swann and Austen Swann, employees. Steve Philpott, the Registrar Investigator (Investigator), testified on behalf of the Registrar. The Tribunal received and admitted Complainant’s exhibit numbers 1 -`5 and Respondent’s exhibit numbers 1 - 11.[1] 7. The Investigator on behalf of the Registrar testified as to his communications with Complainant and Respondent, his inspections of the job site, and the Directive issued by the Registrar as a result of his observations from his inspections. Specifically, he testified that he conducted a pre-hearing inspection on September 24, 2018, and observed that Complaint Items 4 and 5 had been corrected, but that the permit issue was still outstanding. He stated the contractor obtained the initial building permit which was approved for construction based on a 3 bedroom design. He further stated that during construction, the parties apparently redesigned the planned second floor from a large game room into two bedrooms and a bathroom without resubmitting the plans to the county. As a result, he said he believed the pre-existing septic system (that was not installed by Respondent) may not have sufficient capacity because it was designed and approved only for a 3 bedroom residence and a certain amount of water fixtures. Complainant Brian Gibson testified in relevant part that Complete Items 4 and 5 had been corrected but that Respondent has failed to obtain a building permit or a Certificate of Occupancy (“COO”). He stated Respondent told him that the county was aware of the additional second floor bedrooms and bathroom and that he, Respondent, would contact county to get septic approved. He further stated that Respondent told him the county did not care if they added extra bedrooms and bathrooms. He further testified that he wanted Respondent to complete the first floor and then have it inspected and then proceed with the second floor. He also stated that he contacted the county once to have the septic system inspected but that they did not come out due to scheduling conflicts and therefore it was never inspected. 9. Rusty Swann, owner of Respondent, testified on behalf of Respondent in relevant part that Complainant provided the original plans for the residence with a large second floor game room and no bathroom but also provided revised plans which included two second floor bedrooms and a bathroom. He said Complainant told him to build the first floor and then have it inspected by the county to obtain a COO and then proceed with the second floor. He stated that as soon as he got temporary COO, the plans changed and they wanted him to get started on a revised second floor with the two bedrooms and a bathroom. Mr. Swann admitted that he knew the second floor revision would require a permit, or at least an update to the already issued permit for the original plans, but he stated that not submitting the revised plans was a stipulation imposed by Complainant in order to get the work. He stated that if he was not willing to follow Complainant’s direction, he would not get the work. He further stated that Complainant had evidently talked with the county about septic compliance because Complainant told him that they did not want to submit the plans for second floor bedrooms and bathroom to the county because they knew the existing septic system would not comply. He stated Complainant knew they had septic issue and wanted to avoid having to get a new septic system that might be required by adding additional bedrooms and a bathroom.. 10. Mr. Swann stated that he tried to get a COO in July 2017, and that the inspector signed off on the building but told him the septic system would need to be approved to get a COO or final building permit. He stated that he told Complainant that an inspection of septic system was needed and that he told Complainant to arrange for an inspection but that there was a possibility that the septic system may not be approved because of the second floor bedrooms and bathroom. He further stated that after Complainant had not done anything about getting the septic system inspected, he followed up in January 2018 with the county. (Respondent’s Exhibit 5). He stated at that time that he told the county that the residence had five bedrooms even though the original drawings submitted showed three. He said he was told by the county that the homeowner would have to authorize an inspection and test of the septic system and that he informed Complainant of such but did not receive a response. He stated the county would accept an application for the second floor permit but that it would be put on hold until septic system was tested once the owner contacted them. As a result, he stated he paid for permit.(Respondent’s Exhibit 10). 11. Ashley Swann, employee of Respondent, testified on behalf of Respondent that she told Complainant in June 2017 that he would need an inspection of the septic system in order to obtain a COO. She stated that she told him that they needed additional testing of the septic system and that he responded that they would take care of it. She further testified that she had accompanied Mr. Swann with he visited the county and met with Brian Buzzell of the county who informed them that without testing of septic system, they could not get a permit or COO. She stated he further stated that the homeowners would have to schedule that inspection but that he would make it a priority item when they contacted him. 12. Austen Swann, employee of Respondent, testified on behalf of Respondent that she contacted the county in early 2018 to inquire as to the steps to be taken to obtain a permit for a construction project that had in large part been completed. She indicated a county representative told her that she needed an “R and R permit” and then the county would come out to perform an inspection. She advised him about the two bedrooms and a bathroom that had been added to the original design and asked him about the septic system. She said he responded that the homeowner would have to arrange for inspection and testing of septic system which would include drilling before a permit could be issued for the second floor revisions. 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. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by preponderance of the evidence. See Arizona Administrative Code Rule 2-19-119. 3. 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). 4. A.R.S. § 32-1154(A) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, …

2. 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.

3. Violation of any rule adopted by the registrar. …

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. 5. As it relates to A.R.S. § 32-1154(A)(3) concerning a violation of any rule adopted by the Registrar, Arizona Administrative Code Rule 4-9- 108(A), provides that “[a] contractor shall perform all work in a professional and workmanlike manner.” 6. Complainant has not presented sufficient evidence to establish cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(2) due to the departure from or disregard of plans or specifications or any applicable building codes in any material respect that is prejudicial to another without the consent of the owner. Although the evidence showed that Respondent obtained an initial building permit for the first floor, Respondent proceeded with the work on the second floor without obtaining a permit for the second floor, or otherwise revising the initial permit by submitting the revised plans. Respondent admitted that he knew he needed a new or revised permit but proceeded with the work anyway because he stated Complainant did not want to disclose to the county that they had revised the initial plans to add two bedrooms and a bathroom. He stated that Complainant knew that this might raise issues regarding the capacity of the septic system. 7. Respondent’s primary argument was that although Complainant proceeded without cause a building permit, the alleged departure from or disregard of building codes was done with the consent of the owner, or more to the point, at the direction of the owner.[2] The Tribunal finds Respondent’s testimony to be credible that Complainant did not want Respondent to submit revised plans to the county adding two bedrooms and a bathroom because it may have raised issues regarding the capacity of the septic system. Complainant did not contradict Respondent’s testimony in this regard and only countered by suggesting that Respondent should have made him aware of any potential violations. Again, however, Complainant never denied that he already knew of the potential septic system issues or that that the entire scheme to not submit revised plans to the county was that of Complainant. Accordingly, the Tribunal finds that Respondent’s departure from or disregard of a building code was with the consent of Complainant. 8. The Tribunal recognizes that the argument that owner consent can constitute a defense to a contractor’s violation for a departure from or disregard of a building code may appear unseemly. However, it is noteworthy that the phrase “without the consent of the owner” in A.R.S. § 32-1154(A)(2) is not limited to the departure from or disregard of plans and specifications. While a contractor’s violation for a departure from or disregard of a building code with an owner’s consent may still be a violation of that particular building code with whatever consequences or remedies there may be for such a violation, the Legislature seems to have determined that such a violation otherwise does not warrant disciplinary action under A.R.S. § 32-1154(A)(2). 9. Complainant has not presented sufficient evidence to establish cause to discipline Respondent’s contractor’s license under A.R.S. § 32- 1154(A)(3) for the failure to perform work in a professional and workmanlike manner. With respect to the Directive items regarding workmanship, Complaint Items 4 and 5, it was undisputed that these items had been corrected by Respondent. 10. Complainant has also not presented sufficient evidence to establish cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(22) for failure to perform corrective action. Complainant presented no evidence as to what more Respondent could have done to obtain a building permit other than what it did. The evidence was uncontradicted that Respondent paid for the permit and attempted to have the county building inspector inspect the second floor of the residence. The evidence is further uncontradicted that the county indicated that it was not going to issue a final permit until the homeowner allowed inspection and testing of the septic system, a system that was not installed by Respondent. Complainant testified that he attempted once to schedule such an inspection, but that there were scheduling conflicts. There was no evidence of any further attempts by Complainant. Respondent should not be penalized for Complainant’s lack of follow up in that regard. Accordingly, Respondent has demonstrated that there was a valid justification for its failure to fully perform corrective action. 11. Lastly, even if the Tribunal had found that Respondent had violated A.R.S. § 32-1154(A)(2) due to the departure from or disregard of any applicable building codes in any material respect that is prejudicial to the owner without the consent of the owner, the Tribunal’s finding of a valid justification for failure to perform corrective action in that regard would negate the imposition of disciplinary action. 12. Accordingly, Complainant has not established that Respondent’s license should be disciplined for a violation of A.R.S. § 32-1154(A)(2), A.R.S. § 32-1154 (A)(3), or A.R.S. § 32-1154 (A)(22). RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order in this matter, that the Citation and Complaint in Case No. 2018A-1638 shall be dismissed. In the event of certification of this 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 the certification. Done this day, October 17, 2018.

/s/ Roger A. Geddes_____ Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractor

----------------------- [1] The Tribunal also took administrative notice of the Registrar’s file. [2] Respondent also initially argued that the alleged departure was not prejudicial, but later conceded that the resulting inability to obtain a COO was prejudicial.

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