ALJDEC decisions subject to certification as final

2019A-04389-CHC-ROC · Registrar of Contractors · 2020-06-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

LC Views Arizona LLC,

COMPLAINANT,

v.

Wm A Clark Construction Inc.,

License No. ROC 080678,

RESPONDENT.

No. 2019A-04389-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 4, 2020, at 1:00 p.m.

APPEARANCES: LC Views Arizona LLC (“Complainant”) was represented by Brian M. Mueller, Esq., Sherman & Howard, LLC; Wm A Clark Construction Inc. (“Respondent”) appeared through William Allen Clark, its qualifying party/officer.

ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

According to the Arizona Registrar of Contractors’ (“the Registrar’s”) public website, on or about November 2, 1988, the Registrar issued License No. ROC 080678, General Residential B General Contractor license to Respondent.

On or about August 29, 2019, Complainant filed a complaint with the Registrar against Respondent that alleged that Respondent had failed to complete and had charged too much on its contracts to construct a house for Complainant at 10500 E. Lost Canyon Drive Lot 10, Scottsdale, Arizona 85024. The Registrar assigned Investigator David Fagerburg to investigate the complaint. Frank Bell and his wife, Jennifer Bell, are Complainant’s principals. Mr. Bell explained at the hearing that they formed the LLC solely to protect their interest in the house and their residential lot.

On October 5, 2019, Investigator Fagerburg performed a jobsite inspection, which Mr. and Mrs. Bell and Respondent’s qualifying party/officer, William Clark, attended. Mr. Clark told Investigator Fagerburg that the parties’ contract had terminated in July 2019. Investigator Fagerburg issued jobsite inspection notes that he later sent the parties, going through each of the items on the complaint and opining that all were statements of dispute and none alleged poor a workmanship or other cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A).

Complainant later filed an amended complaint. On December 5, 2019, Investigator Fagerburg performed a second jobsite inspection. On December 20, 2019, Investigator Fagerburg on behalf of the Registrar issued a written directive, requiring Respondent to perform certain corrective work on or before Friday, January 10, 2020, at 5:00 p.m., in relevant part as follows:

Addendum Complaint Item 1: Some of the trusses were placed in the wrong locations

Investigator’s Observation: The respondent acknowledged that some of the trusses are not installed per plan. I was able to verify that some of the trusses are not installed per the plan and some were placed in the wrong locations.

Governing Rule: ARS §32-1154 (A) (2) (3)

Addendum Complaint Item 9: On some area the existing framing of the house is deviated from the framing plan, this may cause some load transfer that may create some structural issues.

Investigator’s Observation: The respondent explained that during the framing of the home some interior walls were moved around or relocated and there were deviations to the plans. The complainant acknowledged that there were requests to deviate from the plans but only with engineering approval and that the respondent moved the walls without consulting with engineering or get[ting] engineering approval. I was able to verify that the respondent deviated from the framing plans.

Governing Rule: ARS §32-1154 (A) (2) (3)

Addendum Complaint Item 10: Test result from drilling though the concrete show that at few locations the footing is missing and the thickness of concrete is between 3 and 5 in.

Investigator’s Observation: I observed many areas where the slab has been cut out and trenches dug in the locations of interior footing that were missing. I did not observe the minimum 4 inch A/B base under the slab per code. The contract states that the concrete slab thickness will be 5 inches. I was able to verify that some of the interior footings are missing and the concrete slab thickness is between 3 and 5 inches.

Governing Rule: ARS §32-1154 (A) (2) (3)

Investigator Fagerburg referred the matter to the Registrar’s Legal Department. On January 22, 2020, the Registrar issued a Citation against Respondent’s license, charging cause to suspend or revoke the license under A.R.S. § 32-1154(A)(2), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, and A.R.S. § 32-1154(A)(22).

Respondent filed a timely written answer to the Citation. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

An evidentiary hearing was held on June 4, 2020. Complainant’s attorney submitted five exhibits and presented two witnesses’ testimony: (1) Mr. Bell; and (2) Timothy Larson, the qualifying party/officer of La Casa Builders, Inc., License No. ROC 091247 (“La Casa Builders”), which repaired and is completing Respondent’s work. Mr. Clark testified on Respondent’s behalf. Investigator Fagerburg also testified.

Hearing evidence

Investigator Fagerburg testified that Respondent made no attempt to comply with the directive. Investigator Fagerburg performed a prehearing jobsite inspection on June 1, 2020. Proper footings had been constructed and all the trenches had been filled. Portions of the walls had been constructed using 2x4 studs were now constructed using 2x6 studs.

In response to the Administrative Law Judge’s questions, Investigator Fagerburg testified that some changes had been made when he inspected the jobsite on December 5, 2016. The 2x4 walls had been changed to 2x6. A worker was in the process of cutting the slab, in preparation for installing interior footings. Investigator Fagerburg testified that he discussed the matter with the parties and made clear that Respondent was responsible for construction that had been performed up to that point.

Investigator Fagerburg acknowledged that he observed some animosity between the parties at the October 5, 2019 jobsite inspection. But Mr. and Mrs. Bell did not say that Respondent could not return to the jobsite to correct its work.

Mr. Bell testified that in early 2017, he and his wife were looking at lots on which to build their residence. They consulted an architect and a contractor, Respondent. They did not start constructing the residence until another year had passed. Because Respondent had helped them select the lot, they hired Respondent to build the residence, although they had obtained bids from other contractors.

Mr. Bell testified that the first red flag was when Respondent was performing excavation for the slab on Mr. and Mrs. Bell’s hillside lot. At first, Mr. Clark stated that everything was fine, then said that Respondent was $40,000 over budget. Respondent seemed to be struggling with the stemwall and foundation.

Mr. Bell testified that in July 2019, Mr. Clark asked Mr. and Mrs. Bell for a $100,000 loan to Respondent so that it could continue construction. As a result, in July 2019, the parties entered into a termination agreement, releasing Respondent from the obligation to complete the residence.

Mr. Clark testified that he offered his residence as collateral for the loan. Mr. Bell acknowledged that Mr. Clark had offered collateral.

Mr. Bell testified that his wife later discovered that Respondent had misappropriated monies. On or about October 17, 2019, Mr. and Mrs. Bell received a report from Hamid Rassti, a certified engineer with HR Engineering, stating that he had found many deviations from plan at the residence, including that trusses were in the wrong places, were not supported as shown on the plans, and that some of the footings under load-bearing walls were either missing or inadequately poured. Mr. Bell testified that after he and Mrs. Bell received the engineer’s report, they filed the addendum to the complaint.

Mr. Bell testified that Mr. Larson had cut out the slab to show missing or inadequate footings before the second jobsite inspection. Mr. Larson also attested to other deficiencies in Respondent’s construction in a letter dated May 15, 2020.

Mr. Larson testified that all interior footings were missing from Respondent’s construction of the slab. As a general contractor, Mr. Larson has built many custom homes on hillside lots. Footings beneath weight-bearing walls in the interior of the house are basic construction components that most contractors know to do when building custom homes on hillside lots.

Mr. Larson testified that Respondent did not contact him about complying with the December 20, 2019 directive. He does not know that Respondent contacted anyone.

Mr. Clark testified that the project became more complicated that he could have anticipated. Mr. and Mrs. Bell made many changes to the plans. The slab was made thicker to be stronger. Mr. Bell was very involved in the process. Mr. Clark intended to finish the project until Respondent was terminated in July 2019.

Mr. Clark testified that at the initial October 5, 2019 jobsite inspection, another contractor had been hired and was proceeding with repairs. Mr. Clark testified that the framing was repaired and the foundation was cut. Mr. Clark testified that Mr. Bell had told Investigator Fagerburg that Respondent was not welcome back. Mr. Clark noted that Respondent was not told to repair anything after the first inspection.

Mr. Clark testified that, by the time of the December 20, 2019 directive, work was already well in progress at the jobsite. Respondent was not allowed on site. He did not know that he was required to take extraordinary measures for Respondent to comply with the directive. Mr. Clark explained that he did not contact Mr. and Mrs. Bell or Mr. Larson because they already had made clear that Respondent was not welcome at the jobsite and so much work had already been performed. Mr. Bell acknowledged that no one told him that Respondent could not come back.

On rebuttal, Mr. Bell testified that it was not true that remedial work was underway on October 5, 2019. He had been careful to not have anyone touch anything to change the jobsite between the July 2019 termination and the October 15, 2019 jobsite inspection. Complainant did not hire Casa Builders until October 17, 2019. Complainant submitted photographs of the jobsite at the December 5, 2019 inspection, showing the missing footings.

Mr. Larson testified that Complainant’s house was large, but not especially complicated. It was a large house, but all the walls were square. When he cut the slab to investigate whether footings were present, some parts of the slab were only 3” thick, rather than 5”.

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 is active and in good standing. One previous case has resulted in discipline.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish cause to suspend or revoke Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses and factors in mitigation of the penalty by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

Complainant established that Respondent placed some trusses in the wrong places, installed some trusses without the required load-bearing points, installed some trusses on non-load-bearing walls, constructed a slab that was not uniformly 5” thick, and failed to construct interior footers for load-bearing walls, contrary to what was required on the plans and by construction standards. Therefore, Complainant established cause to revoke or suspend Respondent’s license under A.R.S. §§ 32-1154(A)(2) and 32-1154(A)(3), namely A.A.C. R4-9-108.

Mr. Clark did not dispute that Respondent had failed to comply with the December 20, 2019 directive. Because Mr. Clark never contacted anyone to request access to allow Respondent to comply with the directive and no one ever expressly refused Respondent access to comply with the directive, Respondent did not establish a legal excuse for Respondent’s failure to comply with the directive. Therefore, the evidence establishes cause to revoke or suspend Respondent’s license under A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is ordered that, on the effective date of the final order in this matter, License No. ROC 080678 of Respondent Wm A Clark Construction Inc. shall be suspended for a period of fourteen (14) days.

It is further ordered that the Respondent shall pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(E).

If Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the final order, the Registrar shall 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 five days from the date of that certification.

Done this day, June 23, 2020.

/s/ Diane Mihalsky

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors