ALJDEC decisions subject to certification as final

2020A-04264-CHC-ROC · Registrar of Contractors · 2021-03-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Universal Homes Construction LLC,

COMPLAINANT

Custom Courts Maintenance LLC,

License No. ROC 324163,

RESPONDENT

No. 2020A-04264-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: February 17, 2021

APPEARANCES: Scott Contadino for Complainant; Chris Angulo and Isidro Angulo for Respondent

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On January 15, 2021, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on February 17, 2021 at the Office of Administrative Hearing.

Through the Notice of Hearing, ROC alleges that Respondent Custom Courts Maintenance LLC may have violated Ariz. Rev. Stat. sections 32-1154(A)(3), (A)(16), (A)(19), and (A)(22).

Respondent holds license No. 324163. Chris Angulo and Isidro Angulo are Respondent’s owners. Both appeared and testified.

Complainant is Universal Homes Construction LLC. Scott Contadino, Complainant’s vice-president of construction appeared and testified for Complainant, which also presented the testimony of Douglas R. Ward, Stacey Hickman and Austin Holloway.

ROC investigator Jim Dimond also testified.

Complainant and Respondent entered a contract that called for Respondent to coat and seal a basketball court, tennis courts, and pickleball courts at the Granville Clubhouse and Craft Center on Tuscany Way in Prescott Valley. The basketball court is not at issue in this matter.

Chris and Isidro Angulo signed that contract on December 23, 2018, and Mr. Contadino accepted for Complainant on March 6, 2019.

Respondent asserts that the parties’ contract includes a limited warranty that is described in “[Respondent] CCM Limited Terms.” Under those terms, Respondent provides that its warranty is only active if the concrete slab meets United States Tennis Association standards.

Complainant disagrees, asserting that the CCM Limited Terms are not part of the contract and that Respondent did not include a copy of those terms when it sent the original contract.

The courts were all of new construction and none had been coated prior to Respondent performing its work. Complainant had hired a concrete contractor to build the concrete slabs for the courts. Respondent sealed and coated the courts using Laykold Poly Primer, Laykold Acrylic Resurfacer, and Laykold Color Concentrate.

The courts all experienced peeling or delamination of the surfaces.

Complainant hired the Ward Group, which holds ROC license numbers 094809 and 095479, to inspect the courts.

Mr. Ward prepared a report dated July 8, 2020, in which he presented his opinions that the concrete contractor and Respondent both had failed to follow the appropriate standards and that both were responsible for delamination of the coatings.

The American Sports Builders Association (“ASBA”) has issued guidelines for building reinforced concrete tennis courts. Mr. Ward’s opinion is that the all the concrete slabs should have been built in conformity with those guidelines.

Mr. Ward concluded that the concrete contractor’s work fell below the standard of care because it did not install a moisture barrier under the concrete slabs and it used curing agents on the concrete.

Mr. Ward’s opinion is that Respondent’s work was deficient because Respondent did not follow Laykold’s installation instructions as to the proper surface preparation and moisture testing, and in that Respondent did not use the proper product for the conditions at the site.

Respondent’s position is that the peeling or delamination occurred because the slabs were built without a vapor barrier and because Complainant was allowing water from sprinklers to collect on the courts.

Respondent provided a copy of the installation instructions for Laykold Acrylic Resurfacer, but no other product instructions are in evidence or in the ROC administrative record.

The roughness of concrete surfaces are rated using the “CSP” or Concrete Surface Profile scale.

Mr. Ward’s opinion was that Laykold’s instructions show that the concrete slabs should have been brought into a CSP-3 surface profile before the product was applied and that achieving a CSP-3 surface profile requires use of a mechanical means such as shot- or sand-blasting.

Mr. Ward concluded that Respondent did not meet the standard of care because it had not sand-blasted the courts, but rather used only a broom finish.

Laykold’s Acrylic Resurfacer instructions show that a CSP-3 is required for new concrete surfaces, but those instructions show that this is achieved with a medium broom finish. Those instructions call for old surfaces to be sand-blasted, but the instructions do not specify what CSP-level will result from such a treatment.

After receiving Mr. Ward’s report, Respondent informed Complainant that Mr. Ward’s report was in error and that Respondent had achieved the CSP-3 surface as required using a broom finish. After ROC issued a citation to Respondent, Respondent informed ROC that Mr. Ward’s report was in error, and at the hearing, Respondent again raised this point.

Mr. Ward’s report shows that the Laykold primer instructions call for testing to determine the moisture vapor emission rate (“MVER”) before the product is applied. MVER is given in units of pounds of vapor/moisture coming from 1000 square feet during 24 hours.

Laykold Acrylic Resurfacer instructions do not call for a moisture test to be conducted.

Chris Angulo testified that although Laykold does provide information regarding what product to use depending on the MVER, it does not require a moisture test to be conducted, and that in Respondent’s experience moisture testing is not typical for sport courts in Arizona.

According to Mr. Ward, in June 2020, Engineering Test Consultants performed a moisture test using ASTM F 1869-98. The pickleball courts had a MVER of 3.33 and the tennis courts a MVER of 9.05.

According to Mr. Ward, Laykold’s instructions show that for MVERs between 3 and 25, the Laykold VTB primer should be used. Consequently, Mr. Ward concluded that Respondent should have used the VTB primer.

Respondent takes the position that the MVER testing was not representative of conditions when it surfaced the courts because since that time Complainant had added landscaping around the courts. During Mr. Dimond’s jobsite inspection, he observed areas where moisture had pooled near the courts; sprinklers near the courts; water stains from the sprinklers; and evidence of possible ponding of water on a tennis court.

Chris Angulo also testified to the effect that using a stronger sealant is not necessarily better because the court sealants are designed to “breathe” and stronger sealants have a greater tendency to delaminate because stronger sealants inhibit breathing.

After Mr. Ward completed his report, the parties exchanged correspondence. Complainant informed Respondent that (1) based on Mr. Ward’s report, Complainant was of the opinion that Respondent and the concrete contractor were both responsible for the delamination; (2) the concrete contractor had stripped and shot-blasted the basketball court and planned to do same on the tennis and pickleball courts; and (3) Complainant expected Respondent to honor its warranty and resurface the courts. Respondent replied, setting forth its position that Mr. Ward’s report was flawed, explaining its position that its work was not deficient, and offering to perform work at a reduced cost.

On September 2, 2020, Complainant filed with ROC a complaint alleging poor work on Respondent’s part.

ROC’s Jim Dimond conducted a jobsite inspection on September 21, 2020. Prior to Mr. Dimond’s inspection, the surface of the basketball court had been removed.

Mr. Dimond observed that the surfaces of the tennis courts and the pickleball courts were peeling and bubbling in random areas. He observed other damage to tennis and pickleball courts that may have been caused by the nets, and that he did not believe was a workmanship violation.

Mr. Dimond found that the local codes do not require a vapor barrier for these slabs and that the plans also did not call for vapor barriers.

Mr. Dimond referenced Mr. Ward’s report showing that the concrete slabs were not in compliance with applicable sport-court standards and that Respondent had not shot-blasted or properly prepared the concrete slabs. Mr. Dimond noted that Respondent had acknowledged that it had not conducted a moisture test.

Mr. Dimond concluded that Respondent had “accepted the surface” when it placed its coatings on the concrete slabs and that because the courts were experiencing the peeling and bubbling, Respondent had violated Ariz. Admin. Code R4-9-108(a) that requires contractors to perform their work in a professional and workmanlike manner.

On October 20, 2020, ROC issued to Respondent a Directive through which ROC ordered Respondent make repairs to the tennis and pickleball courts and to provide ROC with proof of compliance by 5:00 p.m. on November 21, 2020.

ROC concluded that Respondent was not responsible to make repairs to the basketball court because that work had been modified and could not be the basis on which a citation could issue.

Respondent did not perform any corrective work and it takes the positon that its work is not in violation of the workmanship standards.

ROC issued to Respondent a Citation dated November 30, 2020 through which it alleges that Respondent may have violated Ariz. Rev. Stat. sections 32-1154(A)(3), (A)(16), (A)(19), and (A)(22).

On December 10, 2020, Respondent filed its answer to ROC’s Citation.

In its answer, respondent asserted that Mr. Ward is not an expert on sport-courts; that ASBA, the United States Tennis Association, and the American Concrete Institute all require vapor barriers for sport courts, which standard was required to be met even if not called out in the plans; the Directive was in error with regard to the preparation of the courts in that Laykold’s instructions show that “New concrete substrates shall be medium broom finish (CSP3),” which is what Respondent did; and, the “acceptance of the surface policy” does not apply because the courts were not build in conformity with the USTA standards, voiding any warranty based on the CCM Limited Terms.

Isidro Angulo testified to the effect that he had advised Mr. Contadino of the need to uses an experienced court-builder to pour the concrete slabs, and that Respondent had no reason to suspect, and no knowledge, that the slabs had not been built in compliance with sport-court industry standards.

ROC’s substantive policy statement 2017.01 sets out the following pertinent information:

As a general principle in construction, a subcontractor who performs work on top of a surface prepared by another accepts the surface. The subcontractor should have inspected the surface for any flaws or defects that would affect the work he proposes before performing the work. If he found the surface to be unacceptable, he should have called any defects to the owner’s or general contractor’s attention so that the owner can choose whether to pay for the defective surface to be corrected or if the owner is not willing to pay to correct the surface, the contractor may obtain an explicit warranty disclaimer.

CONCLUSIONS OF LAW

Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

“At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2).

“At a hearing on an agency's imposition of fees or penalties or any agency compliance order, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(3).

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). It has not been shown that Respondent is unscrupulous, unqualified, or financially irresponsible.

The Administrative Law Judge may consider ROC’s administrative record. See Ariz. Admin. Code § R4-9-118.

Ariz. Rev. Stat. section 32-1154(A) provides that

The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:

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3. Violation of any rule adopted by the registrar.

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16. Knowingly contracting beyond the scope of the license or licenses of the licensee.

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19. Subsequent discovery of facts that if known at the time of issuance of a license or the renewal of a license would have been grounds to deny the issuance or renewal of the license.

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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. 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.

Ariz. Admin. Code section R49108(a) provides that “A contractor shall perform all work in a professional and workmanlike manner.”

ROC may not issue to a contractor a citation alleging a “failure to perform work in a professional and workmanlike manner or in accordance with any applicable building codes and professional industry standards if .... 2. The contractor's work has been subject to neglect, modification or abnormal use.” Ariz. Rev. Stat. § 32-1155(D).

Ariz. Rev. Stat. section 32-1154(E) provides that ROC may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of Ariz. Rev. Stat. section 32-1154(A)(22).

Substantive policy statement means:

[A] written expression which informs the general public of an agency's current approach to, or opinion of, the requirements of the federal or state constitution, federal or state statute, administrative rule or regulation, or final judgment of a court of competent jurisdiction, including, where appropriate, the agency's current practice, procedure or method of action based upon that approach or opinion. A substantive policy statement is advisory only....

Ariz. Rev. Stat. § 41-1001(22).

The preponderance of the evidence does not show that Respondent violated Ariz. Admin. Code section R4-9-108(a) by failing to perform its work in a professional and workmanlike manner. Consequently, it has not been proven that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(3).

Contrary to Mr. Ward’s conclusion that Respondent was required to prepare the slabs using shot-blasting or mechanical means, the evidence shows that Respondent was only required to prepare the slabs using a broom finish, which it did.

Although Mr. Ward’s opinion was that Respondent was required to conduct a moisture test, Complainant presented no evidence to corroborate that opinion, which is particularly important in light of Mr. Ward’s error regarding the purported need to shot-blast the slabs. In addition, Respondent presented credible testimony showing that moisture testing was not required and that moisture testing was not common in the industry in Arizona.

ROC alleges that Respondent “accepted the surface” by sealing the courts despite the fact that the concrete contractor had built the slabs without a moisture barrier. But there was no substantial evidence to show that an inspection of the slabs would have revealed that information. In addition, it is possible that the delamination is being caused (at least in part) by water from Complainant’s landscaping. Consequently, that policy is not applicable to this matter, which is better seen as a contractual dispute between Complainant, Respondent and the concrete contractor.

Complainant presented no evidence to show that Respondent violated Ariz. Rev. Stat. sections 32-1154(A)(16) or (A)(19).

It has not been shown that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(22) because it is not been proven that Respondent committed any workmanship violations.

Because it has not been proven that Respondent violated Ariz. Rev. Stat. section 32-1154, this matter should be dismissed.

RECOMMENDED ORDER

IT IS ORDERED that case number 2020-04264 is 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 is forty days after the date of that certification.

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-137160-45720000Done this day, March 9, 2021.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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