ALJDEC - Licensing

2022A-06249-CHC-ROC · Registrar of Contractors · 2024-06-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Heather Lynn McCall

McCall Hauling & Dirt Works LLC,

COMPLAINANT,

Xtreme Precision, LLC

License No. ROC 323233,

RESPONDENT.

No. 2022A-06249-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 25, 2024, with further hearing on April 24, 2024, and May 16, 2024

APPEARANCES: James Sparks, Esq. represented Complainant Heather Lynn McCall/McCall Hauling & Dirt Works, LLC, with representative, Heather McCall. Cameron McCall was also present. James Hanson, Esq. represented Respondent Xtreme Precision, LLC, with representative, Danette Walker. John Gregory, Esq. was also present. Arizona Registrar of Contractors Investigator Miles Crosby appeared as witness, as did Alan Shelton and Don Carroll.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

EXHIBITS ADMITTED INTO EVIDENCE: Administrative Notice of Agency Record; Complainant Heather Lynn McCall/McCall Hauling & Dirt Works, LLC’s Exhibits 1, 6, 15, 23, 36, 39, 41, and 45

Respondent Xtreme Precision, LLC’s Exhibits 1 and 2

FINDINGS OF FACT

Xtreme Precision, LLC (“Respondent”) is the holder of License Number 323233 issued by the Arizona Registrar of Contractors (“Registrar”). Jeremy Walker is Respondent’s Qualifying Party, Manager, and Member. Danette Walker is a Manager and Member of Respondent.

Heather Lynn McCall/McCall Hauling & Dirt Works, LLC (“Complainant”) contracted with Respondent for Respondent to construct a pre-fabricated metal building, including the framing, windows and door installation, as well as electrical work.

On or about July 28, 2022, the Registrar received a Complaint against Respondent from Complainant alleging abandonment and poor work with respect to Respondent’s scope of work.

The Registrar assigned the Complaint to Investigator Miles Crosby. After an August 16, 2022 Jobsite Inspection, Investigator Crosby issued a Written Directive to Respondent dated August 23, 2022, that provided as follows:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A) (22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on September 10, 2022.

You are directed to remedy the following violations by the appropriate means:

Compliance Item: 1 - Windows and doors leak large amounts of water

Investigator’s Observation: I observed the windows and flashing to be installed poorly causing pooling above the window. The Respondent then filled the entire cavity with caulk. Does not meet standards. Respondent should correct by appropriate means.

Compliance Item: 7 - Exterior door installations also may be causing water to leak in

Investigator’s Observation: As with the windows I observed the doors and flashings to be installed incorrectly. Does not meet standards. Respondent should correct by appropriate means.

Compliance Item: 8 - Window and door trim/flashing installed wrong

Investigator’s Observation: Does not meet standards. Respondent should correct by appropriate means.

Compliance Item: 12 - An electrical wire is hanging from the ceiling in the upstairs bathroom

Investigator’s Observation: Does not meet standards. Respondent should correct by appropriate means.

Compliance Item: 17 - Metal panel was cut by sliding door and not repaired.

Investigator’s Observation: Does not meet standards. Respondent should correct by appropriate means.

Compliance Item: 18 - White paint was rubbed off of some panels because they weren't installed all the way and a wind storm hit in the middle of the night.

Investigator’s Observation: Does not meet standards. Respondent should correct by appropriate means.

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Compliance Item: 2 - Water in walls when it rains.;

Investigator’s Observation: Related to Item #1. This is a statement and not an allegation that implicates poor work that I can inspect and report on.

Compliance Item: 3 - Water is sitting and running along 2x4's on floor along exterior wall and some interior walls.

Investigator’s Observation: Related to Item #1. This is a statement and not an allegation that implicates poor work that I can inspect and report on.

Compliance Item: 4 - Mold in window sill of master bathroom

Investigator’s Observation: This is an Owner-Build project and as such, the Complainant is assuming the role of General Contractor and has the responsibility to verify work as it progresses prior to moving to the next phase of construction. This item is result of the windows and flashing being installed incorrectly. The ROC does not inspect or determine the existence of Mold. This item to should be inspected and tested by a 3rd party.

Compliance Item: 5 - Worried about mold forming in other areas that have been getting wet in walls and around doors and windows

Compliance Item: 6 - Insulation is getting wet

Compliance Item: 9 - Windows were not caulked on the interior of window upon installation

Investigator’s Observation: This item cannot be determined without destructive means. The ROC does not use destructive means to determine whether items meet standards.

Compliance Item: 10 - Multiple terrible, failed caulking attempts on the exterior to prevent water from leaking in.

Investigator’s Observation: This is a statement and not an allegation that implicates poor work that I can inspect and report on.

Compliance Item: 11 - Sliding door not installed correctly. Doesn't lock well. doors don't meet together well.

Compliance Item: 13 - Electrical trim work needs to be completed

Compliance Item: 14 - Weather stripping installed wrong on metal walk through door. When installed correctly will leave holes on the interior of door

Compliance Item: 15 - Black trim corner piece of building was dropped and banged up.

Compliance Item: 16 - Insulation is visible on the east and west ends of building eaves. something doesn't seem right.

Compliance Item: 19 - Plastic stuck in seams of metal building because it wasn't removed before install

Investigator’s Observation: No areas of concern were observed at the time of inspection.

Compliance Item: 20 - Cracks already appearing in walls and around windows

Compliance Item: 21 - Crooked walls

All errors in original.

After the expiration of the time period in which to perform corrective work pursuant to the Written Directive, on September 22, 2022, Investigator Crosby conducted a Compliance Jobsite Inspection. Investigator Crosby’s Compliance Jobsite General Notes state the following in pertinent part:

I conducted the CJSI at the above date and time. At the time of inspection, the Respondent sent an employee, Don Carrol. I performed a water test on an area where I was advised was corrected. This window system is the same for all windows installed and served as an example for what each window would do under the same conditions. It was indicated by both the Complainant and Carrol that the Qualifying Party, Jeremy Walker had not been to the job site and has not inspected the work performed by his employee. Regardless, the work was very poor and in most instances was not corrected at all. Other areas, had no corrective work attempted. Carrol made statements inquiring how one was to know or find out what the correct installation methods are. I advised Carol that the manufacture will provide the correct installation method. These are easily found online and in most instances from the manufactures website. It is clear from the attempted corrections that whomever did the work did not know how to correct the issue and the QP of the License was not supervising the work. It should be noted that the procedure of placing an entire tube of caulk, if not more, in each cavity above the window, is completely unacceptable. Under no circumstance would this practice be approved and goes against the caulk manufactured application instructions. In both instances, the J-flashing for the windows not being installed correctly and the application of tubes of caulk, shows a complete lack of professionalism and disregard for proper construction practices.

However, due to the Owner-Builder status, dictated by the Complainant choice not to hire a General Contractor, many of the items could not be included in the written directive that would have been in normal circumstances.

Compliance Findings:

Compliance Item: 1 - Windows and doors leak large amounts of water

Investigator’s Observation: This item was not corrected to manufacture recommendations or industry standards. There were still areas that had significant amounts of Caulk be used to prevent water intrusion. J Flashing was not corrected to allow water to drain from the cavities above every window and door.

Compliance Item: 7 - Exterior door installations also may be causing water to leak in

Investigator’s Observation: This item had no further work completed or attempted and does not meet standards. Door still have exposed OSB that is now separating. No effort made to stop water intruding under the doors.

Compliance Item: 8 - Window and door trim/flashing installed wrong

Investigator’s Observation: This item was not corrected to manufacture recommendations or industry standards. As mention above, the J Flashing was not corrected and still pools inches of water above all the doors and windows. I performed a water test which showed the flashing was not corrected and remains a incorrect.

Compliance Item: 12 - An electrical wire is hanging from the ceiling in the upstairs bathroom

Investigator’s Observation: This item was corrected by the Complainant.

Compliance Item: 17 - Metal panel was cut by sliding door and not repaired.

Investigator’s Observation: Although, this item was corrected and the color match was adequate, the Respondent did not blend the area causing a very distinct texture difference. However, the correction meets minimum standards.

Compliance Item: 18 - White paint was rubbed off of some panels because they weren't installed all the way and a wind storm hit in the middle of the night.

All errors in original.

Thereafter, Investigator Crosby forwarded the matter to the Registrar’s Legal Department. The Registrar issued a Citation against Respondent charging possible violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(a), A.R.S. § 32-1154(A)(12), specifically, A.R.S. § 32-1124(B), and A.R.S. § 32-1154(A)(22).

Investigator Miles Crosby’s Testimony

Investigator Crosby testified consistently with his findings contained in his Jobsite Inspection Notes, the Written Directive, and the Compliance Jobsite General Notes. Investigator Crosby referenced the photographs he took at the Jobsite Inspection illustrating his findings and depicting poor work.

Regarding the window installation, Investigator Crosby referenced photograph number 11 and testified that Respondent utilized incorrect material and did not perform the installation to manufacturer specifications. Investigator Crosby also referenced photograph number 6 and testified that a water barrier is missing and that a rubber or foam material that aligns with the corrugation should have been installed. Instead, Respondent filled the area with caulk and such is not appropriate. Investigator Crosby testified that the excessive application of the caulk and the location of the caulk in direct sunlight, will lead to failure. Further, the excessive amounts of caulk used will not allow the caulk to cure. Investigator Crosby testified that the J flashing was incorrectly installed and that the trim and metal should not be in contact as installed by Respondent.

Investigator Crosby testified that the doors and windows should prevent water from infiltrating the home when it rains. Investigator Crosby testified that Respondent constructed the building and installed the windows and doors. Consequently, it was Respondent’s responsibility to know how to perform the work it contracted to perform, prior to undertaking the project.

Complainant’s counsel showed several videos during the course of the hearing and questioned Investigator Crosby about those videos. Investigator Crosby testified that the videos illustrated violations of the Registrar’s standards in that they showed water infiltrating the home during a rain storm after corrective work was completed at both the doors and windows.

Investigator Crosby also testified that the electrical wire in the ceiling does not meet the Registrar’s standards due to the fact that the wire is exposed and the location is inappropriate, as it should be in the middle of a stud to prevent accidental penetration of screws or nails.

Investigator Crosby referenced photograph number 9, depicting a scratch on the metal panel that looked to be caused by a circular metal saw. Investigator Crosby explained that Respondent should have obtained touch up paint to protect the metal from the outside elements, and that not doing so violated the Registrar’s workmanship standards.

Investigator Crosby explained all of the workmanship violations he verified, and also explained his reasoning for not verifying certain items of Complaint. Investigator Crosby testified that because Complainant is an owner/builder, it was Complainant’s responsibility to verify Respondent’s work before moving forward. Investigator Crosby testified that the items of Complainant not verified were attributed to Complainant not inspecting and verifying Respondent’s work prior to moving forward with the next phase of the project.

Investigator Crosby testified that Respondent made some attempts at corrective work during the period of the Written Directive, however, Respondent did not comply with the Written Directive. There were no allegations of denial of access.

Investigator Crosby testified that the parties did not have a written, signed contract. Also, the estimates provided by Respondent do not contain Respondent’s license number preceded by the acronym "ROC."

Alan Shelton’s Testimony

Alan Shelton is a forensic construction consultant and an expert witness in construction defect cases. Mr. Shelton testified regarding his qualifications and experience. Mr. Shelton testified that he authored a report following an inspection of the project. Mr. Shelton testified that he concurred with Investigator Crosby’s findings and testimony regarding how the windows should have been installed versus how they were installed. Mr. Shelton testified that the J flashing was improperly installed, as the depth of the J molding is incorrect, and that a gap is necessary in order to provide a channel for water. Regarding the caulking, Mr. Shelton testified that clear silicone caulking is not an approved application and that the thickness with which it was applied is designed to fail. Mr. Shelton testified that typically, an external sealant should not be used because it is exposed to the elements, causing a breakdown in the material.

Mr. Shelton testified that Jobsite Inspection photograph number 12 is illustrative of Respondent having utilized a high speed grinder which would promote rust.

Mr. Shelton testified that Jobsite Inspection photograph number 13 depicts a hole in the corner with no flashing installed to direct water away from the building. Mr. Shelton testified that the windows were not attached properly on the inside of the structure and were not sealed to the building. Mr. Shelton asserted that he found “nothing correct” with the window installation and that they were installed “too tightly.” Mr. Shelton explained that a quarter inch gap with foam, backer, and an approved sealant, was necessary. Mr. Shelton further explained that if the joint is too tight, a sealant can expand resulting in tearing and failure. Mr. Shelton further testified that Respondent did not install the windows with the correct sequencing, and that all window installations should start from the bottom.

Mr. Shelton testified that it is a general building code requirement that buildings be water resistant and that under normal weather conditions, water should be kept outside and not infiltrate a building. Code requires flashing which keeps water from infiltrating the building. Mr. Shelton opined that had Respondent performed the window installation to industry standards, this building would not have experienced water intrusion.

Regarding the door installation, Mr. Shelton testified that none of the doors, including the exterior door to the garage, the entry door, and the sliding glass door, were properly installed. Regarding the front entry door, Mr. Shelton testified that it is slightly recessed and installed in wood framing with no flashing installed and no caulking or sealant. A gap is present allowing water to flow freely into the house. Mr. Shelton testified that such installation violates building code and Registrar standards.

During his testimony Mr. Shelton referenced several photographs that Complainant had taken depicting the water intrusion. Regarding the door to the office, it is also in wood framing, like the entry door, and also has no flashing or sealant, and that “no attempt to prevent weather” intrusion was made. Mr. Shelton testified that the sliding glass door was installed without flashing or sealant and that a sill pan was not installed, notwithstanding that it is required by code, which would have directed water to the outside of the structure. Further, the sliding glass door was not properly fastened to the structure and was bowed. All windows and doors had the same systemic installation issues, with no attention to weatherproofing, sealant, or flashing with some being worse than others. Mr. Shelton testified that Respondent “did not understand basic principles of installation” and there was “no due diligence.”

Mr. Shelton opined that because Respondent constructed the building, Respondent accepted the surface upon which it installed the windows and doors.

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

Acceptance of the Surface

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.

Heather McCall’s Testimony

Heather McCall testified that the parties did not have a written contract, but rather had a verbal agreement as to the scope of Respondent’s work which included the construction of a pre-fabricated metal building, installation of the windows and doors and framing of the home, as well as electrical work.

Ms. McCall testified that in June 2022, there was a rainstorm and water leaked into the home. Ms. McCall immediately texted Respondent about the leaking. Respondent responded by sending an employee, Don Carroll, to caulk around the windows and doors. However, as soon as it rained again, the leaking resumed.

Ms. McCall informed Mr. Carroll that she did not believe the caulking was a viable solution. Ms. McCall texted Jeremy Walker, Respondent’s Qualifying Party and owner, however, he did not respond to her texts.

On June 25, 2022, Ms. McCall ran into Mr. Walker and asked him to come to the property to inspect the windows and doors. Mr. Walker went to the property on that one occasion, however, did not return thereafter and did not respond to Ms. McCall’s calls or texts.

Because Respondent’s repair attempts were unsuccessful, Ms. McCall filed the instant Complaint.

Ms. McCall referenced the photographs contained in Exhibit 23, and testified regarding the photographs that were taken on September 23, 2022, after Respondent’s corrective work was performed. Specifically, Ms. McCall testified that the South door continued to leak. Ms. McCall testified that following an October 4, 2022 rainstorm, the primary bedroom windows continued to leak and there was a paint bubble containing water in the primary bathroom, and referenced photographs taken at that point in time. Ms. McCall explained that flooring has yet to be installed because water continues to intrude throughout the entire South side of the house. The front door on the North side of the home also leaks, as well as the back door.

Danette Walker’s Testimony

Danette Walker. Mr. Walker’s wife, testified that she is familiar with Respondent’s business operations “at a high level.” Ms. Walker testified that Mr. Carroll was tasked with ensuring compliance with the Written Directive. Ms. Walker testified that Mr. Walker did not attend the Jobsite Inspection, Compliance Jobsite Inspection, or any of the three hearing dates because he was bidding jobs in Show Low and was “keeping jobs going to keep them afloat.”

Don Carrol’s Testimony

Don Carroll testified that he was employed by Respondent at the time of this project and that he ran the jobsite and the crews. Mr. Carroll testified regarding his experience in the construction industry.

Mr. Carroll testified that he was involved in responding to the Written Directive and “did everything he could except tear the windows out.” Mr. Carroll estimated that he spent approximately sixty hours attempting to comply with the Written Directive. Mr. Carroll testified that he attempted to procure the manufacturer specifications.

Regarding the excessive caulking, Mr. Carroll explained that he used “a lot” “to try to prevent” the windows from leaking. Mr. Carroll testified that the windows were installed after the framing and admitted that they should have been installed prior to framing. Mr. Carroll testified that Respondent “put the cart before the horse” and that this was the reason the windows leaked. Mr. Carroll blamed Complainant for the error in sequencing because she was “in a hurry.” However, Respondent did not obtain a waiver from Complainant despite the fact that Respondent knew that it was not following correct procedure for installation of the windows.

Mr. Carroll testified that he wanted to comply with the Written Directive and thought he had. Mr. Carroll testified that because of the conflict between the parties, Complainant would not allow Respondent to work on the project after the Written Directive expired. Complainant was not legally obligated to do so.

Administrative notice is taken of Respondent’s prior License record on May 24, 2024. Such prior License record reflects that Respondent’s License Number 323233 was first issued on January 11, 2019, and is active. Such prior License record also reflects that there are two open complaints, zero resolved/settled complaints, and no discipline against Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

In this case, Investigator Crosby found that Respondent’s work was not in conformity with the Registrar’s standards. Investigator Crosby determined the existence of workmanship issues concerning the work that was performed by Respondent, particularly in regard to the installation of the doors and windows. Mr. Shelton, an expert in the industry, concurred with Investigator Crosby’s findings in this regard and provided additional detail regarding the deficiencies and the egregious poor workmanship. Moreover, Mr. Carroll, Respondent’s own witness, testified that the windows were installed after the framing and admitted that they should have been installed prior to framing. Mr. Carroll testified that Respondent “put the cart before the horse” and that this was the reason the windows leaked. Respondent erected the metal structure, and installed the windows and doors, as well as performed the electrical work. Respondent accepted the surface it constructed within which it installed the doors and windows. The credible, substantial, and probative evidence of record established that Respondent failed to perform its scope of work in a professional and workmanlike manner. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(a).

The evidence established that Respondent’s estimates do not contain Respondent’s license number preceded by the acronym "ROC." Therefore, Complainant established that Respondent failed to comply with the Registrar’s statute in violation of A.R.S. § 32-1154(A)(12).

The credible, substantial, and probative evidence of record established that Respondent did not complete the required corrective work following the Written Directive being issued. Further, there was no evidence provided establishing any denial of access during the period of the Written Directive. The Administrative Law Judge concludes based on the evidence of record that valid justification did not exist for Respondent’s failure to comply with the Written Directive. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a Written Directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License Number 323233 for a period of ten (10) days.

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

It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty (30) days following the effective date of the Registrar’s final order, the Registrar 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)(7), unless Respondent tenders payment of any outstanding prior civil penalty.

It is further recommended that on or before thirty (30) days after the effective date of the final order, Respondent shall provide sample contract and estimate forms to the Registrar to demonstrate that it has amended its contract and estimate forms to include Respondent’s license number preceded by the acronym "ROC." If Respondent fails to establish to the Registrar that it has brought its contract and estimate forms into compliance with A.R.S. § 32-1124(B) within thirty (30) days, its contractor’s license shall be suspended until it demonstrates that it has done so.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

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 forty (40) days from the date of that certification.

Done this day, June 3, 2024.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Tom Cole, Director

Registrar of Contractors

Miles Crosby

[email redacted]

James D. Sparks

Sparks Law Group, PLLC

[email redacted]

James Hanson, Esq.

Lang & Klain, PC

[email redacted]

John Gregory

Jones, Skelton & Hochuli, PLC

[email redacted]

By: OAH Staff