ALJDEC - Licensing
2023A-00993-CHC-ROC · Registrar of Contractors · 2024-01-30
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Isa Ismail,
COMPLAINANT
v.
H & H Development Inc.
License No. ROC 293336,
RESPONDENT
No. 2023A-00993-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: January 26, 2024
APPEARANCES: Isa Ismail appeared on his own behalf. Thomas Price, Esq. appeared on behalf of H & H Development Inc. Richard Hamilton, Don Winchester, Nina Scheerer and Don Basick appeared as witnesses.
ADMINISTRATIVE LAW JUDGE: Amy M. Haley
EXHIBITS ADMITTED INTO EVIDENCE: Administrative notice of the Registrar of Contractor’s Hearing Packet submitted with the Notice of Hearing.
_____________________________________________________________________
FINDINGS OF FACT
H & H Development Inc. (Respondent) is the holder of License No. 293336 issued by the Arizona Registrar of Contractors (Registrar).
On or about November 21, 2018, Isa Ismail (Complainant) entered into a contract with Respondent for the construction of a new steel building that was to be used as storage.
On or about February 2, 2023, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to the project.
The Registrar assigned the complaint to Investigator Brian Binkney. After a jobsite inspection, Investigator Binkney issued a written directive to Respondent 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 05/16/2023.
DIRECTIVE REQUIREMENTS
You are directed to remedy the following violations by the appropriate means:
Compliance Item: 1 - Roof leaks
Investigator’s Observation: Upon inspection it was noted that several of the vehicles that were parked in the garage had evidence that there is a leak in the roof that were consistent in spacing with the screws used to attached the metal paneling to the metal trusses.
Verified. The Respondent will need to correct this by the appropriate means.
. . . . .
Compliance Item: 2 - Roof panels rusting
Investigator’s Observation: Upon inspection of the roof it was noted that the roof panels were showing signs of rusting. Per manufacturer it could be from cutting the panels, metal shavings, or anything of that nature.
Verified. The Respondent will need to correct this by the appropriate means.
. . . . .
Compliance Item: 5 - Overhead doors binding/grinding when in operation
Investigator’s Observation: Upon inspection it was noted that when the overhead doors were opened and closed it appeared that they were binding.
Verified. The Respondent will need to correct this by the appropriate means.
. . . . .
Compliance Item: 6 - Overhead doors no longer lockable due to foundation settling
Investigator’s Observation: Upon inspection the following was noted:
SE door can lock and be secured.
SW door cannot be locked or secured.
NW door cannot be locked or secured.
Verified. The Respondent will need to correct this by the appropriate means.
. . . . .
Compliance Item: 8 - Wall panels not installed correctly
Investigator’s Observation: Upon inspection of exterior walls it was noted that there are inconsistences throughout the paneling. Most notably is what is referred to as "sharktoothing" there the overlapping panels are not at the same height near the bottom ranging from being level with the adjacent panel to being approximately 1" out of level. Per manufacturer there is not tolerance as to how much "sharktoothing" is allowed. This can be from the wall panels not being installed plumb. However, it is visual deficiency and should be fixed by appropriated means.
. . . . .
Compliance Item: 9 - Panel end seals not installed causing air infiltration
Investigator’s Observation: Upon inspection it was noted that the end wall rubber closures were not installed per manufacturer's final erection drawings.
Verified. The Respondent will need to correct this by the appropriate means.
. . . . .
Compliance Item: 10 - exterior roof corner caps not installed
Investigator’s Observation: Upon inspection it was noted that the corner gutter to rake trim caps are not installed per the final erection drawings.
. . . . .
Compliance Item: 13 - Wall panel bulging, stripped screws
Investigator’s Observation: Upon inspection several areas of the exterior walls were showing that there was a bulge and manipulating these walls showed that the screws were not properly set into the walls and were stripped out.
Verified. The Respondent will need to correct this by the appropriate means.
. . . . .
Compliance Item: 15 - Missing panel screws
Investigator’s Observation: Several areas were noted to have missing screws in the exterior wall panels.
Verified. The Respondent will need to correct this by the appropriate means.
. . . . .
Compliance Item: 21 - Wall base angle distorted due to improper panel install, broken anchor screws
Investigator’s Observation: Several areas were noted to have a slight bend. Per manufacturer specifications the base trim are manufactured with a 5 degree slope to promote watershed. Respondent to ensure that the base trim profiles are in accordance with specifications from the manufacturer.
All errors contained in original.
Following the issuance of the written directive, Respondent corrected all items except for Item 2. After multiple extensions on the compliance deadline, a final compliance jobsite inspection was conducted on November 15, 2023. Investigator Binkney noted Item 2 remained uncorrected.
The Registrar issued a Citation against Respondent, charging possible violations of Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A), and Ariz. Rev. Stat. § 32-1154(A)(22).
Investigator Binkney testified consistently with his written directive. He further testified that he gave Respondent multiple extensions of the original compliance deadline of May 16, 2023, due to the nature of the work that needed to be completed. On November 15, 2023, he conducted his final compliance jobsite inspection.
Investigator Binkney testified that he understood some remedies were made available to Complainant for Item 2, but that they were ultimately refused.
Investigator Binkney testified that several of the roof panels contained rust and believed that, by a “preponderance of the evidence” it was due to poor workmanship rather than a manufacturing defect. Based on the areas in which he was able to observe the rust, the rust was located on more areas than just the areas surrounding the drilled holes. Investigator Binkney testified that there could be many reasons that rust could form, and believed that there was more evidence that the roof had not been cleaned (possibly from metal shavings) than there was evidence of a product defect. Because of this, he proceeded to send the matter for the issuance of the Citation. Lastly, Investigator Binkney testified that he believed eight months was more than enough time to correct all outstanding issues.
Complainant testified that he had hired Respondent to build a metal building from the ground up. He further testified that there was sporadic rusting all over the roof, making the roof look old. Complainant stated that the panels were improperly stored upon their delivery to the home. They were stored flat on the dirt ground for over a year, enduring all seasons. Complainant further testified that there was a large label on the panels themselves indicating that the panels were to be stored at an angle so at to allow runoff of the elements. Complainant testified that he was offered the solution of placing a coating on the roof to seal it, but declined that remedy because he was unclear how the coating would weather through the years and he would not have had the 25 year warranty that came with the panels. Lastly, he declined it because he stated the manufacturer did not recommend a coating.
Richard Hamilton, owner and president, testified on behalf of Respondent. Mr. Hamilton testified NuCor Steel is a company that deals with metals and ABC is a subsidiary company under the NuCor umbrella. ABC manufactured the panels and the panels came with a 25 year warranty. Mr. Hamilton testified that he tried to work with ABC and made arrangements for NuCor to come and inspect the panels. He further testified that, as a result of the inspection, NuCor sent an email to Respondent, advising:
We are taking this up with our coil provider to make a warranty claim to have the panels replaced. . . . Typically they will want a sample of the material so they can examine it in their lab. With the roof being completed and not having any material remaining that we could salvage a sample from. . . that leaves us with 2 options. First, we could supply a new roof through a component order at our manufactured cost with would be right around $12,000. The second option would be to remove a damaged panel and temporarily replace it with a new one which would allow us to get the sample the supplier will need.
Ultimately, neither of the options above were executed and NuCor denied the warranty claims, stating that the improper storage of the panels voided the warranty.
Mr. Hamilton further stated that the original contract and permit was for an unoccupied structure to be used for storage and that is how it was built. Sometime after the Certificate of Occupancy was issued on February 18, 2021, Complainant then built an internal structure, causing the premises to be red-tagged, and ultimately re-permitted. However, once Mr. Hamilton discovered the addition of the internal structure, he no longer felt comfortable removing the roof to replace it as he felt doing so would compromise the integrity of the structure. Lastly, Mr. Richardson testified that, because of the addition of the internal structure, he felt that coating the roof was the optimal solution.
Nina Scheerer, former project manager and former vice president, testified on behalf of Respondent. . Ms. Scheerer largely testified to emails between Complainant and Respondent with regard to various irrelevant issues and outstanding payments.
Don Winchester, office manager, testified on behalf of Respondent that she was involved in asking NuCor to inspect the product. She also testified to the email communications with NuCor with regard to the warranty issue.
Don Basick, project manager, testified on behalf of Respondent that the suggested coating would provide adequate protection.
Administrative notice is taken of Respondent’s prior License record on January 26, 2024. Such prior License record reflects that Respondent’s License No. 293336 was first issued on July 10, 2014 and is active. Such prior License record also reflects that there was this open complaint and no prior complaints 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.”
It is clear that Respondent made good faith attempts to correct the issues in the written directive. It is also clear that Respondent believed the rusting to be caused by a product defect rather than a workmanship issue. Notwithstanding, Respondent had a duty to correct the issue by the appropriate means and the issue was never corrected.
Respondent maintains that it offered, what it considered to be, the best solution, which was to place a coating on top of the roof. However, the question with the coating then becomes whether this would have been considered an appropriate correction. But for the testimony of Respondent, there is no evidence that this would be considered an appropriate correction. To the contrary, there is evidence that this may not be considered an appropriate correction, namely (1) the manufacturer itself could not recommend any products and stated its advice was replacement; (2) even with the coating, Complaint still did not receive the benefit of a 25 year warranty; and (3) the long-term or lasting effects of the coating were unknown.
Additionally, from the evidence submitted, it appears the coating solution was not offered to Complainant until late November 2023, after the written directive compliance deadline.
The testimony of Investigator Binkney, when taken in combination with the statements made by NuCor through exhibits, provide enough evidence to meet the burden of proof in this case.
The evidence established that Respondent’s work was not in conformity with the Registrar’s standards. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A).
The evidence established that, although Respondent did attempt to complete the corrective work following the Directive being issued, Item 2 failed to be corrected. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of Ariz. Rev. Stat. § 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 No. 293336 for a period of 1 day.
It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to Ariz. Rev. Stat. § 32-1154(E).
It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty 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 Ariz. Rev. Stat. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.
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, January 30, 2024.
/s/ Amy M. Haley
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
By: OAH Staff