ALJDEC - Licensing

2023A-03223-CHC-ROC · Registrar of Contractors · 2024-04-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Raymond Lee Sharp

Rayden Enterprises, Inc.,

COMPLAINANT,

Keystone Masonry, LLC

License No. ROC 276465,

RESPONDENT.

No. 2023A-03223-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 5, 2024, with further hearing on March 26, 2024; the record closed on April 25, 2024

APPEARANCES: Complainant Raymond Lee Sharp appeared on his own behalf and on behalf of Rayden Enterprises, Inc. Terry Rathbun appeared as a witness and Denise Sharp was present.

Elisabeth Martini, Esq. represented Respondent Keystone Masonry, LLC. Joseph Torres was present on behalf of Respondent Keystone Masonry, LLC. Jerry Painter and Taylor English appeared as witnesses. James Brady and Robert Stephens were present.

Arizona Registrar of Contractors Investigator Michael Springer appeared as a witness.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

EXHIBITS ADMITTED INTO EVIDENCE:

Administrative Notice of Agency Record

Respondent’s Exhibits: 2, 4, 10, 11, 18, 20-27, 28, 29, 57, 59, and 60

Complainant’s Exhibits: 1e, 1f, 2a, 2h 3a, 3i, 3.1g, 3.1k, 3.2, 5a, 5a1, 6b, 7a, 8a, 9a, and 9b

FINDINGS OF FACT

Keystone Masonry, LLC (“Respondent”) is the holder of License Number 276465 issued by the Arizona Registrar of Contractors (“Registrar”). Joseph Torres is Respondent’s Qualifying Party and sole Member.

In or about June 2022, Raymond Lee Sharp Rayden Enterprises, Inc. (“Complainant”) contracted with Respondent for Respondent to construct a masonry structure “per Final Design. This includes C0476 Grout, Grey Smooth CMU & One Side Grey with Black Lava Rock/Dark Charcoal Split Face W/IWR Normal Weight grade N Hollow concrete masonry units as per AMG-101-20.” The contract specifications further included the following: 1) Mortar W/IWR; 2) C-476 Grout; 3) Grey Smooth and Color 1 Side Split Face CMU w/ Black Cinder & IWR.

On or about March 24, 2023, 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 Arlo Houston. However, after his investigation and prior to the hearing, the matter was re-assigned to Investigator Michael Springer due to Investigator Houston’s military leave.

After an April 13, 2023 Jobsite Inspection, Investigator Houston issued a Written Directive to Respondent, dated May 5, 2023, 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 May 26, 2023.

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

Compliance Item: 1 - "Masonry walls leak."

Investigator’s Observation: Verified.

Observed area of West wall that allowed for water to run through block/mortar.

Respondent to remedy all areas where a similar condition is exhibited.

Compliance Item: 4 - "Unsightly unacceptable CMU grout, mortar smears, streaks, and stains on walls."

Investigator’s Observation: Verified.

Areas of mortar remaining on faces of blocks around window openings.

Respondent to remedy all areas where a similar condition is exhibited.

Compliance Item: 6 - "MCJ are Not cleaned to the required depth of one inch."

Investigator’s Observation: Verified.

Control joints poorly cleaned.

Compliance Item: 7 - "Door frame by bathroom has not fully grouted."

Investigator’s Observation: Verified.

Not fully grouted.

Compliance Item: 8 - "West exterior and interior wall is a different color and texture."

Investigator’s Observation: Verified.

West wall blocks on lower portion different color/lighter than upper portion.

Compliance Item: 9 - "Numerous mortar voids, hairline cracks, and tags on the exterior and interior mortar joints"

Investigator’s Observation: Verified.

Area of poorly finished mortar joints where water was running through on West wall. Respondent to remedy all areas where a similar condition is exhibited.

I did not observe for excessive voids in mortar joints 1/4" or larger.

Compliance Item: 10 - "Bathroom CMU walls that abut to the main building."

Investigator’s Observation: Verified.

Areas where bathroom walls abut adjoining walls with insufficient mortar fill.

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Compliance Item: 2 - "Non-compliant industry standard head and bed joints."

Investigator’s Observation: Unverified.

I am unable to make a determination, from visual inspection alone, regarding this allegation item. Complainant had ground out some of the joints as well as punched a nail through other joints but no independent third party inspection had been performed which would aid in verifying for this item.

Compliance Item: 3 - "Refusal to remove and replace the inadequate wall construction."

Investigator’s Observation: Statement by complainant which does not contain a workmanship related allegation for me to observe and report on.

Compliance Item: 5 - "Numerous discolored mortar joints, color varies from snow white to black;"

Investigator’s Observation: Unverified.

I did not observe for excessive color variation in color of mortar joints or for white or black mortar joints.

All errors in original.

On June 1, 2023, Investigator Houston conducted another Jobsite Inspection due to Complainant having filed addendum items to the Complaint. Investigator Houston issued an Amended Written Directive to Respondent, dated June 9, 2023, that provided as follows:

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

Compliance Item: 1 - "Masonry walls leak."

Investigator’s Observation: Verified.

Observed area of West wall that allowed for water to run through block/mortar.

Respondent to remedy all areas where a similar condition is exhibited.

Compliance Item: 4 - "Unsightly unacceptable CMU grout, mortar smears, streaks, and stains on walls."

Investigator’s Observation: Verified.

Areas of mortar remaining on faces of blocks around window openings.

Respondent to remedy all areas where a similar condition is exhibited.

Compliance Item: 6 - "MCJ are Not cleaned to the required depth of one inch."

Investigator’s Observation: Verified.

Control joints poorly cleaned.

Compliance Item: 7 - "Door frame by bathroom has not fully grouted."

Investigator’s Observation: Verified.

Not fully grouted.

Compliance Item: 8 - "West exterior and interior wall is a different color and texture."

Investigator’s Observation: Verified.

West wall blocks on lower portion different color/lighter than upper portion.

Compliance Item: 9 - "Numerous mortar voids, hairline cracks, and tags on the exterior and interior mortar joints"

Investigator’s Observation: Verified.

Area of poorly finished mortar joints where water was running through on West wall. Respondent to remedy all areas where a similar condition is exhibited.

I did not observe for excessive voids in mortar joints 1/4" or larger.

Compliance Item: 10 - "Bathroom CMU walls that abut to the main building."

Investigator’s Observation: Verified.

Areas where bathroom walls abut adjoining walls with insufficient mortar fill.

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Compliance Item: 2 - "Non-compliant industry standard head and bed joints."

Investigator’s Observation: Unverified.

Compliance Item: 3 - "Refusal to remove and replace the inadequate wall construction."

Investigator’s Observation: Statement by complainant which does not contain a workmanship related allegation for me to observe and report on.

Compliance Item: 5 - "Numerous discolored mortar joints, color varies from snow white to black;"

Investigator’s Observation: Unverified.

I did not observe for excessive color variation in color of mortar joints or for white or black mortar joints.

Compliance Item: 11 - "Material supplier has attempted to stain the west wall but cannot get close to blending the colors. It is important to state that the respondent built a small mock up wall but has not used it in any fashion. This mock up wall was to be used to apply the same chemical they used to deface the lower portion of the west wall then stain it back to original color. There has been no attempt at this at all, the mockup wall just set there unused for its intended purpose."

Investigator’s Observation: Unverified. Duplicate of item 8.

Compliance Item: 12 - "Respondent has stopped preforming on repairs agreed to during your site visit and has not been on site since two days before your directive was issued."

Investigator’s Observation: Unverified. Statement by complainant which does not contain a workmanship related allegation for me to observe and report on.

Compliance Item: 13 - "Contract included CMU materials for site walls that have only partially deliveries. Respondent will not complete delivery of missing materials. Missing materials are; Qty of 2 Dark 8x8x16 S1S1E, Qty of 4 Gray 8x8x16 S1S1E, Qty of 235 Grey 8x2x16 Smooth Solid Caps, Bundle (500 Lineal Feet) of 8" Hot Dipped Wire for Horizontal Joints."

Investigator’s Observation: Unverified. Statement by complainant which involves a contract dispute that does not contain a workmanship related allegation for me to observe and report on. Respondent advised at time of addendum JSI that they would be delivering these items to the jobsite.

Compliance Item: 14 - "The walls are out of plumb. Masonry industry standards that this project is governed under allow for one-half inch maximum “Out of Plumb”. These walls range from three-quarters to nearly two inches Out of Plumb. This is a very serious craftsmanship/management issue that could lead to catastrophic failure involving life and limb and property damage of magnitude."

Investigator’s Observation: Unverified. Areas of walls observed to be more than 1/4" out of plumb from floor (grade) to ceiling (roofing system). However, the general contractor, Rayden Enterprises Inc., has installed a roofing system, and related bracing, and by taking this action has accepted the areas of out of plumb conditions of the walls. If actions were taken by the general contractor, Rayden Enterprises Inc, to remove and reinstall the roofing system, and related bracing, at their expense then that would allow the respondent the opportunity, while the roofing system and related bracing were removed, to remedy by appropriate means the out of plumb conditions of the masonry walls.

Compliance Item: 15 - "Respondents absolute refusal to continue with your directive toward repairs. I have pleaded with and directed the respondent to complete areas identified by your directive to facilitate project progress. I have already stated they stopped communicating and manning the site for any repairs since May 3rd 2023.

Investigator’s Observation: Unverified. Statement by complainant which does not contain a workmanship related allegation for me to observe and report on.

All errors in original.

On June 19, 2023, Investigator Houston conducted a Compliance Jobsite Inspection. Investigator Houston’s Compliance Findings are as follows:

Compliance Item: 1 - "Masonry walls leak."

Investigator’s Observation: Work performed for this item by respondent: areas remain where work/tuck pointing still allowing water to run through block/mortar joints

Compliance Item: 4 - "Unsightly unacceptable CMU grout, mortar smears, streaks, and stains on walls."

Investigator’s Observation: Areas of mortar remaining on faces of blocks around window openings

Compliance Item: 6 - "MCJ are Not cleaned to the required depth of one inch."

Investigator’s Observation: Completed: complainant satisfied with work performed for this item.

Compliance Item: 7 - "Door frame by bathroom has not fully grouted."

Investigator’s Observation: Mostly completed: small area on door frame that was poorly finished.

Compliance Item: 8 - "West exterior and interior wall is a different color and texture."

Investigator’s Observation: Not completed.

Compliance Item: 9 - "Numerous mortar voids, hairline cracks, and tags on the exterior and interior mortar joints"

Investigator’s Observation: Work performed for this item by respondent: areas remain where tuck pointing still allowing water to run through block/mortar.

I did not observe for excessive voids in mortar joints 1/4" or larger.

Compliance Item: 10 - "Bathroom CMU walls that abut to the main building."

Investigator’s Observation: Completed: complainant satisfied with work performed for this item.

All errors in original.

After the Compliance Jobsite Inspection, Investigator Houston 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) and A.R.S. § 32-1154(A)(22).

Investigator Michael Springer’s Testimony

Investigator Springer testified consistently with the above delineated Findings of Fact. Investigator Springer further testified regarding email correspondence between the parties and the Registrar. Specifically, Investigator Springer testified regarding an email that the Registrar received from Respondent on June 17, 2023, stating that although Respondent was performing corrective work, Complainant was not allowing Respondent access to perform some of its work. Investigator Springer testified that the Registrar requires “some proof” of denial of access, and not simply an “accusation.” Further, Investigator Springer testified that there was no indication provided at the Compliance Inspection that Complainant had denied Respondent access to perform the required corrective work. Investigator Springer testified that a complainant must provide “reasonable” access to the jobsite during the period of a Written Directive which is generally from Monday through Friday from 8:00 a.m. to 5:00 p.m. However, the parties can agree to other mutually convenient days and times. In this case, the parties’ customary times for access to the jobsite were Monday through Friday from 6:00 a.m. until 2:30 p.m.

Investigator Springer also explained that once a Written Directive expires, a complainant is not obligated to provide access to the jobsite for further corrective work.

There was also testimony elicited from Investigator Springer regarding emails received by the Registrar from Respondent that pre-dated the issuance of the Written Directives and therefore, are not relevant to the determination of compliance with the Written Directives.

Investigator Springer explained that the period of time for compliance with the Amended Written Directive was only extended until June 16, 2023, because no additional items were verified, and therefore, the deadline provided was sufficient. Had additional items been verified, Respondent would have been provided an additional fifteen (15) days for compliance from the issuance of the Amended Written Directive.

Ray Sharp’s Testimony

Mr. Sharp testified that the parties’ contract called for a block construction industrial manufacturing facility that was supposed to resist water intrusion. Mr. Sharp acted as the general contractor for the project, as he is the managing member and Qualifying Party for Rayden Enterprises, and he owns the building.

Mr. Sharp asserted that Respondent did not perform its work to industry standards resulting in water intrusion. Mr. Sharp testified Respondent was on the jobsite for only 16 of 46 working days and that Respondent never had more than two employees working at any given time. Further, Respondent only worked partial days, usually until 11:00 a.m., and never had any objection to the agreed upon working hours of 6:30 a.m. to 2:30 p.m. Mr. Sharp testified that all trades, including Respondent, could “come and go” and had unhindered access to the jobsite, and Mr. Sharp did not reduce working hours during the period of the Written Directives.

Mr. Sharp testified that there are deficiencies in the mortar joints and that testing was conducted illustrating such. Mr. Sharp asserted that in order to correct the deficiencies, a tuck point procedure would need to be utilized. Mr. Sharp further asserted that Respondent’s proposed remedies would not result in a water resistant structure.

Mr. Sharp testified that he contracted with Respondent for IWR in order for the building to resist water intrusion. The IWR “BLOCKTITE MORTAR ADMIXTURE is formulated to resist moisture intrusion and migration in masonry mortar, and is a component of the BLOCKTITE system for water repellent specified masonry construction. BLOCKTITE MORTAR ADMIXTURE significantly reduces water absorption and efflorescence potential, and will help preserve color and overall mortar integrity as a result.” The grout utilized by Respondent did not contain IWR.

Mr. Sharp testified that after Respondent’s attempts at corrective work, the building continued to leak.

Joseph Torres’ Testimony

Mr. Torres testified that he has been in business since 2005, has completed over 200 projects, and has never been subject to discipline by the Registrar.

Mr. Torres testified that Respondent performed the corrective work and tested it. Mr. Torres further asserted that Respondent was “hindered” by Complainant because Respondent’s “means and methods were constantly questioned and interrupted.”

Mr. Torres contended that Complainant restricted Respondent’s use of water and was told not to perform certain work. However, the credible evidence of record established that water was restricted on only one day while other trades were performing work. Therefore, Mr. Torres’ testimony asserting that Respondent could not determine whether repairs were sufficient because it was denied access to water, is found to be disingenuous, as water was available every day but one.

Mr. Torres further asserted that Respondent’s Quality Control Officer, Taylor English, was “banned” from the project by Complainant, and therefore could not observe the corrective work being performed, resulting in an adverse impact on Respondent. However, Respondent acknowledged that its management consists of seven (7) individuals, and others could have overseen the corrective work.

Respondent asserted that Complainant poured the foundation and installed the footings for the building and that they sat for months before Respondent performed its work. Respondent contended that the leaking of the building could have been attributed to this fact.

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.

The Administrative Law Judge finds that Respondent accepted the surface upon which it performed its work.

Respondent spent a great deal of time at hearing addressing attempts at corrective work prior to the issuance of the Written Directives. However, such information is not relevant to the instant proceeding as those attempts were not successful and were prior to the Jobsite Inspections and issuance of the Written Directives.

Taylor English’s Testimony

Mr. English, Respondent’s Quality Control Safety Officer, testified that from the day Respondent began its remediation work on the project, the “continuous improvement is a never ending task.” Mr. English testified that Respondent made “spot corrections” and that he drafted the “tuck point procedure.” Mr. English asserted that the roof installation could have played a part in the leaking of the building.

Jerry Painter’s Testimony

Mr. Painter, Respondent’s expert witness, testified regarding his credentials. Mr. Painter testified that the roof may have affected the integrity of the walls and caused stress cracks. Mr. Painter also testified that IWR must be in the block and the mortar in order for the building to be water resistant.

Mr. Painter testified that the way to test whether block and mortar contain IWR is to “throw a cup of water at it” to test it.

Mr. Painter acknowledged that Respondent’s contract with Complainant specified that Respondent would use IWR block and mortar.

Mr. Painter testified that it is Respondent’s responsibility to stop the leaking and that Respondent should have “brought in” the masonry supplier. Mr. Painter opined that the “block is the issue” and that Respondent “should have known the blocks were not the correct blocks.”

Administrative notice is taken of Respondent’s prior License record on April 30, 2024. Such prior License record reflects that Respondent’s License Number 276465 was first issued on February 3, 2012, and is active. Such prior License record also reflects that there is only the instant open complaint, 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 Houston found that Respondent’s work was not in conformity with the Registrar’s standards. Investigator Houston determined the existence of workmanship issues concerning the work that was performed by Respondent. Further, Respondent’s own expert witness acknowledged that it was Respondent’s responsibility to determine the cause of the leaks, and that moreover, Respondent is contractually obligated to construct the building with IWR blocks and mortar and its own expert witness testified that it failed to do so. Respondent’s assertion that the cause of the issues may be attributable to Complainant having poured the foundation and installed the footings for the building, and that they sat for months before Respondent performed its work, is not persuasive, as Respondent accepted the surface upon which it performed its work. Respondent’s further assertion that the issues may be attributable to the roof are also not persuasive. 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 credible, substantial, and probative evidence of record established that Respondent did not complete the required corrective work following the Written Directives being issued. 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 Directives. 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 276465 for a period of seven (7) 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.

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, April 30, 2024.

/s/ Sondra J. Vanella

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Michael Springer

ROC Investigator

[email redacted]

Raymond Lee Sharp

RayDen Enterprises, Inc.

[email redacted]

Elisabeth E. Martini

Resnick & Louis P.C.

[email redacted]

By: OAH Staff