ALJDEC

96F-M0927-ROC-rem · Registrar of Contractors · 1998-11-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 6, 1998.

APPEARANCES: The Complainant was represented by his attorney, Roger C. Decker, Esq.

The Respondent was represented by its attorney, John W. Rasmussen, Esq.

ADMINISTRATIVE LAW JUDGE: Robert I. Worth _____________________________________________________________________

Evidence and testimony were presented, and based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order on Remand are made.

FINDINGS OF FACT

1. This matter was remanded to the Registrar by Order of the Superior Court following Complainant’s pursuit of a judicial review action that was limited to that portion of the prior administrative Decision and Order relating to the concrete slab in the workshop. Such Order of Remand effectively concluded that the Administrative Law Judge erred as a matter of law in applying any form of estoppel or preclusion against

Complainant to assert complaints about the workshop floor caused by Respondent’s placement, installation or type of control joints. The Court’s conclusion operates as the law of this case and is binding upon the Registrar as well as upon the Administrative Law Judge.

2. The original hearing of this matter encompassed numerous hours of testimony and many documentary and photographic exhibits. In addition to the parties’ respective presentations at the remanded hearing, a transcript of the original proceeding has been subsequently provided to and reviewed by this tribunal.

3. It was not effectively disputed that the concrete slab in the workshop has developed numerous cracks following the installation work by Respondent. An unacceptable extent of compound cracking was shown to exist at the East end of the structure, and other cracking at the West end, while somewhat less extensive, also was shown to be substandard and in need of remedial measures.

4. A determination is supportable under all the evidence, as presented, reviewed and reconsidered, that the proximate and primary cause for the compound cracks and the other cracking was the absence of effective control joints in or on the workshop slab. Any adverse impact attributable to Complainant’s premature placement or allowance of scaffolding on the slab surface or his interruption of the curing process by allowing early foot traffic thereon is found to have exerted no more than a minor or remote causal impact on the ultimate cracking that was experienced. Although the existing cracks were not shown to constitute or to be indicative of any structural deficiency in the slab, they do reflect substandard and unacceptable workmanship and should be properly repaired.

5. The parties are presently engaged in civil litigation that encompasses most of the same issues of law and fact forming part of the instant administrative action. Recognizing the civil Court as being the far more appropriate forum for the ultimate resolution of monetary claims, counterclaims or off-sets, it is determined that, with respect to the workshop floor slab issue, an administrative condition in the nature of

restitution or, more properly, partial restitution, instead of any corrective work conditions, should be included as a means to reduce any otherwise warranted disciplinary penalties. Each party would therefore be left free to utilize the pending civil lawsuit as a vehicle in which to seek a greater or lesser extent of monetary recovery or liability, after credit is applied for any amount transmitted in satisfaction or partial satisfaction of a monetary condition in this disciplinary action.

6. The significant degree of involvement by the Complainant, acting in this project as an owner-builder performing or responsible for performing functions otherwise assumed by a project’s general contractor, has been held on appeal of this matter not to estop or preclude a subsequent complaint with respect to the results of Respondent’s concrete slab installation performed in the workshop. The responsibilities of Respondent, as a specialty contractor on this phase of the jobsite work, continue. However, nothing in the Court’s judgment remanding the matter for further hearing appears to mandate or require that the owner-builder’s involvement may not be appropriately considered and evaluated at least to some extent when formulating reasonable terms and conditions as part of a disciplinary penalty hereunder. Consequently, in the determination of a proper amount of partial, and possibly complete, restitution, this tribunal has resorted to a comparative fault analysis based upon circumstances surrounding the control joint issue, allocating only a minimal degree of shared responsibility to Complainant as the owner/builder on this project.

7. The expert evidence tended to demonstrate that, at the time of the last hearings, repairs on the West end of the slab may not have required a complete removal and replacement of the cracked area. The testimony of the same expert at the remanded hearing was inconclusive as to the probable efficacy of other repair measures at this time after some extent of intervening contamination into the cracks from oil and grease materials used by Complainant in the workshop area, since the current condition had not been recently examined by such expert witness. However, a finding is supportable under all the evidence and testimony, including reasonable inferences therefrom, that in light of some visible spalling along the sides of numerous cracks, it is more than likely that alternative repair methods short of replacement would not be appropriate or effective at the present time.

8. Consideration must be and was given to the showing that Complainant, during the pendency of this administrative action, including the appeal period, neither took any precautionary steps to protect the slab surface while continuing to work on vehicles in the area nor indicated any willingness to allow other floor covering materials to be installed over the entire surface, including the cracked areas. As a general rule, a licensed contractor’s obligation to accomplish remedial work may not be made more onerous or expensive because of intervening action or inaction by or on behalf of the property owner. In this case, Complainant must be deemed to have had knowledge or at least constructive knowledge, available from his own expert, as to the risks of contamination from spillages of materials onto unprotected surfaces. In fact, at the initial hearing and again at the remanded hearing, Complainant’s expert expressly confirmed the potential that a risk of contamination would exist. While Complainant, as the owner of the property, is not expected to indefinitely delay the starting or to cease using the workshop for the intended purposes, the demonstrated failure to mitigate damages which has now effectively ruled out a less expensive repair method previously available, according to the testimony of Complainant’s own expert, becomes a factor for monetary evaluation at least to some extent as part of any comparative fault analysis.

9. The undersigned Administrative Law Judge has also evaluated the potentially lower anticipated costs for utilizing floor covering materials rather than removing and replacing those sections or areas of the slab being used for bathroom and office space along with the probable cost differences for using other significantly less expensive epoxy methods in the area of the lesser cracking but for the intervening occurrence of avoidable contamination. Additionally, some further shared responsibility allocation appeared appropriate so as to accord some quantum of recognition to the showing of a degree of interference with the curing process of the newly poured workshop slab due to Complainant’s allowing foot traffic and the placement of scaffolding on the slab surface very soon after Respondent had applied a curing compound.

10. Based upon several estimates submitted over two years ago that were in the case record, adjusted upwards for the passage of time since they were obtained, it is approximated that the combined aggregate costs for removal and replacement of a

major part of the workshop slab, the recovering other portions of the slab surface rather than replacing the entire slab plus the added costs, if any, associated with disturbing the present bathroom fixtures and lift equipment, will be no less than a total net expense amount of $14,000.00. It is further determined that an allocated amount payable by Respondent to Complainant of $10,000.00, equal to over 70% of the minimum anticipated costs for accomplishing remedial measures addressing the workshop floor issue, is appropriate and fully warranted for inclusion in the Registrar’s disciplinary Order to be entered herein, subject to refinement upwards or downwards by the civil court following the conclusion of the parties’ pending lawsuit.

11. Nothing in this decision is intended to disturb or alter the portion of the original decision relating to Respondent’s obligation to accomplish proper corrections on or near the rear patio of Complainant’s residence. The judicial review action did not embrace any issues other than those consisting of the workshop floor installation and responsibilities. The effective date of the entire original Order has been postponed by the appeal of part of the original Order, and substantial compliance by Respondent with the corrective work terms of such Order must be demonstrated on or prior to the extended effective date of the Order to be entered in this remanded matter.

12. The original Order of the Registrar had set forth lingering penalties that were to be imposed against Respondent after compliance with corrective work conditions. These additional disciplinary penalties consisted of a period of probation and payment of a specified civil penalty amount. The propriety and extent of these added penalties may properly be and were reconsidered as part of the remanded hearing. In view of the rather substantial extent of the monetary obligation that is to be included as a further condition, another modification of the terms of the prior administrative Order is deemed appropriate so as to wholly eliminate the imposition of any lingering probation period or civil penalty applicable after compliance with all terms and conditions specified in the final Order. Consequently, the modified Order on Remand should provide only for a provisional license suspension unless and until compliance by Respondent with the rear patio corrective work conditions and with the partial restitution condition is demonstrated, thereby deleting all other additional lingering penalties.

CONCLUSIONS OF LAW

1. The issues on this remanded hearing were expressly limited to those relating to the Respondent’s installation work and responsibilities on the workshop floor slab.

2. Upon review and reconsideration of the above-stated limited issues, and treating the determinations by the Superior Court as the law of this case, the record sufficiently supports a finding that, with respect to the workshop floor slab installation, Respondent has violated the workmanship provisions contained in A.R.S.§32-1154A(3); namely, Rule R4-9- 108.

3. It is not a proper function of either the Office of Administrative Hearings or the Registrar of Contractors to adjudicate and award money damages which must be recovered, if at all, through a civil court action. However, the Registrar is empowered by statute to impose reasonable conditions which may serve to reduce or eliminate any otherwise appropriate disciplinary penalties for proven violations of the State’s contracting laws. Whenever the performance of corrective or remedial measures on a jobsite is no longer warranted or possible, the inclusion of a condition in the nature of restitution, total or partial, is fully appropriate and equitably justified. See Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 803 P.2d 430 (1990). In this way, a Complainant in an administrative action who has sustained the burden of proving contracting law violations does not have to await the outcome of protracted civil litigation in order to recover at least a portion of a demonstrated loss and, of equal or perhaps greater significance, a licensed contractor/Respondent is given the means to control, to some extent, the severity of any disciplinary penalty. Moreover, any amounts paid in satisfaction of a condition affecting licensure may properly be evaluated, credited or applied against any civil judgment ultimately obtained in favor of either party. 3. The prior Order of the Registrar with respect to the required patio area corrections remains unchanged. Timely compliance with such corrective work conditions will be necessary for Respondent in order to avoid the imposition of a temporary license suspension. Additionally, the further payment condition relating to or attributable to the workshop slab must also be timely complied with by Respondent.

5. The deadline date for Respondent to comply with any payment condition in this Order on Remand should be fixed after the date on which such Order becomes final and not further appealable so that no monies change hands until and unless both parties are assured that the administrative proceeding is terminated.

6. The inclusion of additional reasonable conditions in the Order to be entered in this remanded action, consisting of the payment by Respondent to Complainant of a significant sum of money, provides adequate justification for a further modification of the originally entered Order by deleting any and all additional or lingering penalties against Respondent, more specifically, the elimination of any period of probation following compliance with all conditions and also the elimination of the requirement to pay any civil penalty amount.

RECOMMENDED ORDER ON REMAND

In view of the foregoing, it is recommended on remand that the Class C-09 license number 101807 of Respondent, Rockwell Concrete Construction (a “corporate” entity) be revoked ten (10) days after the date that the Registrar’s Order on Remand becomes final, effective and non-appealable.

It is further recommended, commencing ten (10) days after the date that the Registrar’s Order on Remand becomes final, effective and non- appealable that the Class C-09 license number 112579 of Respondent, Rockwell Concrete Construction (a “business trust” entity) be suspended until the Registrar receives proof that Respondent (i) has accomplished appropriate corrective work beneath the patio posts resting on the replaced patio slab sections; (ii) has rectified the rough surface condition on the unreplaced patio slab section; (iii) has repaired damage to painted surfaces and to some roof tile pieces adjacent or near to the patio area; and (iv) has paid or tendered the sum of $10,000.00 to Complainant.

It is further recommended that if Respondent accomplishes or causes the accomplishment of the above-described corrective work and pays or tenders the

aforementioned monetary amount to Complainant on or before the above- specified extended deadline date, then no revocation of the corporate entity’s license number 101807 shall take place and such license shall be deemed to have terminated in good standing; and also that no license suspension shall be imposed against business trust’s license number 112579; and that the entire Citation and Complaint issued in case Number M96-0927 and X96-0927 against both licenses shall be closed.

Dated: November 24, 1998.

OFFICE OF ADMINISTRATIVE HEARINGS

_________________________________ Robert. I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

Michael P. Goldwater, Director Registrar of Contractors 800 West Washington, 6th Floor Phoenix, AZ 85007

ATTN: Joyce Armijo -----------------------

Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 (602) 542-9826