ALJDEC

97F-0218-ROC · Registrar of Contractors · 1997-11-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARINGS: October 21 and 22, 1997; 9:00 A.M.; Phoenix, Arizona

APPEARANCES:

Complainants: Gregory P. Gillis, Esq.

Arizona State Plastering, Inc.: John G. Ryan, Esq.

Shea Company, Inc.: Laura W. Janzik, Esq.

ADMINISTRATIVE LAW JUDGE: George A. Schade, Jr.

These three contested cases were consolidated for disposition.[1] The complaints covered three areas, (1) application of stucco or plastering (“the stucco complaint”) on Complainants’ house, (2) installation of drywall (“the drywall complaint”) in one area of the house, and (3) grading of the lot for purposes of drainage from adjacent land (“the drainage complaint”). The stucco complaint was presented in Citation and Complaint No. 97F- 1576-ROC, involving Respondent Arizona State Plastering, Inc. (“ASP”). The drywall and drainage complaints were presented in Citations and Complaints No. 96F-2388-ROC and 97F-0218-ROC, respectively, involving Respondent Shea Company, Inc. (“Shea”).[2] By stipulation, Citation and Complaint No. 97F- 1576-ROC was heard first, and the drywall and drainage complaints were heard on the second day of hearing. Based upon the evidence presented at the hearing, Administrative Law Judge George A. Schade, Jr. submits this Recommended Decision and Order to the Director of the Arizona Registrar of Contractors (“Registrar”). FINDINGS OF FACT PROCEDURAL HISTORY AND FACTS[3] I. The Parties 1. Quentin Augspurger and Nolya (Nody) G. Augspurger, husband and wife (“Augspurgers”) are the Complainants and homeowners. The work done on their house, in Scottsdale, Arizona, is the subject of the complaints. 2. Respondent ASP holds License No. 060746, Class C-36, issued by the Registrar on August 2, 1984. Mr. Walter D. Schuster is the qualifying party. 3. Respondent Shea holds License No. 032620, Class B-04, issued by the Registrar on August 17, 1970. Citation and Complaint No. 96F-2388-ROC originally referred to Shea’s License No. 071349, Class A, but License No. 032620, Class B, was the license the Registrar cited. The procedural history of the complaints involving Shea is not easy to follow due to the facts several complaints, filed over a period of months, were made addendums to these two complaints, and there were closings and reopenings of complaints. Those other complaints were resolved, and only the drywall and drainage complaints filed against Shea were heard in this proceeding. II. Citation and Complaint No. 97F-1576-ROC Against ASP 4. The Augspurgers filed this complaint on December 24, 1996. The complaint alleges that ASP did not apply the one coat Omega Diamond Wall Insulating Exterior Stucco System in conformance with Evaluation Report No. 4004 of the ICBO Evaluation Service, Inc. (dated November, 1994),[4] and secondly, there was no Installation Card for this application. 5. On January 31, 1997, following a jobsite inspection, Mr. Richard K. North, the Registrar’s inspector, issued a Corrective Work Order, which stated: “Stucco minimum thickness is less than 3/8" in some areas of the fascia and greater than the maximum of 1/2" - per I.C.B.O. ER #4004. Contractor to comply with the ICBO requirements for this product.”

6. On February 13, 1997, ASP requested a hearing on this complaint because a stucco expert had inspected the work done by ASP and had concluded “that the application of the stucco is well within accepted industry standards and that the manufacturer of the stucco system will upon request stand behind its warranty,” and secondly, the Augspurgers’ house was being remodeled and corrective work should not be done until the remodeling was completed. See, ASP’s Exhibit No. 6. ASP did not undertake any work to comply with the Corrective Work Order. 7. The Augspurgers requested a hearing on March 6, 1997, and on April 29, 1997. 8. On March 7, 1997, the Registrar closed the complaint, apparently by clerical mistake, but on March 27, 1997, reopened the complaint. 9. On May 13, 1997, the Registrar issued to ASP Citation and Complaint No. 97F-1576-ROC alleging violations of Arizona Revised Statutes §§ 32- 1154(A)(3) (Registrar’s Rule R4-9-108, Ariz. Admin. Code); 32-1154 (A)(7); and 32-1154(A)(23). 10. On May 29, 1997, and on August 14, 1997, ASP answered the citation and complaint and amended complaint, respectively. 11. On June 16, 1997, the Registrar issued a Notice of Hearing. Under the authority of A.R.S. § 41-1092.02, the hearing was assigned to the Office of Administrative Hearings. 12. On July 7, 1997, pursuant to Shea’s motion to consolidate, this matter was consolidated with Citations and Complaints No. 96F-2388-ROC and 97F-0218-ROC. III. Citations and Complaints No. 96F-2388-ROC and 97F-0218-ROC Against Shea The Stucco Complaint Against Shea 13. The Augspurgers filed Complaint No. 96F-2388-ROC on April 18, 1996, and Complaint No. 97F-0218-ROC on July 29, 1996. When originally filed, Complaint No. 96F-2388-ROC did not pertain to the stucco complaint, but when the Augspurgers, on December 24, 1996, filed a stucco complaint against Shea (after simultaneously filing a similar complaint against ASP), the Registrar added the Augspurgers’ stucco complaint against Shea as an addendum to Complaint No. 96F-2388-ROC. For purposes of these cases, Complaint No. 96F-2388-ROC represents the stucco complaint against Shea (Complaint No. 97F-1576-ROC represents the stucco complaint against ASP). 14. On January 31, 1997, following his jobsite inspection, Mr. North issued to Shea a Corrective Work Order which stated the same directives as the corrective work order issued to ASP. 15. On April 25, 1997, Shea informed the Registrar it concurred in ASP’s February 13, 1997, letter regarding the stucco complaint. Shea did not undertake any work to comply with the Corrective Work Order regarding the stucco complaint. 16. On May 28, 1997, the Registrar issued an Order of Closing Complaint No. 96F-2388-ROC. 17. On June 4, 1997, the Registrar issued an Order Reopening Complaint No. 96F-2388-ROC. The Drainage Complaint 18. When filed, Complaint No. 97F-0218-ROC addressed the drainage issue only. The drainage complaint alleges that following precipitation events, storm runoff enters the Augspurgers’ property, where water ponds in one area, for more than forty-eight consecutive hours, and the water does not drain properly, a result of Shea’s deficient grading of the lot prior to construction. Secondly, it is alleged Shea’s construction encroached on a watercourse in violation of a City of Scottsdale ordinance. 19. On August 21, 1996, the Augspurgers withdrew their drainage complaint against Shea, as they had not had any storm runoff which had ponded for more than forty-eight consecutive hours. The Registrar closed this complaint on August 21, 1996. 20. On November 22, 1996, the Augspurgers asked the Registrar to reopen their drainage complaint on the grounds that a series of rains had caused water to pond for more than forty-eight hours, and secondly, in the manner it had graded their lot prior to construction, Shea had violated City of Scottsdale Ordinance Section 47-66 (Encroaching on a Watercourse). 21. On December 2, 1996, the Registrar reopened Complaint No. 97-0218- ROC as it pertained to the drainage complaint. The Drywall Complaint 22. On February 10, 1997, the Augspurgers filed the drywall complaint against Shea. The complaint alleges that Shea deviated from the building plans by installing 1/2" gypsum wallboard between the garage and the house and in the ceiling of the garage, and not installing 5/8" drywall as called for in the building plans. The Registrar, rather than assign it a unique number, added this complaint as an addendum to Complaint No. 97F-0218-ROC. Therefore, Complaint No. 97F-0218-ROC represents both the drainage and drywall complaints against Shea. 23. On March 7, 1997, Mr. North informed the Augspurgers that as Shea had installed a fire sprinkler system, the installation of 1/2" drywall met City of Scottsdale building requirements, and as the substitution of materials was permitted under Shea’s contractual scope of work, “no action [would be] required of contractor at this time.” See, Shea’s Exhibit No. 40. The letter stated the Augspurgers could submit for review additional evidence in support of their complaint if “received within ten (10) working days.” 24. On April 16, 1997, the Augspurgers responded and requested the Registrar to issue a citation. The Augspurgers did not submit additional evidence, but stated that the document mentioned by Mr. North (the scope of work) was not part of either the Augspurgers’ contract or of the drawings of the house on file with the City of Scottsdale. 25. The Augspurgers requested a hearing on April 16, 1997, and on April 29, 1997. On April 25, 1997, Shea requested a hearing on these complaints. 26. On March 7, 1997, the Registrar closed the drywall complaint, apparently by clerical mistake, but reopened it on March 27, 1997. 27. On May 13, 1997, the Registrar issued to Shea Citation and Complaint No. 97F-0218-ROC alleging violations of A.R.S. §§ 32-1154(A)(2); 32-1154(A)(3) (Registrar’s Rule R4-9-108, Ariz. Admin. Code); 32-1154 (A)(7); and 32-1154(A)(23). 28. On May 15, 1997, the Registrar issued to Shea Citation and Complaint No. 96F-2388-ROC alleging violations of A.R.S. §§ 32-1154(A)(2); 32-1154(A)(3) (Registrar’s Rule R4-9-108, Ariz. Admin. Code); and 32-1154 (A)(7). 29. On June 2, 1997, Shea answered these citations and complaints. The answer denied the allegations and any wrongdoing or liability and denied that Shea had deviated from building plans, specifications and applicable building codes. 30. On June 18, 1997, the Registrar issued a Notice of Hearing. Under the authority of A.R.S. § 41-1092.02, the hearing was assigned to the Office of Administrative Hearings. IV. Proceedings at the Office of Administrative Hearings 31. On July 7, 1997, pursuant to Shea’s motion to consolidate, these matters were consolidated for disposition. A hearing was set for August 11, 1997, and the consolidated cases were assigned to Administrative law Judge George A. Schade, Jr. 32. On July 31, 1997, the Augspurgers filed a Consolidated and Amended Complaint. This amended complaint contained three counts: (1) the stucco complaint against ASP, (2) the drainage complaint against Shea, and (3) the drywall complaint against Shea. This amended complaint was intended to clarify the issues to be heard. 33. On August 8, 1997, following a telephonic conference with all counsel, pursuant to stipulation, the August 11th hearing was continued to October 21 and 22, 1997. 34. On October 21, 1977, and October 22, 1997, hearings were held from 9:00 A.M. to 7:30 P.M. By stipulation of the parties, the stucco complaint against ASP was heard on October 21, 1997, and the drainage and drywall complaints against Shea were heard on the following day. Both parties presented testimony and documentary evidence.[5] The majority of the exhibits were admitted by stipulation of the parties. At the October 21, 1997, hearing, Shea did not present evidence on the stucco issues, but relied on the defenses presented by ASP. THE PURCHASE CONTRACT 35. On or about January 9, 1996, the Augspurgers and Shea entered into a Purchase Contract wherein Shea promised to sell and the Augspurgers promised to buy the real property and the house to be built thereon by Shea, located in Scottsdale, Arizona, for the price of $218,185.00. Later, the Augspurgers changed their lot selection and chose to purchase a house which was already under construction and about 30 to 45 days from end of construction. 36. On April 30, 1996, the Augspurgers closed escrow on the purchase of the property. 37. The Augspurgers did not immediately move into the house because they undertook to do some remodeling which they wanted (but which Shea had not agreed to do as part of the Purchase Contract). This remodeling involved several areas of the house and lasted the balance of 1996. This remodeling work did not involve either ASP or Shea. 38. During the course of the remodeling, when parts of the walls of the house were exposed, the Augspurgers learned of the facts which subsequently became the grounds for the allegations of the stucco and drywall complaints. THE WITHDRAWAL OF COMPLAINT NO. 96F-2388-ROC AGAINST SHEA 39. At the conclusion of the hearing on October 21, 1997, the Augspurgers withdrew their stucco complaint against Shea (Complaint No. 96F- 2388-ROC). The withdrawal was based on the allegations contained in their amended complaint pertaining to parties and prehearing agreements of counsel. THE STUCCO COMPLAINT AGAINST ASP (COMPLAINT NO. 97F-1576-ROC) 40. ASP was the plastering subcontractor utilized by Shea to apply exterior stucco to the Augspurgers’ house. 41. ASP applied the one coat Omega Diamond Wall Insulating Exterior Stucco System (“Diamond Wall”). This item was an option for which the Augspurgers paid an additional $2,465.00. 42. Prior to close of escrow, on February 25, 1996, the Augspurgers wrote a Construction Memo (a form used by Shea) indicating they had seen “cracks in brown coat various places,” and “we still see uncovered drywall.” See, Complainants’ Exhibit No. 30. On April 30, 1996 (the close of escrow date), the Augspurgers requested warranty work for the “finish on exterior - not even.” See, Complainants’ Exhibit No. 2. 43. Prior to close of escrow, the Augspurgers noted a “blotchy” area, which Mr. Schuster described as measuring approximately 10’ x 10’ on the rear exterior wall. The Augspurgers asked Shea and ASP to redo this area and other areas. According to Mr. Schuster, as the Augspurgers were going to remodel, ASP agreed it would return after the remodeling work was completed. The significant disagreement between these parties on this issue is that according to the Augspurgers, ASP agreed to return and redo large areas of the plaster, while Mr. Schuster claimed the agreement was that ASP would redo only the 10’ x 10’ area, where, in his opinion, the blotchiness was more apparent than elsewhere. 44. ASP, however, applied a coating of Elastomeric 44 to all the stuccoed areas. This product, according to Mr. Schuster, “basically, gives you a rubber house…like a rubber glove.” The product is “quite thick” and has a high percentage of elasticity. It provides a coating over cracks and gaps but does not repair them. 45. In December, 1996, the Augspurgers asked ASP to return to redo the plaster. ASP did not return to the Augspurgers’ house because ASP did not want to get “involved” in this project. By that time, the numerous complaints the Augspurgers had filed against other contractors were known to ASP, and ASP chose not to get involved with the plaster work. Moreover, ASP did not have a contract to do any of the remodeling work for the Augspurgers. When ASP did not return to their house, the Augspurgers filed the stucco complaints against both ASP and Shea.[6] 46. During the remodeling, the Augspurgers discovered: a). The stucco in some areas was less than 3/8” thick. b). The stucco in some areas was more than 1/2” thick. c). The lath wire fabric was No. 20 gauge, 1” fabric, and not No. 17 gauge, 1 ½” woven wire lath. d). Some of the screws were not No. 8 screws having a 3/8” diameter pan head. Some of these screws did not appear to have penetrated 1/2”. e). Furring crimps were not provided at maximum 6-inch intervals each way. 47. Mr. Augspurger obtained a copy of the ICBO’s Evaluation Report No. 4004 (November 1994), which provided the workmanship standards for the application of the Diamond Wall. This Report was prepared with the assistance of Omega Products International, Inc., the manufacturer. This Report provided in pertinent parts: “4. Lath: a. Wire Fabric Lath: Minimum No. 20 gauge, 1-inch galvanized steel woven-wire fabric. Lath must be self-furred [ed. note: furring] or furred when applied over all substrates except unbacked polystyrene board. Self-furring lath for coatings must comply with the following requirements: 1. The maximum total coating thickness is ½ inch. *** C. Installation: 1. General: The exterior cementitious coating is applied by hand troweling or machine spraying in one coat to a minimum 3/8-inch thickness. The lath must be embedded in the minimum coating thickness and therefore cannot be exposed. *** 2. Furring crimps must be provided at maximum 6-inch intervals each way. The crimps must fur the body of the lath 1/8 inch minimum from the substrate after installation. *** 2. Application Over Open Framing: a. EPS Insulation Board: *** For application to minimum No. 20 gauge (0.0396 inch minimum) steel studs spaced 24 inches on center maximum, minimum 1 ½ inch by No. 17 gauge woven wire lath is applied over the EPS board with 2-inch laps, and secured with No. 8 screws having a 3/8-inch-diameter pan head at 7 inches on center to all studs and track. See, Complainants’ Exhibit No. 6.

48. Mr. Augspurger obtained a copy of the One Coat Stucco Compliance Program standards promulgated by the Maricopa Association of Governments (“MAG”) on May 10, 1993, and adopted by the City of Scottsdale on March 17, 1993. The standards became effective July 1, 1993. See, Complainants’ Exhibit No. 7. The pertinent deficiency the Augspurgers raised based on this document is that a “completed Installation Card for each job must be left at the job site for the owner and a copy submitted to the jurisdiction upon completion of the work or prior to the final inspection of the project.” (Emphasis in document.) See, Complainants’ Exhibit No. 7, page 2. Failure to file an Installation Card may be a “cause for rejection of the stucco system.” See, Complainants’ Exhibit No. 7, page 3. 49. Mr. Augspurger testified he had not seen the Installation Card, and he had visited the City of Scottsdale and had not found an Installation Card on record with the City for the plastering done at his house. 50. Pursuant to the requirements of MAG’s One Coat Stucco Compliance Program, ASP is a manufacturer-approved installer for the Diamond Wall products of Omega Products International, Inc. 51. Mr. Schuster oversaw the employee (Mr. Danny Ray) who applied the Diamond Wall to the Augspurgers’ house. Mr. Ray had training in using the product. Mr. Mark E. Cline, ASP’s General Manager, testified that Mr. Glenn Martin, the supervisor for the stucco work at the Augspurgers’ subdivision, was trained in the application of Diamond Wall. 52. The Augspurgers measured with a steel rule (not a micrometer or calipers) some of the pieces of stucco removed during the remodeling. Various pieces of the exposed stucco were measured, with thicknesses of 1/8”, 11/16”, 5/8”, 1/4”, 5/16”, 3/16”, and ¾.” Generally, the thinner stucco was found in the fascia areas, and the thicker stucco around the windows. 53. Mr. Augspurger testified that after one and a half years after ASP applied the stucco no cracking is “visible,” no stucco is “falling off” or chipping and no wire mesh or lath shows through the stucco. 54. Mr. Gary D. Lionberger, a stucco consultant retained by ASP and called as an expert witness, visited the Augspurgers’ house three times. He testified that stucco is leveled by hand with the objective of obtaining a “level wall,” proceeding from the roof line down. Variations in the thickness of stucco will occur as this leveling process is undertaken, taking into account the undulating condition of the framing and the tautness of the wire mesh. The “perfect wall is not going to happen,” so stucco applicators will account for underlying undulations, resulting in variations in thickness. Stucco is applied thinner in the fascia areas so heavy stucco will not fall off or sag, and is applied thicker around window frames to account for the ending of the foam board and tucking in the wire lath. Generally, foam boards are 1” thick so the stucco has to take into account this thickness. Stucco will stick as long as it covers both sides of the wire mesh or lath. His inspection of the pieces of stucco shown to him by Mr. Augspurger show stucco on both sides of the metal lath, and therefore, the stucco is “sticking” and holding. It is a common practice to use wafer head screws to attach the metal wire to the walls. The threads of the screws used, which he saw, would penetrate ¼” into the steel studs, as needed for a proper application. No furring is required when the kind of foam board used at the Augspurgers’ house is utilized (“beaded foam board”). No stucco applicator in Maricopa County uses No. 17 gauge wire lath for one coat stucco because at 3/8” thickness, the wire fabric which is raised would show through the stucco. The raised crimping of the wire mesh is obvious from an inspection of No. 17 wire mesh. See, Complainants’ Exhibit No. 32. Fractures would occur, and stucco thickness would have to be 5/8” or even 7/8” to cover the No. 17 gauge wire lath. Mr. Lionberger testified “they just made a mistake” when the ICBO Evaluation Report No. 4004 provided for the use of No. 17 gauge wire. In fact, the ICBO has revised Evaluation Report No. 4004 to provide for No. 20 gauge wire lath. He did not see any cracks in the finished stucco at the Augspurgers’ house. About 90% of stucco applications in Arizona are one coat stucco because of its superior thermal insulating qualities and lower cost than three coat stucco.[7] His opinion was that ASP’s stucco application was a “good application” and “good stucco.” 55. Mr. Randy R. Down, Omega Products International’s representative, testified that No. 17 gauge wire mesh is not used in applying the Diamond Wall or in one coat stucco applications, and he is not aware of any stucco applicator in Arizona who uses this gauge wire for one coat stucco. The statement in ICBO Evaluation Report No. 4004 regarding the use of No. 17 gauge wire was an “oversight” and a point “obviously overlooked.” 56. Mr. Down was authorized to approve the issuance of a material warranty to the Augspurgers for the Diamond Wall application. For residential jobs, the standard warranty is five years. Such a warranty is not issued until after the manufacturers’ representative makes an on-site inspection. Mr. Down testified the stucco job ASP did for the Augspurgers “was above average” and “more than acceptable,” and merited the issuance of a five year warranty. On March 10, 1997, Mr. Down wrote a letter to the Augspurgers stating, “Based on our observations and conclusions, I am recommending to Omega Products that they issue their 5 year material warranty.” See, Complainants” Exhibit No. 10. The warranty cannot be issued now, as remodeling stucco has been applied, and Mr. Down would have to inspect the remodeling stucco. No Diamond Wall material warranty has been issued to the Augspurgers. 57. Mr. Down, who was informed of the decision to use Elastomeric 44 prior to its application, testified that ASP’s application of Elastomeric was “overkill.” This elastomeric coating is generally used to cover cracks and gaps, but in this case it was used to remediate blotchiness. The product has been used in “problem jobs,” and in Mr. Down’s opinion, the Augspurgers’ stucco application was not a problem job, and ASP was “trying to please the customer” when it applied the Elastomeric 44 to blend colors. 58. Mr. Schuster testified No. 17 gauge wire has never been used in Arizona for one coat stucco because the crimping in the wire mesh sticks out thereby interfering with the uniform application of the stucco. Mr. Schuster “helped invent the [one coat stucco] system in Arizona.” He has used Omega Diamond Wall products for about six years. 59. Mr. Schuster testified the screws used for the stucco application have bigger heads than required by the ICBO, screw indentations will be found in the foam boards particularly when steel studs are used, and these indentations do not represent overdriving or overfastening the screws. Indentations show efforts to fasten the wire mesh better to the wall. 60. Mr. Schuster testified that Installation Cards are given to the general contractor’s construction managers, this was done in this case, and the managers keep the cards in filing cabinets in the worksite trailers. He did not know why the City of Scottsdale did not have an Installation Card for the Augspurgers. He testified the City had Installation Cards for other houses in the subdivision. 61. Mr. North, who issued a Corrective Work Order, was not called to testify. 62. ICBO Evaluation Report No. 4004 was reissued on May 1, 1997. The reissued report deletes the requirement to use the “minimum 1 ½ inch by No. gauge woven wire lath.” See, ASP’s Exhibit No. 17. For wire fabric lath, the revised report calls for a “Minimum No. 20 gage (note: the November 1994 report spelled it “gauge”), 1-inch (25 mm) galvanized steel woven-wire fabric,” the same mesh used by ASP. See, ASP’s Exhibit No. 17, section 2.2.4.1. 63. There is no evidence showing the City of Scottsdale did not approve, following the required inspections, either the installation of the lath or the application of the final coating. APS’S PRIOR DISCIPLINARY RECORD[8] 64. The disciplinary record of ASP, reported in the Registrar’s public computerized records, shows five confirmed complaints, including this complaint, have been filed against ASP between December 15, 1994, and February 6, 1996. These are Complaints No. 95-1359 (McKinnon), 96-0191 (Berkery), 96-0663 (Brown), 97-1576 (Augspurger), and 96-1782 (Helm). Mr. Schuster testified that ASP stuccos approximately 1,400 houses annually in Arizona, and some 1,500 houses in Nevada and Texas. In terms of size, ASP is usually ranked between first and fifth in Arizona. ASP has 300 employees in Arizona. THE DRAINAGE COMPLAINT AGAINST SHEA The Drainage Problem 65. Adjacent to the Augspurgers’ lot to the south and west is an elevated Natural Area Open Space (“NAOS”). The NAOS is land dedicated to the City of Scottsdale, butt is maintained by the subdivision’s homeowners’ association. No buildings exist inside this portion of the NAOS. 66. The elevated portion of the adjacent NAOS is populated with large boulders and attractive natural desert vegetation, including sahuaros, ocotillos, Palo Verde trees, and desert and ephemeral grasses. 67. On June 4, 1996, some five weeks after close of escrow, Mr. Augspurger called Shea about the drainage of his property. He testified he wrote a letter to Shea on July 11, 1996. A copy of this letter was not submitted as an exhibit, but Mr. Augspurger testified he called Shea about the “drainage problem,” and that he would commence landscaping unless he heard from Shea as to a solution to the drainage problem. Not hearing from Shea, Mr. Augspurger retained a landscaping contractor (Mr. Steven R. Clark) and began landscaping his yard. 68. In the summer of 1996, at least prior to July 29, 1996, when the drainage complaint was filed, storm runoff ponded in a low area on the Augspurger’s property. The low area is circular in shape, approximately nine inches deep and is entirely located on the Augspurgers’ property. This low area was described as a “basin” (Joseph D. Morris, P.E., an employee of the City of Scottsdale), a ”swale” (Mr. Clark, the landscaping contractor) and a “depressed area” (Mr. Thomas J. Jones, Shea’s Vice President of Construction). 69. On August 19, 1996, Mr. Augspurger wrote to Mr. North: “So far we have not had rainwater runoff standing longer than forty- eight (48) hours, and until that happens, it would appear that we have no issue against Shea Homes through your office, and I would ask that you release our claim against Shea Homes on the [“drainage problem”] issue.” See, Shea’s Exhibit No. 10.

Mr. North closed the complaint on August 21, 1996. 70. In August, 1996, a series of rains occurred and water ponded in the low area. Standing water remained for more than forty-eight hours, Mr. Augspurger testified “four days.” 71. On November 22, 1996, Mr. Augspurger requested that Mr. North reopen the drainage complaint, and Mr. North did so on December 2, 1996. 72. On or prior to September 11, 1997, storm runoff again ponded in the low area, but this time not for more than forty-eight hours. Therefore, from close of escrow on April 30, 1996, to the present, water has remained standing in the low area for more than forty-eight hours only once. 73. The water which remains standing in the low area comes from at least two sources, namely, storm runoff flowing down from the elevated NAOS and rainwater which flows down from the roof of the house and is carried to the low area through an “area drain pipe.” 74. This area drain pipe is a four-inch diameter PVC pipe which is twelve to fifteen feet long and “daylights” above the low area. The drain pipe captures the water which flows down from the roof and is collected on the ground between the house’s west wall and the sidewalk. The sidewalk has flagstone on top of it, and its height is approximately one to two inches. Mr. Clark, the landscaping contractor, installed this area drain pipe. Mr. Augspurger estimated the rainwater flowing into the area drain pipe comes from 279 square feet of the roof. No evidence was presented showing how much water can be reasonably estimated to flow from the roof, but this source, given the need for a four-inch diameter pipe and Mr. Clark’s excavation of the low area to accommodate this water, should not be downplayed. The Grading and Drainage Plan of the Subdivision 75. The grading plan for this property called for positive drainage from front to rear. The elevation of the pad was 36.0 feet, the elevation of the finished floor was 36.70 feet, and the elevation of the rear of the lot was 34 feet. The grading and drainage plan called for storm runoff to flow down from the elevated NAOS, enter the property near its southwest corner, flow to the north inside a retaining wall[9] located along the west side of the property, and drain out on the north side of the property. 76. On October 18, 1994, the City of Scottsdale approved Shea’s grading and drainage plan for the subdivision. The City of Scottsdale’s Ordinance Section 47.66 77. The City of Scottsdale has adopted an ordinance which prohibits “constructing...any structure” which encroaches on a “watercourse.” See, Complainants’ Exhibit No. 19. A central issue of the Augspurgers’ complaint is that Shea encroached on a watercourse in violation of this ordinance. The watercourse, according to the Augspurgers, is the watercourse whose terminus is at the low area or swale on their property where storm runoff has ponded. 78. The ordinance defines the term “watercourse” as follows: “Watercourse means a channel for the carrying of stormwater, including both natural and artificial watercourses. For purposes of this article, the channel shall have a minimum capacity of five (5) cubic feet per second or sufficient to carry a twenty-year design storm on its tributary area whichever is more.” See, Complainants’ Exhibit No. 19.

The Watercourse 79. Edward A. Adair, P.E., a civil engineer retained by the Augspurgers and called as an expert witness, visited the property twice in the spring and summer of 1996, and studied the topographic contour lines of the area taken from the grading and drainage plan. Based on this information, he calculated that the capacity of the alleged wash, at its most “conservative” point, was 35.9 cubic feet per second (“CFS”). Mr. Adair used Manning’s Formula (using cross-sectional data to calculate velocity and flow of water). Mr. Adair testified he used Shea’s grading and drainage plan because the pad of the house had “obliterated” the wash. The point Mr. Adair selected to take his measurements from the grading and drainage plan is located at the point where the wash would have exited the Augspurgers’ lot, or in his opinion, where the water would have flowed on the property. See, Complainants’ Exhibit No. 23. At this point, Mr. Adair calculated the width of the claimed wash to have been 11.5 feet, and its deepest depth to be 0.8 foot. The capacity of 35.9 CFS assumes the watercourse is running full to the highest level of its banks before it overflows.[10] 80. In July, 1996, Darrel E. Wood, P.E., R.L.S., an engineer who prepared the grading and drainage plan for Shea, “investigated the drainage area to the west of” the Augspurgers’ lot. See, Complainants’ Exhibit No. 21. He determined: a). The drainage watershed of the alleged watercourse was estimated at 12,000 square feet. b). The estimated longest travel length is 120 feet. c). The estimated peak discharge for a 100-year rainfall/runoff event in the alleged watercourse would yield 1.7 CFS. “A 100-year rainfall/runoff event has a 1% chance of occurring in any given year and statistically averages once every 100 years.” See, Complainants’ Exhibit No. 21. d). The 100-year precipitation intensity “at the subject location” is “about nine inches per hour.” See, Complainants’ Exhibit No. 22. 81. On September 12, 1996, in response to Mr. Adair’s calculations of a capacity greater than five CFS, Mr. Wood reported it would take a precipitation event of 26.45 inches of rain per hour for five CFS to flow in the claimed watercourse, significantly higher than the 100-year precipitation intensity at the subject location of nine inches per hour. Mr. Wood testified the capacity of a watercourse should be measured in terms of “actual” flows, as he did, rather than “potential” flows, as Mr. Adair had done. 82. The parties stipulated that as measured on July 27, 1997, by Arthur N. Brooks, P.E., R.L.S., a consulting civil engineer retained by the Augspurgers, the claimed “wash is actually 1.7 feet below the curb at that point where [the house] was placed on the lot,” and secondly, “the driveway was built roughly level from the curb to the garage.” See, Complainants’ Exhibit No. 29. These stipulations were the extent of Mr. Brooks’ admissible testimony. After the Construction of the House 83. Mr. Adair, who visited the property in the summer of 1996, testified that when he visited, from a visual perspective, the lot “did not appear” to have positive drainage from south to north. 84. Mr. Steven R. Clark, who holds a Bachelor of Arts degree in Landscaping Design (Texas Tech, 1985), visited the property two to three times in the Spring of 1996 for landscaping consultations with the Augspurgers prior to commencing any landscaping work. He testified he found an eight to ten inches difference between the elevation of the swale and the “disturbed area” of the preconstruction grading, and “all water was draining” toward the swale. He found “all points on the lot” were higher than the swale. He testified there was a tree near the swale, whose elevation was lower than in the north portion of the lot. He had “grading and drainage concerns,” as he noticed “some sloppy grading.” In his opinion, it was an “impossibility to get water from front to back.” Mr. Clark never contacted Shea to discuss his drainage concerns. 85. It was Mr. Clark’s idea to install an area drain pipe which would be “self-cleaning” and “daylight” in the low area. He made this selection because the low area was the lowest point on the lot available for drainage. As the area drain pipe had to “daylight,” he concluded that the low area would be the best place for it to daylight. The area drain pipe daylights above the low area and its exit is camouflaged by a bush plant. 86. Mr. Thomas J. Clark excavated part of the low area to increase its storage capacity. 87. Mr. Jones, Shea’s Vice President of Construction, testified at the time escrow closed there had been a “continuous gradient” and “the grading looked like a gradual fall” from the NAOS down to the lot, where later he found “a depressed area.” Three photographs taken by Mr. Augspurger prior to close of escrow tend to support this testimony. See, Complainants’ Exhibits No. 40, 41 and 42. But under close and careful examination, these photographs do not show all the fine contours of terrain and gradient, which the vegetation hide, which would clearly establish the existence of a gradient which facilitated the unimpeded flow of runoff water. The photographs show a generally downward sloping gradient and reflect the efforts of the grading contractor to accommodate the terrain at this property. The photographs, however, do not show that the low area subject of this complaint was definitively not there when escrow closed. 88. Mr. Jones testified that when he visited the property in the summer of 1996 he found that the low area had been excavated. He inquired of Mr. Augspurger why the area had been excavated and “dirt had been removed,” and Mr. Augspurger responded that there had been a concern about a tree that might die. 89. A tree has been planted in the west side of the lot in the area where runoff water was planned to flow as it heads north out of the property. 90. At least two large decorative boulders and earthen steps leading up to the NOAS are visible in the area where storm runoff was planned to enter the property and flow to the north, between the retaining wall and the west side of the house. See, Shea’s Exhibits No. 55 and 56. It is reasonable to a discerning eye that, at a minimum, these boulders would most likely impede the flow of storm runoff through its planned route on the west side of the property. A Feasible Solution 91. The parties and some of their consultants (Messrs. Adair and Wood) have reviewed possible solutions to the drainage problem. See, Complainants’ Exhibit No. 24. The solution which would not negatively impact the NAOS and which is practical and feasible is the “Bleed Off System,” which would consist of the installation of a PVC drain pipe with an inlet at the low area, crossing underneath the driveway of the house and connecting to an existing 24-inch storm sewer pipe which runs along the east side of the Augspurgers’ property. The length of this drain pipe would be approximately 65 feet. The parties may have agreed on the engineering feasibility of this solution but disagreed on its financial aspects. THE DRYWALL COMPLAINT AGAINST SHEA 92. The Purchase Contract stated in pertinent part: “Seller shall construct the Residence in substantial conformance with the Plans, subject to substitution of equipment, appliances and materials of equal or better quality and subject to such changes in the Plans as may be required by any federal, state, county or local governmental authority or in order to accommodate change orders approved by Seller.”

93. The floor notes of the floor plans which Shea filed with the City of Scottsdale state that the fire separation between the house and the garage would be “5/8" type X gypsum board.” See, Complainants’ Exhibit No. 13. The plans were dated September 22, 1994. See, Complainants’ Exhibit No. 13. 94. Shea installed 1/2" gypsum wallboard in the ceiling of the garage and on the wall separating the garage from the house. A portion of the wall to the left of the wall facing the entrance to the garage also has 1/2" drywall. 95. The garage walls which have 1/2" drywall are not fire resistive walls. 96. Shea installed an approved automatic fire sprinkler system and smoke detectors in the house. 97. The City of Scottsdale does not require fire resistive construction “when the entire building is equipped with an approved automatic fire sprinkler system and smoke detectors are installed in accordance” with building regulations. See, Complainants’ Exhibit No. 14 (Section 302.4, Ordinance No. 2783 of the City of Scottsdale).The effect of this provision is that Scottsdale allows the installation of 1/2" drywall when a fire sprinkler system, such as that in the Augspergers’ house, is installed.[11] 98. There is no evidence showing that the City of Scottsdale did not approve the installation of 1/2" drywall in the affected areas. 99. Both Mr. North and Mr. Jones testified that, in their opinions, the Augspurgers received a substitution of equal value when 1/2" drywall was installed in conjunction with the automatic fire sprinkler system. Mr. North, following his jobsite inspection, had determined no contractor action was required on this complaint. 100. The Augspurgers presented evidence showing differences between 5/8" drywall and 1/2" drywall exist in three areas: a.) There is a difference of one Sound Transmission Class between 5/8" and 1/2" drywall used with steel studs. b). There is a difference of 0.11 in thermal resistance values (“R- values”) between 5/8" and 1/2" drywall. c). There is a difference of 66 lb. in shear values for screw application of gypsum board on walls, for parallel application, between 5/8" and 1/2" drywall. d). There is a difference of 31 lb. in shear values for screw application of gypsum board on walls, for perpendicular application, between 5/8" and 1/2" drywall. 101. There is no evidence showing that the Augspurgers’ house does not meet the required sound transmission class. No evidence was presented if such requirements exist or what is the current sound transmission class of the Augspurgers’ house. The evidence presented on this issue relates to the unique sound transmission properties of 5/8" and 1/2" drywall, when tested by themselves under control conditions. 102. The Purchase Contract provided that ceilings over living areas would have a resistive value of R-38, and exterior walls in living areas would have a value of R-19. 103. There is no evidence showing that the insulation in the Augspurgers’ house, installed by Shea, does not yield the resistive values specified in the Purchase Contract). 104. The evidence of shear values consisted of the results of a particular test conducted with certain parameters. The test used a specific screw type with specific edge screw and field screw spacings, “to determine the shear resistance of gypsum board applied to one side of wood stud partitions...” (Emphasis added.) See, Complainants’ Exhibit No. 17. The Augspurgers’ house has steel studs. There is no evidence showing how close these test conditions match or track those existing in the Augspurgers’ house. 105. Mr. North testified sound transmission ratings, thermal resistive values and shear values of drywall were not brought up at the jobsite inspection or in the many discussions Mr. North had with the Augspurgers regarding the drywall complaint. These issues were presented for the first time at the hearing, and over objection, the Administrative Law Judge heard this evidence in the spirit of completeness. SHEA’S PRIOR DISCIPLINARY RECORD 106. The disciplinary record of Shea, reported in the Registrar’s public computerized records, shows two confirmed complaints have been filed against Shea’s License No. 032620, Class B-04, between November 15, 1995, and March 29, 1996. These are Complaints No. 96-1164 (Sebade) and M96-1483 (Wilhelm). CONCLUSIONS OF LAW APPLICABLE STATUTES AND RULES A.R.S. § 32-1154(A) provides in the pertinent subsections: “A. 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: *** 2. Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner’s duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.

3. Violation of any rule adopted by the registrar. *** 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. *** 23. 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 pursuant to the provisions of this article.”

Registrar’s Rule R4-9-108(A), Ariz. Admin. Code, states “All work shall be done in workmanlike manner.” CONCLUSIONS OF LAW 1. In these administrative cases, the complainants have the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. See, Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996), rev. denied (1997); Troutman v. Valley Nat. Bank of Arizona, 170 Ariz. 513, 826 P.2d 810 (App. 1992). A Apreponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence, ' 5 (1960). It “is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” BLACK=S LAW DICTIONARY 1182 (6th ed., 1990). THE STUCCO COMPLAINT AGAINST ASP 2. The evidence does not establish ASP violated A.R.S. § 32- 1154(A)(3). The Registrar is charged with determining workmanship of construction, or whether a licensed contractor performed “in a good workmanlike manner and in a manner befitting a skilled contractor.” Reliable Electric Co. v. Clinton Campbell Contractor, Inc., 10 Ariz. App. 371, 374, 459 P.2d 98 (1969); see, J. W. Hancock Enterprises, Inc. v. Registrar of Contractors, 126 Ariz. 511, 514, 617 P.2d 19 (1980); A.R.S. § 32-1154(A)(3); Rule R4-9-108(A), Ariz. Admin. Code. The keystone of the Augspurgers’ complaint is that ASP failed to adhere to ICBO Evaluation Report No. 4044, a major point being the failure to use No. 17 gauge wire lath. This Report was revised, however, to delete the requirement of No. 17 gauge wire, and now calls for the use of No. 20 gauge wire, which is what was used in this stucco application. It is ironic that if ASP would be required to restucco the house, it would be required by the revised ICBO Evaluation Report No. 4004 to utilize the same No. 20 gauge wire lath it originally utilized. The Augspurgers have the benefit of thicker stucco around the windows, thinner stucco in the fascia areas where it will not sag or fall off, and the right gauge wire as now recommended by the ICBO report. A year and a half after the application, poor workmanship is not visible. The application qualified for a five year material warranty. The preponderance of the evidence shows ASP’s stucco application was done “in a good workmanlike manner and in a manner befitting a skilled contractor.” Reliable Electric Co. v. Clinton Campbell Contractor, Inc., supra, 10 Ariz. App. at 374. 3. The evidence does not establish ASP violated A.R.S. § 32- 1154(A)(7). To be operative, this provision requires that “a wrongful or fraudulent act” by a licensed contractor results in another person being “substantially injured.” A.R.S. § 32-1154(A)(7). The evidence does not support a conclusion that ASP’s application of stucco constituted either a “wrongful” or a “fraudulent” act. 4. The evidence does not establish ASP violated A.R.S. § 32- 1154(A)(23). This provision disciplines failure to take corrective actions “without valid justification within a reasonable period of time after receiving a written directive from the registrar.” A.R.S. § 32-1154(A)(23). ASP timely (within two weeks) responded to the Corrective Work Order and provided valid justification for not undertaking the directed actions. ASP obtained the opinion of an expert stucco consultant, and secondly, it was reasonable for ASP not to commence corrective actions while the remodeling was occurring. THE DRAINAGE COMPLAINT AGAINST SHEA This complaint presents two issues, first, is the drainage a “watercourse” within the definition of the City of Scottsdale’s Subdivision Ordinance Section 47-66?, and second, was Shea’s grading of the lot responsible for the ponding of water? I. Is the Drainage a “Watercourse”? The drainage is not a “watercourse” under Ordinance Section 47-66. 5. Scottsdale’s Subdivision Ordinance Section 47-66 defines a “watercourse”: “Watercourse means a channel for the carrying of stormwater, including both natural and artificial watercourses. For purposes of this article, the channel shall have a minimum capacity of five (5) cubic feet per second or sufficient to carry a twenty-year design storm on its tributary area whichever is more.” See, Complainants’ Exhibit No. 19.

The Augspurgers submit that the capacity of the wash, measured by volume and area, is 35.9 CFA, therefore, the wash is a watercourse under the terms of this ordinance. Shea asserts that a precipitation event yielding 26.45 inches of water per hour, measured in terms of a 100-year intensity, would have to occur for 5 CFS to be discharged in the claimed wash, but the 100-year intensity at this location is significantly less, about 9.0 inches per year, which would yield 1.7 CFS in the wash. The choices offered by the parties are between volume capacity or discharge flows. 6. The ordinance’s definition of “watercourse” is not a superior model of clarity, but one word aids the inquiry. The watercourse must have a “channel.” Arizona water case law gives guidance as to what a “channel” should be in order to be considered a watercourse. The Arizona Supreme Court has defined the term “watercourse” when considering the appropriability of public waters. Appropriability is obviously not an issue here, but these judicial opinions give good guidance. When considering what constitutes a watercourse, the Arizona Supreme Court has spoken of “a well-defined channel,” City of Globe v. Shute, 22 Ariz. 280, 289, 196 P. 1024 (1921), and has held that “the essential characteristics of a water course are a channel, consisting of a well- defined bed and banks…” Maricopa County Municipal Water Conservation Dist. No. 1 v. Southwest Cotton Co., 39 Ariz. 65, 85, 4 P.2d 369 (1931), modified on other grounds and rehearing denied, 39 Ariz. 367, 7 P.2d 254 (1931). (Emphasis added.); see also, Kirkpatrick v. Butler, 14 Ariz. App. 377, 381, 483 P.2d 790 (1971) (“well-defined boundaries”). The lucid import of these holdings is that the channel of a watercourse must be “well-defined”. 7. The evidence does not establish there is a well-defined channel which carries water to the low point on the Augspurgers’ property. Therefore, the drainage is not a “watercourse” within the terms of Scottsdale’s Subdivision Ordinance Section 47-66. The photographs of the property and surrounding land show a well- appointed home situated near the top of a hill populated with large boulders and attractive desert vegetation. See, Complainants’ Exhibits 40- and 45-51. The existence of elevation contour lines on a topographic map is not dispositive proof that a “watercourse’ under the terms of Subdivision Ordinance Section 47-66 exists in the area. Map contour lines intend to show topographic elevations and physical features which may not necessarily show the existence of watercourses, streams or rivers. The existence of a watercourse is best established with data gathered in the field rather than visually interpreted from topographic maps. 8. The elevated NAOS area adjacent to the Augspurgers’ property carries diffused surface waters, or “waters which flow on the land from the skies or arise in springs and diffuse themselves over the surface of the ground, following no defined course or channel and are lost by being diffused over the ground through percolation, evaporation, or natural drainage. [citations omitted].” Espil Sheep Co., Inc. v. Black Bill & Doney Parks Water Users Ass’n, 16 Ariz. App. 201, 203, 492 P.2d 450 (1972); Kirkpatrick v. Butler, supra. These diffused surface waters, resulting in this case from rains, travel over the ground and are collected at the low point on the Augspurgers’ property where their flow is impeded by higher ground. II. Is Shea Responsible for the Ponding? Shea is partially, but not totally, responsible. 9. If Shea is found to be partially responsible for the standing water resulting from a grading deficiency, the applicable provision would be A.R.S. § 32-1154(A)(3), or a violation of Registrar’s Rule R4-9-108, the “workmanlike” rule. The Registrar is charged with determining workmanship of construction, or whether a licensed contractor performed “in a good workmanlike manner and in a manner befitting a skilled contractor.” Reliable Electric Co. v. Clinton Campbell Contractor, Inc., supra, 10 Ariz. App. at 374; see, J. W. Hancock Enterprises, Inc. v. Registrar of Contractors, supra; A.R.S. § 32-1154(A)(3); Rule R4-9-108(A), Ariz. Admin. Code. 10. The Registrar’s Minimum Workmanship Standards for Licensed Contractors for site grading and drainage work state in pertinent part: “Acceptable Tolerance - Necessary grades shall be established to insure proper drainage away from the structure. No standing water should remain in the yard over 48 hours after a rain, unless city or county requirements specify retention of storm water in yard...

Contractor Responsibility - The contractor should correct deviations from the established grades, but is not responsible for conditions caused by others not under his control after close of escrow.” Sixth Edition, page 33 (June 1994).

During the past year and a half, water has remained standing in the low area, for more than forty-eight hours, only once. The standing water in the low area was first noted after close of escrow. But “Contractor responsibility under these standards does not extend to items which have been subject to owner…modification…” Sixth Edition, page 1 (June 1994). 11. The preponderance of the evidence does not establish Shea failed to perform in workmanlike manner when it did the site grading and drainage work and that this failure resulted in storm runoff ponding in the low area. The Augspurgers’ landscaping contractor excavated the low area and installed a drain pipe which takes water out to the swale. The Augspurgers have added landscaping vegetation and boulders to certain areas which would impede the flow of runoff water. On the other hand, the Augspurgers, within five weeks after close of escrow, informed Shea of a “drainage problem.” The photographs of the property, taken prior to close of escrow, show a sloping down gradient but do not clearly show that potential drainage problems from storm runoff could not occur. The desert bushes shown on the photographs, coupled with the photographer’s angles, do not clearly and distinctly show a consistent down gradient. Lastly, Mr. Clark’s testimony, at a minimum, described drainage concerns which foretold the current situation. The most equitable disposition of the drainage complaint is to apportion responsibility between the Augspurgers and Shea for the correction of the standing water. A reasonable partition of responsibility, supported by the evidence, is 50% to each side. 12. The evidence does not show a violation of A.R.S. § 32-1154(A)(3) in Shea’s preparation of the grading and drainage plan. Not only was the plan approved by the City of Scottsdale but also the plan was not shown to have been inadequate. This case was one of carrying out the plan rather than the plan itself. 13. The evidence does not establish Shea violated A.R.S. § 32- 1154(A)(2). The preponderance of the evidence does not establish Shea deviated from the approved grading and drainage plan, in a “material respect,” when it graded the Augspurgers’ lot. A.R.S. § 32-1154(A)(2). 14. The evidence does not establish Shea violated A.R.S. § 32- 1154(A)(7). To be operative, this provision requires that “a wrongful or fraudulent act” by a licensed contractor results in another person being “substantially injured.” A.R.S. § 32-1154(A)(7). Black’s Law Dictionary defines “substantial” as meaning “Of real worth and importance; of considerable value; valuable. Belonging to substance; actually existing; real; not seeming or imaginary; not illusive; solid; true; veritable. [citation omitted]. Something worthwhile as distinguished from something without value or merely nominal. [citation omitted]. Synonymous with material.” BLACK’S LAW DICTIONARY 1428 (6th ed., 1990). The evidence does not support a conclusion that in the grading of the lot Shea committed a “wrongful” act resulting in “substantial” injury to the Augspurgers. 15. This complaint does not involve a violation of A.R.S. § 32- 1154(A)(23) because a corrective work order was never issued. THE DRYWALL COMPLAINT AGAINST SHEA 16. The evidence does not establish Shea violated A.R.S. § 32- 1154(A)(2). This provision requires that a departure or disregard of building plans and specifications must be both “material” and “prejudicial” to a homeowner where consent is not given. A.R.S. § 32-1154(A)(2). The evidence, viewed in the light most favorable to Mr. and Mrs. Augspurger, does not establish that Shea’s installation of 1/2" drywall, instead of 5/8" drywall, was either a material departure or that it was prejudicial to the Augspurgers. The differences in sound transmission properties and thermal resistive and shear values are not material, and the evidence does not show or establish that they are prejudicial to the integrity or usefulness of the house. 17. The evidence does not establish Shea violated A.R.S. § 32- 1154(A)(7). As stated above, to be operative this provision requires that a “wrongful or fraudulent act” by a licensed contractor results in another person being “substantially injured.” A.R.S. § 32-1154(A)(7). The evidence, again viewed in the light most favorable to Mr. and Mrs. Augspurger, does not support a conclusion that the installation of 1/2" drywall was either a “wrongful” act or that it resulted in the Augspurgers being “substantially injured.” 18. The drywall complaint against Shea does not involve a violation of either A.R.S. § 32-1154(A)(3) because there is no complaint or allegation of poor workmanship, or of A.R.S. § 32-1154(A)(23) because a corrective work order was not issued. In fact, the Registrar determined no violation had occurred. 19. The Registrar “may temporarily suspend, with or without imposition of specific conditions,” a residential contractor’s license for violations of any of the provisions of A.R.S. §32-1154(A). See, A.R.S. § 32-1154(B). EXHIBITS Several exhibits are large or heavy and cumbersome to store. Counsel are asked to call Ms. Cruz Serrano (542-9826) at the Office of Administrative Hearings to retrieve their exhibits, if judicial review will not be sought. The cooperation of the parties in retrieving their exhibits at the earliest possible time is appreciated. RECOMMENDED ORDER It is recommended that the Registrar: 1. Dismiss Citation and Complaint No. 96-2388 pursuant to Mr. and Mrs. Augspurger’s withdrawal of this complaint. 2. Dismiss Citation and Complaint No. 97-1576. 3. Dismiss Citation and Complaint No. 97-0218 as it relates to the drywall complaint filed against Shea. 4. With respect to the drainage complaint filed against Shea, suspend Shea’s License No. 032620, Class B-04, but this suspension shall not occur if the Registrar receives, on or before sixty days after the effective date of the Registrar’s order of suspension, written notification that Shea has completed, or has caused to complete through other licensed contractors, the installation of a drainage pipe from the low point on the Augspurgers’ property to the existing storm sewer line. Shea shall, however, not be responsible for more than one-half of the reasonable amount of monies necessary to complete this work. There is the alternative of leaving the low area as a desert watering hole for birds and terrestrial life, but this is for the parties to decide themselves. If this corrective action is timely completed, the Registrar should dismiss Citation and Complaint No. 97-0218. SUBMITTED this 4th day of November, 1997.

George A. Schade, Jr. Administrative Law Judge

The original Recommended Decision and Order was mailed on November 4, 1997, for distribution to the parties, to:

Michael Goldwater Director Arizona Registrar of Contractors 800 West Washington, 6th Floor Phoenix, Arizona 85007-2940

George A. Schade, Jr. ----------------------- [1] These cases were mistakenly consolidated under Docket No. 97F-2388-ROC. They are consolidated under Docket No. 96F-2388-ROC. [2] For simplicity, the case docket numbers will be used to identify the complaints. [3] Official notice was taken of the documents needed to complete this procedural history. [4] The ICBO Evaluation Service, Inc. is a subsidiary of the International Conference of Building Officials. [5] Not all marked exhibits were admitted. The exhibit numbers used in this recommended decision refer to the remaining tabs in the Exhibit Binder, which contains the admitted exhibits. [6] Which explains why both complaints read the same: “Walt Schuster promised to come back when we were ready for retexturing and he will not respond.” [7] One coat stucco was developed in the cold regions of Germany some fifty years ago. [8] The Administrative Law Judge informed counsel he would take notice of ASP’s and Shea’s disciplinary record with the Registrar and described the record being noticed. [9] Also described as a “fence,” but “retaining wall” would be the more appropriate term. See, Complainants’ Exhibit No. 43. [10] If this calculation is done for the Colorado River as it flows through the Grand Canyon, the Canyon’s capacity would assume the River flows up to the highest flat levels of the Canyon’s spectacular rims. [11] The Administrative Law Judge notes that the building plans were dated September 22, 1994, and Ordinance No. 2783 adopted the 1994 edition of the Uniform Building Code (UBC). It appears possibly the plans were prepared prior to Scottsdale’s adoption of the 1994 UBC, and once Scottsdale adopted the UBC changes, Shea amended its building plans accordingly. This possibility was not raised at the hearing.

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