ALJDEC

97F-2465-ROC · Registrar of Contractors · 1998-04-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 14, 1998 APPEARANCES: Complainants were represented by their attorney, David Kash, and Respondent failed to appear. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

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

FINDINGS OF FACT

1. Pursuant to written contract, Respondent agreed to complete major remodeling and renovation of Complainants’ home. The contract price was in excess of $180,000.00. Complainants allege certain deficiencies in the work performed by Respondent and same are discussed in the findings below.

2. Evidence of record demonstrated that although the original bid and contract for the job were submitted and signed in May 1995, actual construction on the project did not commence until the latter part of July 1996. Further evidence of record showed that the project should only have taken approximately three to four months to complete and the project is still not complete as of the date of the instant hearing (some 21 months after commencement of the project).

3. At the time of the original bid submitted by Respondent in May 1995, Respondent did not possess a contractor’s license. Respondent’s Class B license was not issued until June 9, 1995. Respondent’s conduct of bidding on a construction project prior to the date that it received a contractor’s license constitutes illegal unlicensed contracting activity and, as such, same is viewed as a serious wrongful act within the meaning of the charged section of the State’s Contracting laws. 4. Although Respondent was shown to have received the full contract price set forth in the applicable contract, uncontroverted evidence of record demonstrated that Respondent abandoned the project prior to total completion and therefore, has been over-paid for its work on the project. 5. Several jobsite inspections were performed by the assigned inspector for the Registrar of Contractors, including a courtesy inspection prior to the filing of the instant complaint. A formal jobsite inspection was conducted by said inspector on April 24, 1997, subsequent to the filing of this complaint, and pursuant to that inspection Respondent was sent a letter directing, among other things, that Respondent complete the project within a stated period of time. Notwithstanding the terms of said Agency directive and Respondent’s efforts to perform further work on the project, Respondent failed to complete the project and thus, it failed to comply with all of the terms and conditions of the Agency directive. 6. A pre-hearing jobsite inspection was conducted by the assigned Agency inspector and said inspector found numerous construction deficiencies remaining on the project. 7. Uncontroverted evidence of record established that the following construction deficiencies are present on the project and attributable to Respondent: a. Hollow sounds were evident in numerous sections of the flagstone installation, indicating that said material had not been properly installed into the mortar bed. In addition, certain areas of the edge of the mortar bed were indicative of unfinished work. There also was paint splatter or over-spray on specified areas of the flagstone installation. b. The septic tank system was not installed in accordance with the location set forth in the applicable plans and specifications. Part of the system was installed under an R.V. gate and thus, could be susceptible to damage from an R.V. driving over said area. c. No gate was provided for a section of the chain link fence system and thus, there remains a void in the fencing of the rear yard. d. Notwithstanding the fact that a “view” wall was constructed for the purpose of hiding the air-conditioning system from view, Respondent installed the air-conditioning disconnect box above the area covered by the “view” wall. e. Construction debris such as old lumber, mounds of concrete, and general demolition debris remain on the property. f. In the procedure for installing the new patio concrete slab, Respondent failed to install a “deco-drain” in the area wherein the new concrete meets the existing kool-deck. Moreover, a specified section of the new concrete slabs fails to provide for positive drainage in that same slopes toward the door to the master bedroom. g. New electrical power system going to the house was installed “over-head” as opposed to underground. The local building authority requires electrical power, such as that at issue herein, to be installed underground. Thus, this is a serious code violation. h. A buzzing sound emanates from the landscape sprinkler system power box when the system comes on, indicating a degree of faulty wiring within said control box. i. A bare hot wire is touching the bottom of the electrical service panel box. In addition, there are no labels on the breakers indicating which sections of the electrical system they control. j. There is no fire rated “man-door” in the garage as required by the local building authority. k. Applicable plans and specifications required certain size “turn- downs” under the garage and driveway slabs placed by Respondent. Respondent omitted certain of these required “turn-downs” and others were not constructed in the required dimensions. l. Specified exterior light fixtures on the garage were not installed with a weather-tight seal. This constitutes a local building authority code violation. m. Although Respondent installed an alarm system in the home, it failed to provide Complainants with any instructions for the operation of same and a specified motion detector was placed in a location behind a planned wall unit, thereby negating the operation of said motion detector. n. Specified metal window frames are bent. o. A hole in the drywall is visible in the area wherein a certain light fixture is installed in the master bathroom. p. There is a significant plumbing pipe hammer sound when the water is turned on in the master bathroom. q. Although the plans and specifications required the installation of “reading” lights over the master bed, Respondent installed the same type of light fixtures installed in other areas of the home and same were not shown to be the “reading” lights contemplated by the plans and specifications. r. There is no adequate latching device to lock the kitchen window. s. Specified window screen frames were at one point covered with stucco. When advised of the error, Respondent chipped out the stucco that was improperly installed over the frames for the window screens. However, the resulting finish in said areas is now very rough and the stucco needs to be finished off in a smoother manner. t. Respondent painted certain door stoop areas in an attempt to resolve any problem with the roughness of the concrete finish. Evidence of record showed that it is improper to paint such a concrete area that will receive significant foot traffic. u. Patio ceiling light installations fail to adequately cover the hole in the ceiling wherein said fixtures are installed. v. The drain outlet installed between the house and the air- conditioning equipment was installed too close to the house and not in a manner to allow for proper drainage away from the house and away from said area. This deficiency is beginning to cause erosion of the ground in this area. w. There is a missing exterior electrical receptacle and an interior switch that was supposed to operate exterior electrical is apparently not connected to any electrical lighting or receptacle. x. Significant and excessive splitting is present in specified exterior vigas. y. There are voids in the painting of the exterior fascia. z. Water pressure for the home is excessively high. aa. Applicable plans and specifications required nine dimmer switches installed in the home. Respondent only installed eight dimmer switches. In addition, one electrical receptacle installed in the family room is not of the required three prong type. bb. There is a noticeable bump in the drywall of a specified wall wherein new construction meets an existing wall. In addition, paint work in this area fails to adequately match the rest of the painted surfaces of the wall. cc. Doorway from kitchen to living room is out of square on one side. dd. No heating/air-conditioning register was installed in the daughter’s bathroom. ee. Paint splatter is on the weather-strip on the bottom of the garage door. There is paint spatter on the garage floor. In addition, a lens cover is missing from the garage door opener motor assembly. ff. Paint over-spray is visible on the chimney and on some of the roof shingles. This is indicative of sloppy workmanship. gg. Rust spots are present on the driveway as a direct result of Respondent attempting to clean off oil spots that were dripped on the driveway surface. hh. Zone valves for the irrigation system are in a state of disarray and inoperable. ii. Grading of the soil on a specified section abutting the garage was not completed. jj. A specified existing landscape tree died due to Respondent’s failure to reconnect the irrigation system. kk. Interior doors were not painted or sealed on all 6 sides. ll. Attic access door was not fire rated as required by the local building authority. This item has already been corrected by Complainants. All of the foregoing are found to not only constitute poor and unacceptable workmanship but also wrongful acts within the meaning of the applicable charged section of the State’s Contracting laws. 8. Undisputed evidence of record demonstrated that Respondent utilized a number of unlicensed contractors on the project, in violation of the State’s Contracting laws. Respondent’s use of unlicensed contractors constitutes a serious wrongful act as charged in the instant citation and should also be viewed as a matter in aggravation for any disciplinary penalties to be imposed herein. 9. Complainant attempted to formally amend the citation in this matter to include issues of alleged fraudulent conduct by Respondent in obtaining the final draw from the construction lending institution. Allegations in this regard also included claims that Respondent forged Complainants’ signatures on the final draw two-party check issued by the lending institution. 10. The aforementioned allegation referable to fraudulent conduct occurred approximately three month’s prior to the date of the instant hearing and significantly after the filing of the instant complaint. For reasons not totally clear to this Tribunal, Complainants neglected to obtain a formal amendment to their Citation from the Registrar of Contractors in a timely manner. Thus, Respondent was never placed on adequate notice that said conduct would be an issue to be determined at the instant hearing. 11. Based on basic due process considerations, Complainants were not allowed to amend their Citation and Complaint at the hearing to include these new allegations regarding fraud by Respondent. However, nothing in this ruling would serve to bar Complainants from filing a new complaint with the Registrar of Contractors regarding such issues. 12. The instant uncontroverted record is replete with evidence of Respondent’s continued inexcusable delays and lack of diligence in working on and completing the project. Complainants have sustained considerable aggravation and inconvenience as a direct result of Respondent’s failure to complete the renovation of their existing home and to abide by numerous time schedules and promises made to Complainants. Complainants have sustained living with their house in a state of chaos for almost 21 months and on numerous occasions they vacated the home in order to provide Respondent with unfettered access to work on the project. 13. Although the Registrar of Contractors normally allows a contractor a reasonable opportunity to correct its own construction deficiencies and errors subsequent to hearing, under all of the salient facts and circumstances presented herein, this Respondent should not be allowed to wreak any further havoc on the lives of these homeowners. Thus, any condition placed into this Order for the purpose of allowing Respondent to accomplish corrective work as a means to reduce or eliminate otherwise appropriate disciplinary penalties should include the requirement that Respondent cause another properly licensed contractor to complete the project. 14. By its failure to appear for the scheduled hearing, Respondent failed to present any matters in defense or mitigation.

CONCLUSIONS OF LAW

1. Respondent violated the provisions of A.R.S. § 32-1154A (23), (7), and (3); namely Rule R 4-9-108. RECOMMENDED ORDER

In view of the foregoing, it is recommended that the Class B license of Respondent shall be revoked on the effective date of the Order entered in this matter. It is further recommended that if Respondent causes another properly licensed general contractor to accomplish appropriate and effective remedial work on the items set forth in Findings of Fact 7 (a) through 7 (kk), above, on or before the effective date of the Order entered in this matter, then the above-provided license revocation shall not take place but instead Respondent’s Class B license shall be placed on active suspension for a period of 21 days followed immediately by a period of disciplinary probation for one year. This alternative penalty shall commence, if at all, on the effective date of this Order. It is further recommended, in addition to the above-provided penalties, that Respondent pay the sum of $425.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. § 32-1154(D). The failure by Respondent to pay the entire amount of the aforesaid civil penalty on or before 30 days following this Order’s effective date shall result in the automatic revocation of Respondent’s contractor’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) (3), unless payment of any outstanding civil penalty is tendered. It is further recommended, if the alternative penalty is applicable and in addition to the above provided penalties, that any restoration of Respondent’s rights to resume contracting, whether or not probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of twenty- four (24) months, including future renewal periods, in the amount of $1,500.00, such bond or deposit to be for the sole benefit of persons injured as defined in A.R.S. § 32-1131 (3) and to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. § 32-1152 (D). Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above-provided twenty-four (24) month period and only if no claims are then pending.

Done this day, April 20, 1998.

_________________________________ MARK A. SILVER Administrative Law Judge

Original transmitted by mail this ____ day of April, 1998, to:

Mr. Michael P. Goldwater, Director Registrar of Contractors ATTN: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By _______________________________

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