ALJDEC

97F-F0327-ROC · Registrar of Contractors · 1998-04-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 27, 1998

APPEARANCES: Complainant appeared through its owner, Dave McLean and Respondent appeared through its owner, Tom Burke.

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. Complainant was the general contractor on the remodel of an existing commercial building. As part of the construction of said project, Complainant requested bids for the design and installation of a fire protection sprinkler system for the building.

2. Respondent submitted a bid to install the fire protection system and same was ultimately accepted by Complainant. Complainant alleges certain deficiencies in the work performed and materials provided by Respondent and same are discussed in the findings below. 3. The following salient facts were adduced at the hearing and are important to note:

a. Initially local code requirements did not require the installation of a fire protection system in the building in question. Thus, at the outset of the project, installation of the fire protection system was treated by the local fire department (the building authority for fire protection systems) as a voluntary system.

b. It was undisputed that in order for a fire protection system to move foreword in compliance with the local code requirements, not only must a permit be applied for but the contractor installing the fire protection system must also submit engineered drawings for the system to the fire department.

c. Notwithstanding the above-referenced requirement for engineered plans for the fire protection system and the fact that the applicable contract between Complainant and Respondent required Respondent to provide said plans, the project began without any such plans. Apparently the local building authority allowed Respondent to commence work on the project without the required plans due to the fact that the fire protection system was merely a voluntary system. Nevertheless, it was clear that the engineered plans would be required before final approval for the system would be issued.

d. Respondent installed the fire protection system and was paid approximately $16,000.00 for his work. The fire department passed the pressure test of the system but refused to give a “final” approval to the system due to the failure of Respondent to provide said building authority with the necessary engineered plans.

e. Due to the inability or unwillingness of Respondent to provide the aforementioned plans, Complainant filed the instant complaint with the Registrar of Contractors, alleging that Respondent failed to supply the required plans for the project, thereby preventing Complainant from obtaining a certificate of occupancy from the local building authority. The filed complaint further set forth other enumerated construction deficiencies.

3. Respondent contends that it was unable to prepare the required plans for the fire protection system due to the fact that the building plans submitted to him by Complainant were inaccurate. Although it was undisputed that Complainant provided Respondent with plans for the building remodel, Respondent contends that from the day he first came on the project there were significant changes going on in the “as-built” construction work being performed by Complainant. Therefore, Respondent further contends that since he had failed to provide engineered plans at the time of submitting the permit, he was unable to do so while working on the project due to the fact that construction on the project kept changing and varied from what was shown on the original building plans submitted to Respondent by Complainant.

4. Complainant admits that there were some changes in the as-built construction project from what was shown on plans provided to Respondent but further avers that Respondent was merely obligated to design and install a fire protection system in accordance with the “shell” construction plans provided. Moreover, the weight of the evidence of record was sufficient to support a finding that the building project basically proceeded in an orderly fashion and that all subcontractors were advised to adhere to the original plans for a “shell” construction project and any changes would later be placed into written change orders.

5. The bid request from Complainant, the applicable contract between the parties, and the local fire department requirements, all require that Respondent design a system and submit engineered drawings for said system to the fire department for their approval. Evidence of record supports a finding that if Respondent had merely submitted plans for his system based on the construction plans submitted by Complainant showing a shell construction project (without tenant improvements) then Respondent would have complied with the terms and conditions of the applicable contract and the local fire department would have given final approval to Respondent’s work, assuming there were no other deficiencies in Respondent’s workmanship . Any tenant improvement work or changes that would necessarily require alteration or modification of Respondent’s system would then have been the subject of written change orders at additional costs to Complainant.

6. It is determined that Respondent was obligated to merely design a system in accordance with the plans provided by Complainant and his failure to do so, thereby preventing Complainant from obtaining a certificate of occupancy, effectively constitutes an abandonment of the contract.

7. As a licensed contractor, Respondent has an obligation to perform work in accordance with all contract and code requirements. In the event, as Respondent contends, that he could not perform such work due to the changes going on in the project, he should never have begun working on the project. Respondent avers that he saw changes to the project (from what appeared on the plans provided by Complainant) from “day-one” on the project. By virtue of agreeing to perform the contract work and installing the fire protection system, Respondent is found to have accepted the conditions, under which he performed his work, as being adequate to support a workmanlike result. After performing the work in question and accepting payment in the amount of $16,000.00 (basically the full contract sum minus disputed “extras”) Respondent is now estopped to complain that Complainant’s changes in the as-built construction of the project prevented him from supplying the fire department with engineered drawings for the fire protection system that he was hired to design, at the time the parties entered into the applicable contract.

8. Evidence of record supports a finding that the following deficiencies were present in Respondent’s system at the time he quit work on the project without obtaining the final approval from the local fire department for his system:

a. C.P.V.C piping was installed in improper locations, contrary to local code requirements. b. A specified area of the garage was not protected by the fire protection system. c. No engineered plans were submitted to the fire department.

The above-described deficiencies in Respondent’s performance on the project not only constitute poor and unacceptable workmanship but also a wrongful act within the meaning of the applicable charged section of the State’s Contracting laws.

9. A jobsite inspection by the appointed inspector for the Registrar of Contractors was held, pursuant to which that Agency sent Respondent a letter directing it to either submit the engineered plans to the fire department or return $16,000.00 to Complainant. It is important to note that Respondent did not appear for the jobsite inspection due to a problem with the Registrar mailing notice of said inspection to the improper address for Respondent. Nevertheless, it was adequately shown that Respondent somehow received notice of the Agency corrective work order within a very short time after issuance of same, thereby allowing Respondent adequate time to comply with said directive. Notwithstanding the terms of said Agency directive, Respondent made no effort to contact Complainant and attempt to resolve the issues set forth in the filed complaint and the written directive.

10. Due to Respondent’s failure to take any action after the time period allowed in the aforementioned Agency Corrective Work Order, others were ultimately retained to correct any deficiencies in Respondent’s workmanship and to obtain final approval from the fire department. Apparently the necessary work was accomplished and final approval was issued. However, Complainant contends that due to all of the problems with the installation of the fire protection system and the delays that were created by Respondent’s failure to obtain approval for the system from the local building authority, the owner of the project terminated Complainant from working on the project and not only refused to pay Complainant his final draw on the project (some $40,000.00) but also canceled a contract involving work by Complainant on another (future) construction project. Thus, Complainant claims unspecified monetary damages against Respondent.

11. Evidence of record showed that although the successor fire protection contractor on the project may have altered portions of Respondent’s work, an undetermined degree of Respondent’s materials and work remained and were utilized in the final approved fire protection system. Under the facts and circumstances presented in this case, the Registrar of Contractors, acting through an administrative license disciplinary hearing, is the inappropriate forum to adjudicate and award the type of monetary damages claimed herein. Therefore, any claim for such money damages must be pursued, if at all, through an action before a civil court of competent jurisdiction.

CONCLUSIONS OF LAW

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

RECOMMENDED ORDER

In view of the foregoing it is recommended, commencing on the effective date of the Order entered in this matter, that the Class L-16 license of Respondent shall be placed on disciplinary probation for a period of 120 days. It is further recommended, in addition to the above-provided penalty, that Respondent pay the sum of $150.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32-1154D. The failure by Respondent to pay the entire amount of the aforesaid civil penalty on or before 30 days following the effective date of the Registrar’s Order 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. §32-1101A(3), unless payment of any outstanding prior civil penalty is tendered.

Done this day, April 6, 1998

______________________________________ Mark A. Silver Administrative Law Judge

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

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

ATTN: Joyce Armijo

By ___________________________ -----------------------

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