ALJDEC

98F-0234-ROC · Registrar of Contractors · 1998-02-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 24, 1998. APPEARANCES: Complainant Valentine S. Terrones appeared personally. Respondent was represented by its attorney, Stephen A. Myers. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________

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

The Terrones family purchased a mountain top site in Sun City, Arizona. Mansion de Los Terrones was designed to be a 15,000 square foot family residence located on top of the mountain. The architectural plans for Mansion de Los Terrones were completed in 1992. Between 1992 to August of 1994, the Terrones family performed site preparation, including blasting the mountain. The Terrones family first had contact with Respondent’s president and qualifying party, Kenneth Ervin Preston, in August of 1994. Valentine S. Terrones (“Complainant”) and Respondent entered into a written project management agreement (“Agreement”) dated August 17, 1994, for the construction of Mansion de Los Terrones. Complainant was the agent for her mother, Lucy D. Terrones, who was to have resided at the residence. Under the terms of the Agreement, Respondent agreed to be responsible for the coordination and management of “…the necessary professionals and subcontractors to perform predetermined contracts”. Both the Complainant and Respondent were to review all bids and interview subcontractors for the project. Complainant was responsible for signing all contracts and paying all contractors and vendors only upon the approval of Respondent. Complainant was obligated to furnish Respondent with all project plans for bidding and construction purposes. Respondent did not accept responsibility for the errors and/or omissions of any professional or subcontractor. Respondent agreed to assist Complainant in controlling construction costs. Respondent was to assist Complainant with containing construction costs and to recommend cost saving procedures. Complainant agreed to assist Respondent in making construction decisions. Respondent was required to communicate construction progress to Complainant. Complainant gave Respondent the authority “…to make decessions (sic) in the field when (Respondent’s president and qualifying party) is unable to contact (Complainant) and/or the appropriate professional or sub-contractor”. Respondent was to receive a fee of “10% of the total construction cost, less the payment of $6,000.00 a month and the balance due upon completion of construction. The Agreement set forth the following payment schedule: “A partial payment of $3,000.00 advance payment when this proposal is excepted (sic) and $3,000.00 in 30 days. All other payment (sic) of $6,000.00 will be paid on or before the end of each month. At the end of the project all Monthly (sic) payments shall be subtracted from the total cost of the project and the difference shall be paid with in (sic) 30 days of completion.” The totality of the evidence of record supports a finding that Respondent served as the general contractor for this project. Respondent’s disclaimer of responsibility for acts or omissions of professionals and subcontractors which is contained in its written agreement with Complainant does not dislodge its responsibility as a licensed general contractor to be responsible for the work of subcontractors that it supervises or manages. Respondent supervised and managed the framing subcontractor. There are numerous gaps in the framing. Respondent is deemed responsible for causing proper framing repairs to be performed to minimum workmanship standards. Respondent is found to be responsible for the proper installation of all ballasters per plans and specifications. Respondent supervised and managed the concrete subcontractor on this project. That subcontractor did not install a concrete stairway per plans and specifications. Respondent is deem responsible for causing the stairway to be installed to minimum workmanship standards. Respondent was terminated from the project by Complainant in July of 1996. The project was also halted by the Terrones family about that time. The framing and concrete subcontractors have each expressed a willingness to return to the jobsite and perform the required repairs when the project starts back up. It is determined that although the project has been put on hold, those repairs should nonetheless be performed. The Registrar of Contractors issued Respondent a corrective work order directing it to perform remedial repairs to the concrete stairway and framing. In view of Respondent’s prior termination from the project and the Terrones family’s decision to stop construction on the project, Respondent’s failure to timely comply with the Registrar’s written directive should be excused. However, Respondent should now be required to cause those repairs to be performed to minimum workmanship standards as a reasonable condition to be placed upon its Class B license in this disciplinary action. Respondent’s failure to properly supervise and manage the deficient framing and concrete work is deemed a wrongful act which has substantially injured Complainant. Any allegation contained in Complainant’s Complaint which is not specifically addressed above is determined either to meet minimum workmanship standards, to have been properly repaired or to lack sufficient evidence of record to support a finding of a statutory violation. The monetary dispute between the parties should be resolved by a civil court of competent jurisdiction.

CONCLUSIONS OF LAW

Respondent was a residential contractor on this project pursuant to A.R.S. ( 32-1101. Respondent was compensated for supervising and managing the construction project for Complainant. Respondent recommended subcontractors to Complainant, who accepted them relying upon Respondent’s expertise and superior knowledge of contracting. There is credible evidence that subcontractors, especially the framing and concrete subcontractors, understood that Respondent was the project’s general manager and conducted their business with Respondent accordingly. Respondent cannot disclaim responsibility and liability for errors or omissions of subcontractors that it supervised and managed on behalf of Complainant. The evidence of record is adequate to establish that Respondent has violated the provisions of A.R.S. ( 32-1154 (A) (7) and (3); namely Rule R4- 9-108. There is insufficient evidence to establish that Respondent has violated the provisions of A.R.S.( 32-1154 (A) (1), (2) and (23).

RECOMMENDED ORDER

In view of the foregoing, it is recommended commencing on the effective date of the Order entered in this matter that Respondent’s Class B license shall be suspended until the Registrar of Contractors receives written proof that the items set forth in Findings No. 17, 18 and 19 have been appropriately rectified by Respondent at its sole cost and expense.

It is further recommended that if Respondent properly accomplishes the above described corrective work on or before the effective date of the Order entered in this matter, then the above-provided license suspension shall not take place and this citation and complaint shall be closed.

Done this day, March 16, 1998.

______________________________________ BRIAN BRENDAN TULLY Administrative Law Judge

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

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

By _______________________________

-----------------------

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