ALJDEC

98F-F0206-ROC · Registrar of Contractors · 1998-09-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 13 and 14, August 26, and September 8, 1998 APPEARANCES: Tony Collum, Attorney at Law on behalf of the Complainants David Martin, Attorney at Law, on behalf of the Respondent ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________

PRELIMINARY MATTERS This matter was heard in Flagstaff, Arizona on July 13 and 14, 1998. The evidence of record had been received but the hearing was continued without date to allow for closing argument. On July 16, 1998, counsel for the Complainants filed a motion to submit rebuttal exhibits and Respondent’s counsel filed an objection. The motion was granted and the evidentiary record was reopened and a telephone conference was to be held to determine the time and manner for receiving the additional evidence. A telephone conference was scheduled for, and was held on August 26, 1998, at 4:00 p.m. The Complainants and their counsel were present. The Respondent was also present. Respondent’s counsel was not present. The telephone conference proceeded with testimony, physical evidence and closing argument received from the Complainants. The Respondent did not have copies of the new exhibits although they had been provided to his counsel. The Respondent objected to the hearing proceeding, the receipt of new evidence and the conclusion of the hearing without having the benefit of his counsel. On August 28, 1998, the Respondent’s counsel submitted a Notice of Non Appearance and Motion to Strike Proceedings of August 26, 1998. Counsel cited oversight as the reason for his non appearance at the telephone conference. Another telephone conference was held on August 31, 1998, at which time the matter was set for submission of rebuttal evidence by the Respondent and closing argument. The hearing concluded by telephone conference on September 8, 1998, with the Respondent’s final evidentiary submission and final closing argument. FINDINGS OF FACT The Complainants purchased a multiple acre parcel of property outside Williams, Arizona, for the purpose of erecting a vacation residence. In 1997, the Complainants purchased a log home called the Arizona Prow from the manufacturer, Great Bear Log Homes in Scottsdale, Arizona. The house is an A-frame design consisting of two floors with a slightly pointed prow at the front. Both the first and second floors of the prow are primarily windows. The house would be transported to the Williams site once a foundation was in place. In June, 1997, the Complainants and John Lee (Lee), owner of Great Bear Log Homes, staked out the position for the home at the Williams site. The Complainants took compass readings at the time he staked the position. Four stakes were placed for each corner of the home and the fifth stake was placed for the point of the prow. The home was staked to have the prow face toward a meadow which lay in an easterly direction and could be seen beyond some trees. The driveway for the home was to be toward the back of the home at the westerly end of the property. The Complainants made a plot plan for a building permit from the Coconino County Building Department. The plan has no compass directions but shows that the length of the home was to run parallel with the length of the property line. The Complainants contacted David Aldrete (Aldrete), owner of the corporate Respondent, to have the footing, stem wall and subfloor constructed. The contract between the parties was entered in July, 1998, and the cost for the construction was $10,600.00. Under the contract, Aldrete attempted to disclaim any liability as Big D Aldrete’s Construction, Inc. The Complainants paid Aldrete an initial payment including the building permit costs and gave Aldrete the plot plan. Aldrete was responsible for getting the building permit which was subsequently issued by the county. The Respondent hired Larry Nichols (Nichols), a general contractor, to go to the site and lay out and construct the footing and stem wall. In late September or early October, 1997, Nichols took an employee, William Curry (Curry), to the site. Upon arriving, three stakes, were visible. There is conflict in the testimony of Curry and Nichols as to whether three stakes were in the ground or two stakes were in the ground and one was on the ground. According to Curry, he and Nichols had difficulty laying out the foundation. The distance between two of the stakes was 44 feet. The length of the house was only 34 feet. It appears that the 44 feet is a diagonal measurement across the length. Aldrete testified that his measurement of the three stakes in late summer or early fall, showed the correct dimensions for the house. Nichols and Curry aligned the proposed foundation and had the prow pointing somewhat westerly as instructed by Aldrete. Nichols did not have a copy of the plot plan to work from. The Respondent informed the Complainants that the prow would be facing the road (westerly). The Complainants informed the Respondent this was the wrong alignment and that the prow should face east and a couple degrees south. The Complainants offered to come to the site but the Respondent told him it was unnecessary. Nichols realigned the proposed foundation after being told to point the prow in an easterly direction, by the Respondent. The testimony of Curry conflicts with this in that he testified the Respondent told Nichols to face the prow to the south. The trenches for the footing were dug and the concrete poured. The Respondent’s testimony regarding the compass readings of July 14, 1998, is not considered credible in light of contrary evidence. The foundation was built with the prow facing in a southeasterly direction. In December, 1997, the Respondent telephoned the Complainants and requested final payment. Aldrete went to the Complainants’ house in Scottsdale, Arizona. The Complainants drew a picture of the house facing predominantly to the east on the plot plan and asked the Respondent if that was the correct alignment of the vacation home. The Respondent assured the Complainants this was the case and the Complainants made final payment of $2,761.00. The Arizona Prow home was transported from Scottsdale to the Williams site and placed on the foundation. The walls were up and the windows were installed. The roof had yet to be installed. On February 1, 1998, the Complainants took roofing material to the site and saw that the prow of the home was facing in a southeasterly direction. When the Complainants spoke with Aldrete about the problem, Aldrete claimed that the corporate Respondent was not responsible because Aldrete had signed the contract in his individual capacity. The complaint was filed with the Registrar of Contractors (Registrar) on February 10, 1998. On March 6, 1998, Inspector Mark Schweiger (Schweiger), of the Registrar’s Office, did an inspection of the site and concluded that the foundation was not constructed according to the plan. It appeared to be turned nearly 90 degrees from what was pictured on the plot plan. Schweiger issued a Corrective Work Order (CWO) on March 24, 1998, which required the Respondent to correct the condition by appropriate means. The Respondent did not make the necessary correction and the Complainants had the house taken down and hired another contractor to dig out the foundation and build a new foundation with the prow facing in the easterly direction which provides a better view of the meadow. The actual cost and low bid costs of disassembling the home, the tear down and rebuilding of the foundation and re-erecting the home is over $23,000.00. This includes the low bid for the tear down and rebuilding of the foundation at $18,135.44. The new foundation turned the prow approximately 45 degrees from southeasterly to an easterly direction. CONCLUSIONS OF LAW The allegations of the Citation and Complaint concern A.R.S. §32- 1154(A)(3)/ A.A.C. R4-9-108, workmanship, (A)(7) wrongful or fraudulent conduct, and (A)(23) failure to take appropriate corrective action. The Complainants’ position is that the Respondent knew or should have known that the only reasonable view for the house would be directed toward the meadow. Additionally, the Respondent had been given the plot plan which showed the direction the house was to be facing with respect to the property lines. The emphasis on the aesthetics of the view as dictating the alignment, is not considered a substantial basis for determining how the home should be facing. Matters such as this are too subjective. What may be desirable to one person is not necessarily so to another. The Respondent’s position is that the Complainants staked the lay out of the foundation and that if there was any error it was caused by the Complainants. This position is not accepted because the Respondent’s witnesses (Curry and Nichols) testified that only three stakes were up or partially up. Running a diagonal should allow for a determination of the direction the home should face if it was certain that the remaining stakes which were on the property had not been moved or otherwise disturbed. It is evident that some of the stakes had been removed and disturbed and this should raise some question about the correctness of the remaining stakes. Additionally, Curry testified the initial attempt to lay out the foundation did not fit. According to Curry, he and Nichols measured between two of the stakes and it was 44 feet when it should have been 34 feet. This 44 foot measurement appears to have been a diagonal measurement across the length, and if it was mistaken for the side of the house, it would significantly alter the direction of the house. In any event, under the circumstances, it would have been reasonable and prudent in light of the fact that the stakes had been set approximately four months earlier, and some of the stakes were missing, to accurately determine the placement of the foundation. Since the stakes could not be reasonably relied on to accurately reflect the desired direction, the verbal description imparted by the Complainants to the Respondent and the alignment on the plot plan which had been given to the Respondent would be controlling. Based on the evidence, both of these pointed the prow in an easterly direction, with a slight turn to the south.

The fact that the Respondent took it upon himself to build the foundation with a resulting deviation of approximately 45 degrees, after informing the Complainants that the Complainants did not have to come to the site to ensure the correct placement, and after being given the directions for placement by the Complainants, places the responsibility for the deviation primarily on the Respondent. This constitutes a violation of A.R.S. §32- 1154(A)(3)/A.A.C. R4-9-108 (A) which requires that “All work shall be done in a workmanlike manner.” Subsection (A) of the cited rule does not reference building codes or any other specific standard. These are referenced in subsequent subsections of the rule. Subsection (A) provides in general terms that the work shall be workmanlike. Although the Citation could have cited A.R.S. §32-1154(A)(2), departure from plans or specifications, it is concluded that the “workmanlike” as used in the rule addresses the issue in this case where direction is an integral part of the work to be accomplished and the failure to place the foundation in the proper direction constitutes a failure to do the work in a workmanlike manner. The failure to correct the error as directed by Schweiger is a violation of (A)(23). The Respondent’s representation to the Complainants at the time of final payment, of how the building was situated, was clearly erroneous. The evidence did not show this statement was a knowing misrepresentation so as to constitute fraud. Aldrete’s attempted disclaimer of liability as set forth in the contract, with respect to the corporate Respondent, is not considered legally binding. Aldrete was contacted by the Complainants because his company was a licensed contractor. The work could only be lawfully done by a licensed contractor. Any intentional attempt to do the work in an unlicensed capacity would subject Aldrete to potential charges and sanctions which need not be discussed in light of the instant conclusion. Any unlawful contractual provisions are either void or voidable for being contrary to public policy and are given no legal effect. The Respondent’s error of placing the home in the wrong direction and unjustified avoidance of its contractual obligation in this case constitute a violation of A.R.S. §32- 1154(A)(7), a wrongful act. The costs related to the raising and tearing down of the home are attributed to the Complainants who should have viewed the foundation before having the home delivered and put in place. The cost of tearing out and rebuilding the foundation are attributed to the Respondent for the reasons stated above. These costs are appropriate for restitution under Sunpower of Arizona v. Registrar of Contractors, 166 Ariz. 437 (App. 1990). 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 B license of the Respondent shall be suspended until the Registrar of Contractors receives written proof that the Respondent has paid or tendered payment to the Complainants in the amount of Eighteen Thousand-One Hundred- Thirty-Five and 44/100’s ($18,135.44) Dollars, as restitution; It is further recommended that if the Respondent pays or tenders payment of restitution on or before the effective date of the Order entered in this case, then the Citation and Complaint upon which it is based shall be closed. Done this day, September 11, 1998.

_________________________________ ALLEN REED Administrative Law Judge

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

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