ALJDEC

98F-F0223-ROC · Registrar of Contractors · 1999-02-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 28, 1999. APPEARANCES: COMPLAINANTS: Joseph and Sharon Ledwidge, on their own behalf; Lifestyle Homes: by Joseph Ledwidge; RESPONDENT: Paul Hyde and Debbie Hyde, as sole proprietors, by Gerald Nabours, Esq.

ADMINISTRATIVE LAW JUDGE: Anthony Halas _____________________________________________________________________

These consolidated matters proceeded to hearing on January 28, 1999, in Flagstaff, Arizona, for the purpose of determining whether Respondent violated state law as alleged by Complainants and as cited by the Registrar of Contractors (Registrar). Based on the evidence presented at that time, as well as administrative notice of certain events relative to the procedural history of each matter herein, the following Findings of Fact, Conclusions of Law, and Recommended Decision are made and submitted to the Director of the Registrar of Contractors:

FINDINGS OF FACT 1. Complainants Joseph and Sharon Ledwidge (Ledwidge) contracted with Respondent Paul Hyde, dba Leisure Living Construction, holder of License No. 061348, Class B, to build several houses in Greenhaven, Arizona, about which two form the subject matter of these consolidated complaints. The first, at 385 Tower Butte (the “Tower Butte” residence) was to be their home; the second, at 35 Lakeview (the “Lakeview” spec house), was built as a joint venture between Complainants (dba Lifestyle Homes) and Respondent, for eventual resale. 2. The Ledwidges paid the contract price in full on the Tower Butte residence, and moved in about November, 1996. Subsequent events relevant herein (as Case No. F98-0223/Docket No. 98F-F0223-ROC) are as follows: A. On February 13, 1998, the Ledwidges filed a complaint with the Registrar of Contractors, essentially alleging poor workmanship relative to a number of items specified. B. On March 19, 1998, the Registrar’s inspector, Mark Schweiger (Schweiger), conducted a jobsite inspection of the residence, with Complainants and Respondent present. C. Based on that inspection, Schweiger then issued his Corrective Work Order (CWO) on April 15, 1998, listing 24 items, consistent with the itemization of the Ledwidges’ complaint. Of those 24, items 1 – 6, 8, 16 – 19, and 21 - 24 all required some degree of corrective or remedial action. Administrative notice is taken of the CWO, and references to particular items will be made as “CWO 1”, etc., consistent with the inspector’s numbering. D. When the items were not corrected to Complainant’s satisfaction, the Registrar then issued CITATION AND COMPLAINT on June 30, 1998, charging Respondent with possible violations of A.R.S. §§ 32- 1154.A.3/A.A.C. R4-9-108, .7, and .23. E. Respondent timely filed his answer with the Registrar on July 13, 1998, asserting that all items had mostly been corrected, but for the Saltillo tile, about which nothing could be done. F. On September 2, 1998, Complainants filed an addendum with the Registrar, alleging additional defects as itemized. Administrative notice is taken of that document, with references herein to “ADD 1”, etc., as appropriate, based on Complainants’ numbering. No inspection of these items was made by inspector Schweiger until his pre-hearing jobsite inspection on January 26, 1999, so no specific CWO was ever issued regarding the addendum items. G. The Registrar issued NOTICE OF AMENDMENT TO CITATION AND COMPLAINT on September 28, 1998, to which Respondent filed an additional answer on October 5, 1998. 3. With regard to the Lakeview spec house, events relevant herein (as Case No. F98-0225/Docket No. 98F-F0225-ROC) are as follows: A. On February 13, 1998, the Ledwidges filed a complaint with the Registrar of Contractors, alleging that Respondent had abandoned the project and refused to perform. Complainants attached a list of specific items. B. On March 19, 1998, the Registrar’s inspector, Mark Schweiger (Schweiger), conducted a jobsite inspection of the spec house, with Complainants and Respondent present. C. Based on that inspection, Schweiger then issued his Corrective Work Order on April 23, 1998, listing 19 items, consistent with the itemization of the Ledwidges’ complaint. Of those 19, items 1, 4 – 12, –17, and 19 all required some degree of corrective or remedial action. Administrative notice is taken of that CWO. D. When the items were not corrected to Complainant’s satisfaction, the Registrar then issued CITATION AND COMPLAINT on June 30, 1998, charging possible violations of A.R.S. §§ 32-1154.A.3/A.A.C. R4-9- 108, .7, and .23. E. Respondent timely filed his answer with the Registrar on July 13, 1998, asserting that only items 1 and 8 were yet to be corrected. 4. The two matters were then consolidated by the Registrar for purposes of this hearing. 5. At hearing, Complainants appeared and testified, presented the testimony of inspector Schweiger, Karen Gosnell, and Joe Fortuna, and offered Exhibits 1 – 8, 13 – 17, and 19 – 23, all of which were marked and admitted, without objection. 6. Respondent appeared, through Paul and Debbie Hyde, as sole proprietors, and by counsel. Mr. Hyde testified, and Respondent also presented the testimony of Mr. Schweiger, and offered Exhibits 9 – 12, 18, 24, and 25. 7. With regard to the Tower Butte residence, the following items remained at issue and subject to the evidentiary proof: A. CWO 1: Spotted and stained saltillo tile at the rear patio and front entry porch. The Ledwidges confirmed the sound workmanship of the tile installation throughout (as did inspector Schweiger), but asserted that the appearance of the exterior tile finish revealed aesthetically unacceptable blotches and swirls. In support of this, they provided a number of photographic exhibits and the testimony of inspector Schweiger; Karen Gosnell, the very knowledgeable owner of a business specializing in Mexican tile, from whom their tile had been purchased (but who had not observed the finished installation, only pictures); and Joe Fortuna, also very knowledgeable as an Arizona licensed contractor and expert in tile floor finishing and restoration (who had been hired by the Ledwidges to attempt remedial refinishing of the tile in question, with his attempt successful in some areas, and not so in others). The Ledwidges asserted that the blotches and swirls became evident shortly after the installation and application of a sealer/finish by Respondent, and blamed those defects on Respondent for any one or a combination of mistakes: including improperly using a sealer in the first place, contrary to their intent; then failing to allow moisture in the tile to fully dry prior to sealing; using a dirty mop to apply the sealer; and/or leaving shoe imprints. Hyde then described his prior experience in installing/finishing saltillo tile (obviously to an extent only secondary to his more general contracting work), conceding only that the tile in question was more porous than any he had previously worked with. Hyde denied any improper application of the sealer, grout or any other finish material, or that he had acted contrary to any explicit direction or intent of the Ledwidges, asserting that he had no interest in proceeding contrary to their expressed wishes, and that in the absence of such, he had followed specific instructions for use of the sealer product on exterior tile from the manufacturer/distributor (Sunray) of that product. Of particular interest is that those instructions were contrary to Gosnell’s specific recommendation – which the Ledwidges intended to adopt, but about which Hyde was unaware until after the fact – to leave the exterior tile unsealed. In turn, her recommendation was contrary to that of Fortuna, who did also recommend a particular sealer, but not the one Hyde used. With regard to the saltillo tile, and based on the evidence presented, the undersigned finds that the very nature, and appeal, of that tile is its rustic, variable appearance. Nonetheless, that variability would not generally extend to include the aesthetically unappealing blotching and swirl marks readily apparent herein, which are found to be the result of the finishing process. However, given the absence of contractual terms defining the manner in which the exterior tile was to be finished, or not; and given the lack of explicit verbal direction from Complainant to Respondent; and given the three distinctly different recommendations from the experts, and Hyde’s reasonable reliance and efforts to implement one such recommendation, it cannot be found that Respondent either acted wrongly or failed to meet workmanship standards, which do not otherwise specifically address aesthetics, which are subjective by definition. B. CWO 2: Cracked, chipped and rust-stained backyard stairs to the patio. Schweiger opined that at the time of his pre-hearing inspection, the stairs still did not meet industry standard. The photographic exhibits and testimony by Ledwidge corroborate the inspector’s conclusion, and Respondent agreed that this was a valid complaint. It is found that Respondent failed to meet workmanship standards, and failed to take reasonably appropriate corrective action. C. CWO 4: Cracked and stained vertical stucco face under the patio perimeter. Schweiger confirmed that this item remained uncorrected at his most recent inspection, in excess of industry standard. The photographs graphically document this defect, consistent with Ledwidge’s description. Hyde stated that the stucco had not been stained when Respondent had completed it, with such stains apparently the result of cleaning chemical runoff from the floor above when the subsequent remedial saltillo tile refinishing was done. If true, the staining would not be directly attributable to Respondent’s workmanship, but given Hyde’s proposed remedy – to “fog” on matching material – and Respondent’s responsibility to remedy stucco damage from rainwater runoff from substandard roof flashing and/or gutters (See Finding 7 H, below), the undersigned reasonably finds this stucco repair to also be Respondent’s responsibility. D. CWO 5: Ponding in excess of 3/32” at the rear door/stoop. Schweiger concluded that although some remedial work was evident at his most recent inspection, the item was still not in compliance and required corrective action. Hyde conceded an additional coating was necessary, and it is so found: this defect in workmanship was not timely corrected. E. CWO 7: Closet rod height separation. Although Schweiger did not at any time determine a violation existed, and therefore did not require any corrective action, Ledwidge asserted that the space between the upper bar and the lower bar was insufficient for certain articles of his wife’s clothing, and should be modified. Consideration by the undersigned of Ledwidge’s and Hyde’s recollections of their telephone conversation about the height between bars results in a finding that each appeared to be operating on the “by guess and by God” theory of calculating lineal distance, such that, in this instance there was no meeting of the minds. Since Respondent’s choice of distance between the bars appears to be within reason, even though not exactly as Complainants would have wished, no violation of workmanship standards can be made, or corrective action ordered F. CWO 8: Leak in the front bedroom window. Schweiger noted that some remedial action had been done, but the leak remained, perhaps due to a defect in the window manufacture. Hyde described the remedial clear silicone caulking done, and his conclusion that the continued leak appeared to be either at the “maulling”, or the window itself, either of which were relatively easily remedied. This is found to be a failure in workmanship. G. CWO 17: Cracked and uneven concrete to asphalt junction at the drive entry. Schweiger confirmed this had not yet been corrected, with the defect depicted in an exhibit of a photograph taken the same day as his pre-hearing inspection. On questioning by Respondent, Schweiger conceded that this was not a structural defect, but rather cosmetic, and that while other drives in the neighborhood varied in method of construction, some were similar to the drive in question. The undersigned finds that the concrete to asphalt junction fails to meet workmanlike standards, in that while such standards are not that specific, they do require the junction to be true to line, without deterioration, not the case herein. H. CWO 19: Reddish staining in the drive at random locations. Schweiger noted no change in the staining at his last inspection, and deemed the stains to be something other than paint or glue, and in need of cleaning, with acceptable results likely with certain bleaching agents. It is found that such or similar corrective action is necessary to remedy this unworkmanlike defect. I. CWO 21: Failure of gutter water tightness, and color match at corners. Schweiger noted some remedial work since his first inspection, but was advised by Ledwidge of continued leakage, as confirmed by photographic exhibits demonstrating water staining on the stucco adjacent to and under the roof’s edge, and gutters.. Based on the testimony of Schweiger, Ledwidge, and Hyde, this is found to be a defect in workmanship of either the flashing at the edge of the roof, or the guttering, or both, and in either event, subject to Respondent’s remedial efforts, which would include remediation of the stucco staining. J. CWO 22: Entry door cracks at the attachment screws. Schweiger concluded that this item should and could be simply corrected, and it is so found: this is a defect in workmanship, not timely corrected. K. CWO 24: Discolored patio dimmer switch not matched to color of adjacent cover plates. Schweiger most recently observed this unique dimmer switch to be unchanged. So, while the consensus opinion of Schweiger, Ledwidge, and Hyde was that the origin or etiology of this mismatched or discolored switch was a mystery, it is found by the undersigned that remedy of this dilemma is not: this is a defect in workmanship and Respondent’s responsibility. L. ADD 1: Sagging kitchen and family room drywall, possibly from leak. As with all the addendum items, Schweiger’s first observation of this matter was at the time of his pre-hearing inspection, at which time he noted evidence of two nail pops, bowing in the drywall of 1/8” to 1/16”, from a possible leak, without drip marks. He stated that Complainant’s straight-edge measure of a 5/8” bow would not be representative. He noted that the leak might instead be condensation, and he opined that this should have been subject to Respondent’s one time repair only during the first year of occupancy. It is so found. M. ADD 2; and ADD 3 (combined): Shift out of plumb of west side retaining wall. Crack in northwest corner of retaining wall; rear wall out of plumb and tilting to the north; and west wall out of plumb and tilting to the west. Schweiger’s first impression of these several walls at the time of his pre-hearing inspection caused him to confirm that each was essentially out of plumb and/or tilting, consistent with Complainants’ assertion. However, given that Complainants said each was a retaining wall, and Respondent asserted all were site walls, with differing standards for each type determining whether correction was necessary, and given the absence of plans or specifications or county inspection defining which type each wall was, and had been meant to be, and given that the impact and extent of subsequent landscaping could not be effectively measured after the fact, Schweiger could not determine whether corrective action was necessary. Nor can the undersigned, such that despite the extensive testimony and photographic exhibits offered by both parties, it is found that Complainants have failed to provide the preponderance of the evidence necessary to meet their burden to hold Respondent liable for violations of workmanship, or for corrective action. N. ADD 4: Ponding on driveway. After first observing this area of concern at his pre-hearing inspection, Schweiger concluded it was a marginal defect at worst, and generally would be considered acceptable, and not a breach of workmanship or subject to corrective action. In the absence of further probative evidence, so it is found. O. ADD 5: Chipping of garage control joints. After observing this for the first time, Schweiger concluded that the joints were functioning as intended, but with typical rough cracking, which could and should be remedied with a dry caulking. This is found to be a workmanship defect for Respondent to address as appropriate. P. ADD 6: Driveway chips, with exposed aggregate. At Schweiger’s first observation of these, he found them to be about the size of a silver dollar, correctable with a simple patch repair, and it is so found: Respondent is to remedy these defects in workmanship. Q. ADD 7: Built-in ironing board and electrical outlets in master bedroom not operating. Per Schweiger’s testimony, this problem was apparently addressed and corrected at the time of the pre-hearing inspection by the expedient application of a wire nut. If so, the item is now moot. If not yet corrected, then a finding of defective workmanship would be appropriate. R. ADD 8: Large cracks in basement drywall. Schweiger determined that these were typical “stair-stepping” cracks of the sort the contractor would be responsible for through the first year, but that since the addendum items were raised over a year after occupancy, Respondent was no longer required to correct. So it is found. S. ADD 9: Improper fit of basement entry door. Schweiger observed and determined the door needed adjustment to meet industry standard. Respondent is found in violation of the workmanship required. T. ADD 10: Leak in family room window. On the basis of his single observation, Schweiger concluded the window might have a minor leak, without noticeable damage, but he was unable to determine a workmanship violation or need for remedial action. In the absence of additional evidence, Complainants fail to demonstrate such. U. ADD 11: Hole next to electrical outlet in master bedroom. Schweiger observed and determined this small defect in workmanship could and should be repaired with drywall or caulking. So it is found by the undersigned. 8. With regard to the Lakeview spec house, the following CWO item remained at issue and subject to the charged violation and evidentiary proof: A. CWO 11: Garage door border area pop-out within industry standards, but not per plan. Schweiger explained this was not a workmanship issue but rather compliance with plans. He conceded that other pop-outs in the spec house also did not appear to meet plans, but were not complained of. This would appear to be a violation of A.R.S. § 32-1154.A.2, not a charge originally made in the Registrar’s CITATION AND COMPLAINT. However, given the Registrar’s NOTICE OF AMENDMENT TO CITATION AND COMPLAINT which provided Respondent notice of this item as it was contained in Complainants’ letter of September 2, 1998, and Respondent’s answer to that notice, there clearly can be no due process concern for Respondent’s timely ability to defend the allegation. On the basis of the evidence of record, it is found that Respondent departed from the building plans to an extent contrary to this statutory section.

APPLICABLE LAW Arizona Revised Statutes (“A.R.S.”) §32-1154.A provides, in relevant part, that a holder of a license or a person listed on a license shall not commit the following: (CWO 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 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 written directive from the Registrar.

Each Citation and Complaint names A.A.C. R4-9-108 as the rule charged pursuant to A.R.S. § 32-1154.A.3. That rule provides that all work shall be done in a professional and workmanlike manner, and in accordance with any applicable building codes and professional industry standards.

CONCLUSIONS OF LAW 1. To warrant action by the Registrar pursuant to the statutes above, Complainants must demonstrate by a preponderance of the evidence that Respondent violated any one of the statutory sections cited. Culpepper v. State of Arizona, 187 Ariz. 431, 437-38, 930 P.2d 508 (Ariz. App. 1996). A “preponderance of the evidence” means that the evidence is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). 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 (rev. 6th ed. 1990). 2. Complainant fails to demonstrate any fraudulent conduct on the part of Respondent. 3. With respect to Respondent’s alleged wrongful conduct, unworkmanlike efforts, failure to correct, and departure from plans, Complainants have sustained their burden of demonstrating violations, as specifically found above. “A workmanlike manner means doing the work in an ordinary skilled manner as a skilled workman should do it.” J.W. Hancock Enterprises, Inc. v. Registrar of Contractors, 126 Ariz. 511, 514, 617 P.2d (1980) (quoting Brown v. Eakins, 220 Or. 122, 348 P.2d 1116, 1117 (1960)).

RECOMMENDED DECISION On the basis of the foregoing, IT IS RECOMMENDED that, commencing on the effective date of the Registrar’s Order (thirty-five days after the date of mailing by the Registrar), Respondent’s Class B license be suspended until the Registrar receives proof that Respondent has accomplished appropriate and effective corrective work to remedy the defects in workmanship and departure from plans found above. IT IS FURTHER RECOMMENDED that, if Respondent accomplishes the above- described corrective work in a proper workmanlike manner on or before the effective date of the Registrar’s Order, then no license suspension shall be imposed, and the entire CITATION AND COMPLAINT in Case No. F98-F0223 and F98-F0225 shall be closed. Done this day, February 18, 1999.

______________________________________ Anthony Halas Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1999, to:

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

ATTN: Joyce Armijo

By ___________________________

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