ALJDEC

98F-M0421-ROC · Registrar of Contractors · 1998-08-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 22, 1998, and June 26, 1998. The record concluded upon the filing of post-hearing submissions. APPEARANCES: Mark E. Lassiter appeared representing Pete’s Fish and Chips, Inc., Complainant. Alicia Mykyta appeared representing Dan Mar Roofing, Inc., Respondent and holder of class L-42 license number 111263.

ADMINISTRATIVE LAW JUDGE: Kip M. Micuda _____________________________________________________________________ The hearing in this matter was held for the purpose of determining whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors (“Registrar”). Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Decision are made:

FINDINGS OF FACT 1. Pete’s Fish and Chips, Inc. (hereinafter “Pete’s Fish and Chips”), Complainant, is a restaurant chain in the Phoenix Valley with a number of locations. The instant matter involves the location at 22 South Mesa Drive, Arizona. 2. Dan Mar Roofing, Inc. (hereinafter “Dan Mar Roofing”), Respondent, is a roofing contractor and holder of class L-42 license number 111263 issued by the Registrar. 3. This matter arises out of a contract for roofing that Respondent entered with Complainant in January 1997. 4. In January 1997, Pete’s Fish and Chips discovered a roof leak in the back patio area of the restaurant, which is the west patio loggia that is sometimes referred to during the hearing in this matter as the “back side.” 5. Shortly after the discovery of the leak, a representative of Pete’s Fish and Chips contacted Respondent to examine the roof of the restaurant. Respondent performed roof repairs for Complainant on three earlier occasions. 6. In late January 1997, Dan DiMickele, President of Respondent, personally inspected the roof in issue. He discussed two options with Kathy Adams and Pat Foster, President and Vice President of Complainant, respectively. One option called for mere repairs of the existing roof, the other option called for a re-roof. The preponderance of the evidence, including the credible testimony of Ms. Foster, establishes that the parties entered an agreement for Respondent to re-roof the restaurant. (See, e.g., Complainant’s Exhibit 1). Instead, Respondent installed a roof overlay on the restaurant, between February 1, 1997, and February 14, 1997. Complainant paid Respondent the sum of $5,600.00 for the job. 7. Rains between March 1997 and September 1997 revealed numerous leaks in the restaurant’s roof. In particular, four to six weeks after Respondent’s installation of the roof overlay, rains revealed leaks at the original site discovered in January 1997, and a new leak in the northeast corner of the restaurant. Soon thereafter, additional rains revealed numerous other leaks and caused further damage. Perhaps the greatest damage was caused, however, by the “El Nino” rains of September 1997. 8. The overwhelming evidence demonstrates that the damage caused by the rains between March 1997 and September 1997 was substantial; leaks caused damage at the original site, the northeast corner, the southeast corner, the drive-thru area, other areas along the backside of the restaurant, and inside the restaurant over the stairwell and kitchen areas. 9. The preponderance of the evidence establishes that, each time Complainant discovered leaks in the restaurant, Pete’s Fish and Chips contacted Respondent to correct the problem, and Dan Mar Roofing responded by assuring Complainant that it would correct all leaks. The preponderance of the evidence establishes further that, subsequent to each of Complainant’s contact with Respondent, Dan Mar Roofing often undertook efforts to remedy the leaks and would then advise Complainant that it corrected the leaks. 10. In September 1997, Ms. Foster met with Dan and Sam DiMickele. During this meeting, Dan DiMickele denied Respondent’s responsibility for the roof leaks that occurred over the previous seven months, as well as responsibility for those leaks that might occur in the future. 11. Dissatisfied with Respondent’s work, as well as Respondent’s response to its concerns about the roof, Pete’s Fish and Chips filed a Complaint against Dan Mar Roofing with the Registrar on October 2, 1997. In the Complaint, Complainant charges that Respondent failed to re-roof the restaurant as agreed and, moreover, failed to perform the work it did in a workmanlike manner. 12. On November 13, 1997, after inspecting the restaurant’s roof and interior water damage, James T. Walsh, Inspector for the Registrar, issued a Corrective Work Order (hereinafter “CWO”) ordering Respondent to do the following: 1. Contractor to properly repair all roof leaks. 2. Repair and refinish all drywall damage caused by these leaks.

During the hearing in this matter, Respondent challenged the propriety of the CWO by raising several defenses to Complainant’s claim that Respondent’s unworkmanlike efforts caused the roof leaks in this matter: 1) that the roofing materials used in the overlay were defective; 2) that the restaurant’s water cooler malfunctioned, causing flooding on the roof; 3) unknown chemicals found on the roof; and 4) the misting system located around the outside of the restaurant. The overwhelming evidence, including the opinions of Robert I. Schwartz, AIA, Complainant’s expert witness, in particular, shows each of Respondent’s defenses to be disingenuous and grounded in little more than rank speculation. Indeed, the overwhelming evidence demonstrates that not only did Respondent’s installation of the roof overlay fall below minimum workmanship standards, it disabled the functional integrity of the original roof. (See, e.g., Preliminary Field Investigation Report by Robert I. Schwartz, AIA, with Schwartz, Romano & Associates, Inc. and Deposition of Rod Walker of U.S. Intec). The preponderance of the evidence establishes that the CWO is reasonable and justified. 13. The preponderance of the evidence further establishes that, although Respondent attempted some corrective measures, Respondent failed to fully comply with the CWO without valid justification. Although Respondent contended during the hearing that the scope of the CWO did not include certain repairs, the language of the CWO is unambiguous and justified: Respondent was ordered “to properly repair all roof leaks” and “[r]epair and refinish all drywall damage caused by these leaks.” (Emphasis added). Finally, the preponderance of the evidence fails to establish that Complainant unreasonably interfered with, or prevented, Respondent from complying with the CWO. 14. The overwhelming evidence establishes further that Complainant sustained actual damages and incurred necessary costs (such as expert fees and attorney’s fees) as a direct result of Respondent’s refusal to accept responsibility for its unworkmanlike efforts and refusal to fully comply with the Registrar’s CWO.

APPLICABLE LAW Arizona Revised Statutes (“A.R.S.”) §32-1154A provides, in relevant portions, that a holder of a license or a person listed on a license shall not commit the following: 3. Violation of any rule adopted by the Registrar.[1] xxx 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. xxx 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.

CONCLUSIONS OF LAW 1. To warrant action by the Registrar pursuant to the statutes above, Complainant must demonstrate by a preponderance of the evidence that Respondent violated any one of the statutes. Culpepper v. State of Arizona, 187 Ariz. 431, 437-38, 930 P.2d 508 (Ariz. App. 1996). Proof by “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 its burden of demonstrating any fraudulent conduct on the part of Respondent. 3. With respect to Respondent’s alleged wrongful conduct and unworkmanlike efforts, Complainant sustains its burden of demonstrating violations. “A workmanlike manner means doing the work in an ordinary skilled manner as a skilled workman should do it.” J.W. Hancock Enter., Inc. v. Registrar of Contractors, 126 Ariz. 511, 514, 617 P.2d 19 (Ariz. 1980) (quoting Brown v. Eakins, 220 Or. 122, 348 P.2d 1116, 1117 (1960)). Complainant demonstrates sufficient evidence that Respondent’s installation of a roof overlay, rather than a re-roof; Respondent’s unworkmanlike efforts in the installation of the overlay itself; and Respondent’s unworkmanlike efforts in its attempts to correct the restaurant’s roof and interior damage, constitute violations of §§32-1154A(7) and A(3), namely A.A.C. R4-9-108. 4. With respect to Respondent’s alleged failure to take corrective action, Respondent fails its burden of demonstrating valid justification for its failure to fully comply with the CWO. Respondent’s failure constitutes, therefore, a violation of §32-1154(23).

RECOMMENDED DECISION In view of the foregoing, it is recommended to the Director that, commencing the effective date of the final order entered in this matter, the Class L-42 license of Respondent be suspended. It is further recommended that Respondent have an opportunity to avoid suspension of its license. If Respondent completes and effectively corrects the items outlined in the CWO, on or before the final order’s effective date, then no license suspension shall take place. It is further recommended that Respondent be placed on disciplinary probation for a period of thirty (30) days, commencing on the effective date of the final order

. . . entered in this matter. Done this day, September 17, 1998.

_________________________________ Kip M. Micuda Administrative Law Judge

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

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

By _______________________________

----------------------- [1] Specifically A.A.C. R4-9-108 provides that all work shall be done in a workmanlike manner. Workmanlike manner is described to be compliance with local building codes of express application to the type of work done and complained of.

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