ALJDEC

98F-M1215-ROC · Registrar of Contractors · 1998-10-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 27, 1998 APPEARANCES: Complainant appeared on her own behalf; Respondent appeared on his own behalf ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

The parties presented evidence and testimony and, based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order:

STATEMENT OF FACTS

Respondent, an individual, possesses License No. 108427, Class B, which the Registrar of Contractors issued on July 27, 1995. Complainant, with her husband, owns a large parcel of land in Higley, where they have been living and currently live in a trailer. Complainant and her husband had planned to construct a home in Eager when, on July 3, 1997, her husband suffered a massive stroke. The stroke caused Complainant to abandon plans for home construction in Eager. Craig Burnham and Bill Cole are Complainant’s neighbors and attend the same church as Complainant. Craig Burnham told Bill Cole that Complainant’s husband’s poor health would prevent them from constructing a house in or moving to Eager. Bill Cole is a licensed heating and cooling contractor; Craig Burnham owns a backhoe and is an excavation contractor. On or about August 9, 1997, Bill Cole went to visit Complainant. He told her that his nephew, Respondent, was a licensed general contractor and could build Complainant and her husband a nice, inexpensive house on their land in Higley. Although Complainant was distraught about her husband’s health, she also wanted a house. On or about August 11, 1997, Bill Cole and Respondent went to Complainant’s house with a set of universal plans for a house, an itemized cost breakdown, and a contract. Respondent had built two similar houses for speculators, who resold the houses for a profit. Because cost was a major consideration in construction for the owners of those houses, as it was for Complainant, Respondent had made certain changes to the plan for all three houses. These changes included omission of a pot shelf in the kitchen and addition of a sheetrock wall, one-piece acrylic fiberglass tub surround and a tub in place of the glass wall, ceramic tile and cast-iron tub shown in the plans for the master bathroom. Respondent discussed the changes that would be made to the master bathroom with Complainant and she agreed to his suggested cost-cutting modifications. The only change to the plan that Complainant required was to extend one side of the house four feet because the bedrooms were too small in her opinion. The cost of this modification was $4,150, making the total contract price $74,300. Respondent did not anticipate making any profit on the house because only $2,000 of the total contract price was not allocated to materials or labor. Respondent agreed to build the house, however, as a favor to his uncle and to help Complainant. Complainant was provided a copy of the itemized cost breakdown and was aware of the cost for every item. The itemized cost breakdown did not include any costs for electric fixtures or flooring. Complainant and Respondent agreed that, if Complainant could find someone to perform a cost item for less, she could contract directly with that person and deduct the cost from the amount she owed to Respondent for performance of the contract. Complainant eventually made her own arrangements for painting and termite treatment, which costs were deducted from the contract amount. Bill Cole was to install the air conditioning. Although the plans called for a split system, which means the air handler would be in the attic, Mr. Cole does not recommend such a system because leaks in the air handler can ruin ceilings, attic insulation may interfere with access to the air handler for maintenance and repairs, and the air handler may be adversely affected by high attic temperatures, which may exceed 200 degrees in the summer. Mr. Cole therefore recommended to Complainant that the air conditioner be installed on the roof instead. Complainant agreed and also requested that a roof jack, duct work, water and electricity be supplied to the roof for eventual installation of an evaporative cooler next to the air conditioner when Complainant could afford it. The additional cost of preparations for installation of the evaporative cooler was $300. Complainant cannot read building plans and did not know what features the house would include, apart from what Respondent and other contractors told her and the items included on the itemized cost breakdown, when she signed the contract on August 11, 1997 and gave Respondent a check to begin construction. Construction was commenced immediately and initially proceeded fairly quickly. On October 31, 1997, however, the patio footings failed the county inspector’s inspection because “the plan has not been complied with and correction is necessary.” The patio footings failed four subsequent inspections, either because Respondent had not poured a 16” square of concrete under the patio slab posts or had not uncovered the footings for inspection. Footers make the patio and garage slabs able to bear more weight without cracking. During the framing stage of construction, the framer made two mistakes that would later cause two additional departures from the plan: the windows in the master bathroom would be 4’, rather than 5’, high and the closet in the second bedroom was only 20” wide, rather than the 24” specified in the plans, which is standard in the industry. Respondent called both mistakes to Complainant’s attention and she agreed to these modifications. When the framer told Complainant about the problems with the patio footers, she became concerned and called the county inspector. The county inspector told Complainant to call the Registrar of Contractors. Complainant then called her friend, Peter Frederick, a licensed general contractor who builds custom homes that sell for more than a half million dollars.[1] Mr. Frederick examined the plans and the partially completed house and, with Complainant, prepared a list of 26 items to complain about to the Registrar. At some point in 1998, construction on Complainant’s home ceased because Respondent sought to avoid confrontation with Complainant and her advisers. The Registrar’s Inspector Van Bagley required no action on three items on Complainant’s list because he found that the contract did not require the complained about item to be provided, as follows (item number from Inspector Bagley’s original corrective work order shown in parentheses): u) No backing needed to be installed at sheetrock lid on the patio because the plans did not require it (11); v) No flooring needed to be installed because the contract did not require it (24); and w) No electrical fixtures needed to be installed because the contract did not require them (26). Complainant abandoned these complaints at the hearing. Inspector Bagley found fifteen items needing corrective work, which Respondent agreed to perform, as follows: v) Hurricane straps to be installed on the patio (2); w) 2x6 doorbucks to be installed on the garage door (5); x) Plywood mounting board for electrical service to be installed correctly so that water is sealed out at the top (6); y) Stucco at the north end of the garage door to be repaired so that it no longer bows in (7); z) Gap in the joint at the facia at the east side of the house to be repaired (8); aa) Trim around the garage service door to be tightened (9); ab) Exterior trim on the patio door to be replaced with trim that matches the exterior trim at the other doors and windows (11); ac) Stucco to be applied under the popouts in the front of the house (13); ad) Debris in the stucco at the west wall of the house to be removed and the stucco then patched (14); ae) Hole under the eave on the west side of the garage, which gives access to birds, to be plugged or filled in (16); af) Birdblocks at the front of the house between the entry and the garage to be cut at a 45 degree angle (17); ag) Ridge support block to be installed at the peak of the garage gable (18); ah) Door entering the house from the laundry to be replaced with a left- hand swing door (19); ai) Pantry door to be replaced with a right-hand swing door (20); and aj) Baseboards to be completed (25). At the time of hearing, Respondent had not completed these items of corrective work because, as noted above, he feared a confrontation with Complainant, but he affirmed his willingness to do so. Respondent was advised that the undersigned would recommend a penalty be assessed against Respondent’s license if he did not perform the corrective work described above. No additional evidence was presented on these items. Inspector Bagley directed Respondent to correct the asphalt shingles to overhang the house by one-fourth inch, or as per manufacturer’s specifications. At the hearing, however, no evidence controverted Respondent’s testimony that the shingles had been installed according to the manufacturer’s specifications (15). Inspector Bagley directed Respondent to install an 8” turndown around the patio and at the garage entry floor, as required by the plan (3 and 4). On the plan, the turndown on the patio should be attached to the footers. Respondent did not dispute that the plan called for these turndowns and that they were not installed when the foundation was poured. Inspector Bagley did not direct Respondent to pour patio footings because the footings already had been poured (1). Although Complainant disputed this, the photographs she submitted into evidence showed holes dug by the patio and filled with concrete. The Citation and Complaint issued by the Registrar advised Respondent that, if he were found in violation of any contracting law, his prior disciplinary record of final Registrar of Contractors’ orders may be considered in mitigation or aggravation. Accordingly, notice is taken of official records of the Registrar of Contractors, which reveal that this complaint is the only complaint against Respondent on the Registrar’s current record that alleges deficient workmanship. Therefore, Respondent’s prior record is deemed to be excellent and, thus, is viewed as a matter in mitigation for any disciplinary penalties to be imposed as a direct result of this case.

CONCLUSIONS OF LAW

The contracting statutes and regulations apply to Respondent as long as he is a licensed contractor performing contracting work, regardless of whether he is making a profit on a particular job. See A.R.S. § 32-1101(A)(3). The evidence supports a conclusion that that Respondent violated A.R.S. § 32-1154(A)(23) by failing to perform the corrective work described at items 2, 5-9, 11, 13, 14, 16-20, and 25 of Inspector Bagley’s directive, summarized above at statement of fact 21, which Respondent accepted. The evidence does not support a conclusion that Respondent violated any contracting law in failing to install shingles with a ¼” overlap or that he failed to install footers at the patio. The evidence does not support a conclusion that Respondent violated any contracting law by modifying the wall, location of plumbing fixtures, or size of windows in the master bathroom or the installation of the air conditioning unit because he or his subcontractor apprised Complainant of the modifications and she agreed to them, as described in statements of fact 8 and 12. Although a better practice would have been to secure written approval from the owner before making any departure from the plans, where the owner knows about and consents to a contractor’s departure from plans, and the contractor otherwise complies with applicable industry standards and building codes, no statute is violated. The evidence also does not support a conclusion that Respondent violated A.R.S. § 32-1154(A)(2) [2] in departing from plans in omitting a pot shelf from the house’s kitchen, even though Complainant did not expressly consent to the omission, because the omission was neither material nor prejudicial. Respondent had omitted the pot shelf from the two similar houses he had previously constructed to cut cost, which was Complainant’s primary consideration at the time of contracting, Complainant did not even know the plans included a pot shelf until Mr. Frederick pointed it out to her, and no evidence was offered that the omission deprived Complainant of the benefit of her bargain or compromised the aesthetic or structural integrity of the house. Cf. J.W. Hancock Enterprises, Inc. v. Registrar of Contractors, 126 Ariz. 511, 514, 617 P.2d 19, 22 (1980) (Where homeowner considered contractor’s departure from specification to be a serious problem from the beginning, departure was material). The evidence supports a conclusion that Respondent violated A.R.S. §§ 32- 1154(A)(2), (7),[3] and (3)[4] in departing from plans in failing to install 8” turndowns around the patio and at the entrance to the garage and in constructing a closet in the second bedroom that was only 20” wide. Although Complainant did not know the plan required the 8” turndowns until Mr. Frederick so informed her and consented to the change in the size of the bedroom closet, evidence was presented that the patio and garage would be less structurally sound without the turndowns and that the industry standard requires a 24”-wide closet to accommodate coat hangers.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that Respondent’s Class B license be suspended on the effective date of the Registrar’s order, 35 days after the date of mailing by the Registrar. It is further recommended that, if on or before the effective date of the Registrar’s order, Respondent provides the Registrar with proof that he has accomplished the corrective work required by conclusions of law numbers and 6 above in a professional and workmanlike manner, no license suspension shall be imposed and the entire Citation and Complaint in Case Number 98-M1215 shall be closed.

Done this day, October 30, 1998.

_________________________________ Diane Mihalsky Administrative Law Judge

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

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

ATTN: Joyce Armijo

By _______________________________

----------------------- [1] Mr. Frederick testified at the hearing that, although he did not charge Complainant anything for his help, advice, or hearing testimony, he does not build houses in the price range that Complainant can afford. [2] A.R.S. § 32-1154(A)(2) provides among grounds for suspension or revocation of a contractor’s license “[d]eparture from or disregard of plans or specifications . . . in any material respect which is prejudicial to another without consent of the owner . . . .” [Emphasis added.]

[3] A.R.S. § 32-1154(A)(7) provides among the grounds for suspension or revocation of a contractor’s license “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.”

[4] A.R.S. § 32-1154(A)(2) provides among grounds for suspension or revocation of a contractor’s license ”[v]iolation of any rule adopted by the registrar.” Here, the rule allegedly violated was A.A.C. R4-9-108, which requires that “[a]ll work be performed in a professional and workmanlike manner.”

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