ALJDEC

99F-1493-ROC · Registrar of Contractors · 1999-07-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 12, 1999. APPEARANCES: COMPLAINANT: Carol Kelllerhals, on her own behalf. RESPONDENT: by Julian Tucker, qualifying party, vice- president, and authorized representative.

ADMINISTRATIVE LAW JUDGE: Anthony Halas _____________________________________________________________________ This matter proceeded to hearing on July 12, 1999, to determine whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors (Registrar). Based on the testimony and evidence of record, and administrative notice of certain events and documents relevant to the case, the following Findings of Fact, Conclusions of Law, and Recommended Decision are made and submitted to the Registrar of Contractors:

FINDINGS OF FACT

1. Complainant Carol Kellerhals (Kellerhals) resides in her manufactured home, but as yet without electricity or a sewage system, at 40404 North 10th Street, in Phoenix, Arizona. She purchased the home on May 27, 1997, from Mountainview Homes, Inc. (Mountainview), the Home’s manufacturer, and contracted with that company for the installation of the home on site. 2. According to the Registrar’s public records, Respondent RDS Construction Inc. (RDS) is a corporation holding license no. 128487, Class B, issued November 3, 1997. Julian Tucker (Tucker) is the qualifying party for the license, and the corporation’s vice-president. 3. Tucker testified that he contracted with Mountainview to provide coordination of certain installation-related services for buyers of Mountainview’s manufactured homes. According to Tucker’s testimony, these services, at least relative to Kellerhals’ particular home, were to be provided through Tucker’s company, Regatta Developer Services (Regatta), which shared at least Respondent’s initials, but which Tucker asserted was unrelated to Respondent corporation, which he stated was not formed until approximately September, 1997, with the contractor’s license issued about a month later. 4. According to Kellerhals, the manufactured home was installed on site by an installation company (ProSetters, subcontracted to Mountainview ) in about August 1997, with at least some, if not all site preparation work (such as tie-downs) done per Tucker’s direction. She then moved in about June 15, 1998. 5. Kellerhals testified that she remained unaware, until a rainstorm early in November, 1998 that the installation had not been approved as required by the Flood Control District of Maricopa County (FCD). See Exhibit B, DRAINAGE CLEARANCE APPLICATION, approved August 4, 1997, which stated that: FINISH FLOOR TO BE A MINIMUM OF 12” ABOVE THE HIGHEST POINT OF NATURAL GRADE WITHIN 10 FEET OF THE PROPOSED STRUCTURE. MAINTAIN HISTORIC DRAINAGE PATTERNS.

6. Administrative notice is taken that the lack of approval was made official by the FCD’s inspector on November 6, 1998, when he “red-tagged” and failed the installation in his FINAL DRAINAGE CLEARANCE INSPECTION REQUIRED BY FCD report, concluding that: FINISH FLOOR ELEVATION DOES NOT MEET 12” REQUIREMENT. VIOLATION EXISTS DUE TO LACK OF INSPECTION REQUESTS. FINISH FLOOR NEEDS TO BE RAISED OR SUBMIT ENGINEERED GRADING & DRAINAGE PLANS.

7. Within a week, on November 12, 1998, Kellerhals filed her complaint with the Registrar of Contractors, naming “Julian Tucker, Regatta Developer Services, Ltd.” as the complained-of contractor, with her essential complaint that FCD had red-tagged the home site as not 12” above grade, which prevented completion of the septic tank system and electricity. 8. On the basis of the complaint, the Registrar’s office administratively determined Respondent to be RDS Construction Inc., and the Registrar’s inspector Phil Coscia (Coscia) then conducted a jobsite inspection of the premises on December 29, 1998, in Kellerhals’ presence. It is uncontroverted that Respondent did not timely receive notice of that inspection, and therefore did not have any representative in attendance. 9. Based on the findings and conclusions he made at that time, inspector Coscia then issued his Corrective Work Order to Respondent on January 25, 1999, providing 15 days in which: CONTRACTOR SHALL TAKE APPROPRIATE ACTION NECESSARY TO CORRECT IMPROPER HEIGHT OF FINISH FLOOR ELEVATION THAT IS NOT IN COMPLIANCE WITH THE FLOOD CONTROL DISTRICT OF MARICOPA COUNTY.

CONTRACTOR SHALL TAKE ANY AND ALL ACTION NECESSARY AS REQUIRED TO ENSURE FINISH FLOOR ELEVATION COMPLIES FOR FINAL DRAINAGE CLEARANCE INSPECTION, REQUIRED BY THE FLOOD CONTROL DISTRICT.

10. When the matter was not resolved administratively, the Registrar of Contractors then issued CITATION AND COMPLAINT on March 31, 1999, charging respondent with possible violations of A.R.S. §§ 32-1154. A.1, .2, .3 (and the workmanship standards of A.A.C. R4-9-108), .7 and .23. 11. Respondent, through Tucker, timely filed written answer to the CITATION AND COMPLAINT, asserting that: RDS DID NOT HAVE A CONTRACT WITH CAROL KELLERHALS. HER CONTRACT WAS WITH MOUNTAINVIEW HOMES AND REGATTA DEV. SER. ACTED AS CONSULTANT TO THEM. THIS JOB HAS RECENTLY BEEN SETTLED WITH MOUNTAINVIEW & CORRECTIVE ACTION WILL BE TAKEN….MOUNTAINVIEW AND REGATTA HAVE BEEN WORKING ON THIS MATTER WITH AN ENGINEER WHO RECENTLY CAME UP WITH THE CORRECTIVE DESIGN.

12. At hearing, Inspector Coscia testified to clarify and confirm his findings and conclusions on inspection, and the substance of his Corrective Work Order requiring action as appropriate and necessary to meet the elevation requirements of the County Flood Control District. 13. Coscia concurred with the parties in opining that instead of raising the elevation of the home to meet the elevation permitted by the Flood Control District, such action could consist of an engineered retaining/diversionary wall, if it met approval of the FCD. 14. Kellerhals testimony referenced many of the documents of which the Registrar’s file is comprised. Of those documents so referenced, the undersigned takes administrative notice of those relevant to this proceeding. 15. Kellerhals explained that as far as she was aware, the only action taken relative to the finish floor elevation since the Corrective Work Order was issued had been the staking and surveying for a retention wall done by an engineering firm in February, 1999, notwithstanding a subsequent mediated civil court settlement in April, 1999. She asserted the settlement required that such wall be built within 30 days from the settlement date but that the wall had not yet been started, despite assurances from Tucker. 16. Kellerhals confirmed that she would rather have the retaining wall built, presuming the FCD approved the engineered plans for such a wall, instead of actually re-siting the home to increase its elevation, since the wall seemed the much simpler alternative. 17. Kellerhals explained her understanding of the complex and confusing interrelationship, and current impasse, of Maricopa County’s permitting process regarding the sewer system/septic tank (not yet approved by the County’s Waste Water Management Dept., so not yet installed); the engineered retaining wall plans necessary to pass FCD inspection (but not yet officially approved); and the “final” approval required by the County Planning Dept. (dependent on the other permits, and necessary before electricity to her home could be turned on by APS), with that electricity needed to cool the home and power her water pump, among other uses. 18. Tucker testified to describe his companies’ business relationships with Mountainview, in general, and then more specifically, his - and his companies’ - activities on behalf of Mountainview or directly with Kellerhals in coordinating and accomplishing the siting of her home and ancillary matters, such as the installation of a water tank. 19. Tucker noted that “Pro-Setters” was named on the DRAINAGE CLEARANCE APPLICATION (Exhibit B), and not himself or his companies. He nevertheless conceded that he had agreed, on behalf of Mountainview, to take the corrective action required by the Registrar of Contractors to have the engineered retaining wall plans approved by the FCD and then built by one of two masonry subcontractors whose bids he had arranged, one of which would be accepted by Mountainview (through its insurance agent) as soon as the FCD approved the plans. 20. Tucker explained that due to the difficulty in coordinating the several permitting processes for the approvals necessary, and his intent, for time, cost, and efficiency purposes, to concurrently install the septic tank system and construct the retaining wall, the only tangible accomplishment since the Corrective Work Order was issued had been the completion of the engineered plans for the retaining wall, which he stated he understood had recently been informally approved by the FCD and should therefore soon be officially permitted. 21. On the basis of the entire record, and testimony and evidence presented, the undersigned finds that the prior actions, and promises of further action, made by Julian Tucker relative to the failure of Kellerhals’ home siting to meet FCD elevation requirements, and the resultant Corrective Work Order issued by the Registrar of Contractors, reasonably come within the scope of contractor’s license no. 128487 held by Respondent RDS Construction, Inc., for which Tucker is the qualifying party. That license is therefore properly the subject of this disciplinary proceeding.

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: 1. Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

2. Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner’s duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.

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.

The 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, Complainant must demonstrate by a preponderance of the evidence that Respondent violated any one, or more, 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, by a preponderance, that Respondent violated A.R.S. § 32-1154.A.1. 3. The uncontroverted evidence, and therefore significantly greater than a preponderance, establishes that Respondent violated A.R.S. § 32- 1154.A.2 by failing to meet the minimal finish floor elevation requirements of the Flood Control District of Maricopa County, a failure not consented to by Kellerhals as the owner, and a failure significantly prejudicial to her reasonable interests in obtaining habitable premises. 4. The evidence does not establish, by a preponderance, that Respondent’s work, to the extent completed, failed to meet workmanship standards. Therefore, there is no violation proven of A.R.S. § 32-1154.A.3.

5. A preponderance of the evidence establishes that the acts of Respondent, and its continued failure to act, were and are wrongful and have resulted in substantial injury to Complainant, and therefore violate A.R.S. § 32-1154.A.7. 6. Notwithstanding the real or apparent time delay inherent in the complexities of the permitting process, the evidence establishes, by greater than a preponderance, that Respondent failed to take and complete corrective action within a reasonable time after the Registrar’s Corrective Work Order was issued on January 25, 1999, and that such failure was without sufficient valid justification. A violation of A.R.S. § 32- 1154.A.23 is therefore proven. // // // 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 issuance), Respondent’s Class B license be suspended until the Registrar receives proof that Respondent has accomplished complete, appropriate, and effective corrective action with regard to the floor finish elevation defect. IT IS FURTHER RECOMMENDED that if Respondent accomplishes proper corrective work on or before the effective date of the Order, then no active license suspension shall be imposed, and the Citation and Complaint in Case No. 99-1493 be closed. Done this day, July 13, 1999.

______________________________________ Anthony Halas Administrative Law Judge

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

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

By ___________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826