ALJDEC

99F-3277-ROC · Registrar of Contractors · 2000-01-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 20, 2000. Record held open until February 11, 2000. APPEARANCES: David and Lynn Sinnott, Complainants; Denise Troy, Respondent’s attorney; Kenneth and Eileen Macejka, witnesses for Respondent; Barry and Donna Greenley, Respondent’s witnesses; Mike Teeples, Respondent’s witness; Rick Griswald, Respondent’s witness; Mary Jean Fasci, Respondent’s witness; and Joe Cotton, Registrar of Contractors Inspector. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________ Having heard the testimony of the witnesses and having read and considered the entire record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Decision to the Director of the Arizona Health Care Cost Containment System Administration. FINDINGS OF FACT 1. Complainants and Respondent contracted on March 10, 1998 for Respondent to build Complainants’ home. When the home was almost complete, the parties conducted a “walk through” and identified several items needing correction which were listed on a “punchlist”. On May 26, 1999, Complainants filed a Complaint with the Registrar of Contractors listing several items with which they were unsatisfied in the construction of their home. On July 9, 1999, Registrar of Contractors Inspector Robert Dragoon conducted an inspection of the items complained of by Complainants. Of the 102 items in the Complaint, he found that approximately 52 required correction by the contractor. 3. Inspector Dragoon issued a Corrective Work Order on August 4, 1999 instructing Respondent to repair or correct the items listed as needing such. Between that date and the time of the hearing, 11 visits were made by subcontractors to the home to effect repairs; however, most of the visits were regarding correcting leaking in some windows and almost none of the other items in the Corrective Work Order were corrected by the time of the hearing. 4. As of the time of the hearing, the following 47 items remained in dispute or were agreed by Respondent as needing correction:

#1 Appropriate manufacturer’s strike plates on exterior doors. Installation was visible on all the locks on the bore hole. Completion was not aesthetic and was not in compliance with minimum workmanship standards. #2 Improperly latching exterior doors. Placement in the strikes of the door jambs was improper and did not meet minimum workmanship standards. #7 Exterior French Door has weathered varnish, splits on lower rail, discolored wood. Did not match the corresponding door to the master bedroom. #8 Gaps in corners where moldings don’t meet correctly. Several baseboards throughout the house had not been caulked and some were caulked in a sloppy manner. #9 Baseboard butt joints have lippage. Several shows signs of attempted correction but three or four remained uncorrected. #10 Nail pops in moldings. Homeowner felt this issue was not resolved but agreed that sufficient time had not yet passed to repair them. #11 No baseboard behind toilet in parent’s bath. Prior to hearing, it had been installed but had not been caulked or painted and still did not meet minimum workmanship standards. #14 Molding doesn’t meet wall in corner of master bathroom. Missing moldings at linen closet, master bath linen closet base, and shower base. Prior to hearing, moldings had been installed but did not match existing moldings in pattern. #19 Uneven reveals around jambs at den entrance doors, den closet, master bedroom French door, master bedroom entrance doors, powder room door, laundry room door, main garage entry, exterior garage door, entry door between parent’s and main house, parent’s bathroom, boy’s bedroom, east side utility door, girl’s room door, and French door to south patio. Only two doors had proper reveals all around. Doors also had twisted jambs and wouldn’t latch. Attempts were made prior to hearing to correct the work, but the corrections still did not meet minimum workmanship standards. Garage entry weatherstripping damaged. #20 Parent’s entry door weather stripping not touching door. Attempted repair left the bottom too tight with resulting damage to the bottom gasket. Water damage and mold on the carpet backing resulted from the workmanship. #23 Head jambs not even in hallway closet/laundry/garage/guest area. Though Complainants contest this, the Registrar of Contractors Inspector used a level on the doors and found them to be within 3/8 inch. He testified that this met the minimum workmanship standards. #24 Head jambs not even height in kid’s hall closet/girl’s bedroom/boy’s bedroom. The Registrar of Contractors Inspector found them to be within ¼ inch and meeting minimum workmanship standards. #26 Window leaks of five fixed window units behind master bath whirlpool. Attempted repair was successful but resulted in corollary damage to marble countertop. Counter had a 5 to 6 inch noticeable scratch which would need to be buffed out. #27 Master bedroom sliding window unit leaks. Prior to hearing the leak was fixed and met standards but glue left on the drywall did not meet minimum workmanship standards. #28 Fixed window unit on the left end shows water staining of the drywall sill area. Drywall repair was in progress when the Registrar of Contractors Inspector did his pre-hearing inspection. #29 Recessed light halo over the kid’s window seat shows water staining of the drywall. Mrs. Sinnott argued that she could still see a ring stain after repair. The Registrar of Contractors Inspector testified that he could almost see it if he stood in one corner of the room. He testified that rings in paint which are only visible at one angle are not considered outside of the minimum workmanship standards. #37 Stucco on either side of the Arcadia is broken. Complainant has repaired this and wants reimbursement. #38 Weep screed by family fireplace is bent. The Registrar of Contractors Inspector testified that it was improperly installed and should have been notched and bent to radius. He testified that it did not meet standards but admitted that this was a subjective standard. He found that no repair had been attempted on this item. #40 Stucco by the right rear corner of the house outside the boy’s bath has a broken corner. This was not repaired. #41 Corner wire hangs down left of the front door. It is unsightly and no repairs had been attempted. #45 Stucco has spalled at the powder room window sill. The Registrar of Contractors Inspector confirmed that it was 8 or 9 inches long, was cracked and flaked, and that no repairs had been attempted. #47 Plumbing items: Toilet lid does not stay up; powder room toilet didn’t flush correctly; powder room toilet not grouted to the floor; sink in parent’s kitchen needing a shut off handle. This was not corrected. #48 Air conditioner compressor installed facing backwards and has insufficient clearance on the sides. The Respondent submitted proposals to move the unit but Complainant did not approve them due to the effect on the aesthetics of the backyard and pool areas. Respondent refused to switch the location of the unit with the pool equipment (which would have retained the basic location of everything and not affected the aesthetics or the noise level inside the home) because he refused to accept responsibility for the pool equipment which would result from his moving it. Complainants argued that Respondent simply needs to move the unit to an appropriate place to comply with the Corrective Work Order and must accept whatever responsibilities result. #49 Compressor screen walls not tall enough to hide equipment. This cannot be fixed until the equipment is moved. #50 Scratches and dents on knotty alder doors and frames repaired with improperly matching wood fill. The Registrar of Contractors Inspector testified that the repairs are very noticeable and do not meet standards. A witness on behalf of Respondent testified that he fixed the doors first with a color which was too dark. He later removed this filling and repaired it with a lighter color. Complainants submitted photos of the doors showing the darker color showing at the edges of the repair and the lighter putty sunken below the surface of the door. Respondent’s witness testified that a repair would not have shrunk into the door that way. He stated that the repair was good when he made it and it appeared to have been tampered with. Complainants denied tampering with the repairs and asserted that the doors were supposed to be new, the dents were deep and the repairs were noticeable. #51 Dishwasher wood panel not installed. This was done by the time of the pre-hearing inspection but one of the screws was missing. Mr. Macejka agreed at the inspection to put the screw in. At that time, however, the door did not meet standards. #52 Parent’s kitchen and bath cabinet grain and color variations not acceptable. The Registrar of Contractors Inspector testified that variations are expected and found that they were within minimum workmanship standards. Complainants argued that they were noticeably different and offered photographs into the record to support their position. #53 Parent’s patio has severe slope on northeast end. Respondent argues this meets standards. The Registrar of Contractors Inspector testified that he used a level on the patio and found that the slope was excessive on one end. While there is no written standard on the amount of slope, 1/8 inch is sufficient to have proper drainage and his measurements reflected that there was a 3 ¼ inch fall on one end and a one inch fall on the other end. The Administrative Law Judge finds that the 3 ¼ inch fall is excessive. #54 Crack on concrete at corner of back patio behind family room. The crack has been repaired but it has recracked. It is under 1/8 inch wide and 4 to 5 feet long. While the Registrar of Contractors Inspector testified that this is within the official standards, photographs show that it is unsightly. #57 Holes in foundation where refrigeration lines enter foundation. Repaired by homeowner. Homeowner wishes to be reimbursed. #60 Hole in foundation to left of single garage door by electric outlet. The Registrar of Contractors Inspector verified that the hole was there and inappropriate. Mr. Macejka acknowledged at the inspection that Respondent is responsible for the matter. #64 Cultured marble scratches and dull finish on tub wall in children’s bath. The Registrar of Contractors Inspector testified that he confirmed that there were scratches present but found them to be visible only with backlight and the proper angle. Therefore, he found that they met minimum workmanship standards. Photographs of the problem were not in evidence and so could not be determined by the Administrative Law Judge. #66 Gaps/over-cuts around some of the light cans, sprinkler heads, switch plates and fire alarms. The Registrar of Contractors Inspector confirmed the problem and testified that they did not meet minimum workmanship standards. Photographs in the record substantiate this. #69 Water damaged drywall by the master bath windows, the master bedroom window, the den window and the kids’ bedroom window seat ceiling. Except for the kids’ window seal ceiling, these items were not within standards. #70 Nail holes in top surface of the entertainment center. While some progress was noted in repairs, the area was confirmed by the Registrar of Contractors Inspector as having nail pops and also needing sanding and painting of the drywall. #72 Bow in the family room wall. Bulge in the pantry room wall. The Registrar of Contractors Inspector testified that the pantry room wall had been repaired close to standard and the family room wall did not meet minimum workmanship standards. Photographs confirmed his statements. #73 A void in the drywall on the lower left of the tub area. At the time of the pre-hearing inspection, the void had been filled but not painted. #79 The issue of filling the driveway for backing out of the third garage was resolved by the homeowner. Homeowner desires reimbursement. #82 Saguaro in backyard damaged. The Registrar of Contractors Inspector testified that the cactus was leaning but did not have any testimony as to how it had been damaged. Complainants argued that it was done by workmen during building and Respondent denied this. #83 Painting by the concrete cuts on the rear patio and the painting of the air conditioner disconnects were resolved by homeowners. Homeowners desire reimbursement. #86 Touch up painting needed on interior areas. The Registrar of Contractors Inspector confirmed at hearing that almost every door that’s been worked on needs attention and that areas around the doorframes had unsanded caulking and needed repainting. #88 Five kitchen nook operating windows not wired into the security system. The Registrar of Contractors Inspector testified that wires have now been run to the proper break points but some had exposed wire and the job was not complete. Drywall had not been repaired where wires entered the walls. #93 Grout cracking in the backsplash and countertop areas of the master and kid’s bath. The Registrar of Contractors Inspector testified that the problem had been corrected on the vanity top on both baths but that the grout did not match the old grout and did not meet standards. The left side of the master vanity had not been done and hairline cracks in the backsplash of the tub had not been fixed. Respondent argued that this was not in the Corrective Work Order. Complainant argued that this was in the complaint and should have been corrected. #98 Hose bib on the north side of the house has stucco spatter on it. The Registrar of Contractors Inspector testified that Respondent had chipped off the spatter back to the ground clamp but did not repaint it. He agrees with the Respondent that chipping off more would be unsightly but found that failure to repaint did not meet standards. #99 Handicap bars in the parent’s bathroom/tub area have not been installed. The Registrar of Contractors Inspector confirmed that these had not been installed. Respondent argued that there is not enough money in the contract to pay for them. #101 No electric run or fixtures provided for sconces in front of courtyard wall. The Registrar of Contractors Inspector testified that he confirmed that the Respondent had run conduit and provided fixtures to the wall but the Complainant testified that it had provided the fixtures. Respondent argued that a credit had been given for the sconces, and Complainant argued that Respondent did not comply with the contract which stated that Respondent was to provide them. The Registrar of Contractors Inspector noted that the sconces still needed painting. 5. The weight of the evidence has established that minimum workmanship standards had not been met on any of the above-listed items except for items 10, 23, 24, 29, 37, 52, 57, 64, 79, 83, and 101.

REASONING AND CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§32-1104(A)(4), 32-1154(B) and 32-1156. 2. The Citation and Complaint issued by the Registrar of Contractors in this matter alleged potential violations of A.R.S. §32-1154(A)(3), (7) and (23) and A.A.C. R4-9-108. 3. The Arizona Revised Statutes at §32-1154(A)(3) provides grounds for suspension or revocation of a contractor’s license for “[v]iolation of any rule adopted by the registrar”. The only applicable rule in the Arizona Administrative Code in this case refers to workmanship standards. A.A.C. R4-9-108. 4. The Arizona Revised Statutes at §32-1154(A)(7) provides for suspension or revocation of a contractor’s license for the “doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured”. 5. The Arizona Revised Statutes at §32-1154(A)(23) provides grounds for suspension or revocation of a contractor’s license for failure to take appropriate corrective action on a Corrective Work Order without valid justification and within a reasonable period of time. 6. The burden of proof at an administrative hearing is generally upon the Complainant. Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). Further, the standard of proof at hearing is a “preponderance of the evidence”. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). 7. In this case, Complainants have established that Respondent has provided work which does not meet minimum workmanship standards. Exhibits submitted by Complainants show that the extent of work still remaining and their testimony regarding the frustration of living with the mess and trying to get Respondent to correct his work establish that Respondent has committed a wrongful act resulting in injury to Complainants which is substantial, though not egregious. Finally, Complainants have established that Respondent has failed to correct his work within a reasonable time after the issuance of the Corrective Work Order. Respondent has not established valid justification for its failure. 8. Complainants have argued that they do not want Respondent to correct the work. Rather, they want his license revoked so that they may have access to the Recovery Fund. A.R.S. §32-1154(E). In this case, the Administrative Law Judge could find no other complaints, suspensions or revocations regarding workmanship issues in the Registrar of Contractors computer screens. Therefore, revocation appears an extreme remedy at this point. 9. The parties herein have litigated the reimbursement aspect of the matter with the American Arbitration Association, Desert Palm Properties, Inc. vs. David G Sinnott and Lynn Ann Sinnott, AAA Case No. 76 E 110 000241 99. Consequently, any award of reimbursement of expenses for repairs by Complainants is barred by the doctrine of res judicata. Gilbert vs. Board of Medical Examiners, 155 Ariz. 169, 745 P.2d 617 (Ct. App. 1987). 10. While no other complaints were found to be on record at the Registrar of Contractors, the extent of needed repairs aggravated by the time taken by Respondent in correcting the items indicate that disciplinary measures would be appropriate.

RECOMMENDED ORDER In view of the foregoing, it is recommended, commencing on the effective date of the Registrar’s Order, (thirty-five [35] days after the date of mailing by the Registrar of Contractors) that Respondent’s Class B license be suspended until the Registrar receives proof that Respondent has corrected all of the remaining items listed above, excluding those which were found as exceptions in paragraph 5 of the findings of fact. The burden of notifying the Registrar of Contractors that the required work has been completed shall be upon the Respondent, and, to the extent that the Registrar requires it, it shall be upon the Respondent to demonstrate that the required work was in fact satisfactorily completed. It is further recommended that, once the above provisional suspension, if any, is lifted, Respondent’s license be placed on probation for a 180 day period. It is further recommended, in addition to the above-provided penalties, if any, that Respondent pay the sum of $375.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32- 1154(D). The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent , as defined in A.R.S. §32-1101A(5), unless payment of any outstanding prior civil penalty is tendered. Done this day, February 14, 2000. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2000, to:

Registrar of Contractors 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