ALJDEC

99F-F0324-ROC · Registrar of Contractors · 2000-09-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

On September 13, 2000, a hearing was held to determine if Respondent Hylite Construction Company (“Hylite”) has violated provisions of A.R.S. §32-1154(A). Complainant Jean Block appeared with her husband Bill Block (the “Blocks”). Hylite was represented by counsel, Brandon Kavanagh. Based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made to the Director of the Arizona Registrar of Contractors. FINDINGS OF FACT In May 1998, the Blocks entered into a contract with Hylite for the purchase of a new home located at 7260 Esplin Way, Flagstaff, Arizona (the ”home”). It is important to note that the home is located in Doney Park, an area of Flagstaff known for extreme weather, including very cold temperatures and high winds. On April 21, 1999, the Blocks filed a complaint against Hylite with the Registrar of Contractors (“ROC”) regarding alleged construction deficiencies concerning the Milguard windows installed throughout the home, as well as the siding on the home. The Blocks’ complaint referenced excessive condensation on the windows, resulting in damage to the window sills and surrounding drywall and paint. By the time of the hearing, the siding was not an issue of record.

On May 15, 1999, ROC Inspector Mark Schweiger conducted an inspection of the Blocks’ home. He determined that no action was required by Hylite at that time because during the inspection, the windows and sills appeared dry and no condensation was present. He did note however, that the natural finish on the window sills was deteriorating rapidly, but did not determine that the deterioration was due to water damage. Therefore, no violation of the State’s contracting laws could be determined. On July 27, 1999, the matter was closed by the ROC as “unconfirmed”. On January 6, 2000, the Blocks requested that the ROC re-open the original complaint against Hylite, again alleging excessive condensation and/or ice build-up on the windows, water damage to the sills and surrounding walls, cold air and dust penetrating the weepholes in the windows, and that the window tracks were over-flowing with water. On February 8, 2000, at 8:00 a.m., Inspector Schweiger conducted a second inspection of the home in reference to the condensation/ice on the windows. Condensation was present during the inspection. The windows were leak tested by Inspector Schweiger using a water hose on the windows. This test was conducted per the Blocks’ request, however, leaks were not detected by Inspector Schweiger. It should be noted that Mr. Block took exception to the pressure utilized by Inspector Schweiger during the leak test. Mr. Block believed that leaks were not detected because not enough pressure/volume of water was exerted on the windows during the test. On February 15, 2000, Inspector Schweiger issued a Corrective Work Order (“CWO”), which referenced the items as numbered on the Blocks’ request to re-open the complaint, dated January 6, 2000. The sole deficiency found by Inspector Schweiger was a piece of missing trim at a window in the kitchen. Hylite was ordered to re-install the trim in a workmanlike manner. The evidence of record established that Hylite did not comply with the CWO issued on February 15, 2000, requiring Hylite to replace a piece of missing trim from a kitchen window. On August 2, 2000, the Blocks filed an additional item of complaint concerning a broken plumbing fixture. A citation and complaint was not issued to Hylite regarding this item of complaint. However, at the hearing Hylite waived notice regarding the plumbing complaint and the Administrative Law Judge ruled that the scope of the hearing would include the plumbing issue. The Blocks did not sufficiently address the plumbing complaint during the hearing in order for the undersigned Administrative Law Judge to make a determination as to whether Hylite is in violation of any of the State’s contracting laws with regard to this issue. Therefore, the Blocks failed to meet their burden of proof necessary to demonstrate that Hylite violated the State’s contracting laws with regard to the plumbing complaint. During the hearing, Hylite attempted to shift responsibility for the occurrence of the condensation to the Blocks’ lifestyle. Hylite contended that the condensation is caused by the internal humidity in the home, attributable to the brewing of beer in the home by the Blocks. The Blocks testified that they have not brewed beer in their home since September 1999, and that the condensation condition has occurred since that time. Furthermore, the weight of the credible evidence did not establish that the condensation condition is due to the humidity produced by the brewing of beer in the home, or any other condition present in the home. The Administrative Law Judge finds that the condensation condition is not attributable to the brewing of beer or the internal humidity in the Blocks’ home. The Blocks presented a home video illustrating the condensation condition, portions of which were viewed during the hearing. The video sequences were dated December 1999 and February 2000. Mrs. Block testified that the video depicted the typical condition of the windows in the winter. The video demonstrated that the window tracks were over-flowing with water and mud, and excessive condensation and ice were readily apparent. It was also apparent that the moisture present on the interior of the windows was seeping in from the outside and not attributable to internal conditions of the home. Mr. Gilbert Peru, a Coconino County Building and Safety Inspector, testified at the hearing, that a certificate of occupancy was issued for the home which would not have been issued had the home not met the building code regulations. He further testified that the windows would have been examined during the final inspection, which was conducted prior to the certificate of occupancy being issued. However, the inspection would only pertain to the size, safety and location of the windows, as the county does not test for product performance. Mr. Peru testified that Milguard windows are acceptable for use in Flagstaff per the building code, and that there is no exception for the Doney Park area. Mr. Dell Weaver, Milguard’s Service Manager, testified at the hearing, that Milguard windows are appropriate for geographic areas with cold climates such as Flagstaff, as well as areas with more mild climates. He testified that Milguard windows are sold throughout the United States and the world. They are sold in Russia, Guam, South America, Alaska, Illinois, California, and Hawaii. Mr. Weaver testified that at the request of the Blocks, Milguard inspected the Blocks’ windows on two separate occasions, and that Milguard found no problems with the windows or the workmanship in the installation of the windows. However, due to the Blocks’ dissatisfaction with the performance of the windows, Milguard provided the Blocks with replacement windows as a customer service gesture. The replacement windows have not yet been installed. The Blocks obtained estimates for the installation, ranging from $3,000.00 to $3,600.00. The undersigned Administrative Law Judge finds that Hylite has constructed this home in such a manner as to cause the windows to fail to function properly, as evidenced by their failure to prevent the outside elements from permeating the windows and the excessive condensation from forming on the interior of the windows. Consequently, damage to the window sills and the drywall and paint surrounding the windows has resulted. The weight of the credible evidence indicated that the condensation condition is attributable to Hylite’s selection and installation of the Milguard windows, both of which were matters under the control of Hylite. Although the presence of some condensation is not necessarily indicative of substandard workmanship, the extreme condensation and resulting damage is supportive of a finding of poor workmanship as the causative factor behind the condition in question. Therefore, the undersigned Administrative Law Judge finds that Hylite has breached an implied contractual warranty of fitness for intended purpose, which is found under the circumstances to constitute a wrongful act within the meaning of the charged statutory violation.

CONCLUSIONS OF LAW The totality of the evidence sufficiently supports a determination that the windows as installed by Hylite are unfit for their intended purpose, as impliedly warranted by Hylite, and that the condensation condition reflects an unworkmanlike result. The evidence further supports a determination that Hylite failed to comply with the CWO. Consequently, the evidence of record establishes that, with respect to the deficiencies regarding the windows and the missing trim piece determined in the above Findings of Fact, Hylite has violated the provisions of A.R.S. §32-1154(A)(7),(23), and (3), namely R4-9-108. Based on the foregoing violations, it is appropriate for the Registrar of Contractors to impose discipline against Hylite’s license.

RECOMMENDED ORDER In view of the foregoing, it is recommended commencing on the effective date of the Order entered in this matter, that Hylite’s Class B license shall be suspended until such time as the Registrar of Contractors receives written confirmation that Hylite has: 1. replaced the missing trim piece; 2. remedied the condensation problem in an appropriate manner; and 3. performed the necessary remedial work on the window sills and the surrounding drywall and paint. It is further recommended that if Hylite accomplishes the above- described corrective work on or before the effective date of the Order entered in this matter, then the aforementioned license suspension shall not take place. It is further recommended, in addition to the above-provided penalty, if any, that Hylite pay the sum of $100.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32-1154(D). The failure by Hylite 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 Hylite’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Hylite, as defined in A.R.S. §32-1101(A)(5), unless payment of any outstanding prior civil penalty is tendered. Done this day, October 5, 2000.

______________________________________ Sondra J. Vanella Administrative Law Judge

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

Michael P. Goldwater, Director Registrar of Contractors 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