ALJDEC

99F-H0239-ROC · Registrar of Contractors · 1999-12-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 2, 1999 at 8:30 a.m. APPEARANCES: Complainants appeared on their own behalf; Respondent Thomas R. Swanson dba Hummingbird Builders appeared on his own behalf; Respondent Dennis Eugene Stallings dba Creative Plastering appeared on his own behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

The parties presented evidence and testimony on the issue of Respondents’ alleged failure to remedy certain deficiencies in the exterior plaster, exterior doors, and the concrete slab of Complainants’ residence. By the end of the hearing, the parties agreed to settle all items of complaint. Based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order. FINDINGS OF FACT Background The Registrar of Contractors issued License No. 080757, Class B- to Respondent Mr. Swanson, an individual, on November 8, 1998; the Registrar issued License No. 062639, Class C-36, to Respondent Mr. Stallings, an individual, on May 1, 1995. On March 2, 1998, Complainants entered into a contract to purchase a shell[1] constructed on 5 acres of land in a remote area of Mohave County for $49,800.00 from developer James Teeter. Respondent Hummingbird Builders contracted with Mr. Teeter to construct the shell for Complainants’ residence. Respondent Creative Plastering contracted with Hummingbird Builders to apply exterior stucco to the shell. Creative Plastering advised Complainants to water the stucco twice a day, which they did. Nonetheless, within a few months, before Complainants started interior framing or drywall installation, cracks appeared in the exterior stucco. Although Creative Plastering repaired the cracks, they reappeared. On September 28, 1998, Complainants made a complaint to the Registrar against Hummingbird Builders, alleging that the stucco was cracking, that cracks were reappearing in the stucco that had been repaired, that cracks had appeared in the cement slab and footers, that the exterior French doors leaked, that trim paint was chipping and showed drip marks, that primer was showing through the finish paint in places, and that the trusses were off center. The Registrar designated Complainants’ complaint against Hummingbird Builders Case No. H99-0118. Subsequently, Complainants performed work on the interior of the shell. Although they used screws to hang most of the interior drywall, as Creative Plastering had advised them, they used a pneumatic nail gun to attach interior framing to exterior walls and to attach drywall to the metal corner bead around the windows. The large cracks worsened and hairline cracks appeared in the exterior stucco. The Registrar’s Inspector Jim Boyett subsequently performed a jobsite inspection and, on April 5, 1999 on behalf of the Registrar directed Hummingbird Builders to perform the following corrective action within fifteen days: Properly repair all major stucco cracks.

Properly repair outside doors to seal properly and prevent leaks of water and dust.

Contact Dennis Stalling and James Teeter to possibly share cost of recoloring or painting outside of house.

On April 14, 1999, Hummingbird Builders made a complaint against Creative Plastering, alleging that, although it had patched the exterior stucco, the patches were falling out. The Registrar designated Hummingbird Builders’ complaint against Creative Plastering Case No. H99-0239. Subsequently, Complainants requested a hearing in Case No. H99-0118 and Hummingbird Builders requested a hearing in Case No. H99-0239. The Registrar then issued Citations and Complaints against both contractors, charging them with violations of A.R.S. § 32-1154.A.7, .23, and .3. Both contractors timely answered the Citations and Complaints against them, hearings were scheduled in due course, and the two cases were consolidated for hearing. Inspector William Redman, who succeeded Inspector Boyett at the Registrar’s Kingman office, testified at the hearing. Inspector Redman performed a prehearing jobsite inspection on November 23, 1999. His testimony with respect to each item of complaint is set forth separately below. The Parties’ Resolution of the Specific Items of Complaint The Exterior Stucco Inspector Redman testified that, although the hairline cracks were within applicable standards and were therefore Complainants’ responsibility, he observed at the prehearing inspection cracks that exceeded minimum standards. Inspector Redman was hard-pressed to assign blame for the large cracks. Creative Plastering had performed the warranty work and both Respondents had complied with Inspector Boyett’s directive but the cracks had reappeared. The 3-coat system that Creative Plastering used to apply exterior stucco was a system with which it had extensive experience and which generally is used with good results in the Kingman area. If Creative Plastering’s application of exterior stucco was workmanlike, cracks in the stucco could indicate movement of the structure underneath the stucco. No governmental agency had inspected any portion of the shell, except for the septic system, and it could not be known with absolute certainty whether the shell had been adequately braced. In Inspector Redman’s opinion, however, Hummingbird Builders’ experience and reputation made noncompliance with industry standards unlikely. The wood used for studs has approximately 17% moisture when it is shipped from the second- and third-growth forests in the wet Pacific Northwest. In Inspector Redman’s experience in the high desert area where Kingman is located, care must be taken to protect studs from drying and twisting as the moisture content drops after studs have been incorporated into construction in this area. The shell Complainants purchased stood several months, unoccupied, without air conditioning, with the raw lumber of the studs exposed on the interior. This may have caused movement in the shell, which resulted in the stucco cracking. In Inspector Redman’s opinion, Inspector Boyett may have suggested that Creative Plastering, Hummingbird Builders and the developer share the cost of painting the structure with Elastimeric paint because, otherwise, continued movement of the shell would cause the cracks to reappear. Following the parties’ presentation of evidence concerning the exterior stucco, Creative Plastering agreed to repair the stucco, Hummingbird Builders agreed to paint the residence’s exterior with Elastimeric paint, and Complainants agreed to accept the result, even if the texture of the stucco differed from what they had originally selected, as long as the texture was uniform and the stucco was applied in a professional and workmanlike manner. Complainants agreed to dismiss their complaint with respect to the exterior stucco. The parties agreed the repairs would be deferred until the weather warmed up to ensure optimal conditions. Cracks in the Concrete Slab As noted above, although Complainants’ original complaint to the Registrar included cracks in the concrete slab, Inspector Boyett’s April 5, 1999 directive to Respondent Hummingbird Builders did not address this item of complaint. See Findings of Fact Nos. 6 and 8, supra. According to Mr. Swanson, Mr. Boyett did not address this item of complaint because the cracks had not separated or uplifted at the time of his inspection. Inspector Redman testified that, at the time of his November 23, 1999 prehearing jobsite inspection, he observed one crack in the slab that goes through the house. In Inspector Redman’s opinion, the width of the crack exceeds the minimum workmanship standards that the Registrar has adopted. See Minimum Standards for Licensed Contractors at 14-17 (October 1998). Inspector Redman’s hearing testimony was the first notice that Hummingbird Builders received of a problem with the concrete requiring correction. Hummingbird Builders agreed to correct the crack. In consideration for its agreement, Complainants agreed to dismiss their complaint as to concrete. The Exterior Doors Complainants’ residence has three exterior doors: two French doors in the front and a single door in the back. Hummingbird Builders replaced all three doors more than once, paying its subcontractor for 40 or 50 hours of corrective work, costing between $800.00 and $1,000.00, and has spent $2,400.00 in materials. Complainants agreed that Hummingbird Builders had made substantial and continual efforts to make the doors weather-tight. Complainants agreed that, as of the date of the hearing, Hummingbird Builders had fixed the French doors at the front of the house so that they did not leak. Complainants testified that the single door at the back of the residence still had a small leak. The house does not have and Complainants’ do not intend to install rain gutters. Inspector Redman testified that, although he performed a water test at his prehearing jobsite inspection, he could not say that additional corrective work was warranted on any door. Hummingbird Builders’ subcontractor Robert Wireman testified that replacement of the weather-stripping around the back door with the weather- stripping that had stopped the French doors from leaking would void the manufacturer’s warranty on the back door because such weather stripping was a different system. As a gesture of good faith, Hummingbird Builders offered and Complainants agreed to accept installation of storm doors, which would prevent leaks without voiding the manufacturer’s warranty. In consideration for installation of storm doors, Complainants agreed to dismiss their complaint as to the exterior doors. Other Matters Inspector Redman testified that, at the time of his November 23, 1999 prehearing jobsite inspection, the trim paint had been repaired in a workmanlike manner. Complainants testified that, before the hearing, they had agreed to allow Hummingbird Builders to repaint the exterior doors after repairs were completed. Hummingbird agreed to repaint the exterior doors when the storm doors were installed. Inspector Redman also testified that Hummingbird Builders properly installed the trusses. Complainants did not dispute this. In addition to dismissal of their complaint, Complainants also agreed that they would not file a complaint in a court having appropriate jurisdiction against either Respondent for any civil claims based on the statutory violations alleged in the complaint. However, the dismissal of this administrative action is without prejudice to the filing of a new complaint if either Respondent breaches the terms of the parties’ settlement agreement. These administrative disciplinary proceedings are cut short by the parties’ entry into the settlement agreement, which is presented to the Registrar of Contractors for approval and adoption. Consequently, both Respondents are advised that any future breach of the terms of the settlement agreement will not only constitute grounds for new complaints but also will warrant treatment as a circumstance in aggravation. All rights and defenses of the parties are deemed to have been merged into the settlement agreement and, if any timely petition for rehearing or new complaint is filed in the future, the sole issue for determination shall be whether Respondent has performed its obligations under the terms of the settlement agreement. Mitigation The Citations and Complaints issued by the Registrar advised both Respondents that, if they were found in violation of any contracting law, their prior disciplinary record of final Registrar of Contractors’ orders might be considered in mitigation or aggravation. Accordingly, notice is taken of the Registrar’s official records, which reveal that, if he determines to allow this complaint to remain on Creative Plastering’s record, it will be the only final order against it. Creative Plastering’s prior record is deemed to be excellent and, thus, is viewed as a matter in mitigation for any disciplinary penalty to be imposed as a direct result of this case. The Registrar’s official records reveal that, if he determines to allow this complaint to remain on Hummingbird Builders’ record, it will be the third final order closing a complaint against it on the Registrar’s current record. Hummingbird Builders’ prior record is deemed to be good and is also viewed as a matter in mitigation for any disciplinary penalties to be imposed as a direct result of this case. CONCLUSIONS OF LAW In this administrative proceeding, Complainants bear the burden of proof and must establish statutory violations by a preponderance of the evidence. See A.A.C. R2-19-119; see also Culpepper v. State, 187 Ariz. 431, 438, 930 P.2d 508, 515 (App. 1996). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). A preponderance of the evidence is “evidence which is of greater weight or more convincing than 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 at page 1064 (6th ed. 1990). With respect to the stucco, the evidence shows that Respondents repaired the cracks. Therefore, the evidence does not show a violation of A.R.S. § 32-1154.A.23.[2] Because the cracks reappeared, however, both Respondents might have been in violation of A.R.S. § 32-1154.A.7[3] and .3.[4] Respondent’s failure to repair the stucco so that the cracks did not reappear may be at least partly excused by uncertainty about possible causes of the cracks, which included Complainants’ failure to complete the interior or protect the wooden studs. This uncertainty was exacerbated by the ambiguity of Inspector Boyett’s directive and his replacement by Inspector Redman.[5] Construction is not a perfect science and it is not uncommon in the industry for corrections, repairs or replacement to be required to bring component parts of a construction project up to industry standards. A contractor should be given a reasonable opportunity to complete necessary remedial work. The evidence therefore does not establish that Hummingbird Builders violated any statutory provision with respect to the cracks in the concrete slab, because it did not receive notice or an opportunity to correct such cracks. The evidence also does not establish that Hummingbird Builders violated any statutory provision with respect to the exterior doors and trim paint. Public policy favors settlement of disputes and adverse parties should be free to adjust their differences by entry into agreements or stipulations. The terms of the various settlement agreements are fair and reasonable, under all the circumstances, and the agreement is the product of knowing and voluntary action on the part of each party. RECOMMENDED ORDER In view of the foregoing, it is recommended that the Registrar dismiss the Citation and Complaint against License No. 080757, Class B of Thomas R. Swanson dba Hummingbird Builders in Case No. H99-0118. It is further recommended that the Registrar also dismiss the Citation and Complaint against License No. 062639, Class C-36 of Dennis Eugene Stallings dba Creative Plastering in Case No. H99-0239. Done this day, December 14, 1999.

______________________________________ Diane Mihalsky Administrative Law Judge

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

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

By ___________________________

----------------------- [1] The exterior of the structure and, presumably, rough-in plumbing and electrical work would be completed, but not interior framing, drywall, floor or fixture installation. [2] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure to take appropriate 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.”

[3] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against 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] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[v]iolation of any rule adopted by the registrar.” The rule violated here was A.A.C. R4-9-108, which requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”

[5] This comment is not meant as criticism of either inspector. Inspector Redman’s hearing testimony established that this case was extremely unusual in that more definite opinions could result in unfairness to one or all three of the parties.

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