ALJDEC

99F-L0150-ROC · Registrar of Contractors · 1999-12-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 14, 1999 APPEARANCES: Complainants appeared on their own behalf and Respondent appeared through its vice-president and qualifying party, Rick Punu. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. Pursuant to written contract, Complainants retained Respondent for the purpose of installing a specified walking deck surface on their upper level wood deck. Complainants allege certain deficiencies in the work performed by Respondent and same are discussed in the findings below. 2. The following salient facts were adduced at the hearing and are important to note: a. The wood deck framing was performed by a separate contractor hired by Complainants. Respondent was merely hired to install the walking deck surface for the wood deck. b. Shortly after Respondent completed the walking deck surface installation, Complainants experienced water penetration on the walls and the ceiling underneath said deck. The water penetration has caused staining on specified areas of the stucco walls and the ceiling underneath the walking deck. c. Complainants notified Respondent regarding the water leakage. Although Respondent accomplished specified remedial work in an attempt to terminate the water leakage and was successful in stopping some of the leaks, it was shown that water leakage continues to be a problem in certain areas of the home underneath the walking deck. d. Several cracks occurred in the deck surface installed by Respondent and Respondent made repairs on these cracks. However, said remedial work has failed, in that the cracks have re-occurred. e. When Respondent’s remedial efforts failed to resolve the above- described problems, Complainants filed the instant complaint with the Registrar of Contractors. 3. A jobsite inspection by the appointed inspector for the Registrar of Contractors was held, pursuant to which that Agency sent Respondent a letter directing it to accomplish specified remedial work within a stated period of time. Notwithstanding the terms of said Agency directive and Respondent’s efforts to work on the directive to accomplish further remedial work on the previous crack repairs, substantial compliance was not accomplished. 4. It is important to note that the Agency inspector assigned to this complaint at the time of the original jobsite inspection did not require Respondent to perform any remedial work on the water leakage problem, based on his conclusion that both Respondent and the deck framer had responsibility for the water leaks. Since no complaint was filed against the deck framer and the inspector could not determine what areas of Respondent’s responsibility were causing the leaks, he did not direct Respondent to perform any further remedial work on the water leaks.

5. Respondent contends that it has no responsibility for the water leaks due to the fact that it believes that a significant portion of the water penetration is due to roof deficiencies unrelated to the area wherein it had to “tie-in” its deck walking system to the roof. Although Respondent should not be held responsible for any water penetration caused by deficiencies in the roofing work performed by others, it is found to be totally responsible for the “tie-in” between the roof and the walking deck surface, since it agreed to accomplish an appropriate “tie-in” of said areas. Thus, Respondent should be required to return to Complainants’ property and water test the area of the roof and walking deck surface “tie- in.” After thoroughly water testing said area, any continuing water leakage in said area must be properly corrected by Respondent. Any leaks directly attributable to the roof, other than that portion that is “tied- in” to the walking deck, would be the responsibility of others. 6. The evidence presented was inadequate to establish that Respondent had any responsibility for the water penetration observed underneath a specified southwest corner of the walking deck, due to the finding that same appeared to be totally related to the roofing work performed by others. Thus, Complainants failed to sustain the requisite burden of proof on this issue. 7. Respondent contends that it has no responsibility for the cracks in the walking deck based on the fact that there is a pre-printed disclaimer in the contract referable to the fact that substrates may move and thus, Respondent does not guarantee its decking material against cracking. 8. Disclaimers of liability are frowned upon in the law as being contrary to public policy. For a disclaimer to have any enforceability, it must be clearly established by substantial evidence that the matter being disclaimed was so carefully explained and accepted that little doubt remains as to the intent of the parties. 9. The disclaimer in question herein is in fine print on the pre- printed back side of the contract. There is nothing on the contract indicating that Complainants read and understood this portion of the contract. Moreover, there was no evidence that any intent by Respondent to disclaim liability for cracking of the walking deck system was ever explained to Complainants. In the instant matter Respondent failed to provide evidence which is persuasive to adequately establish that the intent of the parties was to clearly pass the risk of the walking deck surface cracking onto the Complainants. Without such clear and unambiguous contract language, which is clearly accepted by written acknowledgment of the homeowner, a contractor should refuse to perform construction work that is reasonably calculated to result in substandard workmanship. 10. Respondent accepted the project to install a walking deck surface. The cracking described herein is found to be unacceptable, creating not only a breach of the implied warranty of fitness for aesthetic purposes but also an unworkmanlike result. It is determined and held that Respondent, by virtue of agreeing to install its deck coating system to the wooden deck, effectively accepted the deck framing surfaces as being adequate to support a workmanlike result and, as such, is estopped to assert that it has no responsibility for the cracking of its deck coating due to the nature of the deck framing installed under its deck coating system. 11. In addition to the walking deck, Respondent also installed its surface coating application to specified concrete areas of Complainants’ home. Complainants did not indicate any complaints with this aspect of Respondent’s work. Respondent indicated that although he was not certain of the exact cost for the walking deck coating application at issue herein, he believed that same represented approximately $1,200.00 to $1.300.00. 12. In the event Respondent does not believe that it can effectively repair the cracks in the walking deck surface coating to provide a proper and lasting aesthetic repair then, in the alternative, it would be appropriate for the Registrar to impose a condition in the instant Order to provide that Respondent shall pay Complainants the sum of $1,300.00 as restitution for the payment of the deck coating surface and then Complainants shall be free to contract with another contractor to remove Respondent’s deck coating system and install some other form of walking deck surface. Nothing in this Order should be construed to prevent either party from seeking a greater or lesser award of monetary damages in a civil court of competent jurisdiction. . . . . . . CONCLUSIONS OF LAW

1. Any contractual provision that attempts to “write-out” the Registrar of Contractor’s jurisdiction, under the State’s Contracting laws, to discipline a contractor for failure to provide a consumer with good and proper workmanship, should be viewed to be void as against public policy. 2. There is a principle in construction and one generally recognized and applied by the Registrar of Contractors under appropriate circumstances, that a contractor performing work over a surface constructed and/or prepared by another contractor, accepts the surface at the time of the subsequent application, based on the opportunity to inspect for any visible flaws or defects before performing such subsequent work. 3. Respondent violated the provisions of A.R.S. § 32-1154A (23), (7), and (3); namely Rule R 4-9-108. 4. The Registrar of Contractor’s authority in matters such as presented herein, includes the ability to impose restitution, in whole or in part, as a reasonable condition to reduce any possible disciplinary action against contractors. The exercise of such authority is deemed appropriate in the instant case. Therefore, based upon all the evidence, a reasonable alternative condition in this case would consist of the payment by Respondent to Complainant of $1,300.00 as partial or full restitution for the cost of the walking deck surface coating. Imposing such a condition is more preferable than merely imposing a disciplinary action against Respondent’s license without providing a condition to reduce or eliminate same. 5. The Registrar may order a “restitutionary remedy...as part of the Registrar’s regulatory authority to take appropriate disciplinary action against those who violate the licensing…” laws set forth in A.R.S. § 32- 1154A (1) through (24), inclusive. An administrative award of damages is not an unconstitutional exercise of administrative authority where due process procedural rights are protected, where the authority to prohibit conduct has been well defined as in A.R.S. § 32-1154, and where judicial review is available as provided in A.R.S. § 12-901, et seq. Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 803 P.2d 430 (App. 1990). RECOMMENDED ORDER

In view of the foregoing it is recommended, commencing on the effective date of the Order entered in this matter, that the Class C-05 license of Respondent shall be suspended until the Registrar of Contractors receives written proof that Respondent has accomplished one of the following alternative conditions: a. Perform appropriate and effective remedial work to repair all cracking present in the walking deck surface. In addition, water test the area of the “tie-in” between the roof and the walking deck, terminate any water leaks in said area, and cause a properly licensed contractor to repair any water stains shown to be directly attributable to water leakage from the area of the roof and walking deck surface “tie-in.” b. Pay Complainants the sum of $1,300.00. c. Conclude other mutually acceptable arrangements with Complainants.

It is further recommended that if Respondent 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 and in that event this Citation, together with the Complaint upon which it is based, shall be closed. Done this day, December 23, 1999.

______________________________________ MARK A. SILVER Administrative Law Judge

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