ALJDEC

99F-M0105-ROC · Registrar of Contractors · 1999-12-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARINGS: June 9, August 23, 24, November 3, 4, and 12, 1999. APPEARANCES: COMPLAINANTS: Dana and Julie Miller, with representation by George Ferrin, Esq. RESPONDENT: by Robert Freeman, corporate secretary, with representation by James Tanner, Esq.

ADMINISTRATIVE LAW JUDGE: Anthony Halas _____________________________________________________________________ This matter proceeded to hearing to determine whether Respondent Better Homes Construction, Inc., violated state law as alleged by Complainants Dana and Julie Miller, 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 relative to the procedural history of the case, the following Findings of Fact, Conclusions of Law, and Recommended Decision are made and submitted to the Registrar:

FINDINGS OF FACT 1. In January, 1998, Complainants Dana and Julie Miller (the Millers) contracted with C.R. Bobby Freeman (Freeman) on behalf of Respondent Better Homes Construction, Inc. (Better Homes Construction), to build their single family residence at 17544 East Flintlock, in Queen Creek, Arizona. 2. The initial contract price for the residence, prior to any change orders, was $226,022.00; the home is a single story, approximately 2230 square foot Santa Fe style wood frame structure with a concrete slab-on- grade floor, with stuccoed exterior walls and interior drywall surfaces. 3. Better Homes Construction, Inc., is holder of Arizona contractor’s License No. 111628, Class B, issued March 12, 1996. Tammy L. Freeman is Qualifying Party for the license and an officer of the corporation; Bobby Freeman is Secretary to that corporate entity, and appeared on occasion through the course of these proceedings to testify for Respondent. 4. The following procedural history is based on administrative notice of the documents compiled by the Registrar of Contractors in this matter: A. On July 24, 1998, the Millers filed a complaint against Better Homes Construction with the Registrar of Contractors, alleging numerous deficiencies, as referenced in the July 23, 1998 report of Robert Landry for RAL Consulting (Exhibit R), which report was submitted with the complaint. B. A specific numbered listing of 102 complaint items was made by Mr. Miller in correspondence to Mr. Freeman dated August 1, 1998. That document provides the numbering format upon which the Registrar’s Corrective Work Order (below) was premised. C. Through counsel, Complainants amended the complaint by correspondence dated September 15, 1998, and filed with the Registrar on September 17, 1998. In the Corrective Work Order, the numbering format was continued to address these five items as Item 113. D. The Registrar’s inspector Van Bagley conducted a job site inspection on October 28, 1998, in the presence of Complainants, Respondent’s representative, and others. E. On November 20, 1999, inspector Bagley issued a Corrective Work Order (CWO) addressing 113 numbered items, of which a certain number he determined required remedial work. F. By letter to the Millers dated November 22, and filed with the Registrar November 24, 1998, Mr. Freeman responded for Better Homes Construction to state, generally, that any complaint by the Millers was premature, in that the house was not yet completed, before which many of the deficiencies complained of would have been corrected after final walk through; and then specifically to indicate that the numbered items in the CWO had or would be corrected. G. By letter dated January 14 and filed January 26, 1999, Mr. Miller listed the numbered items still in need of correction, and requested hearing. H. On February 24, 1999, the Registrar then issued CITATION AND COMPLAINT in Case No. M99-0105, charging Respondent with possible violations of A.R.S. §§ 32-1154.A.3 (violation of A.A.C. R4-9-108, the workmanship rule), .7 (wrongful or fraudulent act), and .23 (failure to take appropriate corrective action without valid justification). I. By answer filed March 5, 1999, counsel for Respondent denied any violation of the cited sections of the contracting law; the matter was then duly scheduled for hearing. J. Inspector Bagley then conducted a prehearing jobsite inspection on June 7, 1999, with Respondent’s representative and attorney present; neither Complainants nor their counsel apparently received notice of that inspection, and were not present. 5. During the course of these proceedings, a number of procedural motions were presented by both parties, including Respondent’s MOTION TO DISMISS FOR LACK OF STANDING based on Complainants’ loss of ownership interest in the property at issue. When time permitted, the motions were subject to full briefing and written Orders, including ORDER DENYING RESPONDENT’S MOTION TO DISMISS FOR LACK OF STANDING; when time did not permit full briefing, the parties were provided opportunity to present their respective positions at hearing, with oral Orders made on the record by this tribunal. 6. At hearing, Complainants appeared, represented by counsel, and offered Exhibits A through T. A number of the exhibits consisted of multiple photographs. Respondent’s objections to certain of the exhibits were overruled in whole or in part, on the record, and the exhibits were marked, admitted, and given the weight deemed appropriate by the undersigned, upon due consideration. 7. Complainants presented the testimony of Dana Miller, Tom Thomas, Jack Jacobs, and John Kern, all subject to cross-examination. 8. Respondent appeared through counsel, and offered Exhibits 1 through 12. Exhibit 1, admitted over objection, was misplaced during the course of the proceedings, and when not reproduced by Respondent, was stricken from the Exhibit list, and not considered herein. Complainants’ objections to certain other exhibits were overruled, and Exhibits 2 through were marked, admitted, and given appropriate weight . 9. Respondent presented the testimony of Bobby Freeman (due to Freeman’s absence from the proceedings the last two days of hearing, Complainants did not complete their planned questioning of him, and waived any such further testimony in the interests of completing the presentation of the evidence), as well as Peter Fleming and Michael Fitzgerald, who were subject to cross-examination. 10. In addition, the Registrar’s inspector Van Bagley testified relative to his findings and conclusions premised on his jobsite inspections on October 28, 1999, and June 7, 1999. 11. Inspector Bagley’s testimony addressed, in general, the standards of workmanship minimally acceptable to the Registrar, and then more specifically the bases for his initial determination, expressed in the CWO, that approximately 52 items of the 113 listed in the complaint (as amended and supplemented) required some degree of corrective action to meet those standards. 12. Inspector Bagley then explained, based on his second inspection and the observations he made and information received from Respondent at that time, just what corrective action appeared to have been taken by Respondent to address the itemized deficiencies. He determined that, in essence, some degree of correction had been made to about 40 of the items, such that (with some overlap and omission): A. Certain items now met the building plans and specifications and/or the Registrar’s standards – even if not to a standard of perfection (Items 3, 4, 5, 31, 34, 36, 41, 42, 43, 59, 60, 61, 66, 68, 71, 72, 75, 79, 80, 82, 84, 88, 89, 90, 91, 96, 98, 99, 100, 104, 106, 107, 108, 109); B. Some items had been corrected to some extent but required additional work such as sanding, sealing, and/or painting (Items 5, 11, 27, 28, 41, 42, 43, 54, 72, 73, 78, 80, 89, 90, 103); C. Some items had not been corrected at all, or if corrected, still did not meet minimal workmanship standards or deviated from the plans (Items 30, 61, 68, 91, 92, 94, 95, 98, 101, 104, 113/multi-part); D. And, for some items he could not tell whether corrective action had been done or, if done, whether repair met workmanship standards or building plans (36, 54, 63, 64, 68, 87, 91, 94, 98, 101, 105, 106, 109, 112, 113/multi-part). 13. In stating his conclusions regarding specific items, Inspector Bagley considered Complainants’ Exhibits A (the construction schematic), B (photographs), and C (photographs), and Respondent's Exhibit 2 (roofer’s letter). He confirmed he had not been provided any report or other information relative to termite pre-treatment. 14. Overall, Inspector Bagley conceded a relative degree of equivocation in his conclusions, noting that the construction of the home had not yet been completed, such that it was difficult to determine whether certain deficiencies required specific initial or additional corrective action, or would otherwise have been routinely completed in the due course of construction. 15. Inspector Bagley also confirmed that he did not have any particular expertise in addressing soil compaction issues. On his observation of the concrete foundation, he noted “shrinkage/stress” cracks, but not “displacement” type cracks which could indicate insufficient compaction, or excessive settling, although the soil would have to cycle through wet and dry stages for anyone to best address such concerns. He also could not tell if certain of the repaired cracks had widened significantly in the interim between his inspections. 16. Tom Thomas (Thomas) testified for Complainants to generally describe his education and experience in soil compaction and structural foundation matters as a soils and geotechnical professional engineer, and specifically relative to those matters as evident in the construction of the Millers’ residence. His testimony was based on onsite observation and “probing” of the soil before and in follow-up to his report, and was consistent with the information, findings, analysis, and conclusions he expressed in that report of February 26, 1999 (Exhibit D). 17. Thomas described the information he relied on in forming his conclusions, which included review of the home video taken by the Millers during the construction process (Exhibit F). Thomas stated that additional testing of soil bearing capacity, density, and compaction could include “sand-cone” and “nuclear-density” testing. 18. In noting that the residence was built in the middle of a citrus grove immediately after removal of the trees had “disturbed” the soil (with projection of the tree line indicating that some of the trees, before removal, were under the perimeter foundation, with most beneath the interior floors), Thomas explained why he concluded that, “to a reasonable degree of soil engineering certainty”, the disturbed soils and other backfilled areas such as trenches had not been adequately “overexcavated” or compacted to sufficient depth (by means of “fills” ). 19. Thomas reached that conclusion notwithstanding documentation that, at least where tested, the top 6 inches of the soil exhibited an otherwise acceptable 95% compaction (see Respondent's Exhibit 7). 20. Given what he considered to be uneven and insufficient compaction and support for the foundation and floor slabs, Thomas opined that excessive differential settling would likely occur in the future as moisture infiltrated the soil beneath the residence, which would result in excessive cracking of doors, walls, and other structural, functional, and cosmetic problems. 21. Thomas further explained why he concluded that the concrete foundation, as constructed, did not meet the Uniform Building Code (UBC) requirements based on the insufficient manner and depth to which the concrete had been set either into the undisturbed soil or over the disturbed soils. 22. Thomas also explained his conclusion that the fibermesh concrete of the foundations and floor slabs did not meet the minimum compressive strength of 3000 psi specified in the building plans (although it might meet the UBC minimum requirement of 2500 psi); and that there was no evidence of any joints in the floor slabs, contrary to specification. 23. Finally, Thomas opined that the primary cause of the floor slab cracking was due to the lack of joints in the floor slab to accommodate the stresses caused by concrete shrinkage and unstable subsoils, and he testified why he expected further floor slab cracking and other defects to become apparent over time as a result of the variable condition of the insufficiently compacted soils, the potential for which settling he thought could be minimized but not eliminated by certain specific preventative measures. 24. Jack Jacobs (Jacobs) testified for Complainants to generally describe his experience in the construction industry, particularly residential, confirming he was not presently a licensed contractor, and then specifically to explain his observations and conclusions relative to code and workmanship deficiencies after onsite inspection of the Miller residence on January 8, 1999, consistent with his report of January 18, 1999 (Exhibit H), and subsequent onsite inspections. 25. Jacobs opined that the mandated termite pre-treatment had not been done at all – given the absence of any documentation of such treatment – and that the evidence he observed of attempts at post-treatment were inadequate. 26. Relative to the concrete foundation and floor slabs, Jacobs concluded in his report, and stated in testimony, that all aspects of such work were extremely poorly done, specifically referencing particular visible problems: A. Overall house foundation set “out of square”; B. Plan-specified interior control joints absent; C. Absence of cold/expansion joints in garage floor and step- up, entry slab, and rear patio; D. Excessive garage floor cracking (beyond minimum standard), with unacceptable repair; E. Absent plan-specified broom finish on exterior flatwork; F. Poorly designed and finished transition from driveway to garage floor, subject to ponding; G. Interior floor slabs out of level, up to ¾” per 10 feet, or worse; H. Improper repair of uneven floors with “self-leveling” material, with the only acceptable repair requiring rotary grinding of numerous humps and bumps; I. Rough and uneven exterior walls, with attempted repairs cracking and improperly applied; with the foundation wall protruding into the weep screed over approximately 75% of the lineal footage of the home; J. Interior garage foundation walls in need of repair; K. Concrete flatwork turndowns not to proper depth per plan; L. Paint and stucco stains on finished concrete. 27. Jacobs also noted specific framing deficiencies in his report: A. Bowed studs not repaired prior to lath and stucco application; B. Many out-of-plumb interior walls; C. Out-of-plumb and out-of-level door headers and walls; D. Unsightly and inauthentic trim necessitated by improperly installed drywall; E. Framing in master commode constructed for pocket door, rather than plan-specified hinged door; F. Improperly framed window openings resulting in unsightly/uneven reveals; G. Garage door headers not framed with structural members per plan; H. Rough-sawn headers above windows simply nailed to stucco, rather than structurally framed-in; I. Many soft spots in roof sheeting which would eventually delaminate the built-up roofing system. 28. Jacobs also reported and testified to explain his findings of additional construction defects: A. Improper installation of the HVAC plenum such that return air would be drawn from the interior walls of the house and possibly from the gas fumes of the water heater; B. Framing done incorrectly for washer/dryer hot and cold water- tight box, allowing overflow to drain into interior wall; C. Driveway hose bib not per owner request; D. Weep screed installed contrary to manufacturer’s direction, such that in some areas it was improperly flush with the foundation (and would deep water into the structure), while in other areas it was up to 2 ¼” over the edge of the foundation, exposing the lath and framing (allowing dust, moisture and vermin entry); E. Inconsistent stucco finish in various areas and to differing degrees; F. Inconsistent drywall finish, with poor repair; G. Poor quality paint preparation and painting; H. Poor trim carpentry; I. Exterior vigas not sealed or caulked; rough-sawn beams sealed over writing and mildew; front entry beam off-plumb; rear patio beam improperly trimmed and repaired. 29. In his testimony, Jacobs also noted other problems he had subsequently observed in August and October, 1999, and further explained the workmanship deficiencies he found regarding both the original work and the present and likely future insufficiency of certain of the repairs done by Respondent subsequent to the Registrar’s Corrective Work Order. 30. To that end, Jacobs referenced Exhibit A (the construction schematic); photographs he had taken in January, 1999, (Exhibits I, J, K, L, M, and N); August, 1999 (Exhibits I and O); and October, 1999 (Exhibit S); as well as the original January 29, 1998 Contract Agreement between the Millers and Better Homes Construction (Exhibit P), all to explain the bases for his conclusion that the house was poorly constructed, both in general and with reference to many specific items. 31. In particular, Jacobs explained, with reference to the photographs he had taken (Exhibit S) why specific aspects of the concrete work, both initially and as repaired, did not meet minimal workmanship standards. 32. Jacobs further explained why and how he had determined that the weep screed did not fit and would not serve its intended purpose to drain moisture from the frame of the house, despite (and to some extent, because of poorly-done) repairs. 33. Jacobs considered the weep screed problem to be an unavoidable result of Respondent's attempt to install a “squarely” pre-manufactured frame on a significantly “out-of square” and “wavy” foundation and slab, such that even the relatively forgiving nature of the wooden frame construction could not be adapted to the poorly-laid (and unforgiving) foundation. He concluded that the resultant misalignment of the frame (and weep screed) was such that the framing overhung the foundation by several inches in certain areas, while flush or underhung in others, and that only to 20 per cent of the lineal run of weep screed was properly installed. 34. Jacobs concluded that the repairs attempted by Respondent to date to correct the misalignment were poorly done, either as mis-applied patches to the foundation which failed to bond and were already delaminating, or as holes drilled into the weep screed which were ineffective in correcting the problem. 35. Jacobs stated that the only proper repair would be to either chip out the foundation (where the weep screed was offset inward) or use the appropriate preparation and bonding agent to extend the foundation (where the weep screed overhung it excessively) to get the required 1 ½” reveal all around. 36. John Kern (Kern) testified for Complainants to describe his six years carpentry and framing experience, confirming that he was not a licensed contractor, and the manner in which he had first been hired by Build-Tech, the pre-fab framing company, and then by Freeman to work as a framer for Better Homes Construction, on the Miller residence and also on about 6 to 10 other homes, two of which had the same or similar floor plans. 37. Based on his experience, Kern explained the difference between built on site framing, and pre-fabricated framing as done for the Miller house, and how each would require different installation methods. 38. Kern explained that, although he had not observed the foundation or floor slabs being poured, he had concluded that the whole foundation was out of square and wavy, worst on the west side, and that some areas of the slab were out of level (based on measurements he had done with Freeman), which caused him to have to adjust various sections of the framing to fit, even though he had followed the framing lay-out plans. 39. Despite that, Kern stated that many feet of the weep screed, as integrated with the frame, never could be made to fit the foundation properly (that is, with 1 ½” overhang), with up to 3 “ overhang in some areas, while flush or inset in others. Kern stated he had observed how this allowed dust and moisture into the structure under the frame in certain rooms. 40. Kern could not recall seeing any “zip-strip” installed to control concrete cracking, and stated that he had seen uninstalled zip- strip on the site sent elsewhere. 41. Kern testified that, contrary to plan, the engineered trusses were “cantilevered” and did not bear on the rear patio beam, a problem caused by a hump in the concrete floor he had covered by running 1 x 4 trim to cover the gap where the truss met the beam. He conceded he was not an engineer, and his opinion was based on his carpentry experience. 42. Kern stated that while the plans called for 2 x 6 exterior walls, the garage walls were 2 x 4 instead. He confirmed that with regard to the “false” exposed rough header beams, he had just nailed thin trim pieces to the stucco to create the illusion. 43. Kern stated that in response to the Registrar’s CWO, he had his crew address the framing problems per Freeman’s directions, which in some instances resulted in just “covering up” the problem, conceding that he himself had not been on site since early 1999, and was unaware of any work done since. 44. Bobby Freeman testified to describe his prior experience (and the limited experience of his wife as qualifying party for the Arizona license held by Better Homes Construction) in the construction industry, including residential construction as a licensed builder in New Mexico prior to relocating to, and becoming licensed in Arizona in 1996. 45. Freeman confirmed that his New Mexico license had been revoked, perhaps for non-renewal, but denied that such revocation was based on workmanship complaints. The undersigned finds that such testimony is not credible, as it is contrary to reasonable inferences to be made from records of the New Mexico Regulatory Commission documenting revocation of that license on June 24, 1997 (Exhibit V). 46. In explaining the design of the Miller residence, Freeman stated that Miller had provided certain of the dimensions, which Freeman had then computerized to produce the plan specifications. 47. Freeman explained his recollection and understanding of the specific site preparation and “fills” done by his sub-contractor to compact and prepare the soil after removal of the citrus trees and to backfill the trenches laid for the foundation. 48. Referencing certain exhibits (Exhibit A, p. 5, detail C; J/1, 2 and 3; Q/1and 2; I/10/g and h), regarding the workmanship of the concrete and framing, and conformance with the plan specifications, Freeman stated that overall, the various problems addressed in the CWO were either always according to specification; or had been repaired; or would be repaired if his company was given the opportunity. 49. Specifically, Freeman stated that he was satisfied with the weep screed installation and repairs; that he had provided “zip-strips” to Mike Inscore, his concrete sub, to install for controlled cracking of the flooring slab, but that he did not know where or to what extent they had been used; that in any event, the garage was to be saw-cut, rather than zip- stripped, and had cracked before the saw-cutting had been done. 50. Freeman confirmed that the framing for the house was pre- fabricated by Build-Tech, and explained the manner in which that company had employed John Kern, although Kern had been paid by Better Homes Construction in order to avoid licensing problems. Freeman denied that any of the interior framing was out of plumb or contrary to the specifications and plans. 51. Freeman referenced the specifications of the Contract Agreement (Exhibit P), and his own recollection, to contend that certain of Complainants’ dissatisfaction was the result of their own choices, or misunderstanding of the contract specifications. 52. Specific examples of such, according to Freeman, were that only the “heated” walls (that is, not the garage) were R-21 insulated; that the pre-fab framing already included double-paned windows; that a 5’ x 5’ window was moved from the kitchen to the garage, at the Miller’s request, to allow fit of the kitchen cabinets; that the Miller’s had requested an upgrade of their own choosing over the door hardware specified; that the washing machine hot/cold water box was not workmanlike, but only because someone – neither himself or his plumber – had injected expansive foam around the box, causing misalignment of the installation; and that the ducting of the kitchen microwave had been changed by Miller during framing, and was to have been finished by the Millers’ cabinet installer (separate from the general contract). 53. Freeman conceded that he was uncertain whether the termite pre- treatment he had attempted to arrange had ever been completed, since he was unable to get any certification that it had been done, so he stated he had then arranged for post-treatment after the slab was laid, with that second company providing a certificate dated December 6, 1998. He was uncertain just what had been done in that post-treatment. 54. Freeman contended that as of August 18, 1999: all doors had been properly installed to show appropriate reveals; he had notified all his subs to take action per the Registrar’s CWO, such that the exterior vigas should have all been properly caulked and sealed; there was a blank plate for the homeowner to install an egress light; there was an acrylic glass block still broken; he didn’t know what a “drip lip” on the roof scuppers was; he didn’t know when the final electrical inspection would be; the tile of the fireplace hearth was to be set by someone at Miller’s choice (although Respondent's contract responsibility); and that (master bath) marble trim did not appear to line up, although not specified for corrective work by the Registrar’s inspector). 55. Peter Fleming (Fleming) testified for Respondent to describe, generally, his education and experience as a professional engineer in geotechnical and environmental engineering, specializing in soil compaction questions (Exhibit 5), and specifically, consistent with the findings and conclusions expressed in his structural integrity evaluation report dated August 20, 1999 (Exhibit 6). 56. Fleming described the various documents he had reviewed in preparation of his report, including the Thomas Engineering report (Exhibit D), as well as his own site reconnaissance on August 15 and 18, 1999, which included Clegg Impact testing on the natural soils and field density testing. 57. Consistent with his report, and photographic Exhibits 8, 9, and 10, Fleming’s testimony summarized his conclusions to be that: A. The soil was properly placed and compacted; B. The wall, foundation, and slab cracks observed were within tolerable limits, and anticipated, based on the monolithic pour; C. Such cracks did not compromise overall structural integrity, but because the slab had no reinforcing and a limited amount of control joints, the cracking was not as aesthetically pleasing as it might have been with control joints at closer intervals; D. The anticipated settlement and movement had already been substantially completed in the year and a half since the foundation had been laid, given the absence of cracks in the ceramic tile; E. It was unlikely any future settling would be significant, absent the introduction of water next to the foundation, to be prevented by filling of the several holes dug next to the foundation, and by final grading to effect a slope away from the structure; F. Construction of the residence was within accepted standards, and workmanship was average or better. 58. Fleming explained his understanding of the location of the citrus grove relative to the foundation of the house (Exhibit 4), and the process by which the citrus trees had been removed and the disturbed soils filled. He concluded that the footings bore on natural undisturbed soils rather than where trees had been removed, with available bearing capacity greater than the design pressures. 59. Fleming opined that there was no violation of the UBC because all the exterior footings were 18 inches or more below outside final grades (with 12 inches required), and bearing on fill soils or undisturbed natural soils. 60. Fleming considered the calculations of the soil density report (Exhibit 7) relative to the upper 6 inches of fill soil to be not inconsistent with his conclusions that compaction was sufficient and better than 90% under the foundation pad, even if no specific non-destructive testing could be accomplished of those “interior” soils, such as the trenches, which even if only loosely compacted, would be satisfactorily “bridged over” by the overall foundation as a whole. 61. Michael Fitzgerald (Fitzgerald) testified for Respondent to generally describe his 30 years experience in the construction trades involving wood and lumber, and specifically regarding his former employment on the Miller house (and a total of about 50 houses) for Build-Tech, the manufacturer under sub-contract to Better Homes Construction for off-site fabrication of the Miller house framing, and then, when Build-Tech went out of business, for Better Homes Construction as supervisor of framing for 9 months. 62. Fitzgerald described the process by which Build-Tech shot the site (once the form boards were up but before the foundation was poured) with a laser to set the square, with the data then computerized to construct (offsite) the walls and frame to be delivered and installed onsite. 63. Fitzgerald described his appearances (between once a week and once a month) onsite during the framing installation at the Miller house, confirming that he didn’t do the work and wasn’t an inspector, but would discuss any concerns with Kern, usually. 64. Fitzgerald explained his understanding of John Kern’s employment, first with Build-Tech, and then with Better Homes Construction on the Miller house, and Kern’s work installing the pre-fab framing there. 65. Fitzgerald opined that Kern had failed to use, or properly use, the lay-out plans which formed the instructions for the framers, such that Kern had placed some walls in the wrong place, which then had to be corrected by moving windows or plumbing by other means, although the nature of the wooden framing did allow some ability to adjust. 66. Nevertheless, Fitzgerald understood that the Registrar’s CWO (based on the initial inspection Fitzgerald had attended) did not require any significant repair work by Build-Tech. 67. When onsite, Fitzgerald had not observed any walls extended off the foundation, but that if there were, adjustments could have been made by reducing the 2 x 6 framing specified to 2 x 4. He stated he had no knowledge of the weep screed installation, or the state of the concrete floors and foundation. 68. With regard to where and how load-bearing of the roofing trusses (not part of Build-Tech’s work) was to be accomplished, Fitzgerald opined that the framers such as Kern would not make that determination, but would generally be aware, based on the direction the trusses ran, and information to be found in the “truss calcs” . He stated that such information was important, since improper installation could cause load-bearing on walls not designed to do so. 69. Fitzgerald concluded that the framing done on the Miller house did not vary significantly in workmanship, once completed, from the 50 other houses he had worked on for Build-Tech. 70. Respondent’s Exhibit 11, not otherwise referenced in testimony, consists of a two-page report dated August 19, 1999, and authored by Quinton Kubicek (Kubicek) , designer and staff engineer, for S.E. Consultants, Inc. In that report, Kubicek disputes findings and conclusions expressed by others, including the RAL consulting report by Robert Landry, dated July 23, 1998 (Exhibit R) and the Magnum Company report by Jack Jacobs, dated January 18, 1999 (Exhibit H). 71. Specifically, based on his onsite inspection on August 18, 1999, Kubicek asserted that: A. All walls in the home were verified to be plum[b]; B. The clearance between the wall and stem is ½”; therefore the weep screed was not effected [sic] or exposed to the elements; C. There was no evidence the concrete slab was settling, given that there was only one shrinkage crack in the drywall, and the ceramic tile installed for some time had no noticeable cracks; D. The floor slab was never more than 5/16 “ out of level, nor was there excessive cracking beyond minimum standards; E. The foundation was not out of square, as measured diagonally; F. The foundation footings exceeded required depths in 3 areas tested; G. Only finish nails had been used in doors and windows; H. The Registrar’s Corrective Work Order had been completed in a professional manner, or would be completed in the final stages of construction as the house was finished. 72. Respondent’s Exhibit 12, also not referenced in testimony, is a one-page report dated August 20, 1999, by Professional Engineer Jeffrey Chapman (Chapman) for S.E. Consultants, Inc. In his report, Chapman stated that during an initial site visit to determine the validity of settlement problems, no signs of settlement were observed in the structure, completed about one year earlier. He noted one drywall shrinkage crack; only common exterior stucco shrinkage cracking; and no noticeable ceramic tile cracking. 73. On the totality of the extensive documentary and testimonial evidence of record, and in resolution of conflicts readily apparent therein, the undersigned finds that certain of the matters complained by the Millers, as supplemented, do not meet contract specifications, or workmanship standards, or both, as more fully specified below by reference to either the itemization provided in the Registrar’s Corrective Work Order, or as indicated. 74. All items not specifically referenced are found to be satisfactory in meeting workmanship, plan, or code requirements, to the extent relevant to the disciplinary authority of the Registrar of Contractors, or are beyond the scope of the complaint herein as subject to completion to appropriate standards and specifications in the due course of construction. 75. For purposes of clarity, while the following constitutes the inclusive list of matters requiring correction on the evidence presented, it is specifically found that the record herein does not now demonstrate, by a preponderance, evidence of failure to compact the soils, or evidence of settling, sufficient to require present correction pursuant to the Registrar’s authority. 76. Those items requiring correction are: • Item 5. Concrete cracks do not exceed minimal standards to date. However, “zip-strips” were not installed, contrary to specification and workmanship standards, and absence of same requires appropriate correction. • Item 11. Buildup of drywall mud at corner bead has been corrected, but requires appropriate finish work. • Item 27. Floor in workout room repaired, but requires finish work. • Item 30. Pocket door in master bath commode does not meet plan specification, and requires appropriate correction. • Item 54. To the extent corrected, ductwork through cabinetry does not meet specifications or workmanship standard, and requires appropriate correction. • Item 59. Control joints in garage floor not to plan, and require appropriate correction. • Item 60. Stem wall patch in garage does not meet functional or aesthetic standard, and requires appropriate correction. • Item 61. Driveway expansion joints require correction to meet plan specifications and workmanship standards. • Item 63. Apron on garage floor at driveway does not meet plan, and requires appropriate correction. • Item 66. Patch work on stem walls insufficient to meet functional or aesthetic standards and requires appropriate correction. • Item 68. Weep screed, as installed and as corrected, fails to meet minimal workmanship standards, and is not adequate to serve the function for which intended, and requires appropriate correction. • Item 72. Face of raised area of garage floor, as repaired, requires finish work. • Item 78. Peel posts, as repaired, require finish work. • Item 80. Stucco at rear laundry room door, as repaired, requires finish work. • Item 87. Finishing on front porch concrete slab does not meet minimal functional or aesthetic standards, and requires appropriate correction. • Item 89. Stucco around front entry large window, as repaired, requires finish work. • Item 90. Front peel posts, as repaired, require finish work. • Item 94. Hose bib requires correction to north side of driveway. • Item 98. Expansion and contraction of roof insufficient to explain evidence of buckling and water ponding, which require appropriate correction. • Item 100. Garage/driveway expansion joint, as installed and repaired, does not meet functional or aesthetic standards, or plan specifications, and requires appropriate correction. • Item 101. Installation of roof scuppers not per plan or minimal functional standards, and requires appropriate corrective action. • Item 103. Non-uniform overhang at stemwalls, as repaired, requires finish work. • Item 104. Finishing at recessed area of garage doors, as repaired, is insufficient to meet minimal functional or aesthetic standards, and requires appropriate correction. • Item 106. Section of wall and stem between garage doors, as repaired, does not meet minimal functional or aesthetic standards, and requires appropriate correction. • Item 112. Air return for HVAC system, as repaired, still does not meet minimal standards of function and accessibility, and requires appropriate correction. • Not Itemized. Truss intended to bear on rear patio beam incorrectly installed to bear elsewhere, and requires appropriate correction. • Not Itemized. Termite pre-treatment not done, and post-treatment inadequate; appropriate correction required to meet code and plan specifications. • Not Itemized. Overall quality of concrete surfaces is marginal at best, and repair is generally poorly done. All such repair is required to meet minimal standards for function (durability) and aesthetics.

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:

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 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. With respect to Respondent’s alleged unworkmanlike efforts, “A workmanlike manner means doing the work in an ordinary skilled manner as a skilled workman should do it.” J.W. Hancock Enterprises, Inc. v. Registrar of Contractors, 126 Ariz. 511, 514, 617 P.2d 19 (1980) (quoting Brown v. Eakins, 220 Or. 122, 348 P.2d 1116, 1117 (1960)). Complainant has sustained his burden of demonstrating significant and extensive failure to meet minimal workmanship standards (in violation of A.R.S. § 32-1154.A.3 and A.A.C. R4-9-108), with corrective action required, as specifically found above. 3. The evidence further establishes Respondent’s failure to meet plan specifications or code requirements, with corrective action required, as specifically found above. 4. Notwithstanding reasonable inferences that much of the construction of this residence was accomplished with insufficient supervision of marginally skilled workmen, Complainants fail to demonstrate any fraudulent conduct on the part of Respondent, pursuant to that term of A.R.S. § 32-1154.A.7. 5. However, the preponderance of the evidence demonstrates Respondent’s failure to meet workmanship and plan specifications, and code, to an extent and degree sufficient to constitute a wrongful act which has resulted in substantial injury to Complainants relative to lost time, cost, and value. Complainants have therefore proven violation of those terms of A.R.S. § 32-1154.A.7 6. A preponderance of the evidence demonstrates that, as specified above, certain of Respondent’s efforts to satisfy the requirements of the Registrar’s Corrective Work Order, issued November 20, 1998, were insufficient, inappropriate, or not timely completed, all without valid justification. Complainants have therefore proven violation of A.R.S. § 32- 1154.A.23. 7. By standing motion of the Registrar, in the event of any finding of a charged violation, Respondent’s prior disciplinary record of final agency orders, if any, may be considered in mitigation or aggravation when determining an appropriate disposition of this matter. As found by reference to the computerized database maintained by the Registrar of Contractors, there are no prior disciplinary records of final adverse agency orders on Respondent’s record, such that the record of Better Homes Construction should be considered acceptable, although not of long duration, and with question as to the qualifications of Respondent’s qualifying party, and therefore not appropriate for mitigation or aggravation in determining disposition of this case.

RECOMMENDED DECISION On the basis of the foregoing Findings of Fact and Conclusions of Law, IT IS RECOMMENDED that, commencing on the effective date of the Order entered in this matter, the Class B license no. 111628 held by Respondent Better Homes Construction Inc., shall be suspended until the Registrar of Contractors receives credible written proof that Respondent has accomplished complete, appropriate and effective remedial work consistent with this decision. IT IS FURTHER RECOMMENDED that if Respondent accomplishes the required corrective work on or before the effective date of the Order entered in this matter, then the above license suspension shall not take place. IT IS FURTHER RECOMMENDED that Respondent’s Class B license shall be placed on disciplinary probation for a period of one year, commencing on the effective date of the Order, or the date on which notice is filed with the Registrar of Respondent’s compliance with the corrective work required, whichever date is later. IT IS FURTHER RECOMMENDED that, in addition, Respondent’s right to continue contracting, whether or not probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of twenty-four months, including future renewal periods, in the amount of $3500.00, such bond or deposit to be for the sole benefit of persons injured as defined in A.R.S. § 32-1131.3 and to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. § 32-1152.D. Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above- provided twenty-four month period and only if no claims are then pending. IT IS FURTHER RECOMMENDED that, in addition to the foregoing, Respondent shall pay the sum of $500.00 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 that civil penalty on // // // or before thirty days following the effective date of the Order entered in this matter shall result in the automatic revocation of Respondent’s Class B license, effective on such deadline date, and no future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101.A.5, unless payment of any outstanding civil penalty is tendered. Done this day, December 17, 1999.

______________________________________ Anthony Halas Administrative Law Judge

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