ALJDEC

99F-M0140-ROC · Registrar of Contractors · 1999-03-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 10, 1999 at 9:00 a.m. APPEARANCES: Complainant appeared on his own behalf; Respondent appeared through its attorney, Paul Barrett Christian, Esq. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________ The parties presented evidence and testimony and, based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order. FINDINGS OF FACT The Registrar of Contractors issued License No. 120132, Class B-, to Respondent E F W Construction, Inc., a corporation, on December 30, 1996. Complainant Gordon K. Jensen and his wife live in the mountains in Strawberry, Arizona. Sometime in March 1998, during a snowstorm, Mrs. Jensen was attempting to back her car into their garage so she would be able to drive it out more easily. When the car became temporarily stuck in the 6” or 7” of snow that had fallen, Mrs. Jensen applied more gas, and it suddenly moved faster than she had intended. When Mrs. Jensen’s car entered the garage, unfortunately, it knocked out a post in the center of the garage, which provided substantial support for the residence’s second story, where the living room, dining room, kitchen, and master bedroom are located. As a result of the accident, the second-story floor dropped about 1", cracks appeared in the drywall, doors no longer opened and closed easily, and the floor on the second story squeaked. Complainant put in a temporary brace immediately after the accident, which kept the residence from becoming unsafe, at least in the short term. Complainant informed his homeowner’s insurance carrier, Hartford, of the loss. Hartford assigned the claim to independent adjuster GAB Robbins, which assigned the claim to its employees, Roger Grady and, later, Jeff Walker. Complainant also called several contractors to obtain bids, but Respondent was the only one who seemed interested in the job. Complainant asked Respondent to prepare a bid to submit to his insurer to repair the damage to the residence and restore its structural integrity. On or about April 4, 1998, Respondent inspected the damage that had resulted from the accident. Respondent’s inspection caused it to conclude that the residence was poorly designed and constructed.[1] The second- story walls were cantilevered over the first story walls and much of the weight of the second story that was not borne by the exterior walls had been borne by the single support post that Mrs. Jensen had knocked out. None of the doorways on the first story, including the openings for the garage doors, had been constructed with headers. A popout on the second story, where the dining room is located, was cantilevered out and supported only by the wall in which the garage doors were located. Usually, an adjuster performs an inspection before Respondent submits a bid to repair damage covered by a homeowner’s insurance policy. In addition, proper repair of the damage from this accident would require at least some correction of the underlying construction and design deficiencies that had resulted in the damage from a relatively minor accident being so extensive. Respondent felt he needed to talk to the adjuster before submitting a bid to determine what corrective work Complainant’s insurer would approve for payment. Respondent called the adjuster and left several messages but the adjuster did not return his calls. About ten days later, Complainant asked Respondent for a bid. Although Respondent still had not consulted the adjuster, on April 27 or 28, 1998, it submitted a proposal to Complainant to provide to his insurance adjuster. Respondent did not sign the proposal because he did not know the full extent of the damage. The proposal provided that it did not include any work not mentioned specifically in the attached bid or “packing, moving, and/or temporary storage“ and that “[a]ny alteration or deviations from above specifications involving extra cost, [would] be executed only upon written orders and [would] become an extra charge over and above the estimate.” Respondent attached to the proposal a 3-page, single-spaced, typed “construction estimate” that described various work that the parties had discussed. The estimate totaled $6,173.71, which was payable $2,000.00 at the completion of drywall removal, $2,000.00 at the completion of drywall texturing, and $2,173.71 at the completion of the work. Complainant indicated his acceptance of the proposal by signing it. The bid included a cost item for installation of an additional 2” by 6” support post in the garage. Respondent was reluctant to begin work without approval from the insurance company. Complainant made a telephone call to adjuster Jeff Walker to obtain his approval for Respondent’s commencement of work. Mr. Walker orally authorized Respondent to begin work but told him that the insurance company did not want to commit to pay for until they knew with certainty what items needed repair. Complainant said he would pay for anything for which the insurance company refused payment. Complainant also wanted to extend the garage 3' to provide additional support to the popout. On May 5, 1998, Respondent submitted an unsigned proposal to Complainant to perform the following work: Extend front only of existing garage by 3' (three feet) only; Remove 1 (one) arcadia door, and install siding in its place; Add 6 (six) floor joists in garage under washer/dryer/ refrigerator area; Cover same front only with natural stone to heights of 3' (three feet) from ground level only; Remainder of front to match existing building as closely as possible.

NOT INCLUDED: Any permits or plans, anything not mentioned above.

Any alteration or deviations from above specifications involving extra cost, will be executed only upon written orders and will become an extra charge over and above the estimate. . . .

. . . .

In addition [Respondent] will not be liable for any problems and/or defects with any already existing structures, and problems or defects which may be encountered by [Respondent] during the course of construction. Any repairs which would become necessary in order for [Respondent] to complete its job, are not [Respondent’s] responsibility and will be of extra cost to [Complainant]. . . .

[Emphasis in original and added (shown by italics).] The total price of the proposed extension was $4,625, payable $2,300 at the time Complainant accepted the proposal and $2,325 when construction was complete. Complainant indicated his acceptance of the proposal by signing it and giving Respondent a check for $2,300.[2] Respondent then asked Complainant to obtain the adjuster’s permission to pull the drywall away from the back wall of the garage so that the full extent of the damage could be assessed. The adjuster granted oral permission to Respondent to perform this exploratory work. Respondent thereafter removed the drywall, evaluated the damage, and commenced the repairs it thought were appropriate and construction of the garage extension. During the course of work, Respondent’s crew performed some relatively small jobs that were not to repair the damage that resulted from Mrs. Jensen’s accident or to extend the garage, including helping Complainant move a wood-burning stove and some of the furniture in the areas were repairs would be made. Shortly after Respondent started working on the repair project, Complainant decided that a second post that was to have been installed in the garage to provide additional support would interfere with access to his workbench. Respondent agreed to omit the second post from the repair plans and, instead, to add a laminated girder to provide additional support. The parties agreed at the hearing that the additional cost of installing a girder instead of a post was $350. On May 20, 1998, Complainant gave Respondent a check for $2,000.00 for “house repair.” On June 10, 1998, Complainant gave Respondent another check for $4,000.00.[3] By late June 1998, Respondent felt that it had substantially completed construction and asked Complainant for a punch list of items with which he remained unsatisfied. Complainant gave Respondent a one-page handwritten document describing the following: Upper Deck: Paint west end next to wall. Living Room: Clean cieling [sic] near w. wall, install register, screw down floor. Front Entry: Paint above base by door. Entry from Garage: Wall around top of door and door trim & nail holes. Downstairs bedroom: Nail holes in trim. Garage: Entry door trim -- nail holes. Also texture & paint north of door and foam above door trim. Closet door under stairwell needs trim. Doors and floor needs cleaned. Closet under stairwell needs cleaned and door sticks. North garage door north rail needs aligned and a screw tightened. 4 lag screws missing from mounting hardware, south door spring installed to [sic] far south. Outside of garage: Seal and paint block on north wall — clean out drain sump. Touch up paint near rock work.

Respondent corrected at least some of the items on the punch list. Complainant refused to pay the remaining amounts due unless Respondent performed additional work, which Respondent did not believe was part of the parties’ contract. Respondent did not attempt to contact independent adjuster Jeff Walker, with whom Respondent had no contact since it obtained Mr. Walker’s oral approval to commence repair work. Respondent instead contacted Hartford directly about payment through claims agent Brenda Bonser. Ms. Bonser told Respondent that Hartford would not pay for removing and reinstalling the carpet and pad. Respondent also sent via facsimile directly to Hartford a statement showing the total contract price for repairs to be $8,121.24. Respondent later hand-delivered this statement to Complainant. The statement was similar to the construction estimate that accompanied the proposal Respondent had given Complainant on April 27 or 28, 1998, but included several additional items, such as a $350 additional charge, presumably for the girder, but did not include several items and showed somewhat higher labor costs for removing and reinstalling the garage doors and garage door opener and floor framing. Adjuster Jeff Walker testified on Complainant’s behalf at the hearing. According to Mr. Walker, the April construction estimate’s total of $6,173.71 and the June statement’s total of $8,121.24 were both within the price range of what Mr. Walker felt would be a reasonable cost for the repair job. Mr. Walker cannot confirm or deny any communications Respondent may have had directly with Hartford’s employees. Although Mr. Walker as an independent adjuster makes recommendations to insurers like Hartford, he lacks authority to pay claims. Complainant instructed Hartford not to issue a check directly to Respondent and, on July 16, 1998, Hartford issued a check for $2,056.36 payable jointly to Complainant and Respondent.[4] Respondent refused to perform any more work unless it was paid and filed a mechanic’s lien on Complainant’s residence. On July 27, 1998, Complainant made a formal complaint to the Registrar about 17 individually enumerated items. Sometime in the fall of 1998, Complainant or Hartford paid Respondent all that was owed. Although Complainant at the time of the hearing had not received any notification that the lien Respondent had placed on Complainant’s residence had been released, Respondent’s qualifying party and its attorney both assured the administrative law judge that the lien would be released. On September 4, 1998, the Registrar’s inspector Van Bagley performed a jobsite inspection and, on September 23, 1998, the Registrar directed Respondent to take 14 corrective actions. After the Registrar directed Respondent to perform certain corrective work, its qualifying party went to the jobsite, did some work, and videotaped Complainant’s reaction. This tape will be referenced in the discussions below regarding the individual items that remain at issue. Inspector Bagley also performed a prehearing inspection on March 5, 1999. He testified at the hearing that, at that time, the casing around the stairwell door had been repaired, the drywall texture around the door in the garage had been repaired, a spring had been installed on the south garage door to facilitate operation of a garage door opener, concrete had been removed from the French or sump drain, and that the footing had been backfilled (Item Nos. 5, 6, 7, 10, 11, and 13 on the Registrar’s September 23, 1999 directive). His opinions are also referenced the discussions below regarding the individual items that remain at issue. Floor Squeaks in Kitchen and Living Room (Item No. 1)[5] In April 1998, Complainant, Respondent, and adjuster Jeff Walker discussed what should be done about the squeaking on the second story of Complainant’s residence. Respondent felt that most of the squeaks could be eliminated by screwing down the second-story floors from underneath but that, if repairs made from the first story were not completely effective, Respondent might have to remove the carpet and pad covering the second- story floors, screw down the floor from the top, and then reinstall the pad and carpet. Mr. Walker and Complainant both testified it was their understanding that the carpet and pad definitely would be removed and reinstalled. Respondent included in the April 1998 construction estimate the cost of labor to remove and reinstall 35 or 40 square yards of carpet and pad. These items were omitted from the June 1998 statement. Respondent screwed down the second-story floor from underneath, but did not remove or reinstall the pad and carpet or screw the floor down from on top. Respondent’s qualifying party testified that, when he last worked at the residence, the second-story floor did not squeak, which seems to be confirmed by his videotape. If the floor has started squeaking again, the problem could be the older Berber carpet, which in Respondent’s experience can cause squeaks that can be heard at different, shifting locations in the floor, as appears to be the case at Complainant’s residence. Respondent’s qualifying party testified further that it did not charge for and has not been paid for removing and reinstalling the pad and carpet. Mr. Walker did not notice that the June statement omitted any charge for removing and reinstalling the pad and carpet. In Mr. Walker’s opinion, Hartford will pay for the carpet being removed and reinstalled and for any other supplemental claims for repairs of residual damages caused by Mrs. Jensen’s 1998 accident. Inspector Bagley testified that, in his prehearing inspection, he found no squeaks in the living room but that the linoleum floor in the kitchen squeaks excessively. According to Respondent’s qualifying party, the area where the squeak manifested is located near an area where a piece of loose Berber carpet has been placed. Complainant testified that the carpeted floor in the living room still squeaks, but he did not show the area to Inspector Bagley at the prehearing inspection. Drywall Texture and Paint Overspray on Carpet (Item No. 2) Complainant’s complaint to the Registrar complained of “paint, wood stain, drywall residue and drywall texture material on the carpet.” Inspector Bagley testified that, in his prehearing inspection, he saw flecks of paint on the carpet. In Respondent’s video, Complainant indicated these items had been completed to his satisfaction. In addition, the area where Inspector Bagley noted paint specks was where Respondent’s subcontractor had contracted directly with Complainant to perform painting work, as discussed in Findings of Fact nos. 55-59, infra. Door in Master Bedroom (Item No. 3) Complainant conceded before the hearing that the condition of the door into the master bedroom preexisted the accident. Complainant therefore withdrew his complaint about this item. Door Casing at Entry to Garage (Item No. 4) Both the April construction estimate and June statement included an entry for “[l]abor to install prehung solid core doors.” Complainant’s complaint to the Registrar concerning this item was that “[t]he frame and drywall adjacent to the entry door between the garage and the foyer are damaged and the trim is split.” In Respondent’s video, Complainant indicated that Respondent had satisfied his complaint with respect to this item. Inspector Bagley testified that, although the casing had been completed when he performed the prehearing inspection, the threshold was not secured to the concrete and needed to be shimmed and caulked. Respondent’s qualifying party testified that he did not install the threshold. Instead, he had merely removed the existing door, installed a header for additional support, and reinstalled the door that had been removed. Complainant testified that he personally had purchased the door, which was prehung and had a threshold attached. Proper Installation of Garage Door Opener (Item No. 8) The complaint to the Registrar regarding this item stated that, “[i]n order to install the garage door opener the contractor had to cut a hole in the ceiling drywall and inset the end of the T-Rail. Facing east, the left- hand track of the same garage door is not properly aligned and one of the bolts is loose. A lag screw for one of the tract [sic] support brackets is broken and the top of the frame is damaged.” In Respondent’s video, this item remained to be corrected. The April estimate and the June statement included charges for labor to remove and reinstall a garage door opener and two 9’-wide garage doors. Complainant testified that Respondent had changed the installation of the garage door opener, installing it at an angle into the garage ceiling, and compromised the garage ceiling’s fire rating. According to the manufacturer’s instructions, the T-rail should be parallel to the ceiling.

Inspector Bagley testified that, by the time of the prehearing inspection, Respondent had caulked the opening around the garage door opener and tightened the screws and bolts used in installation, but that in his opinion the installation was still unacceptable. Inspector Bagley had never seen a garage door installed like that. Respondent’s qualifying party and his son, who worked on the project, testified that the garage door opener originally was installed the same way it was reinstalled after the garage was extended. The interior of the garage was constructed only 8’1” high, which is the same height as is standard in interior living spaces but less than the 8’2” that is standard for garages. The garage doors, which originally were installed after the residence was constructed, are too big for the garage (or, conversely, the garage ceiling is too low for the doors). The opener is installed the only way it can be installed to allow the doors to clear the metal tracks. The only way to correct the installation of the garage door opener would be to replace the doors. Vernon E. Marvel, for whom Respondent has performed several construction contracts, testified that the ceilings in his garage are also too low for the after-market garage doors. His three garage door openers, which Respondent did not install, also were installed at an angle, like Complainant’s. Cleanup of Concrete Spillage, Paint, and Drywall Off Garage Floor and Driveway and from North Wall of Garage Extension (Item Nos. 9 and 12)

Respondent’s video indicated that Complainant had approved its cleanup of these areas. Inspector Bagley testified that, although some of the spillage had been cleaned up at the time of his prehearing inspection, he saw concrete spillage in several places on the driveway and asphalt and concrete on the north wall of the garage extension. Additional Contract Work (Item No. 14) Complainant testified that he had an oral contract with Respondent that was never fully memorialized in writing, although certain elements were included in the April 1998 construction estimate for repairs, the May 1998 proposal to extend the garage, and the June 1998 statement for repairs. According to Complainant, no written contract set forth all the terms of the parties’ understanding. Respondent’s video closes with Complainant answering “That’s all” to Respondent’s question about whether any remaining repairs or work needed to be discussed. 47) Moving Sump or French Drain The complaint to the Registrar alleged that “[t]he contractor had verbally agreed to move the sump so that it would not be under the garage extension. The contractor did not move the sump. Then, to make room for the garage extension footing, he cut the sump and poured the sump full of concrete, also filling the end of both french drains & transfer pipe full of concrete.” After the garage was extended 3’, its outer edge was located next to the French drain or sump drain. The extended foundation formed the outside edge of the drain. Complainant testified that the drain does not drain completely and that Respondent had agreed to move it several feet away from the garage at no additional charge. Inspector Bagley testified that, although the Registrar’s directive did not address the drain other than to direct Respondent to remove concrete from the pipes, he noticed in his prehearing inspection that the plastic catch basin in the drain had been cut to accommodate the garage extension. The basin should be watertight. Respondent testified that he had lined the drain with concrete at the time of the garage extension. Although he mentioned to Complainant that the drain might have to be moved for the extension, he was able to build the extension without moving the drain or compromising its function. None of the documents included any charge or mention of moving the drain. Respondent testified that moving the drain would require substantial portions of the driveway to be demolished and repaired because the pump drains through a pipe that had been installed under the driveway. The cost of moving the pump would be between $2,000 and $2,500. Respondent offered to use mortar to build up the bed of the drain to prevent water from standing in it. (2) Additional Floor Joists in Garage As noted above, Respondent replaced the 4” by 6” support post that Complainant’s wife had knocked out and otherwise increased support for Complainant’s residence’s second story by putting headers over all the doors in the garage, putting in six additional joists in the washer/dryer area, and installing the laminated beam. All of these items appear on the June 1998 statement. Complainant testified that the parties also made an oral agreement that Respondent would double all of the joists supporting the second story. Mr. Walker testified that it was his understanding that all the joists would be doubled. Respondent denied any oral agreement to provide support in addition to the work he already had performed. No reference to this item is contained in Complainant’s original complaint to the Registrar or in Respondent’s April 1998 construction estimate, May proposal to extend the garage, or the June 1998 statement. (3) Z-Seal Complainant’s complaint to the Registrar alleged that, “[a]ccording to our original verbal agreement, there was to be a ‘Z’ metal seal installed between the TIII existing siding on the downstairs bedroom and the new siding the contractor installed above it on the master bedroom wall. The seal was not installed.” Complainant testified at the hearing consistently with this statement. Respondent denied any oral agreement to install a “Z” metal seal. No charge for this items in contained in either of Respondent’s proposals or in the June 1998 statement to Hartford. (4) Additional Painting Complainant’s complaint to the Registrar did not mention that Respondent had not painted any areas that he should have painted. Among the repairs included in Respondent’s April 1998 estimate were “[p]ainting interior surfaces, two coats” in the living room and hall (1,940 square feet), the bedroom (162 square feet), and the garage (1,264 square feet). When Respondent submitted its proposal, it calculated the cost of painting based on painting only those portions of the interior and the exterior of the house that would be repaired. In Respondent’s experience, its painting subcontractor was able to match colors of existing paint. Mr. Walker and Complainant testified that they understood that Respondent would paint entirely all interior walls of any room where repairs were effected. Mr. Walker said he also measured interior walls and that his measurements of the walls in each room corresponded to Respondent’s allegedly partial measurements. Complainant agreed at the hearing that Respondent’s painting subcontractor had done a good job matching the paint on the outside of the house. At the time of the accident, Complainant’s interior walls were painted with a flat enamel. After the accident, Complainant elected to have the walls painted with a semi-gloss enamel. Because Respondent did not instruct his painting subcontractor to paint all interior surfaces, Complainant personally paid Respondent’s painting subcontractor $200 to paint the surfaces that otherwise would not have been painted. (5) Additional Cracks in Drywall After Complainant made his complaint to the Registrar, cracks appeared in the areas Respondent had repaired. Inspector Bagley testified that he saw some hairline cracks in the drywall at Complainant’s residence of the sort that contractors usually fix as part of their one-year warranty work, but that this item did not seem to be related to any of the items in the original complaint. Respondent agreed that he would patch cracks that had appeared since he completed his repairs, as well as any other appropriate warranty work. Mitigation The Citation and Complaint issued by the Registrar advised Respondent that, if it were found in violation of any contracting law, its prior disciplinary record of final Registrar of Contractors’ orders might be considered in mitigation or aggravation. Accordingly, notice is taken of official records of the Registrar of Contractors, which reveal that, if the Registrar accepts this recommended decision, it will be the only final agency order against Respondent on the Registrar’s current record. Therefore, Respondent’s prior record is deemed to be excellent and, thus, is viewed as a matter in mitigation for any disciplinary penalties to be imposed as a direct result of this case. CONCLUSIONS OF LAW General Principles and Observations In this administrative proceeding, Complainant bears 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). The two proposals that Respondent submitted to Complainant and the statement he submitted to Hartford and Complainant are not contracts, because Respondent did not sign them and Complainant testified that he did not consider the documents contracts, even though he signed some of them. The documents are relevant, however, to the issues of Respondent’s understanding of the scope of his contractual undertaking and the parties’ communications regarding the scope of repairs and renovations. These documents also undermine possible collateral oral agreements because the terms of the proposals that required any variance from the proposal to be memorialized in a change order should have put Complainant on notice that Respondent did not consent to be bound by oral discussions. No writing signed by both parties memorializes their agreements or contracts. In part, the absence of a signed contract can be attributed to the interjection of Complainant’s insurance company, Hartford, and its independent adjuster, GAB Robbins, into the relationship between Complainant and Respondent. Neither the parties to this administrative proceeding nor the third parties responsible for evaluating and paying Complainant’s claims appeared to have communicated very well with any one else. After the parties’ relationship became contentious in summer 1998, apparently as a result of miscommunications and misunderstandings, it appears that both parties may have sought to gain an advantage over the other, rather than to attempt to resolve their dispute. The parties’ relationships to each other and to Hartford and its independent adjuster were further complicated by the original deficient and substandard design and construction of Complainant’s residence. Although Respondent is not responsible for correcting preexisting deficiencies, once he undertook to perform contracting work, he was responsible for performing the work in a professional and workmanlike manner. Thus, although the evidence shows that the reinstallation of the garage door opener was necessitated by preexisting anomalies in the relative size of the garage doors and the height of the garage ceiling, Respondent should not have perpetuated anomalous installation of the garage door opener without first notifying Complainant of the anomaly. At that point, Complainant could have approved anomalous installation of the opener, in writing, or elected to replace the garage doors. This does not mean that Respondent’s failure to obtain Complainant’s approval entitles Complainant to substantial free upgrades to his home. Since it appears that the parties have resolved their financial disputes and that Hartford does not dispute the reasonableness of any of Respondent’s charges in the June 1998 statement, to the extent this recommended decision requires Respondent to perform work for which he has not been paid, Complainant and Hartford should be responsible for payment for the work. Although the Registrar cannot order Complainant or Hartford to pay Respondent, their refusal to pay a reasonable price for additional work that the Registrar orders Respondent to perform will constitute a reasonable excuse for Respondent’s failure to perform that work. In Arizona, an oral contract to provide goods or services at a price of more than $500 is unenforceable in a court of general civil jurisdiction. See A.R.S. § 44-101(4).[6] Although this is a complaint against Respondent’s license, rather than a breach-of-contract claim, Complainant cannot by making a complaint against Respondent’s license in an administrative proceeding force Respondent to perform an alleged contract that could not have been enforced in a court action. Statutory Violations Complainant has established that Respondent violated A.R.S. § 32- 1154(A)(3),[7] (7),[8] and (23)[9] in failing to repair the floor squeaks, in failing to remove drips and overspray from the garage floor and driveway, in failing to build up the mortar in the sump or French drain to avoid standing water, in failing to shim the threshold of the garage door, and in its installation of the garage door opener. Complainant or Hartford will be responsible for paying for removal and replacement of the carpet and pad and, since it is Respondent’s professional opinion that installation of the garage door opener cannot be corrected except by replacing the garage doors, for removing and replacing the garage doors and for the cost of new doors. Complainant has not established that Respondent committed any statutory violations in failing to move the sump or French drain, failing to install additional floor joists, failing to install a Z-seal, or failing to perform additional painting or to clean up after painting its subcontractor performed pursuant to the subcontractor’s contract directly with Complainant. If Complainant wishes Respondent to perform any of this additional work, he must make another contract with Respondent, which should be in writing. Complainant also has not established that the reappearance of cracks in the drywall shows any statutory violation by Respondent. Respondent should be afforded an opportunity to perform routine warranty work and, if that proves unsatisfactory, Complainant may make another complaint to the Registrar. RECOMMENDED ORDER Based on the foregoing, it is recommended that Respondent’s License No. 120132, Class B be suspended on the effective date of the Registrar’s order, thirty-five days after the date of mailing by the Registrar. It is further recommended that, if Respondent provides written proof that it has performed the remedial work described in Conclusion of Law No. 7, or that he has reasonable excuse for failing to do so, on or before the effective date of the Registrar’s order, Respondent’s license shall not be suspended and the entire Citation and Complaint in case no. M99-0140 shall be closed. Done this day, March 29, 1999.

______________________________________ Diane Mihalsky Administrative Law Judge

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

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

By ___________________________

----------------------- [1] Respondent’s qualifying party, Eugene Wullkotte, testified that he had been working in construction in the Strawberry area for a good number of years and knew that the builder of Complainant’s home, George Le Veck, had lost his contractor’s license as a result of cutting corners and poor construction in Complainant’s subdivision when it was built approximately years ago. Complainant, who is not the original owner of the home but purchased it when it was two or three years old, agreed with Mr. Wullkotte’s opinion of the original construction and design of the residence. [2] Complainant’s complaint to the Registrar references a change order amending this contract by adding $200.12 on June 7, 1998. The complaint did not explain the work to be performed pursuant to the change order and no testimony was given regarding it.

[3] According to the complaint to the Registrar, the $2,000 check was to be the initial payment on the contract to repair the damage caused by Complainant’s wife’s accident. Of the $4,000 check, $3,000 was to have been applied to the price of repairs and $1,000 was to cover a change order to the contract to repair the damage. The checks have no notation and no evidence was presented at the hearing about any change order to either contract, with the exception of the substitution of the girder for the second post. [4]At this point, payments from Complainant or Hartford to Respondent totaled $10,356.36. The total owed for the two construction projects was $10,798.71, based on the April construction estimate, or $12,746.36, based on the June statement. No evidence was presented to explain the basis of the amount of Hartford’s July 1998 payment.

[5] The “Item No.” in parentheses refers to the number of the Registrar’s September 23, 1998 directive.

[6] This statute may not bar enforcement if the party to be bound has rendered partial performance, accepted payment for the undertaking, or acknowledged the obligation. None of these potentially binding circumstances were present in the items that Complainant claimed and Respondent disputed were part of the parties’ contract.

[7] 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.”

[8] 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.”

[9] 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.”

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