ALJDEC

99F-M0711-ROC · Registrar of Contractors · 1999-10-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 5, 1999. APPEARANCES: The Complainants appeared personally. Respondent was represented by its general manager, Art Thruston. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT

1. Respondent was the general contractor for the construction of Complainants’ residence in Mesa, Arizona. 2. The Complainants’ family moved into the residence in June of 1998. 3. Respondent did not perform a walk-through inspection with the Complainants prior to their occupation of the home. 4. In August of 1998, the Complainant discovered that their air conditioning unit was a 10 seer unit rather than the specified 12 seer unit. Although the parties’ written agreement specified the 10 seer unit, a subsequent written addendum signed by the parties changed the specification to 12 seer unit. 5. Respondent was unresponsive to Complainants’ numerous requests that it address punch list items. 6. On or about November 18, 1998, Complainants filed a complaint with the Registrar of Contractors alleging that Respondent had violated the provisions of the State’s contracting laws in the construction of their home. 7. In response to the filed complaint, the Registrar’s assigned inspector performed a jobsite inspection at Complainants’ residence to observe Respondent’s workmanship. That inspection resulted in the issuance of a Corrective Work Order dated January 25, 1999, directing Respondent to timely perform the following corrective work:

a) touch-up of interior paint, as necessary b) change air conditioning unit to 12 seer c) repair the holes at the parapet wall d) touch-up of caulking in both baths e) correct the lock set at the garage door f) correct the loose door bell button g) balance the air conditioning unit in all areas h) touch-up exterior paint where splashed with mortar i) touch-up front door and jam at repaired areas

8. The Registrar’s inspector determined that Respondent was not responsible for the following items:

a) roof scuppers b) cost of the property wall c) hose bib d) garage light e) north hose bib

9. There is credible evidence that Respondent’s general manager acknowledged problems with the interior drywall texturing and agreed at the jobsite inspection to make necessary repairs to the texturing. 10. On or about June 23, 1999, the Registrar of Contractors gave notice of an amendment to the Complaint, which listed the following additional nine items of alleged deficient workmanship: k) overhead stove fan vents into the kitchen’s interior rather than to the house exterior l) two sets of double doors do not shut properly m) pour cement pad for stairs to roof deck n) install front light fixture as per contract o) fix the handle and plate on the garage door, and install plate on the garage door p) clean up and paint around glass block window q) fix loose master bathtub handle r) fix broken front door lock s) garage door light does not work all the time

11. Shortly before the convening of the hearing in this matter, the inspector performed a pre-hearing jobsite inspection to determine whether Respondent had complied with the Registrar’s written directive and to view the areas of alleged deficient workmanship set forth in the amended Complaint. The inspector determined that Respondent had repaired the holes in the parapet wall and touched-up the exterior paint splashed with mortar. The remaining items of the corrective work order and the nine items in the amended Complaint were not remedied by Respondent. 12. Respondent is found to be responsible for properly repairing the remaining items on the corrective work order and the nine items set forth in the amended Complaint. 13. Although not required by the plans and specifications, Respondent is deemed responsible for the installation of clay scupper covers. Respondent’s employee showed Complainants the use of clay scupper covers on a neighbor’s residence. There was also indications that Respondent presented to the Complainants’ homeowners association that the clay scupper covers would be installed during the approval process. 14. Respondent is determined to have had more than ample time and opportunities to correct its above described deficient workmanship. Complainants have not interfered with Respondent’s ability to perform those repairs. 15. Respondent’s failure to complete Complainants home to minimum workmanship standards and its subsequent failure to comply with the Registrar’s written directive to correct its deficient workmanship are deemed wrongful acts which have substantially injured the Complainants and their family. 16. Payment of any disputed amount of money shall not be a condition precedent to Respondent’s performance of the required remedial repairs. Respondent’s billing practice in this matter leaves a lot to be desired. Respondent’s claim that additional money is owed to it by Complainants did not surface until after they closed escrow occupied the home and began complaining about Respondent’s deficient workmanship. Complainants do not deny that they may owe Respondent some additional money but also contend that they are not being given proper credits by Respondent. The parties should use their best efforts to resolve their monetary dispute.

CONCLUSIONS OF LAW

1. The evidence of record is adequate to establish that Respondent has violated the provisions of A.R.S. §32-1154 (A)(2), (7), (23) and (3); namely Rule R4-9-108. 2. Pursuant to A.R.S. §32-1154(D), the Registrar of Contractors may impose increased surety bond or cash deposit requirements on the holder of a license found to have violated the provisions of A.R.S. §32-1154(A). Having found and concluded that Respondent has violated the provisions of A.R.S. §32-1154(A) as provided above, a review of the records of the Registrar of Contractors establishes that Respondent maintains a minimum bond amount of $5,000.00. The Registrar should exercise its power to increase Respondent’s surety bond or cash deposit requirement. 3. A.R.S. §32-1154(D) permits the Registrar to impose a civil penalty of not more than $500.00 on a contractor for each violation of A.R.S. §32- 1154(A)(23). The evidence of record supports the exercise of that authority against Respondent in this matter.

RECOMMENDED ORDER

In view of the foregoing, it is recommended commencing on the effective date of the Order entered in this matter that Respondent’s Class B license shall be suspended until the Registrar of Contractors receives written proof that the Respondent has appropriately rectified the following areas of its deficient workmanship:

1. The items described in Finding of Fact No. 7 above, except subsection c) and h) which were properly repaired by Respondent. 2. All necessary repairs to the interior drywall texturing agreed upon by Respondent at the original jobsite inspection. 3. The additional nine items of deficient workmanship described in Finding of Fact No. 10 above. 4. The installation of clay scupper covers as described in Finding of Fact No. 13 above.

It is further recommended that if Respondent properly accomplishes the aforementioned corrective work on or before the effective date of the Order entered in this matter, then the above-provided license suspension shall not take place and the Citation and Complaint shall be closed.

It is further recommended in addition to the foregoing license suspension, if any, that Respondent’s Class B license shall be placed on probation for a period of 120 days commencing on the effective date of the Order entered in this matter or the date on which notice of Respondent’s proper compliance with the terms of the entered Order is filed with the Registrar of Contractors, whichever is later.

It is further recommended, in addition to the above-provided penalties, that any restoration of Respondent’s rights to resume 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 24 months, including future renewal periods, in the amount of $4,000.00, such bond or deposit to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. §32-1152©. Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above-provided 24 month period and only if no claims are then pending.

It is further recommended, in addition to the above-provided penalties, that Respondent pay the sum of $250.00 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 30 days following the effective date of the Order entered in this matter shall result in the automatic revocation of Respondent’s contractors license, effective on such deadline date. 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 prior civil penalty is tendered.

Done this day, October 18, 1999

______________________________________ Brian Brendan Tully Administrative Law Judge

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

Registrar of Contractors Mr. 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