ALJDEC

99F-M1107-ROC · Registrar of Contractors · 2000-07-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: Convened on June 7, 2000, and reconvened on July 12, 2000; record was concluded on July 24, 2000. APPEARANCES: William Eich and his wife, Bonnie Eich, appeared, representing themselves. Husband and wife, Karen Espinoza and Lorenzo Espinoza, Jr., owners of LEJ Concrete LLC, appeared and were represented by Joshua Grabel, Esq. ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn _____________________________________________________________________ The hearing in this above captioned matter was scheduled to be held for the purpose of determining whether Respondent was in violation of statute as alleged by the Complainant and as Cited by the Arizona Registrar of Contractors (Registrar). Based upon review of the entire record, including the documents provided by the Registrar, the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. The Complainants live in Gilbert, Arizona. Complainants’ large property is flood irrigated. 2. Complainant removed existing cracked concrete in various areas at his house, due to drainage problems and cracking in the old concrete. No evidence was available to document the extent of such problems or extent of the cracking in the old concrete. 3. Complainant desired to have new concrete poured in certain areas, and to expand or enlarge the amount of concrete on the property between and up to existing structures. Complainant was acting as general contractor on the work he was doing, or having done, at his house. Complainant is not a licensed contractor, but works as a construction manager. 4. Respondent is the holder of a Class C-09 license issued by the Registrar of Contractors (Registrar). Respondent was contacted by a mutual acquaintance [a person working for a home builder, for whom Respondent also does concrete repair and replacement work], who requested Respondent’s assistance with Complainant’s concrete needs. Respondent specializes in repair and replacement of concrete. 5. Respondent and Complainant had a verbal agreement. No plans were drawn up and no written specifications were supplied by Complainant to Respondent other than their verbal discussions. There were verbal discussions between Lorenzo Espinoza and the Complainant prior to the demolition and excavation work. There were verbal discussions between Lorenzo Espinoza and the Complainant at the time of the set up and during the work. There were verbal discussions with Karen Espinoza and the Complainant before the July 1998 repair/replacement work done by Respondent. There were also some conversations with Karen or Lorenzo or his workers and Mrs. Eich at the time of the May 1999 repair/replacement work. 6. At the time of the May 1999 repair work, Respondent also patched in a portion of a stem wall where it was missing in the garage; Respondent made no extra charge to Complainant for this patch work. 7. According to the invoice created for the job, Complainant and Respondent excluded certain items from their agreement: Excavation, demolition and removal of existing concrete, hauling and disposal of excess dirt, and termite pretreat. According to the invoice created for the job, Respondent was to provide labor and materials (including 38 tons of ABC, and microfiber mesh in the concrete mix) for the concrete flatwork, with the concrete not to exceed a four inch depth and 2500 psi. 8. Complainant did the demolition work on the existing concrete at his house. It is unclear whether Complainant did the hauling and removal of the demolished material and dirt. 9. Respondent ordered the underfill. Another contractor, R.E. Johnson, placed that underfill in areas where it was indicated or requested. R.E. Johnson was not contracted by Respondent to do that work. R.E. Johnson was paid by Complainant. 10. Respondent poured the concrete in April 1998. 11. In July 1998, Complainant called Respondent complaining of hairline cracks in the concrete and of drainage problems in the garage. 12. The parties came to an agreement that Respondent would replace one section of the garage, which they did in July 1998. 13. In March 1999, Complainant filed his formal complaint with the Registrar alleging complaints against Respondent regarding seven specified problems with the concrete or water drainage. 14. As a result of receiving the complaint, Registrar’s Inspector (Inspector) Bagley scheduled a site inspection, which was later rescheduled. 15. Before the time of that inspection, the parties met in April 1999, and Respondent agreed to replace one slab section in the garage, and to cut in some control joints in the patio. That repair work was being done in May 1999. At that time, Complainant insisted that two slab sections in the garage be replaced, and Respondent did replace those two sections. Respondent believed that the matter was resolved, and received a post card from the Registrar indicating the complaint had been withdrawn. 16. In November 1999, Complainant wrote to the Registrar, asking that the complaint be re-opened, and recited that cracking and lifting of the concrete had become more exacerbated and that the drainage was worse after the repairs. The Registrar contacted Respondent to notify them that the complaint had been re-opened. A site inspection was set, and took place on December 27, 1999. 17. On January 14, 2000, the Inspector issued a Corrective Work Order, advising Respondent to make certain repairs to take care of the matter within fifteen days. Eight items were noted on the CWO, and four of those items [#3 (a crack and vertical deflection in one section of the patio; hairline cracks were noted as needing no repair); #5 (garage drainage); #6 (vertical displacement, trip hazards) and #10 (control joints in driveway) were noted for correction or repair. 18. Respondent came to the site and made saw cuts for the control joints in the driveway, but disputed that the other three items needed any repairs. 19. In February 2000, Complainant wrote to the Registrar asking for a hearing since Respondent disputed the other items, and asking for his complaint to be amended for problems with the cracking now being compounded (#3 in his original complaint), with continued drainage and ponding of water on the patio (#4 in his original complaint), and with crooked joints and finish flaws (#7 in his original complaint). 20. The matter was not resolved informally, and was referred to hearing. 21. On March 15, 2000, the Registrar issued its Citation and Complaint against Respondent alleging violations of Arizona Revised Statutes (A.R.S.) §§32-1154.A.7, 32-1154.A.23, and 32-1154.A.3 naming Arizona Administrative Code (A.A.C.) R4-9-108. 22. Respondent filed a written answer, indicating that it was their opinion that they had addressed the only item they were responsible for, that being #8, the control joints. Respondent indicated its position that they were hired only to pour concrete and the Complainant was his own contractor and was responsible for any soil related problems and all other construction related problems on his house. 23. At the hearing, Complainant testified that the cracks had become worse in several areas, and that he had expected the contractor to be aware of and advise him of expansive soil problems. Complainant argued that Respondent was responsible for replacing several areas of cracked concrete and that Respondent had not adequately fixed the drainage problems in the garage and on the patio. Complainant testified that there are crooked joints and finish flaws in the surface of the concrete, and that there are several slabs with tripping hazards due to the concrete moving. Complainant argues that, had the control joints been placed correctly when the concrete was poured, that the new cracks which are close to those saw cut control joints would likely not have happened. Complainant argued that the work overall falls below the minimum workmanship standards of the Registrar and below the American Concrete Industry standards. Complainant requested replacement of areas which fall below standards, arguing that repairs are inappropriate when the problems are so numerous that they virtually affect the aesthetic value of the exposed concrete surfaces. 24. Complainant presented photographic evidence of numerous alleged problems. Hearing Exhibits C-1 through C-12, multiple photographs. 25. Complainant’s witness, Bob Montemayor, testified that he saw excessive shrinkage and crazing cracks; that there should be expansion joints where the new concrete abutted the existing structures; that the distance between control joints was questionable, and that there were problems with negative fall or slope in some slab areas (garage and to a lesser extent, the patio). Mr. Montemayor testified that he did not think the problems were caused by flood irrigation water reaching the new slabs.

26. The Registrar’s Inspector Bagley testified regarding his site inspection, the CWO and the hearing re-inspection (the day before the hearing convened). Inspector Bagley testified that some items had been corrected, per the CWO: the saw cut control joints being appropriate repairs on that item. Inspector Bagley testified that soil reports are typically provided when it’s a part of the contract. Inspector Bagley testified that the driveway cracks near the saw cut control joints were basically hairline cracks, and that he would not have Respondent do anything else on those. 27. Inspector Bagley testified that certain items or problems should be addressed and corrected to comply with Registrar minimum workmanship standards: a. drainage and ponding problems as to the north and southeast slabs in the garage; b. drainage problem on the rear patio slab by the laundry; c. the one slab in the patio (now has a portion removed for the testing) with multiple and compound cracks, and with trip hazard on the southeast corner; d. West section of the patio with compound cracks; e. on the East section, several cracks were not wide enough or deflected enough to require slab replacement, but could be repaired if Complainant desired to have them repaired; f. a compound crack by the garage, where the slab should be replaced; g. the spalding or pop-outs at the radius near the control joints should be patched; h. compound cracks in the driveway on east and west side of driveway by the detached garage (shown in evidentiary photos C-6A and C-6B); and i. compound cracks outside the back side of the house by the detached garage (shown in evidentiary photos C-5A and C-5B and C-5D).

28. Inspector Bagley testified that the other hairline cracks which he could see were such that he would not have written them up on a CWO; that the stem wall was not a part of the contract; that the depth of the control joints was appropriate; that the water test on the rear patio drained to Registrar standards and he would not require anything on that; that he had not noticed a lot of heaving of the concrete; and that he did not think that the irrigation was the root of these problems and could not recall a problem with the slope away from the house. 29. Inspector Bagley testified that he did not know of any code requiring expansion joints at places where the concrete meets structures, and that it might typically be done in a garage where concrete meets a stem wall because “its all boxed in”. 30. Respondent testified that they had felt pressured into the job at a discount in order to keep good relations with UDC Homes, and that they normally turn down this type of job. Respondent testified that their normal price is $2.25 a square foot; the invoice price is $1.75 a square foot. Respondent testified that Complainant made them further discount the invoice for the amount of ABC underfill that had been delivered. Respondent testified that they had discussed potential problems with the job, with the drainage, and with cracks, and that was why Complainant wanted them to add microfiber mesh to the concrete. Respondent argued that they were not responsible for the problems caused by expansive soils and that Complainant had done or been responsible for all the excavation and soil preparation work. Respondent argued that Complainant had been warned, in front of witnesses, about the garage drainage problems and, when given the option to raise the level of the garage to accommodate needed slope, had told them not to raise it that far and to pour it the way it was then subsequently poured. Respondent argued that their work met minimum workmanship standards, and that the cause of the problems is the nature of concrete, the expansive soil and the improper grading/soil preparation.

THE APPLICABLE LAW

A.R.S. §32-1154.A. provides, in the following relevant portions, 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.[1] xxx 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. xxx 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... .

Additionally, A.R.S. §32-1154.D provides that Registrar may impose on a contractor a civil penalty not to exceed five hundred dollars for each violation of A.R.S. §32-1154.A.23, i.e., for each failure to take appropriate corrective action after receiving a written directive from Registrar. CONCLUSIONS OF LAW 1. With Complainant acting as a general contractor and directing others to work on his property, Respondent was essentially a concrete subcontractor on this project, the same as R.E. Johnson was essentially a subcontractor to Complainant. However, that status does not mean that Respondent was not still responsible for the quality and workmanship of its resultant work. A.A.C. R4-9-108. 2. However, it also must be concluded that Complainant was fully aware that there were problems with concrete on the site, as was evident from the existing concrete which he was demolishing due to drainage problems and excessive cracking. Complainant did not request any soil preparation or preventative action from Respondent to accommodate these problems. Complainant refused to accept the garage draining solution presented by Respondent, and directed Respondent to pour concrete in a different manner. Complainant even requested the addition of microfiber mesh to help avoid cracking, but he had no guarantee from Respondent that the microfiber mesh would solve a problem of possible cracking. Testimony, invoice. 3. Clearly, there was no arrangement for Respondent to do any soil testing or preparation. The discussions prior to the demolition must have set forth the only work expected of Respondent, because Respondent only ordered the ABC, and did not excavate or install the ABC. The Complainant was responsible to prepare the area for Respondent’s work. There was no testimony that showed any responsibility of Respondent to “prepare” anything other than the frames or molds for the pouring of the concrete. Testimony, invoice. 4. However, all that being said, a contractor accepts the surface [the substrate and the soil at this project] when it proceeds with work and, in this case, no written waivers were taken from Complainant as to possible effects of the known expansive soils and no certifications were taken from Complainant as to the substrate being properly prepared and meeting minimum standards for a concrete pour on that project. There were determined workmanship problems with various portions of the concrete at the project. Respondent failed to respond to the Registrar’s CWO to make all the corrective repairs. Therefore, Respondent failed to properly complete the contracted work. The record supports a finding that Respondent has violated A.R.S. §§32-1154.A.7, 32-1154.A.23, 32-1154.A.3 and A.A.C. R4-9-108. 5. Respondent’s actions in replacing one and then two slabs, and in placing control joints in the driveway, were good faith attempts to resolve problems occurring at the project, but they fall short of the total actions now required. 6. In this case, based on all the facts and circumstances, the Respondent should not now be required to replace the problem concrete areas until the substrate over the known expansive soil is verified to meet minimum workmanship standards to accept any needed concrete pour. Respondent was not contracted to accommodate these problems, and another contractor and Complainant did the only substrate preparations on this project. 7. The Registrar has the authority, and retains the discretion, to determine the propriety of discipline of a contractor’s license after full consideration of the evidence in a matter. The Registrar is empowered to impose reasonable conditions on a contractor which may serve to reduce or eliminate any otherwise appropriate disciplinary penalties for violations of the Arizona contracting laws. A.R.S. §32-1154.B. The remedy of restitution, partial or total, is equitably justified. In this way, a prevailing homeowner does not have to await the ultimate outcome of any protracted civil litigation to recover at least a portion of a demonstrated loss and, of equal significance, a contractor is given the means to control, to some extent, the severity of any disciplinary penalty. Moreover, any amounts paid in satisfaction of a condition affecting licensure may properly be credited or applied against any civil judgment ultimately obtained in favor of either party. RECOMMENDED ORDER 1. Based on the foregoing, it is recommended that Registrar prepare an ORDER that Respondent’s license be suspended unless the Registrar receives written proof that Respondent has paid, or properly tendered, to Complainant, restitution, in the manner of a rescission of the contract, in the sum of $5,446.75. 2. It is further recommended that if Respondent accomplishes the above restitution, on or before the effective date of the Registrar’s ORDER, then the above recommended temporary license suspension shall not take place and Citation No. M99-1107 shall be closed. RECOMMENDED this day, August 17, 2000.

______________________________________ Kay A. Abramsohn Administrative Law Judge

Original transmitted by mail this ____ day of August, 2000, to:

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

By ___________________________

----------------------- [1] Specifically, A.A.C. R4-9-108 provides that all work shall be done in a workmanlike manner which is described to be in compliance with local building codes of express application to the types of work done and complained of.

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 PH(602) 542-9826/ FAX 542-9827