ALJDEC

99F-M1383-ROC · Registrar of Contractors · 1999-11-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 22, 1999 APPEARANCES: G. Greg Eagleburger, Esq., on behalf of the Complainant John Novotny, Sales Associate, on behalf of the Respondent ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings Of Fact 1. On March 13, 1998, the Complainant general contractor and the Respondent flooring subcontractor entered a contract whereby the Respondent would install approximately 5000 square feet of vinyl composite tile (VCT) for one of the businesses, a Ticket Masters, to be located at a commercial development being constructed by the Complainant at 8181 South 48th Street in Phoenix, Arizona. The contract was in the amount of $59, 574.00. 2. The total area of the concrete slab for the commercial development was approximately 42,000 square feet. 3. The Respondent’s Proposal to the Complainant provided that moisture testing (of the concrete slab), was excluded from the Proposal. 4. The Contract between the parties provided in pertinent part that should the contractor’s (Respondent’s) work depend on the work of another subcontractor, the Respondent would use all means necessary to discover defects and report them in writing to the Complainant in order to remedy the defect. If no defect is reported it is assumed the Respondent has accepted the work of others regardless of the defective work. Exhibit A to the contract included “minor floor preparation” as part of the Respondent’s obligation under the contract. 5. There was no vapor barrier between the slab and ground and the concrete was not sealed. 6. The VCT was installed at Ticket Masters before the air conditioning or heating was operational. The tile which is impermeable (does not breath), is applied with a water base adhesive. Manufacturer’s instructions provide that the job site, tile and adhesives should be at a minimum of degrees Fahrenheit for at least 48 hours prior to and after installation. Moisture testing is also urged with the level not to exceed pounds per 1000 feet in 24 hours of moisture vapor emission, if installed with a certain adhesive. Other adhesives call for a moisture level as low as three pounds. The particular adhesive used in the instant case was not established. 7. The Respondent gave a materials and equipment warranty to the Complainant. The Respondent would repair or replace materials or equipment damaged from defective workmanship or materials. Failure to perform within 30 days under the warranty, allowed for third party repair with the cost payable by the Respondent. 8. Shortly after the completion of the contract, the VCT in the lunchroom began to separate from the concrete slab. 9. The Respondent had a moisture test done of the concrete slab in the lunchroom in late June 1998. It showed 7.15 pounds of water over a 24 hour period for 1000 square feet. As referenced in paragraph five above, a moisture emission of three, possibly up to five pounds, is considered appropriate for the type of flooring at issue in this case. 10. The Respondent reinstalled the lunchroom floor in late July or early August 1998. No sealant was applied to the concrete. 11. The flooring continued to separate from the concrete slab and Ticket Masters contacted the Complainant about this problem. In November 1998, the Respondent had moisture testing done at various spots of the floor in the lunch room and workroom. Readings were between 15 and 20 pounds. 12. In January, 1999, the Complainant had another company test the slab in the lunch room and in labs west of the lunch room. The results varied from 7.6 to 11.1 pounds. 13. The Complainant took the position that the Respondent had failed to do moisture testing and therefore failed to discover the potential for problems with the flooring which was installed. Had the problem been known, a sealant could have been applied or different tile used. The Complainant wanted the Respondent to be responsible for the sealing of the concrete slab in addition to replacing the floor. 14. The Respondent took the position and the Complainant agreed, that even if the condition of the concrete had been known prior to the installation of the floor, the Respondent would not have been responsible for the cost of applying the sealant prior to the floor installation. This being the case, the Respondent argues that the cost of sealing the concrete cannot be passed on to the Respondent under the guise of corrective work. The Respondent offered to provide a new floor once the concrete was sealed with the cost of sealing to be borne by someone other than the Respondent. 15. The parties were unable to reach an agreement and a complaint was filed with the Registrar of Contractors (Registrar), on May 14, 1999. 16. On June 18, 1999, Inspector Ron Lamp (Lamp), of the Registrar’s Office inspected the floor and noted that the tile was lifting up from the concrete slab. On June 24, 1999, Lamp issued a Corrective Work Order (CWO) requiring the Respondent to correct the condition of the tile floors. 17. By letter dated July 6, 1999, the Respondent requested the instant hearing. 18. Ticket Masters became irate and the Complainant hired another firm, Shaw Contract Flooring, to tear up the flooring, seal the concrete and install new flooring. Approximately 83% of the flooring was replaced. The contract price was set at approximately $42,000.00. The various costs were not specifically itemized at the hearing. Additional costs included removal of furniture and equipment, electrical disconnect costs, rental costs and other related costs. The corrective work was done piecemeal from June to November, 1999, and according to the Complainant, total costs were approximately $53,600.00.

Conclusions Of Law

The allegations of this Citation and Complaint concern A.R.S. §32- 1154-ROC (A)(3) violation of A.A.C. R4-9-108 relating to workmanship, (A)(7) a wrongful or fraudulent act resulting in substantial injury and (A)(23) failure to take appropriate corrective action. 1. The facts show that the Respondent knew of moisture testing and should have known of the various problems attendant to the application of this tile to concrete which had no vapor barrier and was not sealed. Although Respondent’s proposal specifically excluded moisture testing, the later contract including the provision regarding acceptance of other contractors’ work overrides the proposal. 2. The Respondent argued that the specific inclusion of “minor floor preparation” in Exhibit A to the contract, excluded ensuring that the concrete was suitable for the flooring. The argument is accepted to the extent that the Respondent was not responsible for making the concrete suitable for the flooring to be installed but under the terms of the contract, it does not excuse the Respondent from determining the suitability of the concrete for the flooring which was installed. 3. The “working building” argument that the Complainant scheduled the work and required the floor to be installed before the heating and cooling were activated is not a defense. The Respondent should know the effect of the incorrect sequence on the intended installation. If a process is known to be wrong or that it will lead to likely failure, the reasonable course of action is to inform the Complainant in writing fully stating the nature of the concerns. It was never satisfactorily explained why the Respondent performed the initial repair in the lunchroom after moisture testing and in light of the readings. The Respondent was either engaging in a futile act, wishful thinking, or did not believe the moisture level was too high. 4. The contract and attendant warranty make the Respondent responsible for corrective work with respect to the work it was required to do properly in the first instance. This did not include application of the sealant to the concrete. The responsibility for discovering a potential problem is not the same as correcting the problem once discovered. In this case the Respondent never had a duty to apply the sealant and it cannot be transferred to the Respondent as corrective work. Other repair related costs may be properly chargeable to the Respondent although the specific issue of consequential or incidental damages is not appropriate to this hearing in light of the fact that repairs were done by another contractor hired by the Complainant. 5. The Complainant cannot completely escape responsibility in this case. As the general contractor it is required to ensure that all work is done in a workmanlike manner. The general contractor is presumed to have essential knowledge in the various areas of construction in order to properly supervise and oversee the work. As between the Complainant and its client, it would be no defense to claim poor workmanship by the Respondent. Although the Respondent took on the responsibility of repairing the tile flooring upon failure, it never took on the responsibility of properly sealing the concrete which should have been caused to be done by the Complainant prior to the initial tile installation. 6. Based on the above, a violation of A.R.S. §321154(A)(3)/A.A.C. R4-9-108 is found. The Respondent’s failure to determine the suitability of the concrete for the tile which was installed and failed, constitutes poor workmanship. However, the Complainant’s insistence that the Respondent bear the cost of sealing the concrete, which cost is more appropriately the Complainant’s, as part of the corrective work, is a defense to the alleged violations of A.R.S.§32-1154(A)(7) and (A)(23).

Recommended Order

In view of the foregoing it is recommended, commencing on the effective date of the Order entered in this matter, that the Class L-08 license of the Respondent shall be placed on probation for a period of sixty (60) days.

Done this day, November 24, 1999

______________________________________ Allen Reed 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 ___________________________

-----------------------

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