ALJDEC

99F-M1422-ROC · Registrar of Contractors · 2000-01-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Pursuant to notice, a formal hearing was held in this case on January 20, 2000, in Phoenix, Arizona, before Neal H. Jordan, Administrative Law Judge of the Office of Administrative Hearings. APPEARANCES For Complainant: Carter Corey, Pro Se. For Respondent: Steven W. Cheifetz, Esq. Cheifetz & Iannitelli, P.C. 3238 N. 16th Street Phoenix, AZ 85016

FINDINGS OF FACT Based upon all the evidence of record, the following findings of fact are determined: Pursuant to a contract dated September 28, 1996, Complainant purchased from Playa del Rey, a limited partnership, a new home to be constructed at 510 North Acacia Drive in Gilbert, Arizona, for a purchase price of $235,290.00. Respondent Ex. A. The home to be constructed was designated as the “Capri” and contained 3,350 square feet within two stories. This home was offered in three elevations and Complainant selected elevation B. See Complainant Ex. 1 and Respondent Ex. D. Respondent was the builder of the home purchased by Complainant from Playa del Rey Limited Partnership. The general partner of Playa del Rey Limited Partnership is the same entity as the Respondent herein. After the home had been completed and occupied, Complainant filed the instant complaint setting forth 22 construction items in need of correction or repair by Respondent. As a result of the complaint being filed in this matter, a jobsite inspection was conducted by an assigned inspector for the Registrar of Contractors, which led to the issuance of a corrective work order letter (“CWO”) being sent to Respondent requiring that certain corrective or remedial work to be performed within a stated period of time. The CWO listed six items that the inspector found to require correction or repair by Respondent. As of the date of the hearing in this matter all but three items have been satisfactorily attended to by Respondent. The CWO indicated that the clear finish on the front entry door requires repair. Respondent maintains that because the CWO states this item is to be repaired it has refused to accept Complainant’s version of what is required. Complainant asserts that the problem in question involves the inside surface of the double front entry doors showing different shading of stain colors, as well as clear coat drips and runs. It is found that Respondent has attempted to “repair” these doors with at least two clear coat applications in the past and the problem remains pervasive. It is appropriate at this junction and it is found on the basis of credible evidence that the inside surface of these doors must be stripped to natural wood, re-stained and a satin clear coat applied to correct this deficient condition. The walkout deck off the second floor master bedroom has evidenced bubbles in the roofing surface that required repairs. Respondent has repaired these bubbles and after the required patching a different and spotty color is now evident over the deck surface. The testimony of the Registrar of Contractors’ inspector establishes that the repairs are within minimum industry standards and that the spotty patch colors will blend in with the other roof areas over time. It is found, therefore, that Respondent has complied with the requirements of the CWO and industry standards for this repair item. The remaining item in dispute involves a question of Respondent’s liability regarding Complainant’s claim that when the home was constructed the wrong front elevation windows were installed. The windows actually installed are single light panes with no dividers. Complainant maintains that he was entitled to have installed colonial style divided light windows as evidenced by the point of sale material given to him prior to the signing of the purchase contract. See Complainant Ex. 1. It is undisputed that every other home built with the subdivision by Respondent has divided light windows installed in the front elevations. Contrary to this assertion, Respondent strongly disputes that divided light windows were to be installed in Complainant’s home on the basis that: 1) Respondent was instructed by Playa del Rey Limited Partnership to install the single pane windows; 2) the plans and specifications do not indicate divided light windows were to be installed; 3) the elevations Respondent was allegedly relying upon did not show divided light windows (see Respondent Ex. D); and 4) it was always intended that Complainant’s home would not have divided light windows installed. The plans depicting the elevations of the home do not reveal a divided light window, however, Respondent could not point out the window detail or specification that delineates the type and style of window to be installed. On or about September 19, 1999, Respondent indicated a willingness to remove the existing windows and install the divided light ones insisted upon by Complainant. However, when, at the request of Respondent, a cost estimate was produced from its window subcontractor, it revealed a price of $3,294.00 to do so. This was an expense Respondent was unwilling to absorb and, when Complainant refused to pay this cost, Respondent refused to replace the windows. The evidence of record is sufficient to support a finding that Respondent is liable for the cost to install the divided light windows in Complainant’s home.

CONCLUSIONS OF LAW The Office of Administrative Hearings has jurisdiction over the subject matter and the parties hereto pursuant to A.R.S. §41-1092 - 1092.12 (1998). The Complainant has brought this complaint and accordingly bears the burden of proving by a preponderance of the evidence that the allegations contained therein are true. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (Ct. App. 1996); Smith v. Arizona Department of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985), (the standard of proof is that of the “preponderance of evidence.”) By a preponderance of the evidence Complainant has established that Respondent violated A.R.S. §32-1154 (A)(7), (23), and (3), namely Rule R4-9- 108, as charged in the Citation and Complaint in each respect as set forth below. By attempting to cure the stain or finish problem on the inside surface of the double front entry doors with multiple applications of clear coat, Respondent is just exacerbating the problem rather than correcting it. These attempts reveal an unwillingness to properly attend to the problem when the solution is to strip and restain and clear coat the doors. Such conduct results in a failure to comply with the CWO and represents a violation of statute as aforesaid. This is true notwithstanding Respondent’s rather narrow interpretation of the CWO when it maintains the “repair” does not contemplate a stripping of the doors. A repair in this context is one that will cure the problem, not continue to make matters worse. While the issue of the windows is more problematical, Complainant has established by a fair preponderance of the evidence that the home constructed for him should have had installed divided windows in the front elevation. When Complainant signed the purchase contract it was clearly on the basis of elevation B depicted on Complainant Ex. 1. No other point of sale material or artwork was given to Complainant and it is found that he never saw Respondent’s Ex. D until it was submitted into evidence at the hearing. Further, every other home built by Respondent within this subdivision has divided light windows installed and to maintain that Complainant’s home was the sole home not to have such windows is entirely unpersuasive. Further, Respondent’s position that it is the developer, Playa del Rey Limited Partnership, that should be liable, if liability should attach, since Respondent did not participate in the sale of the home, but was only the builder acting in accordance with instructions from the developer. This argument is sophism, at best. The Respondent and the general partner of the developer are one and the same. Knowledge and intent as to what was to be included in the sale to Complainant is common to both, and, at the very least, imputed to Respondent. The totality of evidence weighs clearly in favor of Complainant and suggests that when the home was being constructed the wrong windows were installed and Respondent is now attempting to escape the liability for that mistake. It is impermissible to condone Respondent’s attempt to hide behind the developer limited partnership as a cloak of immunity in an effort to avoid the disciplinary reach of the Registrar of Contractors over licensed contractors. Accordingly, it is concluded that Respondent is in violation of the statutes as aforesaid. Respondent, by its own evidence, has established the value by which the home has been diminished when it submitted into evidence the window subcontractor’s estimate to replace the windows. In light of the fact the home has been completed and occupied for over two years, it is more appropriate at this juncture to order restitutionary damages as a disciplinary penalty rather than create a disruptive and potentially damaging reconstructive situation by requiring the windows to be actually replaced. The Registrar of Contractors’ authority, in matters such as presented in this case, includes the power to order remedial restitutive damages in order to compensate an injured party for those amounts of money suffered as a loss due to a respondent’s violation of laws. Based upon the weight and credibility of the evidence of record, it is appropriate and reasonable to render an award of restitutionary damages in this case consisting of the payment by Respondent to Complainants of the sum money. The Registrar may order a “restitutionary remedy … as part of the Registrar’s regulatory authority to take appropriate disciplinary action against those who violate the licensing … “ laws set forth in A.R.S. § 32-1154A (1) through (24), inclusive. An administrative award of damages is not an unconstitutional exercise of administrative authority where due process procedural rights are protected, where the authority to prohibit conduct has been well defined as in A.R.S. § 32-1154, and where judicial review is available as provided in A.R.S. § 12-901 - 914. Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 803 P.2nd 430 (App. 1990). Restitutionary damages are defined as quantifiable amounts of money that may be due an injured party to compensate for pecuniary loss resulting from another person’s violation of laws. Cactus Wren Partners v. Department of Building and Safety, 177 Ariz. 559, 869 P.2d 1212 (App. 1993).

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 B license of Respondent shall be suspended until the Registrar of Contractors receives credible written proof that Respondent has accomplished appropriate and effective remedial work necessary to strip, stain and apply a satin clear coat to the inside surface of the double entry front doors, and has paid or tendered the sum of $3,294.00 as restitutionary damages to Complainant It is further recommended that if Respondent accomplishes the above described corrective work and makes full and complete payment or tender to Complainant of the foregoing restitutionary damages on or before the effective date of the Order entered in this matter, then the above license suspension shall not take place. ENTERED this day, January 26, 2000.

______________________________________ Neal H. Jordan Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2000, 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