ALJDEC

99F-M1592-ROC · Registrar of Contractors · 2000-06-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 20, 2000 APPEARANCES: Joel Martin, joined by his wife Staci, appeared on his own behalf. Emily Auckland, Esq. represented Respondent Kaufman and Broad of Arizona, Inc. ADMINISTRATIVE LAW JUDGE: Daniel G. Martin _____________________________________________________________________

The issue presented by this matter is whether Respondent Kaufman and Broad of Arizona, Inc. (“Kaufman and Broad”) is subject to discipline for acts or omissions in violation of A.R.S. § 32-1154. Based on the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order: FINDINGS OF FACT Kaufman and Broad is the holder of a Class B- license (No. 099276) issued by the Registrar of Contractors (“ROC”). In September 1997, Complainant Joel Martin and his wife Staci moved into a Kaufman and Broad-constructed home in Mesa, Arizona. Within several months after moving into their new home, the Martins began to notice the presence of a black substance on their walls, windows, carpets, furniture ( even the inside of their refrigerator. The black substance appears to be unique to the Martins’ home; none of their neighbors have suffered from a similar problem. The Martins tried washing the substance off with no success. In March 1999, in response to the Martins’ complaint regarding this condition, Kaufman and Broad arranged for an inspection of the Martins’ carpeting by Priority1One Inspections. Jake Jacobs, a certified floor covering inspector who works for Priority1One Inspections and who testified at the hearing, conducted that inspection on March 15, 1999. In his March 17, 1999 report, Mr. Jacobs noted the presence of a “charcoal to medium gray discoloration” throughout the Martins’ home. Mr. Jacobs’ report noted the following further observations: f. When Mr. Martin moved a sofa in the living room, “the discoloration surrounded the sofa but did not discolor the carpet where the sofa had been sitting.” g. The discoloration “is not typical filtration soiling from air moving under walls, coming up through the back side of the carpet or at closed doors where it passes across the top of the carpet creating a line.” h. “There is no indication that any type of mill contamination of type carpet fibers is causing this carbon type discoloration. Usually mill contamination involves light, clear machine oil which feels quite oily. In rubbing my fingers through the installed carpet it did not have the same oily feel that occurs from oil contamination.” i. Mr. Jacobs was able to clean “a couple of discolored spots” using a solvent type spot cleaner. (The Martins had attempted, without success, to clean their carpet using a steam cleaner.) Mr. Jacobs’ report concludes, “the gray discoloration of the surface fibers in this home appears to be the result of unknown local environmental conditions. Any number of factors could be involved from dirty air filters and ducks [sic], heavy burning of candles or possibly from the heating unit . . .” The Martins’ home is heated by a natural gas furnace. Following Mr. Jacobs’ inspection, Kaufman and Broad disclaimed responsibility for the discoloration in the Martins’ home, suggesting that the cause of the black substance was the Martins’ burning of candles in their home. Thereafter, on June 26, 1999, Mr. Martin filed a complaint against Kaufman and Broad with the ROC. ROC Inspector James Walsh investigated Mr. Martin’s complaint. Inspector Walsh conducted an inspection of the Martins’ home on August 26, 1999. During this inspection, Mrs. Martin produced an air filter that Kaufman and Broad agreed to have tested in order to ascertain the cause of the black substance. Kaufman and Broad submitted the air filter to Semtec Laboratories in Phoenix. Ed Holdsworth, Semtec’s president, conducted an analysis of the material on the filter and detailed his findings in a September 3, 1999 letter to Steve Puttre, Kaufman and Broad’s customer relations manager for the south valley area. Mr. Holdsworth’s letter identifies two types of black particles in the material recovered from the Martins’ filter ( relatively large particles on the one hand, and clusters of very small particles on the other hand. Mr. Holdsworth stated “[p]articles of either type are associated with burning material, although the morphology of these particles does not suggest what material was burning.” Mr. Holdsworth testified at the hearing. He obtained a B.S. degree in chemistry in 1966, and, after serving in the army, worked for Arizona State University from 1969 to 1976, at which time he left to start Semtec Laboratories. The Administrative Law Judge found Mr. Holdsworth to be a man of independent judgment and a very credible witness. Because the resolution of this case turns on Mr. Holdsworth’s testimony, the Administrative Law Judge specifically finds that Mr. Holdsworth’s testimony was more credible and reliable than the testimony of any other witness at the hearing, and therefore entitled to substantially greater weight. Part of the reason for this finding, in addition to the Administrative Law Judge’s personal observation, was that although Mr. Holdsworth had been called as a witness by the Respondent, Kaufman and Broad, his testimony did not support Kaufman and Broad’s position in this case. Shortly after beginning his testimony, Mr. Holdsworth, who had not previously been made privy to all of the facts and circumstances of the Martins’ case, made the following statement: “[I] listened with interest when the Martins were describing some of the things that happened in the house, and, going beyond what my report says, I’m quite confident I know where [the black material] is coming from.” In Mr. Holdsworth’s opinion, the Martins’ case is a textbook example of an improperly vented natural gas heater: the black substance is carbon soot that develops when the natural gas is not completely combusted.[1] Mr. Holdsworth specifically testified that the physical characteristics of the soot from the Martin’s house, which he described as “very dry,” match those of soot he has observed in other houses with similar problems. Mr. Holdsworth credibly testified that the burning of candles would not produce this type of soot, as candle soot is much oilier in nature.[2] Mr. Holdsworth testified that the solution in this case is to provide better ventilation to the furnace, thereby allowing for complete combustion of the natural gas. Following Mr. Holdsworth’s testimony, Kaufman and Broad called as a witness Chris Burkhart, operations and safety manager for Chas Roberts Air Conditioning. Mr. Burkhart testified that he is familiar with conditions such as those described by the Martins, and that, in his opinion, the cause of the soot is the burning of candles in the Martins’ home. In support of Mr. Burkhart’s testimony, Kaufman and Broad offered into evidence a series of articles tying candle burning to soot problems. The Administrative Law Judge admitted those articles, and reviewed them, but finds them not to be persuasive as to the cause of the soot. Among other things, all of the articles appear to be drawn from industry sources rather than independent research facilities. Further, the articles are contradicted by Mr. Holdsworth’s direct testimony. The Administrative Law Judge gave greater evidentiary weight to Mr. Burkhart’s direct testimony, but, on balance, found that testimony less credible than the testimony given by Mr. Holdsworth. The Administrative Law Judge finds, upon consideration of all the evidence, that the black substance that has covered the interior of the Martins’ home is soot caused by the incomplete combustion of natural gas, and that Kaufman and Broad is responsible for the existence of that condition. On March 28, 2000, the ROC issued a Citation and Complaint charging Kaufman and Broad with violations of A.R.S. § 32-1154(A)(7) (wrongful or fraudulent act resulting in substantial injury) and (A)(3) (violation of any rule adopted by the ROC, in this case, A.A.C. Rule R4-9-108 covering workmanship standards). The Administrative Law Judge finds, on the evidence presented, that Kaufman and Broad’s installation of the gas heater at the Martins’ residence was not performed in a workmanlike manner. The Administrative Law Judge further finds, by virtue of Kaufman and Broad’s failure to have installed the Martins’ heater in a workmanlike manner, that Kaufman and Broad committed a wrongful act that resulted in substantial injury to the Martins. The Martins requested that any remedy recommended herein include an Order that Kaufman and Broad replace all of the items in the Martins’ home that have been damaged by the soot. The Administrative Law Judge believes that to the extent items such as carpeting, walls and windows are concerned, the Martins’ request is reasonable and appropriate. However, the Administrative Law Judge declines to recommend that the ROC issue an Order conditioning discipline on the replacement by Kaufman and Broad of the Martins’ personal property. To the extent the Martins seek such relief, they must look to the civil courts of this State. CONCLUSIONS OF LAW In this proceeding, Mr. Martin bears the burden to prove, by a preponderance of the evidence, that Kaufman and Broad is subject to discipline for violations of A.R.S. § 32-1154(A)(3) and/or (A)(7) as charged by the ROC in its March 28, 2000 Citation and Complaint. 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). The Administrative Law Judge concludes that Mr. Martin sustained his burden of proof on both charges. Under A.R.S. § 32-1154(A)(3), a contractor is subject to discipline for “violation of any rule adopted by the registrar.” In this case, the ROC charged Kaufman and Broad with a violation of A.A.C. Rule R4-9-108, which, among other things, requires contractors to perform work in a professional and workmanlike manner and in accordance with professional industry standards. Kaufman and Broad violated A.R.S. § 32-1154(A)(3) by failing to install the gas heater at the Martins’ residence in a workmanlike manner, thereby violating A.A.C. Rule R4-9-108. Under A.R.S. § 32-1154(A)(7), a contractor is subject to discipline for “the doing of a wrongful or fraudulent act . . . as a contractor resulting in another person being substantially injured.” The Administrative Law Judge concludes that by virtue of its failure to have installed the Martins’ heater in a workmanlike manner, Kaufman and Broad committed a wrongful act that resulted in substantial injury in violation of A.R.S. § 32-1154(A)(7). Based on the foregoing violations, it is appropriate for the ROC to impose discipline against Kaufman and Broad’s license. The ROC’s March 28, 2000 Citation and Complaint advised Kaufman and Broad that in the event of a finding of a violation against it, Kaufman and Broad’s prior disciplinary record of final Registrar of Contractors’ orders could be considered in mitigation or aggravation. Accordingly, subsequent to the conclusion of the instant hearing, the Administrative Law Judge took notice of prior final disciplinary orders against Kaufman and Broad in the ROC’s official records. Those records revealed three prior complaints in the past two years that had gone into the hearing process, two of which resulted in orders recommending discipline against Kaufman and Broad’s license. Therefore, Kaufman and Broad’s prior record is deemed to be marginal and is viewed as a matter in aggravation to be considered in connection with the disciplinary penalties imposed as a direct result of this case. The Registrar of Contractors’ authority in disciplinary matters such as the one presented herein includes the ability to impose reasonable conditions that allow the disciplined contractor to reduce the scope of the disciplinary action taken against it. The Administrative Law Judge deems the exercise of such authority to be appropriate in the instant case. Therefore, based upon all the evidence, a reasonable condition in this case would consist of correction by Kaufman and Broad of the Martins’ furnace in order to ensure complete and consistent combustion, and further that Kaufman and Broad redress the effects of the soot by (1) arranging for professional cleaning of the Martins’ carpeting and windows, and (2) re- painting all interior painted surfaces in the Martins’ home. Imposing such a condition is preferable to imposing a disciplinary action against Kaufman and Broad’s license without providing a condition to reduce or eliminate same. The Administrative Law Judge concludes that given the amount and type of corrective work to be performed, Kaufman and Broad should be given additional time beyond the effective date of the Order entered in this matter to complete that work. RECOMMENDED ORDER It is recommended that commencing fifteen days after the effective date of the Order entered in this matter, Kaufman and Broad’s Class B- license be SUSPENDED until such time as the Registrar of Contractors receives written proof that Kaufman and Broad has complied with each of the following conditions OR has entered into other mutually acceptable arrangements with the Martins: a. Kaufman and Broad performs such work as is necessary to ensure that the Martins’ gas furnace is attaining complete and consistent combustion; b. Kaufman and Broad arranges for professional cleaning of the Martins’ carpeting and windows; and c. Kaufman and Broad re-paints or causes to be re-painted all interior painted surfaces in the Martins’ home. It is further recommended that if Kaufman and Broad accomplishes the above-identified work in a proper, workmanlike manner on or before the extended deadline date, then no license suspension shall be imposed and the entire Citation and Complaint in Case Number M99-1592 shall be closed. For purposes of further administrative or judicial review, the Registrar of Contractors’ Order becomes effective thirty-five days after the date of entry by the Registrar.

Done this day, July 10, 2000.

______________________________________ Daniel G. Martin Administrative Law Judge

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

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

By ___________________________ ----------------------- [1] This problem, which Mr. Holdsworth described as both subtle and difficult, often eludes detection because, when the heating unit is opened to inspect the flame, additional oxygen is introduced into the system that makes the flame appear to be burning properly.

[2] The Administrative Law Judge notes the apparent conflict between this testimony and the statement in Mr. Holdsworth’s report that “the morphology of these particles does not suggest what material was burning.” Having considered the testimony, the Administrative Law Judge finds that in using this language in his report, Mr. Holdsworth was simply being cautious (or perhaps more accurately, scientifically conservative). As Mr. Holdsworth explained at the hearing, he has only in the past few months amassed sufficient data to positively conclude that the soot he reviewed was attributable to incomplete natural gas combustion. Further, at the time he wrote his report Mr. Holdsworth did not have the benefit of the additional information that he learned during the hearing.

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