Notice of Review and Appeal Rights by HC120831092112


									                BEFORE THE OFFICE OF ADMINISTRATIVE HEARINGS                                       Formatted: Top: 1", Bottom: 1"
                              STATE OF OREGON
                                    for the

In the Matter of the Arbitration between:

Jeannette S. O. LewisStacey Olson,                            File No: 171252-101173317-501
                                                                   ARBITRATION AWARD

David GerberWestco Builders LLC,

                                     HISTORY OF THE CASE

        In September 2006, Complainant Stacey Olson Jeannette S. O. Lewis entered into a           Formatted: Justified
contract for Respondent to install a roof on Complainant’s residence located at 2050 Don Juan
Avenue, Eugene, Oregon. Respondent did not have a CCB contractor license. On November 16,
2006, Complainant filed a complaint with the CCB against Respondent for breach of contract.
On May 14, 2007, the CCB issued a Notice of Intent to Assess a Civil Penalty to Respondent for
violating ORS 701.055(1) by undertaking work as a contractor without a valid CCB license. On
June 20, 2007, Respondent agreed to settle the CCB’s civil penalty action and to submit to
binding arbitration of Complainant’s CCB complaint. (Ex. 16 and 17.) On October 2, 2007,
Respondent signed an agreement to arbitrate Complainant’s claim. Complainant signed the
arbitration agreement on November 9, 2007. (Ex. 14 and 15.) On February 4, 2008,
Complainant filed a Statement of Damages, in which she claimed total damages of $6,313.70
plus the CCB’s $50 processing fee. (Ex. 26.)
        filed a complaint with the Construction Contractor’s Board (CCB) on September 25,
2007, alleging that Respondent breached a contract to construct a bathroom and closet addition
to property located at 1489 B Street, Springfield, Oregon. On November 1, 2007, the
Construction Contractors Board (CCB) issued a Contested Case Notice, Proposed Default Order,
Notice of Opportunity for Hearing, and Final Order by Default (Default Order). Respondent
requested a hearing on November 15, 2007. Complainant filed a Statement of Damages on
December 8, 2007, in which she claimed total damages of $5,682.60 plus the CCB’s $50
processing fee. (Ex. 41.)

       On December 18, 2007March 4, 2008, the CCB referred the complaint to the Office of
Administrative Hearings (OAH) for binding arbitration pursuant to ORS 701.148 and 701.149
and Oregon Administrative Rule (OAR) 812-00410-0590020(1)(b). Neither party requested a
contested case hearing.

       On December 26, 2007March 25, 2008, the OAH served a Notice of Arbitration Hearing          Formatted: Font: Not Italic
on the parties, setting the matter for arbitration on March 24June 4, 2008, and including a copy   Formatted: Font: Not Italic

Olson v. WestcoLewis v. Gerber,, CCB File No. 173317-5011252-101

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of the administrative rules contained in OAR chapter 812, division 10. A prehearing conference
was held on April 24, 2008, at which both parties participated. (Ex. 70.) At Respondent’s
request, the arbitration hearing date was rescheduled to June 11, 2008. At Complainant’s
request, Tthe arbitration was rescheduled to April 7, 2008. The OAH served a First Amended
Notice of Arbitration Hearing on January 22April 24, 2008, giving notice that the arbitration had
been rescheduled for April 7June 11, 2008, at 98:30 a.m. A prehearing conference was held on
January 29, 2008, in which both parties, including Brian West for Respondent, participated and
discussed the April 7, 2008, arbitration date. (Ex. 71.)

         The arbitration proceeded as scheduled on April 7June 11, 2008, at the OAH offices in
Eugene, Oregon, before Arbitrator James W. Han. Complainant appeared without counsel and
testified. Marianne Brown, Complainant’s mother, also appeared. Respondent did not appear
for the hearing. No one appeared on Respondent’s behalf.

       The record consists of a digital recording of the April 7June 11, 2008, hearing and
Exhibits 1 through 8772, submitted prior to hearing, which were admitted into evidence at
hearing without objection. Complainant’s Exhibit C1, consisting of six pages of photographs,
also was received into the record.

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        Complainant and Respondent entered into a written contract in September 2006, under
which On June 21, 2007, Complainant and Brian West, on behalf of Respondent, signed a
written contract for Respondent to build a bathroom and closet at Complainant’s residence. (Ex.
45.) On that date, Complainant gave Respondent a check in the amount of $5,682.60 as a
downpayment for the work. The total cost under the contract was $18,942.00.

        At the time the parties signed the contract, West told Complainant he would apply for
building permits the next day, June 22, 2007. West told Complainant he had all he needed to
apply for the permits. The contract stated: “Work shall begin August 3rd, 2007 as long as permits
are approved. If permitting is not approved at that time, work shall begin no later than 7 days
after approval of permits by the City of Springfield.” (Ex. 43.)

       Complainant called West in July 2007 to ask about the status of the building permits.
West lead Complainant to believe he had applied for the permits but he had not. On August 9,
2007, Complainant called the City of Springfield and learned that Respondent had not filed for
building permits for her residence. She also learned that Respondent’s contractor license had
been suspended sometime after she signed the contract. (Test. of Olson and Ex. 24.) When
Complainant tried to reach Respondent, she learned that Respondent’s telephone service had
been disconnected.

       On August 15, 2007, Complainant sent to Respondent a demand for the return of the
deposit money. (Ex. 25.) Respondent received the demand on August 30, 2007. (Ex. 27.)
Respondent applied for building permits on September 6, 2007. On September 12, 2007,                Formatted: Font: Not Italic
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Complainant asked Respondent to cancel the contract and to refund the deposit. (Ex. 17.)
Complainant was not willing to continue with the contract because Respondent’s license was still
suspended (see Ex. 23) and West had been dishonest about applying for the building permits.

        West told Complainant that Respondent incurred expenses in connection with the
contract but Respondent never told Complainant any specific amount or gave evidence of any
expenses. At the January 31, 2008, prehearing conference, Complainant asked Respondent for
evidence of its expenses but Respondent did not provide it.
         Respondent would install a new roof on Complainant’s residence and Complainant            Formatted: Justified
would pay Respondent $900 for labor and $2,180 for materials. (Ex. 3.) On or about September
15, 2006, Complainant paid $1,883.96 for materials for the roof installation. (Ex. 6.)
Complainant also paid $220.55 and $124.20 for debris disposal (Ex. 7 and 8), and $44.99 for a
tarp to cover the exposed roof. (Ex. 9.)

       Respondent did not perform the roof installation work properly. He used improper
fasteners. The shingle application was off pattern. Valleys were lapped incorrectly. Flashings
around the chimney were improperly installed. Pipe flashings were the wrong size. Respondent
used nails that pierced through the wood on open overhangs. (Ex. 4 and C1.) When
Complainant learned that Respondent was not a licensed contractor, she refused to let him
continue with the work and she did not pay Respondent for any of his labor.

        Complainant hired All Seasons Roofing to correct the work Respondent had started.
Almost all the roofing material Respondent installed had to be removed. Complainant paid All
Seasons Roofing $2,605.00 to remove the roof materials and to install a new roof. (Ex. 5.) The
cost of patching and painting over the nail holes in the underside of the the overhangs will be
$1,140.00. (Ex. 36.) Although Complainant is entitled to recover these costs, I am not
persuaded that Complainant should be awarded the cost of repainting her entire house to match
the new paint on the overhangs—the new paint would be on the underside of the overhangs and
not so obvious that the entire house should be repainted to match it. . Complainant also claimed
the interest she incurred when she charged the roofing expenses on her credit card. However,
she did not present any evidence of the amount of the interest.

        In conclusion, The total amount Complainant paid or will pay to cure the defects in
Respondent’s work is is $4,134.74entitled to an award of $5,682.60, the amount she gave to
Respondent under the contract which Respondent failed to perform. , which includes payment to
All Seasons Roofing ($2,605.00), the cost of the debris disposal ($220.55 and $124.20), the cost
of the tarp ($44.99), and the cost of patching and painting nail holes ($1,140.00).

        Under Complainant’s contract with Respondent, Complainant was to pay a total contract      Formatted: Justified
price of $3,080 ($900.00 for labor plus $2180.00 for materials). After subtracting the cost of
materials Complainant paid, the amount not paid on the contract is $1,196.04. Respondent is
entitled to an offset in this amount, resulting in total damages of $2,938.70 ($4,134.74 minus

      Looking at Complainant’s damages another way, Complainant paid or will pay $2,938.70
more than she contracted to pay Respondent ($4,134.74 to cure defects plus $1,883.96 for           Formatted: Font: Not Italic
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original materials minus $3,080 contract price). Accordingly, Complainant is entitled to an
award of $2,938.70. Complainant is also entitled to recover the $50 CCB processing fee.
Therefore, I hereby enter the following:

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         Respondent shall pay Complainant $2,938.705,682.60 plus the $50 processing fee, for a
total of $2,988.705,732.60.

Dated this 26513__ th day of April June 2008.

                                                     James W. Han, Arbitrator

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