Notice of Review and Appeal Rights

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					BEFORE THE OFFICE OF ADMINISTRATIVE HEARINGS STATE OF OREGON for the CONSTRUCTION CONTRACTORS BOARD In the Matter of the Arbitration between: Olga Reshtanenko and Valentina Reshtanenko, Complainants, and GDI Design Build, Inc., Respondent. File No: 160884-106

PROPOSED AND FINAL ORDER

HISTORY OF THE CASE On February 4, 2008 complainants, Olga Reshtanenko and Valentina Reshtanenko, filed this complaint with the Construction Contractors Board (CCB) alleging that the respondent, GDI Design Build, Inc. (GDI), performed negligent work in the construction of a driveway at a residence located at 920 SW Stephenson Rd., Portland, OR 97219. Ms. Reshtanenko is seeking $12,243 in damages. On June 12, 2008 the CCB referred this complaint to the Office of Administrative Hearings for binding arbitration, in accordance with ORS 701.145, ORS 701.148 and OAR 812004-0590. On June 23, 2008 Administrative Law Judge Anita C. Smith was appointed to serve as arbitrator. On July 3, 2008 GDI filed a timely request with the OAH for a contested case hearing pursuant to OAR 812-004-0590. On July 7, 2008 the parties were served with a Notice of Contested Case Hearing. On September 29, 2008 a contested case hearing was held in Salem, Oregon. Ms. Olga Reshtanenko appeared in person and testified on her own behalf. GDI president, David Gleason, appeared in person and testified on behalf of the corporation. ISSUES 1. Whether GDI performed negligent or improper work in the installation of a driveway at 920 SW Stephenson Rd., Portland, OR 97219? 2. If so, whether Ms. Reshtanenko is entitled to recover $12,243 in damages or some lesser amount? EVIDENTIARY RULINGS Exhibits 1 through 78 were admitted into the record without objection.

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The ALJ takes judicial notice of the CCB license summary for GDI license 160884 and the Oregon Secretary of State’s Office, Corporations Division, business records for GDI Design Build, Inc. The parties have 10 days from the date this order is issued to submit any written, legal objections to the Judicial Notice. FINDINGS 1. At all times relevant herein, GDI was actively licensed with the CCB. (CCB License Summary.) 2. Ms. Olga Reshtanenko and Ms. Valentina Reshtanenko are the owners of a residence located at 920 SW Stephenson Rd., Portland, Oregon 97219.1 Ms. Reshtanenko was acting as her own general contractor. Construction on the house began in September 2006. (Test. of Reshtanenko.) 3. In March 2007 Ms. Reshtanenko found a business card for GDI Design Build, Inc. on her garage door. The person named on the card was Don Reynolds.2 According to the card, Mr. Reynolds was the Project Manager-Superintendent for GDI. The card listed the mailing address for GDI and CCB number 160884. (Ex. 4; Oregon Secretary of States Office, Corporations Division, business records for GDI Design Build, Inc.; Test. of Reshtanenko.) 4. Using the telephone number on the GDI business card, Ms. Reshtanenko contacted Mr. Reynolds about pouring the driveway for her house. Ms. Reshtanenko originally wanted the driveway constructed out of exposed aggregate. Mr. Reynolds convinced her to use stamped concrete instead. Mr. Reynolds claimed that stamped concrete was his specialty and that he used special strengtheners so it would not crack. The parties did not enter into a written contract. Ms. Reshtanenko paid $2,883.75 to the suppliers for materials and $4,916.25 to Mr. Reynolds for labor, for a total of $7,800. Ms. Reshtanenko paid Mr. Reynolds directly, rather than mailing the payment to GDI. She did not consider that to be unusual because several of the other subcontractors working on her house had also requested to be paid directly. (Ex. 6, 7, and 8; Test. of Reshtanenko.) 5. Mr. Reynolds began working on the driveway on April 20, 2007 and completed the project on May 8, 2007. Within a few days of completion, the concrete cracked. Mr. Reynolds attempted to patch the driveway, but the cracks continued to get worse. Mr. Reynolds gave Ms. Reshtanenko some additional filler for the cracks, but the patches and the filler did not work and did not match the rest of the concrete. The pour was uneven and had “waves” in the concrete. Ms. Reshtanenko soon discovered that the concrete was so slick when it was wet that neither she nor her mother could walk on it. The driveway had not been graded correctly and had been poured with a 45º angle. The steep slope, combined with the slick surface, made it very difficult for Ms. Reshtanenko to get her car out of the driveway. (Test. of Reshtanenko.) 6. On November 14, 2007 Ms. Reshtanenko sent a 30 day notice of intent to file a CCB claim to GDI at the address listed on the business card. On February 4, 2008 Ms.
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Ms. Olga Reshtanenko and her mother, Ms. Valentina Reshtanenko are co-owners of the property. Ms. Olga Reshtanenko testified at hearing and was the party responsible for entering into the contract with GDI. All further references in this award refer to Ms. Olga Reshtanenko unless otherwise specified. 2 Mr. Reynolds also goes by the name of Don Van Wormer. Reshtanenko and GDI Design Build, Inc., CCB File No. 160884-106 Page 2 of 5

Reshtanenko filed this complaint against Mr. Reynolds and GDI. Reshtanenko.)

(Ex. 1 and 5; Test. of

7. On April 21, 2008 Mr. David Gleason, president of GDI, appeared at the onsite meeting on behalf of GDI because Mr. Reynolds was working on another project. After looking at the driveway, Mr. Gleason agreed that the driveway was not graded correctly, did not have control joints to absorb stress and the finish was uneven. In addition to the defects pointed out by Mr. Gleason, the CCB inspector found that the substrate had not been compacted properly, which resulted in the cracks. The inspector also determined that because of the slope, the driveway was not an appropriate application for stamped concrete. The CCB inspector recommended that the entire driveway be torn out, re-graded, and a new driveway poured. (Ex. 1, 24, and 25; Test. of Reshtanenko and Gleason.) 5. Ms. Reshtanenko contacted Parker Concrete for an estimate to replace her driveway. The cost to tear out the existing concrete and replace the driveway is $11,011. In addition, the asphalt approach to the driveway needed to be re-graded so that the driveway could constructed properly. Ms. Reshtanenko received an estimate of $1,232 from Gresham Paving to re-grade and re-pave the approach to the driveway. (Ex. 29, 30, 31; Test. of Reshtanenko.) 6. Mr. Gleason denied that Mr. Reynolds was employed by GDI when he poured Ms. Reshtanenko’s driveway in April 2007. According to Mr. Gleason, Mr. Reynolds was discharged from GDI in November 2006. Mr. Gleason also denied knowing that Mr. Reynolds was working under the GDI name in 2007. Mr. Gleason speculated that Mr. Reynolds must have left the GDI business card on Ms. Reshtanenko’s house prior to his discharge from GDI. In 2008 Mr. Gleason and Mr. Reynolds formed West Coast Concrete and were still in business together at the time of the on-site meeting. Mr. Gleason did not file a complaint against Mr. Reynolds with the CCB for unauthorized use his [Mr. Gleason’s] CCB license. (Ex. 26; Test. of Gleason.) CONCLUSIONS OF LAW 1. GDI performed negligent or improper work in the installation of a driveway at 920 SW Stephenson Rd., Portland, OR 97219. 2. GDI is liable to Ms. Reshtanenko for $12,243 in damages. OPINION 1. Negligent or Improper Work According to ORS 701.140(2005): A claim made against a licensed contractor’s bond required by ORS 701.085 must arise from the performance, or a contract for the performance, of work that is subject to this chapter. The claim must be of one or more of the following types: (1) A complaint against a contractor by the owner of a structure or other real property for the following: (a) Negligent work.
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(b) Improper work. * * * ***** In this case, it is undisputed that Ms. Reshtanenko’s driveway is defective due to negligent or improper work. The question in this case is whether GDI is liable for the damages. Ms. Reshtanenko hired Mr. Reynolds to construct her driveway. Mr. Reynolds held himself out as a GDI employee. Mr. Reynolds presented Ms. Reshtanenko with a business card that listed him as the project manager and superintendent for GDI and that GDI was licensed in both Oregon and Washington. According to CCB records, GDI’s contractor’s license was active at that time. It was objectively reasonable for Ms. Reshtanenko to believe that she was doing business with GDI. Mr. Gleason and Mr. Reynolds were doing business together both before and after Mr. Reynolds poured Ms. Reshtanenko’s driveway, first as GDI and later as West Coast Concrete. In light of those associations, Mr. Gleason’s level of knowledge of Mr. Reynolds’ activities, and his failure to report Mr. Reynolds to the CCB for misusing his [Mr. Gleason] CCB license, Mr. Gleason’s testimony that he was unaware that Mr. Reynolds was performing construction work under the GDI name in March and April 2007 is not credible. Mr. Gleason was aware that Mr. Reynolds’ was working as a contractor under the auspices of GDI and by remaining silent, Mr. Gleason as president of GDI, acquiesced in Mr. Reynolds’ conduct. Therefore, GDI is liable for the damages to Ms. Reshtanenko’s driveway. 2. Damages

Ms. Reshtanenko obtained estimates from Parker Concrete and Gresham Paving to regrade the approach, remove and replace her driveway, for a total cost of $12,243. These costs are reasonable. Ms. Reshtanenko is awarded $12,243 for the removal and replacement of her driveway. Pursuant to ORS 701.133(4)(a) and OAR 812-004-0250(2)(c), Ms. Reshtanenko is also entitled to recover her complaint processing fee in the amount of $50.00. ORDER IT IS HEREBY ORDERED that Respondent, GDI Design Build, Inc., shall pay complainants, Olga Reshtanenko and Valentina Reshtanenko, $12,243, plus $50.00 in costs for the processing fee. Dated this 20th day of November, 2008

Anita C. Smith, Arbitrator

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NOTICE OF REVIEW AND APPEAL RIGHTS As provided in ORS 183.460, any party that disagrees with this Proposed and Final Order may file written exceptions, including argument. If you choose to file exceptions, carefully follow the instructions enclosed with this order. Mail your exceptions to the Construction Contractors Board (CCB) at the address provided below. CCB must receive written exceptions on or before the 21st day after this order was mailed to the parties. If CCB does not receive your written exceptions on or before the 21st day after this order was so mailed, your exceptions will not be considered. If exceptions are timely received, CCB will send the opposing party a copy of the written exceptions. At the same time, CCB will send both parties information and guidelines for participating in the exceptions process. Thereafter, the Construction Contractors Board Appeal Committee (Appeal Committee) will consider the exceptions at an Appeal Committee meeting. This will not be a new hearing. The Appeal Committee will only review the original hearing record and this order. The Appeal Committee will not consider evidence that was not a part of the original hearing record. If CCB does not timely receive exceptions, this order will automatically become final on the 21st day following the date of issuance of this order, unless CCB requests the ALJ to review and consider revising the order. OAR 812-009-0160. If this order becomes final, you are entitled to request judicial review pursuant to the provisions of ORS 183.482, by filing a petition for judicial review with the Court of Appeals within 60 days from the date that this order becomes final. Mail any exceptions or a copy of any petition for judicial review to: Assistant to Dispute Resolution Manager Construction Contractors Board PO Box 14140 Salem, OR 97309-5052

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