ALJDEC

00F-2643-ROC · Registrar of Contractors · 2001-01-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 24, 2001 APPEARANCES: Complainant was represented by its attorney, Gretchen Friedlander and Respondent was represented by its attorney, Wade Waldrip. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. Pursuant to contract, Complainant, in its capacity as general contractor, retained Respondent for the purpose of replacing and installing tile in a new home construction project. Complainant alleges certain deficiencies in the work performed by Respondent and same are discussed in the findings below.

2. At the outset of the scheduled hearing, the parties stipulated to the fact that there were loose/hollow tiles present in the tile installation completed by Respondent. The tile work in question was installed throughout the home, including the living room, kitchen, bedroom, hallway, and bathrooms. Evidence of record was sufficient to support a finding that the number of loose/hollow tiles was excessive.

3. The following salient facts were adduced at the hearing and are important to note:

a. On or about September 1999, the parties entered into a written contract for the removal and installation of the previously installed tile floor (which had been installed by someone other than Respondent). b. Respondent completed the new tile installation on or about the end of October 1999. c. Shortly after Respondent completed its work on the project, the homeowner contacted Complainant to advise that he had discovered a number of loose/hollow tiles in Respondent’s tile floor installation. d. The homeowner’s complaint was shown to be valid and apparently Respondent agreed to fix the problem after the holiday season. e. Notwithstanding the aforementioned agreement to correct the tile deficiencies after the holiday season, Respondent failed to perform the remedial work, despite written requests from Complainant via facsimile transmission. f. On or about April 18, 2000 a courtesy inspection was conducted by the assigned inspector for the Registrar of Contractors and at said meeting, the inspector opined that the defective tiles required an appropriate repair. g. Shortly after the above-described courtesy inspection, Complainant again sent a facsimile transmission to Respondent, requesting that the tile remedial work be completed. Complainant testified that it did not receive a response from Respondent in this regard. h. Ultimately, Complainant filed the instant complaint with the Registrar of Contractors. i. A formal jobsite inspection was conducted by the assigned inspector for the Registrar of Contractors in May 2000 and a Corrective Work Order, dated May 24, 2000, was mailed to Respondent, directing it to accomplish remedial work on the loose/hollow tiles. Notwithstanding the terms of said Agency directive, Respondent failed to comply with same. j. When the tile corrective work was not completed within the time deadline set forth in the above-described Corrective Work Order, the homeowner filed his own complaint against Complainant on June 13, 2000. On June 22, 2000 a Corrective Work Order was issued against Complainant, requiring Complainant to correct the tile deficiencies. k. In order to comply with the Corrective Work Order issued against it, Complainant hired others to complete the required remedial work, claiming that it incurred substantial costs to accomplish the necessary corrective work. l. Complainant ultimately requested that the instant complaint be brought to an administrative hearing.

4. Respondent contends that it tried to make contact with Complainant‘s president, in regard to performing the tile remedial work, after it received the above-described Corrective Work Order but Respondent’s president never returned any phone calls. Respondent admits that it had a good relationship with the homeowner, but for unexplained reasons it failed to deal directly with the homeowner, in regard to obtaining access to the home to perform the required remedial work.

5. Notwithstanding Respondent’s claim referable to trying to make contact with Complainant’s president, it was unable to produce any documentation (such as letters or facsimile transmissions) to support said claim and the instant record was replete with documentation from Complainant to Respondent, which showed Complainant attempting to get Respondent to perform the necessary remedial work.

6. It is determined and held that Respondent’s efforts to obtain access to comply with the May 24, 2000 Corrective Work Order were, at best, inadequate and ineffective, thereby supporting a finding of a violation of the applicable charged section of the State’s Contracting laws regarding the requirement to comply with a directive issued by the Registrar of Contractors.

7. Respondent contends that it was not paid in full for the work performed on the home in question. On the contrary, the weight of the credible evidence of record, including specified lien waivers and checks, was sufficient to support a finding that Respondent was paid in full for the work performed on the tile installation at issue herein. Moreover, regardless of any claimed failure of a general contractor to pay in full for work performed, a contractor is responsible to assure that any completed work which it leaves behind on a project must be capable of meeting appropriate industry standards for good and proper workmanship.

8. The loose/hollow tiles were indicative of substandard and unacceptable workmanship and Respondent’s failure to correct the deficiency in the tile also constitutes a wrongful act within the meaning of the applicable charged section of the State’s Contracting laws.

9. Complainant contends that it sustained monetary damages in excess of $21,000.00 to accomplish the remedial work on the project. Complainant’s monetary claim includes actual and consequential damages including, but not limited to, costs to pay for a motel to house the homeowner while the tile was removed and replaced in the home, along with significant costs attributable to Complainant’s supervision of the tile subcontractor retained to remove and replace Respondent’s tile installation. It should be noted that the original cost for the work performed by Respondent was approximately $4,000.00.

10. Although Complainant may pursue its claim for monetary damages against Respondent in a civil court of competent jurisdiction, the Registrar of Contractors, acting through an administrative license disciplinary forum is the inappropriate forum to adjudicate and liquidate the kind of monetary damages claimed by Complainant. Moreover, Complainant averred at the outset of the scheduled hearing that notwithstanding the fact that it had incurred significant costs to correct the tile deficiencies, at the instant administrative hearing it was merely seeking disciplinary sanctions against Respondent’s license.

11. As set forth in the Citation and Complaint issued by the Registrar of Contractors, Respondent was advised that in the event of a finding of a violation against Respondent, Respondent’s prior disciplinary record of final Registrar of Contractors’ orders may be considered in mitigation or aggravation. Accordingly, subsequent to conclusion of the instant hearing, notice was taken of official records of the Registrar of Contractors regarding any prior final disciplinary orders against Respondent and said notice revealed that the instant complaint was the only complaint on the Registrar of Contractors’ current record regarding Respondent. Therefore, Respondent’s prior record is properly deemed to be excellent and thus, is viewed as a matter in mitigation for any disciplinary penalties to be imposed as a direct result of this case.

CONCLUSIONS OF LAW

1. Respondent violated the provisions of A.R.S. § 32-1154A (23), (7), and (3); namely Rule R 4-9-108.

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-03 license of Respondent shall be placed on suspension for five (5) days, followed immediately by a period of disciplinary probation for 120 days. It is further recommended, in addition to the above-provided penalties, that Respondent pay the sum of $200.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32-1154D. The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent , as defined in A.R.S. §32-1101A(5), unless payment of any outstanding prior civil penalty is tendered. It is further recommended, in addition to the above provided penalties, if any, that any continuation or restoration of Respondent’s contracting rights, whether or not probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of twenty-four (24) months, including future renewal periods, in the amount of $1,500.00, such bond or deposit to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. § 32-1152 (D). Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above- provided twenty-four (24) month period and only if no claims are then pending.

Done this day, January 31, 2001

______________________________________ Mark A. Silver Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2001, 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