ALJDEC

00F-RF0228-ROC-rhg · Registrar of Contractors · 2001-02-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 1, 2001. APPEARANCES: Madeline Ross, Complainant; Mary DeLaat Williams, Assistant Attorney General for the Registrar of Contractors; and Van Bagley, Registrar of Contractors Building Inspector. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________ Upon rehearing, the Complainant has established that a portion of the amount she and her husband requested from the Residential Contractors Recovery Fund was properly payable. Although the Registrar of Contractors disagreed with a pay-out based on payments to Fernie’s Landscaping, unlicensed, the evidence at hearing was that the Registrar of Contractors investigated Fernie’s Landscaping regarding this project and dismissed the matter as not presenting an issue of contracting without a license. The Registrar of Contractors also objected to payment for damage to the sidewalk, which was not on the original complaint or Corrective Work Order. The Registrar of Contractors’ entertainment of the new issues (by sending out an inspector to see the damage) and the futility of requiring homeowners to file a disciplinary complaint against a revoked contractor established that the request for recovery regarding the sidewalk was reimbursable. The Registrar of Contractors did not object to reimbursement for a plant allowance that was paid for but not fully used, so long as the figures were correct. A proper calculation of the unused portion of the plant allowance totaled $1057.58. Repair work done by Fernie’s Landscaping for drainage totaled $405. Fernie’s repair work for plants, a light installation and rock coverage totaled $840. Although Ms. Ross had heard that a concrete repair would not fix her sidewalk and that only a complete polymer refinishing would correct the condition, this was not established by the weight of the evidence. Nevertheless, the sidewalk would not have been etched and stained as quickly were it not for the constant flooding of it caused by Respondent’s failure to install it properly. Therefore, Complainants should be allowed to recover $250 for repair of the walk. Based on the following Findings of Fact and Conclusions of Law, I recommend a pay-out from the Recovery Fund in the amount of $2552.58. FINDINGS OF FACT 1. Madeline and Gordon Ross hired Master Curb Landscaping, the Respondent, to install landscaping, a drip system, gravel, plants and a sidewalk at their home. Master Curb Landscaping did not complete the job. The Rosses paid them $10,500. 2. When Master Curb refused to return and complete the work and correct some items, the Rosses filed a Complaint with the Registrar of Contractors, ultimately resulting in Respondent’s license suspension. Respondent’s license was later revoked on another matter. 3. On December 6, 1999, the Rosses filed a Recovery Fund Claim for reimbursement for the unfinished work. They hired Fernie’s Landscape to replace some plants, stake a tree, add some more rock to an area that did not have enough, patch an irrigation leak, place a pipe to drain irrigation away from the flooded courtyard, replace an incorrect light fixture, and make a small trench to assist in draining the courtyard. The Rosses paid Fernie’s Landscape $1,355 for the repair work. (The invoices she presented at hearing from Fernie’s Landscape totaled only $1245, however.) The Registrar of Contractors initially declined to reimburse this money because Fernie’s Landscape was not a licensed contractor. At the rehearing, Madeline Ross offered testimony that the Registrar of Contractors had already investigated Fernie’s Landscape regarding this job and whether they were working without a necessary license. The complaint was dismissed. Although the Registrar of Contractors representative had not been aware of the complaint and noted on the record that she could not be certain that the investigator who dismissed the complaint had investigated all of the items at issue in this case, she had no other evidence to offer on this issue. The weight of the evidence established that the work Fernie’s Landscape did in this project did not require a license from the Registrar of Contractors per a previous final decision by the Registrar of Contractors. 4. The Rosses also requested money from the fund for repairing damage to the sidewalk. An Registrar of Contractors Inspector, Van Bagley, looked at the sidewalk and reported that the problem was due to efflorescence. At the rehearing in this matter, he testified that although this problem often arises from overwatering and would not have happened had not the drip system put water on the sidewalk, it is not considered a failure to meet minimum workmanship standards to have a watering system put water on the sidewalk. Therefore, in his opinion, this was not a matter which was appropriate for reimbursement. He also pointed out at hearing that the flooding that happened with the drip system was not on the Rosses original complaint to the Registrar of Contractors, and even if it had been, the complaint fell outside of the 90 day warranty period for the drip system. For this reason, he disputed the payment of any money for digging a trench and laying a pipe for drainage and for repairs to the sidewalk. 5. Madeline Ross argued that the disputed damages regarding drainage and flodding would not have happened but for the poor drip system and the way it flooded her yard. She did not discover the problem until the complaint was already filed, but did include this in her Recovery Fund claim as part of the damage done by Master Curb Landscape’s poor workmanship. She argued that the repairs were necessary because water sitting next to the home was endangering the foundation. She also argued that none of the other homes in her area had etching in their sidewalks so clearly the damage was done by Master Curb Landscaping. She is requesting $1,355 for the gardening done by Fernie’s Landscape and $2045 to repair the sidewalk. The lowest bid on the sidewalk was $784, but this was for a complete polymer recoating. Van Bagley testified that the appropriate correction for etching is a thin coat of cement with a proper finish. This could be accomplished, he testified, for a fraction of the cost of a polymer finish. 6. Ms. Ross also presented evidence that Respondent wrote the contract between the parties giving a $2000 plant allowance but only put in plants in the amount of $971.90. (An independent calculation of the charges she submitted with her complaint shows the plant cost actually totals $942.42.) She argued that it was Respondent’s fraud or wrongdoing to charge her for the full plant allowance and refuse to provide it. She requests an additional $1028.10 from the fund for this. The Registrar of Contractors does not dispute this amount so long as it comports with the notes on the Treeland Nursery invoice relating to the plants, which would actually pay $1057.58. 7. Although it was initially questioned, the Registrar of Contractors did not object to payment for additional rock coverage since that was arguably included in the complaint as a failure to put in mounds where promised and failure to cover some drip lines. CONCLUSIONS OF LAW 1. The Registrar of Contractors is empowered to determine and award proper payment to Complainants from the Residential Contractors’ Recovery Fund for the purpose of remedying a violation by a contractor pursuant to A.R.S. § 32-1154(E). 2. In this case, Respondent violated A.R.S. §32-1154(A) by doing a wrongful or fraudulent act when he refused to supply all the plants allowed in the contract, and by failing or refusing to correct his work. It was later discovered that his poor workmanship caused drainage problems and flooding in the yard. His license has been revoked by the Registrar of Contractors on another matter. Therefore, the only issue at hearing is the amount that Complainants should be paid from the fund. 3. The burden of proof at an administrative hearing is generally upon the Complainant. Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). Further, the standard of proof at hearing is a “preponderance of the evidence”. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). 4. Since the weight of the evidence at hearing was that the Registrar of Contractors has taken the position in another complaint that Fernie’s Landscape did not illegally do work requiring a license, it would inappropriate to revisit the matter in this hearing and make a different determination Therefore, any of the items properly billed by Fernie’s Landscape may be reimbursed in this case. 5. The Registrar of Contractors has argued that damages arising from the drip system and its flooding are not properly payable because this was not on the original complaint or in the Corrective Work Order. The Registrar of Contractors, however, in a memorandum dated July 25, 2000, which was included in the file it sent to the Office of Administrative Hearings, acknowledged that when Ms. Ross asked why the sidewalk had not been included in its Recovery Fund decision, it entertained this issue by sending Mr. Bagley to do a second inspection. The letter noted that her request was still within the two year limit on Recovery Fund claims and that the Respondent’s license was already revoked. Since the Registrar of Contractors does apparently entertain additions to damage claims once the contractor is revoked and the addition is within the two year limit for filing a complaint, those damages may be considered to be part of the original claim, if proven. In filing a Recovery Fund claim under A.R.S. §32-1132(A), any person injured by an act of a residential contractor which is in violation of that chapter may recover their actual damages arising from that violation out of the Residential Contractors’ Recovery Fund. The filing of a complaint under A.R.S. §32-1155(A) is for the purpose of disciplining the contractor’s license; it is moot if the license is already revoked. Therefore, the only practical remedy for an injured party against a contractor with a revoked license is through the Recovery Fund. 6. Mr. Bagley also questioned at hearing whether drainage had been part of the original contract. Regardless of whether the contract provided for it, however, a landscaper does not meet minimum workmanship standards if he/she does landscaping that alters the established drainage pattern (or allows the equipment to damage the homeowners property). Minimum Workmanship Standards for Licensed Contractors, January 2000, page 23. The evidence at hearing established that the drainage problems, including the resultant sidewalk etching would not have occurred if the drip system and landscaping was installed properly. Therefore, I recommend that these items be reimbursed. If the Registrar of Contractors should find that repair of the leaking drip system is an item that falls outside of its warranty period of 90 days, this item was $15 and should be deducted from the award. 7. The damage from the faulty drip system and the poor drainage includes costs of repairing the drip system, digging a trench, laying a pipe for drainage and recovering it, and repairs to the etched and stained sidewalk. Invoices by Fernie’s Landscape for these items, excluding the sidewalk, total $405.00. Since the etching on the sidewalk would not have occurred as quickly if the area had not been flooded, the damage by the contractor was to make the sidewalk look older than it was. The lowest bid for sidewalk repair was $784, but all the bids were for a polymer coating. Although Ms. Ross has been told that recoating the sidewalk with cement will not repair the etching, this has not been proven in light of Mr. Bagley’s expert opinion that this would suffice. Presumably the etching would return if the area undergoes more flooding, but the evidence shows that this would happen with any cement. Also, it is reasonable to coat the whole sidewalk to avoid a patched look. Since there is no bid on this type of repair, I would still recommend some payment to Ms. Ross to aid in this repair. I find a reasonable sum for such repair would be $250.00. 8. Both parties agreed that the remainder of the Fernie’s Landscape invoices were payable if the Registrar of Contractors finds that Fernie’s Landscape was not improperly working without a license. These charges include changing a light fixture, staking some plants and installing some rock coverage as well as the materials associated with this. The remaining ostensibly agreed-upon charges for Fernie’s Landscape totaled $840.00. Madeline Ross’s invoice from Treeland Nursery shows that Master Curb Landscaping provided $942.42 worth of plants out of a $2000 plant allowance, and the remainder of $1057.58 is also properly payable. 9. The record supports an award to Complainants in the amount of $2552.58, all of which is appropriately chargeable against Respondent and/or persons on the license as set forth in A.R.S. § 32-1139(B). In light of the additional evidence presented at rehearing in this matter, I would amend my recommendation for pay-out in this case to comport with this amount. RECOMMENDED ORDER In view of the foregoing, it is recommended on the effective date of this Order the Registrar of Contractors shall commence and finalize payment procedures from the Contractors’ Recovery Fund to Complainants in the amount of $2552.58.

Done this day, February 5, 2001. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang 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