ALJDEC

01F-1803-ROC · Registrar of Contractors · 2001-08-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

/ / / / / / HEARING: August 8, 2001 APPEARANCES: Anne Montgomery (“Montgomery”) appeared on her own behalf. L and M Laminates and Marble, Inc. (“L&M”) appeared through its vice-president, Joseph Schott. Southwest Custom Remodeling, Inc. (“Southwest”) appeared through its president, Robbie Deskins. 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. The above referenced matters were consolidated for the purpose of hearing since they all involved the same issue and entailed the use of similar witnesses. At the outset of the scheduled hearing the parties stipulated to allowing case no. 01-1804, which was originally scheduled for hearing on October 10, 2001, to be accelerated for the purpose of consolidating all of these similar cases.

2. Southwest was retained by Montgomery to accomplish a specified shower related repair in her home. Southwest ultimately hired L&M to accomplish a specified repair for said project. Montgomery alleges certain deficiencies in the work performed by both contractors and Southwest alleges a deficiency in the work performed by L&M. All of these issues are discussed in the findings below.

3. Southwest’s president was involved in the shower repair project accomplished at Montgomery’s home. Notwithstanding the fact that the original contract was entered into prior to the issuance of Southwest’s B- license by the Registrar of Contractors, as authorized by A.R.S. § 32- 1154A (20) the conduct of such individual may provide a valid basis for disciplinary proceedings against Respondent, since any proven misconduct would reflect adversely upon the good character requirement for licensure and/or renewal, as set forth in A.R.S. § 32-1122 (D).

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

a. Due to the fact that Montgomery believed she had some type of plumbing leak in a specified shower, on or about September 19, 1999 she hired Southwest to accomplish the necessary remedial work. Although Southwest was not licensed at this time, the contract price was only for $617.45. b. On or about September 25, 1999 Southwest sent two men to accomplish the shower repair. It turned out that all Southwest had to do was to remove the shower doors, the cultured marble and then replace the water damaged existing drywall. There apparently was not any plumbing pipe leak involved in causing the damage to the drywall. c. Montgomery was unable to remain at home during the repair work and thus, she left a personal check for the contract sum of $617.45 with Southwest’s personnel. d. When Montgomery returned to the home, later that day, she observed that the cultured marble had been cracked and the shower head was broken. She immediately issued a stop-payment on the $617.45 check and called Southwest. Due to the stop-payment order, Southwest initially did not receive payment for this project. e. Based on the fact that Southwest’s employees had broken two pieces of the marble shower walls and had broken the shower head, Southwest fired these individuals. Although Southwest replaced the shower head, it no longer had any personnel capable of replacing the broken marble panels. Thus, it hired L&M to replace the marble. f. On or about September 28, 1999 Southwest ordered two cultured marble panels from L&M for a cost of $497.00. On or about October 8, 1999, Southwest also had to hire L&M to replace the newly installed green board, which had apparently also been damaged during the original remedial work. The cost for the green board part of the project was $200.00. It was undisputed that L&M has been paid in full, by Southwest, for the $697.00 and that it completed the installation of the replacement green board and the new cultured marble panels. This work was completed on or about October 12, 1999. g. Notwithstanding the fact that L&M completed the aforementioned work, it failed to reinstall the shower glass panels. Montgomery contacted Southwest regarding the failure to reinstall the glass panels and Southwest contacted L&M. h. Initially, L&M refused to install the glass panels, due to the fact that it is not in the business of installing shower glass. Moreover, at the instant hearing L&M testified that it is a very difficult to reinstall old shower glass and not something that it desires to perform. i. Although L&M advised Southwest that it does not install shower doors and it is not their responsibility to accomplish said task, after several hours of argument over the telephone, L&M relented and agreed to return to Montgomery’s home for the reinstallation of the shower glass panels. j. On or about October 20, 1999, L&M attempted to reinstall the shower glass and in the process broke one of the three panels. Montgomery contacted Southwest regarding this new problem. k. Although Southwest believed that it was L&M’s responsibility to replace the broken shower glass, L&M refused, stating that they had advised Southwest that shower glass installation was not their area of expertise and they gave no warranty in this regard. l. Notwithstanding the fact that L&M refused to pay for the broken shower glass, Southwest advised Montgomery that it would pay to correct the problem. Southwest offered to even install glass block if that is what Montgomery desired. m. Eventually, a glass company was sent out by Southwest and they advised Montgomery that due to the unique etched pattern on her shower, it would be difficult to match with a replacement section. However, the glass man advised that he could probably come up with a close match and the cost would be approximately $1,500.00. Montgomery contends that she got another estimate of approximately $1,850 to replace the entire shower glass enclosure. Montgomery failed to present into evidence any written estimates in this regard. n. When Montgomery received the information from the aforementioned glass company, Southwest advised her to go forward with the replacement. Montgomery claimed she did not go ahead with this procedure because the glass company would not allow her to come to their showroom to choose the replacement glass unless they received some type of advance payment. Southwest contends that such a business policy sounds quite strange. o. Ultimately Montgomery became very frustrated with the whole matter and was tired of being without her shower. Thus, she contacted another glass company and for the sum of $385.00 she received what she characterizes as a plain piece of etched shower glass. She advised Southwest of this replacement cost. Southwest testified that when this information was received, it agreed to pay Montgomery for the replacement glass if she would pay her bill for the shower repair. Southwest testified that Montgomery refused to pay anything due to her inconvenience. p. Nothing happened on this matter for a considerable period of time. Apparently both Montgomery and Southwest had “written this off” as a bad experience. For some unexplained reason in December 2000 (over one year after the project had been completed and Montgomery had paid for the replacement glass without any reimbursement from Southwest or L&M), someone from Southwest (not Southwest’s president) again presented Montgomery’s $617.45 check to their bank for payment. Since the “stop-payment” order had expired by this time, Southwest was paid. q. When Montgomery found out about the payment on the year old check, she was upset. She complained to her bank and filed the instant complaints against Southwest and L&M with the Registrar of Contractors. It is important to note, that Montgomery’s bank was ultimately able to have the payment made to Southwest returned to Montgomery. Thus, as of the time of the instant hearing Montgomery has not paid Southwest any money for the project and Southwest does not have the $617.45 payment for the project. r. After Montgomery filed the Registrar of Contractors’ complaint against it, Southwest filed the complaint against L&M.

5. It is determined and held that Southwest and L&M are jointly and severally liable for the broken shower glass panel. L&M is responsible since they were the subcontractor that was performing the construction work and broke the glass. Regardless of whether or not shower panel installations are part of their expertise, upon agreeing to perform said work, they accepted the responsibility for the proper performance of shower installation. Thus, they are estopped to now claim that shower door installations are not within their area of expertise. If they did not believe they could do the work, they should not have agreed to undertake the project.

6. The contractual obligations of Southwest the contractor retained by Complainant to repair her shower, are not discharged merely by making demands, albeit reasonable, upon or filing formal complaints against its subcontractors. Deficiencies, substandard workmanship, or damage caused to the owner’s home must be corrected, notwithstanding the unwillingness or inability of a subcontractor to replace any items that it broke during the course of the project. Montgomery contracted with Southwest, not its subcontractors, and thus the “buck stops” on Southwest’s desk. It is of no concern to Montgomery that Southwest is having problems forcing its subcontractor to pay for the broken shower panel.

7. Southwest attempted to replace the shower panel by tendering either a replacement, glass block, or a credit for the ultimate $385.00 replacement obtained by Montgomery. Southwest’s response to the problem is found to be more than reasonable under the circumstances. In light of the fact that Montgomery had not paid anything on the $617.85 contract cost, it was appropriate for Southwest to treat the $385.00 shower panel replacement as a credit from the contract billing and expect Montgomery to pay the balance of the $617.85 contract. The facts presented herein militate against any conclusion that Southwest violated the applicable charged sections of the State’s Contracting laws.

8. Based on the foregoing, it is determined and held that the failure of L&M to replace the shower glass panel constitutes not only substandard workmanship but also a wrongful act within the meaning of the applicable charged section of the State’s Contracting laws.

9. As set forth in the Citation and Complaint issued by the Registrar of Contractors, L&M was advised that in the event of a finding of a violation against Respondent, L&M’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 L&M and said notice revealed the absence of any prior disciplinary sanctions. Therefore, L&M’s prior record is properly deemed to be good 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. L&M violated the provisions of A.R.S. § 32-1154A (7), and (3); namely Rule R4-9-108. 2.The evidence of record did not sufficiently sustain a finding of violations by Southwest of the provisions of A.R.S. §32-1154A, as charged in the applicable Citation.

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 license of L&M shall be placed on a period of disciplinary probation for ninety (90) days. It is further recommended, in addition to the above-provided penalty, that as an express condition for the next renewal of L&M’s license, notwithstanding the existence or absence of any uniform assessment by the Registrar then in effect, L&M shall be required to pay an additional $125.00 into the Contractors’ Recovery Fund, as authorized by A.R.S. § 32- 1132B. Failure to pay such additional deposit into the fund shall result in the rejection of any renewal application and a suspension of L&M’s license until payment is made and the renewal issued. It is further recommended that the Citation issued against Southwest, together with the Complaint upon which it is based, be dismissed. Done this day, August 21, 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