ALJDEC

01F-2609-ROC · Registrar of Contractors · 2001-09-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 13, 2001. APPEARANCES: Everett “Don” and Sharon Savage, Complainants; Dan Pentico, Respondent’s representative; Don Pentico, Dave Pentico and Brian Ingersoll, witnesses. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________ Everett and Sharon Savage hired Mr. Rooter Plumbing of Phoenix to fix a leak under their floor slab. Mr. Rooter patched the leak when it should have been re-piped and refused to do warranty work when the pipe leaked again. Mr. Rooter’s invoice reflected greatly inflated charges for labor. The evidence established that Mr. Rooter violated A.R.S. § 32-1154(A), and the Registrar of Contractors should impose suitable discipline against its license. Therefore, it is recommended that the Registrar impose a 120-day probationary period and a condition upon the next two license renewals of a $150 payment to the Residential Contractor’s Recovery Fund per renewal. FINDINGS OF FACT 1. Complainants Everett and Sharon Savage hired Respondent, Mr. Rooter Plumbing of Phoenix, to fix a leak under their bathroom sink. In order to fix it, Mr. Rooter’s employees took out a bathroom vanity and opened the floor slab. They patched the leak rather than replacing and rerouting the pipe. After the repair was done, the pipe sprang another leak about one inch from the first. Mr. Rooter offered to repair the second leak at no charge under the condition that this would void the warranty. Mr. Rooter’s employees asked the Savages to sign an agreement to that effect but would not let them hold it to read it. The Savages refused to sign the agreement and the repair was not made. The Savages filed a complaint with the Registrar of Contractors on May 1, 2001. 2. The first major issue raised by the Savages was that the pipe should have been replaced rather than patched. Since their insurance company had agreed to cover a re-pipe but would not cover the second leak, Mr. Rooter’s failure to re-pipe cost them additional money when they had the area re-piped by another contractor. When he did, the old pipes fell apart. Mr. Rooter’s witnesses responded to this issue by stating that the employee doing the repair, who was not present at the hearing, said that the insurance company told him to repair the pipe. A witness for Mr. Rooter admitted, however, that it is not uncommon for a deteriorating pipe to have a second leak and it was “just a matter of time” before it leaked again. 3. The second issue raised by the Savages was the appropriateness of the charges submitted to them in Mr. Rooter’s invoice. It set forth the following charges: Electricity Locate $175 Jackhammer $175 Cement $ 18.75 Remove Lav & Vanity $175.96 men: 5 hrs each=10 hrs $730 Repair of leak $127.50 TOTAL $1,333.98 4. Mrs. Savage testified that Mr. Rooter employees had come to the house a few days earlier looking for the leak in the kitchen area, which was on the other side of the wall from the bathroom. They did some work on the pipes under the kitchen sink. When the leak continued, “Joseph”, a Mr. Rooter employee, told her that the cost of leak detection would be $125.00 added to the total bill and he would come fix it when they were ready to do the entire job. A few days later, two workers, Joseph and “Hugo”, came to the house together, but Joseph left about a half hour after arriving, having found the leak. Hugo stayed, took out the vanity and jack-hammered a hole in the cement until he exposed the leaking pipe. Then Joseph returned for about a half hour again and patched the leak, leaving Hugo to fill in the trench and cement the floor. Hugo worked from about 11:00 a.m. until 5:30 p.m. while Joseph was only there about one hour, a total of about 7 ½ man-hours. Further, the Respondent charged for removing the lavatory and vanity while charging for labor separately as well. The re- piping job only cost $425. 5. Dan Pentico testified that the invoices are filled out by Mr. Rooter’s employees under direction of the company. He stated that the electricity locate and jack-hammer charges reflect use of expensive equipment and are standard charges on top of labor. The cement charge was a small charge for materials. As to the numerous different charges for labor, he was not sure how their components broke down. He acknowledged that the removal of the lavatory and vanity as a separate charge may have been an error. He pointed out that the company was not paid in full. The Savages paid $627.50 up front. 6. Mrs. Savage testified that it seemed inappropriate to request that they sign a waiver of their warranty before the repairs would be made. She stated that her husband had opened the floor to see what the problem was and only wrapped a piece of hose around it to prevent further damage while they awaited the repairmen. They needed to use the bathroom because her young granddaughter was visiting them. It had taken several days before Mr. Rooter sent its employees back to the house. 7. Dan Pentico apparently directed some of the actions of the employees in this case. He testified that they were sent to repair the leak at no charge if it was in the same vicinity as the first leak. When the workers arrived at the Savage home, however, Mr. Savage had reopened the trench and there was a home-made sleeve over the leak. Since the homeowners had worked on top of Mr. Rooter’s work, he felt this voided their warranty. Nevertheless, he instructed the workers to write up an agreement stating that they would fix the leak as a one-time courtesy and would not further warrant the work. He also instructed them not to allow Mr. Savage to have the agreement because he had threatened to tear up any paperwork they gave him. The workers left without doing the repair because the Savages asked them to leave when the situation became hostile. Working with the Savages had been complicated due to Mr. Savage’s disruptive behavior. 8. Mrs. Savage also objected to a representation by Joseph that he had talked to the insurance company after the second leak. He told her they had assured him that a re-pipe would be covered. A witness from the insurance company testified that there was no record of Joseph’s call and that the company would not cover further repairs to the pipe because it appeared that the second leak was due to poor workmanship by the “original plumber”. He clarified that the original plumber he was referring to was Mr. Rooter in its first repair of this pipe. 9. Joseph was not present at the hearing, and Mr. Rooter did not offer any direct testimony regarding this issue. 10. According to the records of the Registrar of Contractors, the license in this matter has had one valid, resolved complaint and has been suspended once from October 28, 2000 to December 6, 2000 for lack of bond. The license was issued on June 13, 1996. CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§ 32-1104(A)(4), 32-1154(B) and 32-1156. 2. The Citation and Complaint issued by the Registrar of Contractors in this matter alleged potential violations of A.R.S. § 32-1154(A)(3) and (7) and A.A.C. R4-9-108. 3. The Arizona Revised Statutes at § 32-1154(A)(3) provides grounds for suspension or revocation of a contractor’s license for “[v]iolation of any rule adopted by the registrar”. The Registrar has adopted a rule requiring licensed contractors to conform to minimum workmanship standards. A.A.C. R4-9-108. 4. The Arizona Revised Statutes at § 32-1154(A)(7) provides for suspension or revocation of a contractor’s license for the “doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured”. 5. The Registrar of Contractors may consider the prior record of a contractor in any disciplinary proceeding provided the records are introduced into evidence. A.A.C. R4-9-117. On standing motion by the Registrar, the computer records of the Registrar’s office may properly be considered to be evidence in the event the Administrative Law Judge finds a violation of any of the statutory provisions cited in the Citation and Complaint. 6. In this case, the Complainants have established that the proper repair in this case of a deteriorating pipe was replacement or re-piping. A trained plumber who opens a floor slab and sees a deteriorated pipe has a duty to either re-pipe the area or warn the homeowners of the potential consequences if he doesn’t. Failure to re-pipe the area caused additional leaking, inconvenience and expense to the homeowners. 7. The weight of the evidence also established that the invoice in this matter charged for labor by the man-hour in addition to charging for labor by the project. Not only that, but the man-hours themselves were inflated. The $1,333.98 bill for the patch, when a $425 re-pipe was the proper fix, calls into question the true reason for Respondent’s choice of repairs and lends credence to Complainants’ allegations of fraud and wrongdoing. 8. The Complainants also established that the Respondent wrongfully refused to do warranty work when it insisted they sign a waiver prior to fixing the second leak. Complainants opened the trench above the work area and clamped a hose around the pipe. They did not actually change or affect the work done by Respondent. Their temporary repairs served to meet the immediate need of having a bathroom available to family and guests while the Respondent took several days to return to the home. This also lessened the possibility of further damage to the home. It did not void the Respondent’s warranty. Further, it is potentially harmful to homeowners for an employee to falsely represent that an insurance company agreed to certain work when he did not, in fact, speak to the company. 9. Respondent’s defense that Mr. Savage was disruptive to its employees did not justify an inappropriate repair, overcharging the homeowners or refusing to do warranty work. It may have justified refusing to hand Mr. Savage any paperwork, but, given the above conclusion that the proposed waiver was improper, no recommendation will be made as to that portion of the complaint. Respondent’s statement that Joseph said that the adjuster had told him to patch the pipe rather than replace it is not helpful either. Joseph’s statement is hearsay and contradicts Mrs. Savage’s direct testimony that the insurance company had said it would cover re-piping on the first leak. Given that she gave direct, consistent testimony under oath, her statements must be accorded more weight. Even if Joseph’s out-of-court statement could be taken as true, the homeowners were relying on the expertise of the plumbers they hired, not the insurance company. They were entitled to elect repairs for the leak based on proper advice from the Respondent. 10. Despite the fact that this complaint brought out several violations of the above statute, Respondent’s record with the Registrar of Contractors should be considered in establishing the appropriate penalty. Therefore, rather than imposing a suspension, it is recommended that the Registrar impose a 120-day probationary period along with a condition for the next two renewals of Respondent’s license in the form of payments to the Residential Contractor’s Recovery Fund in the amount of $150 each renewal. RECOMMENDED DECISION It is recommended that Respondent’s Class C-37R license shall be placed on disciplinary probation for a period of 120 days commencing on the effective date of the Order entered in this matter. It is further recommended, as an express condition for the next two (2) renewals of Respondent‘s license, notwithstanding the existence or absence of any uniform assessment by the Registrar of Contractors then in effect, Respondent shall be required to pay an additional $150.00 into the Contractors’ Recovery Fund, as authorized by A.R.S. §32-1132(B). Failure to pay such additional deposit into the fund shall result in the rejection of any renewal application and a suspension of Respondent’s license until payment is made and the renewal issued. Done this day, September 27, 2001. OFFICE OF ADMINISTRATIVE HEARINGS

____________________________________ Dorinda M. Lang Administrative Law Judge

Original transmitted by mail this 27th day of September, 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