ALJDEC

01F-2711-ROC · Registrar of Contractors · 2001-10-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 9, 2001. APPEARANCES: Complainants were represented by their attorney, Gregory Y. Harris, Esq. Complainant Ernest Harris and Frank Downs testified as witnesses. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT

1. Pursuant to the Notice of Hearing issued by the Registrar of Contractors, the parties were advised of the time, date and location of the instant hearing. 2. The Respondent, JDS Remodeling, Inc., is the holder of License No. 145237, a Class B-03 general residential remodeling and repair contractor license, issued by the Registrar of Contractors. 3. A review of the official records of the Registrar of Contractors reveals that Jimmy D. Stack is Respondent’s president and qualifying party. 4. Complainants are the owners of a residence located at 808 E. Corte Oro, Phoenix, Arizona. 5. Complainants decided to remodel their home. They were especially interested in adding improvements to assist them with their respective disabilities. 6. Complainants notice an advertisement in a newspaper from a contractor named “ADA Remodeling Inc.”. They associated the acronym “ADA” in the contractor’s name with the Americans with Disabilities Act. 7. In reliance upon the above-described newspaper ad, Complainants contacted the named contractor using the information furnished in the advertisement. 8. On or about February 21, 2000, Complainants received a proposal for the remodeling of their home as a result of their response to the ADA Remodeling, Inc., newspaper advertisement. 9. The proposal received by Complainants was on a letter head which reads: “JDS Remodeling, Inc., DBA: ADA Remodeling, Inc., 17819 N. 57th Ave., Phoenix, AZ 85308”. The submitted proposal was signed by Jimmy D. Stack, as president of ADA Remodeling, Inc. 10. The remodeling proposal divided the scope of work into seven phases. The phases of remodeling and corresponding scope of work listed[1] were:

PHASE I: $14,600.00

a) Demo bathroom ceiling. b) Remove bathroom vanity. c) Remove existing tub and fixtures. d) Demo wet bar. e) Demo hearth in living room. f) Remove all tile. g) Order cabinets. h) Order cultured marble for both bathrooms.

PHASE II: $4,535.00

a) Remove all popcorn ceilings. b) Install French door with sidelights white finish. c) Repair master bedroom atrium door to kitchen. d) Frame in new ceiling in bathroom. e) Install skylight in bathroom (20/40). f) Install skylight in laundry room (tubular). g) Run electric for bathroom. h) Frame-in bar area to accommodate buffet and hutch. i) Repair lower wall near wet bar. j) Install skylight in kitchen (tubular).

PHASE III: $5,351.00

a) Install new acrylic tub with cultured marble surround. b) Install new plumbing. c) Replace front window with dual pain, X/O with screen. d) Install all new door handles (lever action). e) Install all new decor style white switches and outlets. f) Seal and recaulk windows and doors. g) Remove and replace ceiling fans (master, dining and kitchen). h) Reframe ceiling to angle in kitchen and install cans and fan. i) Install dimmer controls for kitchen lights.

PHASE IV: $3,705.00

a) Run new electric for kitchen (3 locations). b) Install 3 cans in hallway, 3-4 in living room and 1 near hall bathroom. c) Replace exhaust/light fan in laundry, bathrooms new fan. d) Install waterproof lights over bath and shower (switched). e) Remove lower fixtures in entry and drywall. f) Install cans in living room.

PHASE V: $7,029.00

a) Remove kitchen cabinets and install in garage. b) Remove bathroom cabinet front bathroom. c) Re-plumb front shower bath. d) Install new hi-rise lav and Moen fixtures. e) Install new kitchen cabinets and bath vanity. f) Install pocket door off laundry room. g) Install sensor for lights in laundry room. h) Install screen “slider” at garage entry door. i) Install hardwood entry, dining room, kitchen and tile bath, laundry j) Install old kitchen cabinets in garage.[2]

PHASE VI: $7,029.00

a) Install vanity top (cultured marble) and fixtures. b) Install (cultured marble) walls around shower and fixtures. c) Install shower door (raindrop design). d) Install granite counter tops kitchen. e) Install stainless sink. f) Install ½ [h.p.] disposal with air switch. g) Install water filter under sink. h) Install appliances (owner to furnish material). i) Install kitchen faucet.

PHASE VII: $7,110.00

a) Demo back bathroom ceiling, vanity tub, wall. b) Insulate back wall and re-drywall. c) Frame in new ceiling and drywall. d) Install new tub (Kohler hi boy). e) Install new vanity. f) Install tile. g) Install waterproof light over shower (switched). h) Install combo light/heat over toilet area. i) Install all vanity lighting and 2 cans in bath hallway. j) Install skylight in tub area. k) Install 20/40 skylight in vanity area master bath. l) Install 2 full width mirrors. m) Install security grab bars as needed by owner. n) Install shower pan with seat, walls cultured marble. o) Install rain drop shower door. p) Install fixtures (Moen). q) Finish all electric as needed. r) Install new lav (high rise). s) New medicine cabinets both bathrooms and towel bars, rope hooks. t) Sand smooth window frames dining room, living room and master bedroom. u) Paint interior and garage (one color, Navajo white) v) Paint exterior doors to include front security door. w) Change out entry door (similar) and hardware. x) Change out garage entry door hardware all keyed alike.

11. The original total contract price for materials and labor was $50,000.00. 12. Complainants made the following payments by check directly to Jim Stack rather than in the name of Respondent at his request:

a) $21,000.00 on February 14, 2000 for the required down payment for the remodeling job. b) $473.57 on February 21, 2000. c) $5,000.00 on February 25, 2000. d) $5,000.00 on March 3, 2000. e) $3,000.00 on March 13, 2000 for remodeling extras. f) $1,878.00 on March 23, 2000. g) $3,000.00 on April 13, 2000. h) $5,000.00 on April 24, 2000. i) $6,000.00 on April 28, 2000. j) $814.00 on June 29, 2000.

Complainants have paid Jim Stack the total amount of $51,165.57. 13. Complainants also paid the following individual and suppliers for labor and materials found to be within the scope of Respondent’s responsibility:

a) $342.51 on July 5, 2000 to Frank Downs for labor. b) $484.58 on July 6, 2000 to Copper State Lighting for light fixtures. c) $2,000.00 on July 7, 2000 to Vagan Azatyan for advance on granite. d) $268.15 to Noral Enterprises for a corian sink. e) $75.00 to ABC Glass for a bathroom mirror. f) $40.85 to Sunnyslope Glass & Screen.

14. Complainants have spent a total amount in the sum of $54,376.66 on this remodeling project. 15. After the demolition of Complainants’ residence, Frank Downs saw an employment advertisement for ADA Remodeling, Inc. Mr. Downs associated that name with the Americans with Disability Act. Mr. Downs, who has years of construction experience and who is not a licensed contractor, had an interest in doing remodeling work for homeowners with disabilities. 16. Mr. Downs applied for the advertised construction position with ADA Remodeling Inc. He interviewed with Jim Stack, who stated that the company specialized in remodeling for the disabled consumer. Mr. Stack hired Mr. Downs to run Complainants’ remodeling project. 17. Mr. Stack’s planning for the project included giving Mr. Downs a list of phase work needed to be completed in order to receive additional funding to continue construction. However, the work assigned to Mr. Downs was not consistent with the scope of phase work required to be performed. Mr. Downs disagreed with Mr. Stack’s assessment to cut corners and to use lesser quality items. 18. There is credible evidence that Respondent historically and intentionally delayed construction without justification. Mr. Downs had regular problems getting paid by Respondent for his labor and reimbursement for required construction materials for the project. When Mr. Downs requested help on the project, Respondent sent laborers when skilled workers were needed. 19. As the progress of the project exceeded promised deadlines, the parties had a meeting concerning the level of completion for Mrs. Harris’ return home from her hospital stay. It was agreed that the Complainants would have at least a functional kitchen and a livable bathroom and bedroom. 20. There were numerous delays in construction due to Respondent’s deliberate failure to timely order and install materials. Examples include, but are not limited to, the delay in ordering the bath tub, cultured marble surround, cabinets, mirrors and hardwood flooring for a bathroom. 21. The relationship between the parties deteriorated. Mr. Stack wrote a letter date July 26, 2000 to the Complainants on the letterhead of ADA Remodeling Inc. outlining his version of the dispute and refusing to perform any additional work unless Respondent’s settlement offer was accepted by Complainants. The evidence of record does not support that version. 22. Respondent is found to have abandoned the subject project without legal justification. 23. Prior to Respondent’s abandonment, its president and qualifying party, Jim Stack, had a meeting with Mr. Downs at a Denny’s restaurant. During that meeting, Mr. Stacks admitted owing the Complainant’s approximately $5,000.00 on the project. 24. After the abandonment, Mr. Stack met Mr. Downs at a Home Depot store. Mr. Stack admitted to Mr. Downs that there had been problems on the job and that Respondent did not want to finish the Complainants’ job. 25. There is credible evidence of record to support a finding that Respondent is responsible for completing, or causing to be completed by properly licensed contractors, the following items[3] to minimum workmanship standards:

FRONT BATHROOM

a) Remove toilet, properly caulk it and re-install the toilet. b) Install baseboards with wood that was being replaced instead of paper mache/paper composition baseboards. c) Cultured marble counter top with sink fixture is too short length-wise or cabinets are too long. d) Faucets require adjustments. e) No metal waste was installed in sink. f) Light fixture cannot be installed since no power box was installed in wall prior to installing the mirror. The mirror will have to be removed and replace to accommodate remedying item c) above and the mirror should be detailed out along all sides. g) Two matching drawer pulls were never installed and are missing from jobsite. h) Incorrect pressure balancing valve installed for tub/shower. i) Extrusion to be properly installed/seated. j) Diverter for the handheld shower does not work. k) Jacuzzi/whirlpool tub does not work. Respondent has refused to provide Complainants with an instruction book and warranty for the tub. l) Toilet paper dispenser needs to be installed. m) Another security bar needs to be installed. n) Towel bars need to be inspected to assure proper installation since several have dislodged. o) Room and door need to be painted. p) Linen cabinet doors should be butted doors as specified.

FRONT BEDROOM

a) Adjust sliding closet doors and track. b) Repair air conditioning duct work into room. c) Locate and re-install all shelves, clothes bars, hardware, etc. in closet. d) Replace all light switches and electric outlets as required with new decor switches/outlets and cover plates in white. e) Replace cover plates for telephone jacks and cable outlets with new decor white cover plates. f) Paint air conditioning vent cover. g) Repaint entire bedroom and door including closet.

HALLWAY

a) Install new front door (fiberglass, insulated or solid maple, cherry or appropriate wood to match the existing front door with brass hinges) and dual paned sidelight. Install upgraded front door fixture in bronze (Baldwin) with dead bolt and door lock with trim plate from top to bottom as describe to Complainants by Mr. Stack keyed similar to the other door locks. b) Install wood flooring up to the new front door after that door has been installed. c) Locate and install new front door lighted bell button and chimes. d) Remove and replace the front screen door. Paint it black, including both removable screens and storm door inserts. Locate and install new screen door lock and dead bolt, which should all be keyed similar to all other doors. e) Adjust sliding closet doors and track. Locate all shelves and hardware, which should then be installed. f) Apply paint to the hallway and closet. The inside of the new front door to be painted/stained to match the natural maple of the floor. The outside of the new front door to be painted/stained to match the exterior trim color. g) Paint duct vent cover. h) Locate and re-install the smoke detector and fire alarm mechanism.

KITCHEN

a) Cabinet doors over refrigerator do not open completely. They are obstructed by the door hinges on the refrigerator The cabinet doors need to be removed and replaced with properly fitted doors. b) Upper and lower pantry doors should be removed and replaced with butted doors as specified. Glass inserts should be re- installed in both upper pantry doors. c) Shelves in pantry should be adjusted to avoid hitting hardware. d) Two matching draw pulls were never installed and are missing from the jobsite. e) Replacement of the electric box for the microwave that was broken during installation. f) Filler molding needs to be installed around the sides of the pantry. g) Install piece of matching trim to cover mounting screws under wire rack. h) Replace door molding trim for doorway into hall and doorway into laundry room to match new door molding on doorway in the dining room. i) Replace all light switches and electric outlets with new decor white switches, outlets and cover plates. j) Replace cover plates for telephone jacks and cable outlets with new decor white cover plates. k) Install maple wainscoting to match maple wood flooring in the kitchen dining area. l) Paint the kitchen, ceiling vents; stain all door moldings, Arcadia door and pocket door. m) Adjust/repair the pocket door located between the kitchen and the laundry room; provide and install new brass door pull and other necessary hardware for the pocket door. n) Adjust all cabinet doors, drawers and pullout shelve. Adjust and realign pullout trash can and door to the right of the sink. o) Adjust spraying portion of the kitchen faucet. p) Provide warranty information for the garbage disposal. q) Install finishing trim around all cabinets. r) Install wood flooring in kitchen, front hallway to hall bathroom, dining room and up to the living room. Wood is natural maple, Home Depot item #538-537. Install matching maple wood baseboard and matching wood quarter round around all wood flooring installation. Baseboard and ¼ round to be stained to match wood floors. Appropriate transition hardware to be installed. Floors to be floated on foam or installed on leveled concrete, all holes to be filled and then glued down. Carpet to wood floor joints to be finished to minimum workmanship standards. Installed flooring shall have appropriate finish applied. s) Seal and recaulk the sliding door out to the atrium.

DINING ROOM

a) Check and replace all appropriate light switches and electric outlets as required with new decor switches/outlets and cover plates in white. b) Make appropriate repairs to accommodate the buffet and hutch as specified. c) Adjust new hardware on both pocket doors leading out of kitchen. d) Install wooden flooring similar to the kitchen.

LIVING ROOM

a) Seal and recaulk the newly installed French door and sidelight unit going from the living room to the backyard. b) Seal and recaulk all living room windows. Sand smooth all window frames.

MIDDLE BEDROOM (STAMP ROOM)

a) Seal and recaulk the sliding door leading into the backyard. b) Adjust pocket doors so they function properly. Adjust door pulls so that they lock properly. c) Repaint the room and pockets doors. d) Replace the cover plates for the telephone jacks and cable outlets with the new decor white cover plates.

MASTER BEDROOM

a) Replace all light switches and electric outlets as required with the new decor switches/outlets and cover plates in white. b) Replace the cover plates for the telephone jacks and cable outlets with the new decor white cover plates. c) Repaint the entire bedroom and doors. d) Install the new “phone” door handles on the second bedroom door. e) Seal and recaulk sliding door leading to backyard. f) Adjust pocket door leading into master bedroom so that it functions properly. Adjust door pull and install an appropriate strike plate on the opposite doorjamb. g) Paint air conditioning vent. h) Sand smooth window frames.

MASTER BATHROOM

a) Remove the toilet, properly caulk it and reinstall the toilet. b) Remove and replace cultured marble countertop with sinks to fit the specified faucets requiring 8” centers rather than the installed unit with 4” centers. c) Light fixtures cannot be installed because no power boxes were installed in the walls prior to installing the mirrors. Mirrors will have to be removed, the power boxes installed and the mirrors reinstalled or replaced to complete the installation. d) Faucets require adjustments. e) The two skylights in the master bathroom, the skylight in the small bathroom and the one in the laundry room have leaked. Remedial repairs are required to assure that those units will not leak. f) Towel bars need to be inspected and repaired, if necessary to assure that they are secure. g) A correct pressure balancing valve needs to be installed. h) Toilet paper dispenser needs to be installed. i) Two additional security bars need to be installed. j) Cabinet doors under one sink should be butted doors as specified. k) Pocket door needs to be adjusted so that it opens and closes properly. The door pull must be adjusted so that the door can be locked. l) Door molding needs to be installed around the doorjamb on the lavatory side of the pocket door. m) Install finishing trim around the linen closet. Repair the shelves in the linen closet where nails are protruding. n) The sliding shower doors had been installed backwards and are lacking some hardware. Proper remedial action is required. o) GFI on back wall is inoperative. Proper remedial action is required. p) Master bathroom, both pocket doors and the closet must be painted.

LAUNDRY ROOM

a) Patch the holes in the wall behind the washer and dryer. b) Install the finishing trim around all cabinets and under the cabinets. c) Locate and install the new door lock and dead bolts which are to be keyed alike. d) Paint the walls, rear door, pullout door, doorjambs and folding shelf over the washer and dryer. e) Seal and recaulk the door leading out into the garage.

GARAGE

a) Remove the popcorn ceiling. b) Paint all walls and the ceiling, including the wall over the newly installed closets. Also paint the existing closet, closet door and door leading out from the laundry room. c) Locate and install the new door lock on the closet door, which is to be keyed similar to the other doors. d) Apply two coats of paint to the floor with a color selected by the Complainants.

MISCELLANEOUS

a) Rebalance all fans. b) Install baseboards with wood similar to that being replaced instead of paper mache/paper composition baseboards. c) Replace the cover of the Complainants’ spa which was damaged by Respondent’s workers. d) Obtain replacement sensors and new control box from ADT Security Systems to re-establish home security system and to reinitiate home security monitoring. e) Locate the vertical blinds, shades and mounting brackets left in the possession of the Respondent and install those items in the appropriate windows. f) Repair Complainants’ broken furniture damaged by Respondent’s workers.

26. Respondent failed to obtain the required building permit for the electrical work performed on the project. Respondent is responsible for pulling the required permit and causing all electrical work to be performed by a properly licensed electrical subcontractor. 27. Respondent’s failure to complete the above-described scope of work on this project, its false and misleading advertising in a name other than the one appearing on its license and its disregard of local building codes requiring a permit for the project’s electrical work are deemed to be wrongful acts which have substantially injured Complainants. 28. Based upon a standing Order issued by the Registrar of Contractors, the license history of a contractor found to have violated the provisions of A.R.S. § 32-1154(A) can be reviewed and consider when contemplating disciplinary penalties. The official records of the Registrar reflect numerous complaints against Respondent and the following discipline having been previously imposed against it:

a) suspension from October 12, 2000 to December 8, 2000 for lack of bond. b) suspension from March 30, 2001 to April 4, 2001. c) probation from April 5, 2001 to August 3, 2001. d) suspension from June 1, 2001 to July 3, 2001 for failure to renew the license.

Respondent’s licensing history should be considered a matter in aggravation when considering the imposition of disciplinary penalties against the Respondent.

CONCLUSIONS OF LAW

1. Respondent had adequate and proper notice of the time, date and location of the instant hearing. 2. The evidence of record is adequate to establish that the Respondent has violated the provisions of A.R.S. § 32-1154(A)(1), (2), (7) and (3); namely R4-9-108. … … …

RECOMMENDED ORDER

In view of the foregoing, it is recommended that Respondent’s Class B- license be revoked on the effective date of the entered Order in this matter. It is further recommended that if Respondent accomplishes the items of corrective work set forth in Findings of Fact Nos. 25 and 26 above on or before the effective date of the entered Order in this matter, then the above-provided license revocation shall not take place, but instead that Respondent’s Class B-03 license shall be suspended for a period of 10 days followed immediately by a period of disciplinary probation for 120 days. This alternative penalty shall commence, if at all, on the effective date of the entered Order in this matter. It is further recommended, if the alternative penalty is applicable and in addition to the above-provided alternative disciplinary penalties, that any continuation or restoration of Respondent’s rights to resume contracting, whether or nor probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of 24 months, including future renewal periods, in the amount of $4,000.00, 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(C). Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above-provided 24 month period and only if no claims are then pending.

Done this day, October 25, 2001

______________________________________ Brian Brendan Tully Administrative Law Judge

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

Registrar of Contractors Michael P. Goldwater, Director ATTN: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

----------------------- [1] See Exhibit 2. [2] Appears to be redundant with item a) scope of work. [3] Exhibit 6.

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826