ALJDEC

01F-2741-ROC · Registrar of Contractors · 2002-02-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 22, 2002 at 9:00 a.m. APPEARANCES: Complainants Janice L. Cook and Geoffrey H. Cook, MD[1] appeared through Joshua Grabel, Esq., Lewis and Roca, LLP; Respondent H and D Services, Inc. appeared through Rex A. Christiansen, Esq. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

The parties presented evidence on whether Respondent violated A.R.S. § 32-1154(A)(2), (7), (17), (23), or (3) in the remodeling and repairs it made to Complainants’ property and, if so, the appropriate remedy. Based the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order to the Registrar of Contractors. FINDINGS OF FACT Background and Contract On May 11, 1998, the Registrar issued License No. 134687, Class C-61, to Respondent H and D Services Inc., a corporation. This license qualified Respondent to perform limited remodeling and repair, “not to exceed $25,000 per project per dwelling. Work on electrical, plumbing, air conditioning systems, or boilers that require a building permit must be subcontracted to any appropriately licensed contractor.” In 1997, Complainant Geoffrey H. Cook, MD inherited his mother’s house in Phoenix. The house has approximately 1200 square feet, with three bedrooms and two bathrooms. Dr. Cook’s parents had purchased the house new in 1955 and he had grown up there. Before Dr. Cook inherited the house, only the back bathroom had been substantially remodeled and the kitchen had been upgraded to some extent. Dr. Cook and his wife, Janice L. Cook, decided to remodel the house to be a suitable residence for their daughter, who was moving to the Phoenix area to go to school. Neither Dr. nor Mrs. Cook have any experience in construction or contracting. In 1999, Dr. Cook interviewed several contractors who advertised in the newspaper, including H and D Services, Inc. According to Dr. Cook, H and D Services, Inc.’s qualifying party, Doyle Davis, was “eager, earnest, and licensed.” Based on this favorable impression, Complainants hired Respondent to perform the remodeling. Respondent’s scope of the remodeling at first was limited to modifying a block wall in the back yard, installing an exterior gate, interior and exterior painting, drywall repair, and some basic electrical and plumbing upgrades. Respondent’s crews performed all this work for an initial cost of approximately $16,000.00. Complainants supplied most of the new fixtures and other materials that Respondent used in the remodeling, which they purchased from Home Depot. Complainants also contracted directly with Home Depot for some of the remodeling, including removal and replacement of kitchen cabinets. Complainants paid Home Depot approximately $20,000.00 for fixtures, materials, and labor. The parties’ contract was formed over time and was never memorialized in a single, integrated writing. As Complainants requested that additional work be done, Respondent prepared written estimates. None of the estimates were offered into evidence. The estimates did not correspond to invoices that Respondent prepared and submitted to Complainant Mrs. Cook when he requested payment. Complainants had admitted into evidence twelve invoices, issued to Mrs. Cook, dated between April 28, 1999 and August 8, 1999, totaling $40,474.89.

Complainants also testified and had admitted into evidence documents showing that, between April 17, 1999 and August 10, 1999, they paid Respondent $40,152.67. The payments do not correspond exactly to the invoices. Including the payments to Home Depot for materials and installation of the kitchen cabinets and the payments to Respondent, Complainants eventually paid a total of approximately $60,000.00 for the remodeling. The invoices in part describe the following work: 11a. Invoice # 72040, dated April 29, 1999: *General electrical application for matching all switch plates and outlet plates with all face plates. Beige color 208.00

*Plank flooring installation price, including removal and reinstallation of standard moulding [sic] for the living room, hallway, (3) bedrooms 2,351.70 ***Home owner to purchase all flooring materials of their choice ***The cost for Parquet flooring installation would be $2613.00 for the same area

(see changes for Kitchen, (2) baths)

11b. Invoice # 72041, dated May 10, 1999: *Relocate supply and drain lines for kitchen sink 98.56 . . . .

*Plank flooring addition for kitchen and (2) baths 555.61 . . . .

*R/R cabinet in master bathroom w/ a new one - Home Depot will install new vanity and countertop w/ basin, homeowner will purchase new fixtures, H & D contractors will supply all other materials. 63.36

11c. Invoice # 72047, dated May 23, 1999: *General electrical application for matching all switch plates, and outlet plates with all face plates. Beige color! 49.50

*Plank flooring installation price, including removal and reinstallation of standard moulding [sic] for the living room, hallway, (3) bedrooms 559.62 ***Home owner to purchase all flooring materials of their choice.

11d. Invoice # 72048, dated June 1, 1999: *R/R kitchen window - size 38”x60” or to spec size for cabinet installation on inside of house southwest corner window 113.24 ***(NOTE: THIS PRICE IS ONLY FOR LABOR AND OTHER MATERIALS AND NOT FOR WINDOW COST) Owner has to select style of window . . . .

*Relocate supply and drain lines for kitchen sink 83.44 . . . .

Plank flooring addition for kitchen and (2) baths 470.39

11e. Invoice # 72049, dated June 1, 1999: *Rewire home including all changes made in the kitchen area, and all connections to the breaker box 1,945.66

11f. Invoice # 72051, dated June 25, 1999: *MAIN BATHROOM REMODEL JOB (ADD-ON ITEMS) . . . .

**DISCONNECT SUPPLY AND DRAIN LINES OF VANITY AND REMOVE VANITY **RELOCATE SUPPLY AND DRAIN LINES OF VANITY APPROXIMATELY (30”) TO THE LEFT OF ITS PRESENT LOCATION, (HOME OWNER HAS TO PURCHASE FIXTURE TO SETUP PLACEMENT OF SUPPLY LINES) **remove toilet (no charge) **disconnect supply and drain lines to the bathtub and remove the tub . . . .

**the shower/tub reinstall price will be based on relocating the supply and drain lines of the new shower in the same approximate location as the old, with very little or no alterations. If major alteration should occur, the price given for this item (only) will no longer be valid. A new price will be obtained to reflect the work involved for the retrofit. . . . .

**Install heatlamp, fan and ventilation duct **Install new circuitry for whirlpool tub . . . .

**install toilet after flooring is in (no charge) THE OWNERS WILL CHOOSE, SELECT, AND OR PURCHASE, MEDICINE CABINET, VANITY, COUNTERTOP, FIXTURES, TOILET, BATHTUB, WALL TO WALL MIRROR (TO BE INSTALLED BY MIRROR AND GLASS COMPANY), CULTURED MARBLE, LOUVER DOOR (Home Depot will install the vanity/cabinet, cultured marble countertop w/sink, and the cultured marble shower wall) . . . .

*Supply line for the refrigerator . . . .

*Reinstall the kitchen supply lines for the sink, garbage disposal, drainline, dishwasher lines, and install microwave, this includes materials needed to conclude job . . . .

*Do [sic] to the design of the new vanity in the master bathroom, the plumbing has to be moved to accommodate the drawers. Unlike the kitchen, and main bathrom where moving the plumbing was part of the plan, this relocation job has to be priced out. . . . .

TOTAL $5,351.26

11g. Invoice # 72065, dated June 25, 1999: *Plank flooring addition for kitchen and (2) baths 555.61

11h. Invoice # 72067, dated August 8, 1999: *Installation of Saint Augustine grass plugs 1,600.00

11i. Invoice # 72068, dated August 8, 1999: *Labor cost for all the added work of the electrician and rework from earlier opening and closing of walls and rewiring 194.89 *PLEASE NOTE THAT THIS IS AN ADD-ON WHICH I OVER LOOKED YESTERDAY WHEN I FOREWARDED [sic] THE OTHER INFORMATION TO YOU! ADDITIONAL SPRINKLERS ADDED TO THE EASTSIDE OF THE DRIVEWAY, THESE WILL ALSO RUN UNDER THE DRIVEWAY

11j. Invoice # 72041, dated May 10, 1999: *Install sprinkler at north-east area of home. This area was not included in the original bid 95.00 . . . .

*Repair leak at rear hosebib, open up wall inside of the house to let dry out and apply mildewside to kill odor 140.00 . . . .

*Locate and seal leaking gas valve at hot water tank. This leak had to be traced since it was not part of the remodel work. It was a preexisting leak. 113.00

The invoices do not mention initial installation of an irrigation or sprinkler system, leveling the yard (although removal of several trees or bushes are mentioned), installation of any 3-way dimmer switches in the dining room, installation of cable wiring, installation of telephone line wiring, installation of television antenna wiring, replumbing, or installing a new water line to the water main. The invoices do not explain and no explanation was given at the hearing regarding the apparent duplication of work for which Respondent charged and Complainants mostly paid. Respondent’s qualifying party testified that the estimates included and Respondent performed work not listed on the invoices, for which Respondent was owed $2,200.00. By early August 1999, the parties’ relationship had deteriorated. Respondent’s qualifying party Mr. Davis testified that it refused to perform additional work after Complainants refused to pay for the St. Augustine grass plugs. Mr. Davis testified that he had recommended sod and told Mrs. Cook and it was not the season to plant plugs. Complainant Dr. Cook testified that he and his wife stopped paying Respondent because many problems began appearing in the work it had done. The Complaint to the Registrar On May 21, 2001, Complainants made a complaint to the Registrar against Respondent’s contractor’s license. Complainants attached to their complaint a typewritten list of alleged deficiencies, as follows: 15. The wood floor has stress cracks and is warping. Since the contractor would not come out and address this problem, I have other contractors look at the floor. I have been told that the floor was not installed properly.

16. Sprinkler system is not working properly. It does not water all areas of the lawn, so there are patches that have to be hand watered.

17. The front and back yards are uneven and have numerous pot holes.

18. The electrical switches are not working properly. The dimmer switches do not go on and off the way they are suppose to. There are electrical switches and outlets that do not work.

19. There are phone outlets that do not work. The phone line itself has static. The phone company has been out several times to try to fix the problem but has informed me that the problem is in the inside wiring. The contractor used cheap wiring. (I have a written statement from the phone company).

20. I also had the same problem with the cable company. The television does not receive a clear quality picture. The cable company feels that it is the cheap cable used inside the house.

21. The contractor was suppose to improve water pressure inside the house by udating [sic] plumbing. The water pressure has not improved and a recent leak resulted in a plumber opening up a wall to fix the leak, which showed no plumbing improvements whatsoever.

22. The fan installed in bathroom has no external venting outlet. The contractor assured me that this was fine, however the humdity [sic] is trapped in the roof.

23. A window was revised in the kitchen and the brick work was not done in an interlocking pattern, therefore it does not match the rest of the house.

24. A portion of the driveway was removed to install drip system and when it was repaired it was done with poor workmanship.

25. A glass window which the contractor broke was replaced with plastic instead of glass. I discovered this when washing windows. 26. He was paid to install television antenna wiring throughout the house but never did so.

27. Because he did not finish the walls as close to the floor as he should have we were required to purchase additional materials to cover this up which was an additional expense of over $1,000.00. Now in order to replace the wood floor which is coming up everywhere, we will have to have the walls redone again.

28. The contractor put up a wall to enclose the back yard. The opening for the gate was not wide enough for a standard gate, but he installed the gate anyway and then the bar which the gate latches to could not be installed.

The Registrar’s Inspector Warren Duncan performed a jobsite inspection and, on June 6, 2001, Inspector Duncan directed Respondent within fifteen days to do the following: 16. Laminated floor damaged in numerous areas: Living room, kitchen, bathroom, and back room. • Contractor to correct by appropriate means.

2. Irrigation system layout does not give full coverage in rear yard. • Contractor to correct by appropriate means.

3. Lawn is uneven with numerous potholes. • Contractor to correct by appropriate means.

4A.3-Way dimmer light switch in dining room does not operate properly. • Contractor to correct using properly licensed contractor.

4B.Switched outlet(s) not wired properly in living room. • Contractor to correct using properly licensed contractor.

4C.Burn damage to kitchen counter backsplash caused by improperly installed light. • Contractor to correct by appropriate means.

5. Deficient phone line wiring. • Contractor to correct by appropriate means.

6A.Deficient cable wiring effecting [sic] T.V. reception. Evidenced by testing done by Cox Cable. • Contractor to correct by appropriate means.

6B.Cable outlet trims hanging out of wall in living room and back bedroom. • Contractor to correct by appropriate means.

7. Contractors work failed to increase water pressure inside house. • Inspector was not able to determine contractor responsibility. Inspector could not determine if pressure had changed as result of contractors work. No action required by contractor.

8. Exhaust fan in bathroom not installed to code. Uniform building and uniform mechanical codes require exhaust to be vented to outside of building and shall be equipped with back draft damper. • Contractor to correct by appropriate means.

9. Brickwork at kitchen window does not follow interlocking pattern as throughout house. • Contractor to correct by appropriate means.

10.Poor trowel finish of concrete at end of driveway. • Contractor to correct by appropriate means.

11.Contractor replaced broken glass with plastic in trapezoid window in dining room. • Contractor to correct by appropriate means.

12.T.V. antenna wiring not installed. • Contractor to correct by appropriate means.

13.Texture of walls not applied low enough. • Contractor work followed common industry standards. No action required by contractor.

14.Installation of rear gate latch does not allow gate to be opened from outside. • Contractor to correct by appropriate means.

On June 18, 2001, the Registrar received Respondent’s qualifying party Mr. Davis’ request for hearing “to dispute parts of the list, which I feel are only opinions of others, and to consult legal guidance . . . .” On August 8, 2001, the Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(2), (7), (17), (23), and (3). Respondent timely answered the Citation and Complaint. The Registrar referred the matter to the Office of Administrative Hearings and scheduled a hearing in due course. After the hearing was continued once at Complainants’ request, a hearing was held on January 22, 2002, at which Respondent’s qualifying party Mr. Davis, Complainants Dr. and Mrs. Cook, and Inspector Duncan testified. Complainants offered into evidence seven exhibits. At the beginning of the hearing, Respondent stipulated that its workmanship was deficient and it had not complied with Inspector Duncan’s directive with respect to Item Nos. 2 (the irrigation system in the rear yard), 3 (the uneven lawn), 4A (3-way dimmer switch in the dining room), 4B (switched outlets in living room), 4C (burn damage to kitchen backsplash), 6B (cable outlet trims in living room and back bedroom), 8 (exhaust fan in bathroom), 9 (brickwork at kitchen window), 10 (poor trowel finish of concrete at end of driveway), 11 (plastic in trapezoid window in dining room), and 14 (installation of rear gate latch). Complainants moved to amend their complaint to include that Respondent’s plumbing work was deficient. The Administrative Law Judge denied the motion because Respondent had not received notice of this item of complaint, Inspector Duncan had not had an opportunity to inspect plumbing, and Respondent had not had an opportunity to correct it. Complainants were allowed to present evidence of leaks in plumbing that Respondent had performed to support their theory that it was responsible for the poor appearance of the laminated wood flooring. Evidence Presented at Hearing with Respect to Items Remaining at Issue The Laminated Wood Floor (Item No. 1) Complainants testified that they picked out and arranged for delivery of a laminated wood floor from Home Depot. They considered also hiring Home Depot to install the floor, but Respondent’s qualifying party assured them that his crew could perform the installation. Respondent provided some supplies for installation of the floor, including a vapor barrier. Respondent’s qualifying party recommended that the floor be installed as a “floating floor,” which would not be glued or nailed down. Complainant Dr. Cook testified that he did not believe Respondent properly installed the floor. According to Dr. Cook, Mr. Davis was not present when his crew installed the floor. The crew read the installation instructions, which said that there should be no more than ¼” variance over 6’ in the level of the floor, and put a long straight-edge on the floor, which showed a greater variance. Nonetheless, the crew did not grind the floor down, but proceeded to install the floor. Dr. Cook testified that he did not call Mr. Davis because he thought that the crew must have known what it was doing, since Mr. Davis trusted them to install the floor without him being present. The parties agreed that the appearance of the laminated wood floor was poor and showed evidence of water damage, which was apparent in photographs that Complainants had admitted into evidence. The photographs showed that the floor had started to delaminate in several areas. Inspector Duncan testified that the floor was severely buckled at the first jobsite inspection. The worst areas were in the kitchen and in the hallway between the back bedroom and bathroom. Inspector Duncan testified that the floor looked worse at the prehearing inspection than it had looked at his first inspection. Inspector Duncan testified that, at the jobsite inspection, Mr. Davis had admitted that Respondent was responsible for the water damage because it had installed plumbing under the kitchen sink that leaked. In Inspector Davis’ opinion, water had traveled through the subfloor to the back bedroom. Inspector Duncan testified that water damage was apparent in places in the living room and hallway that would not seem to have been caused by a leaking kitchen sink. Inspector Duncan believes that this water damage was caused by something other than the leaking kitchen sink. Soon after the floor was installed, Complainants noticed a little water damage. Because their daughter had by that time moved into the house, they initially blamed her and accused her of being careless. As the appearance of the floor worsened, Complainants began to suspect a leak. They called Respondent, but it did not respond. Respondent’s qualifying party Mr. Davis testified that it did not replumb the house. After the remodeling work at issue, at least some of the plumbing that had originally been installed in 1955 remained, which could have caused water damage. Mr. Davis testified that Respondent did perform some plumbing, which eventually included removal and replacement of a sink, shower, showerhead in the main bath, toilets in both bathrooms, moving the kitchen sink, and installation of a whirlpool in the main bath and expansion of the main water line to the house. Complainants had admitted into evidence an invoice dated November 1, 2000 from Sunset Tile & Bath, Inc. for $283.16, for “Plumbing Labor Repair to shower/tub leak,” “Check for leak at kitchen & repair at hall bath toilet,” and “Repair to drywall at closet.” Respondent did not obtain the Sunset Tile & Bath, Inc. invoice until shortly before the hearing. Respondent dropped its insurance shortly after the end of this job because it was experiencing financial difficulties. When Mr. Davis first heard about water damage to the floor, he contacted Respondent’s former insurance company to see if there might be coverage for damage to the floor. The insurance company said they needed the invoice to make a time line, but Complainants refused to provide the invoice. Complainant Mrs. Cook testified that she was present when Sunset Tile & Bath performed the repairs. According to Mrs. Cook, the plumber cut two holes in the wall in the bathroom’s shower, and showed her that Respondent had not used any plumber’s tape when he installed the showerhead, which caused it to leak inside the wall. Mrs. Cook also testified that he plumber also showed her that Respondent had failed to proper clamp on a joint under the kitchen sink, which resulted in a leak. Although the plumber clamped the joint, he did not separately charge for the repair because the labor involved was so minimal. Respondent’s qualifying party Mr. Davis testified that permits were obtained for the electrical at the main box and expanding the water line to house. The walls remained open so that the City could inspect under pressure all the plumbing work that Respondent had performed. All of the plumbing work passed inspection. Complainants had admitted into evidence Home Depot’s January 5, 2001 estimate, totaling $11,167.75, for labor and materials to replace the floor. Dr. Cook testified that Home Depot told him that, because the floor was installed as a floating floor, rather than nailed or glued down, it could not be repaired but would have to be completely replaced. Deficient Phone Wiring (Item No. 5) Complainant Dr. Cook testified that he wanted two telephone lines, with outlets, in every room, which could be used to link a computer to the internet. Respondent’s qualifying party Mr. Davis testified that he purchased the telephone line he installed in Complainants’ house at Home Depot. The quality of the telephone line therefore was comparable in the quality of the materials that Complainants purchased themselves at Home Depot to be used in remodeling. Complainant Dr. Cook testified that, when his daughter moved into the house, she could not connect to the internet. Complainants changed internet providers several times, but they still could not connect to the internet using the telephone lines. In addition, Dr. Cook testified that the telephone lines do not provide clear reception. There is excess static. Complainants testified that they eventually contacted Qwest, who told them that the telephone lines were too poor quality to be used to connect to the internet. Complainants eventually paid Qwest approximately $500.00 to install two dedicated lines to two areas of the house. The internet can only be accessed from these two locations. Inspector Duncan testified that the telephone jack did not work in the back bedroom. All of the other jacks he tested seemed to work. Inspector Duncan could not render an opinion on whether the phone line throughout the house was adequate or suitable for a computer to connect to the internet. Inspector Duncan required Respondent to correct the phone line because he spoke to someone at Qwest, who told him that the telephone wiring was not adequate throughout the home. No one from Qwest testified at the hearing. Deficient Cable Wiring (Item No. 6A) Complainants at the first jobsite inspection had given Inspector Duncan and at the hearing had admitted into evidence a note from one Todd Hennelly on a Cox Communications work order form that, “Upon cable installation, the cable wire was found to be unable to hold the digital signal, and also the analog works bearly [sic]. It has ghosting on Channel 10.” Respondent’s qualifying party Mr. Davis testified that he also purchased the cable he installed in Complainants’ house at Home Depot. Inspector Duncan testified that, at his jobsite inspection, the quality of the picture on the television seemed fine. Inspector Duncan made the decision to cite Respondent for the wiring based on the note from Cox Communications. No one from Cox Communications testified at the hearing. Failure to Install Television Antenna Wiring (Item No. 12) Inspector Duncan testified that, at the first jobsite inspection, Respondent’s qualifying party had not corrected Complainants’ statement that it had contracted to install television antenna wiring. Inspector Duncan therefore cited Respondent for the failure. Inspector Duncan admitted at the hearing that Respondent’s qualifying party Mr. Davis had told him at the first jobsite inspection that he did not put jacks for television antenna wiring in any of the rooms. Respondent’s qualifying party at the hearing denied ever having contracted to install television antenna wiring. Complainants could not find any charge for installation of television antenna wiring on the invoices they offered into evidence. They admitted that they had not paid anything for television antenna wiring. Mitigation and Relief Sought The Citation and Complaint advised Respondent that, if it were found in violation of any contracting law, its prior disciplinary record of final Registrar of Contractors’ orders could be considered in mitigation or aggravation. Notice is taken of the Registrar’s records, which reveal that, if the Registrar accepts this recommended decision, it will be the first final order against Respondent on the current record. Respondent’s good record therefore is considered as a factor in mitigation of the recommended penalty. Respondent’s qualifying party Mr. Davis testified that it is not presently contracting. Mr. Davis believes that the relationship between the parties has deteriorated to the extent that he no longer could work with Complainants to perform any corrective work, even the work he admitted was warranted. He requested that Respondent be given an opportunity to hire another appropriately licensed contractor to perform any corrective work that the Registrar may order. Respondent’s qualifying party admitted that it had done nothing to comply with Inspector Duncan’s directive. Although it had sent out a general contractor to estimate the cost of repairs after the corrective work order issued, the general contractor had not performed any repairs because he did not want to become involved in the parties’ dispute. Complainants testified that they did not believe that Respondent could arrange for corrective work to be performed. They requested that the contract be rescinded and that Respondent be ordered to return the full $40,152.67 that Complainants have paid Respondent to date. CONCLUSIONS OF LAW Complainants bear the burden of proof and must establish statutory violations by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] A preponderance of the evidence is “evidence which is of greater weight or more convincing than evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.”[4] The parties’ stipulation, described at Finding of Fact No. 19, establishes that Respondent violated A.R.S. § 32-1154(A)(7),[5] (23),[6] and (3)[7] with respect to Item Nos. 2, 3, 4A, 4B, 4C, 6B, 8, 9, 10, 11, and 14 of Inspector Duncan’s June 6, 2001 Corrective Work Order. Complainants have established that Respondent violated A.R.S. § 32- 1154(A)(17)[8] in the value of work eventually performed on this project and in replacement of the line to the water main, which Respondent admitted it performed and which required a permit.[9] Telephone Lines, Television Cable, and Television Antenna Respondent was required to reduce the parties’ agreement to writing.[10] No integrated contract exists that unequivocally describes Respondent’s scope of work or Complainants’ intended purpose in having upgrades made. But Respondent’s failure to reduce the contract to writing does not establish a violation of A.R.S. § 32-1154(A) or entitle Complainants to relief on their complaints.[11] The Cox Communications’ employee’s note and the Qwest’s employee’s alleged statements that, respectively, the cable and phone lines that Respondent installed in the house were of poor quality is hearsay.[12] Although hearsay may be admitted in an administrative hearing,[13] it should not be relied upon if it is unreliable or not the kind of evidence that reasonable persons would rely upon in serious matters.[14] Because Cox and Qwest provide the signals, both have a motive to blame Respondent’s materials if there is a problem in the signal. This is not the kind of evidence that reasonable persons would rely upon to find a statutory violation. The evidence otherwise shows no deficiency in telephone, as opposed to computer, access, except in the back bedroom. The evidence otherwise shows no deficiency in cable reception. Inspector Duncan’s testimony that Mr. Davis did not deny that Respondent had contracted to install television antenna wire at the prehearing inspection, although technically not hearsay, it is not unequivocal evidence of a statutory violation.[15] Its evidentiary weight is lessened by Inspector Duncan’s testimony that Mr. Davis did say that Respondent did not install antenna jacks and Complainants’ admission at the hearing that they did not pay for the installation of antenna wire, contrary to their complaint allegation.[16] With respect to the installation of telephone lines and television cable, therefore, Complainants have established no statutory violation except for a violation of A.R.S. § 32-1154(A)(7) and (3) with respect to the telephone jack in the back bedroom that Inspector Duncan testified did not work. Complainants have not established any statutory violation in Respondent’s failure to install television antenna wire. The Laminated Wood Floor In their May 21, 2001 complaint to the Registrar, Complainant alleged that “a recent leak resulted in a plumber opening up a wall to fix the leak, which showed no plumbing improvements whatsoever.”[17] Complainants at the hearing alleged that, on November 1, 2000, Sunset Tile & Bath, Inc. opened up the wall in the bathroom and found that improvements that Respondent had performed were defective, which resulted in leaks that damaged the laminated wood floor. The record does not show whether Sunset Tile & Bath, Inc. was the contractor to whom the complaint referred or whether Complainants have experienced other leaks with existing plumbing in their house. Nonetheless, Complainants did establish at the hearing that it is more likely than not that the poor appearance of the floor is due to leaks in plumbing that Respondent had performed. Appropriate Penalty Respondent made no real attempt to comply with Inspector Duncan’s corrective work order. But the evidence also shows that Complainants wanted Respondent to perform work that he did not contract to perform and that they had not paid for, which is one of the reasons Respondent requested a hearing. The relief that Complainants request, the return of all monies paid Respondent, is not support by any evidence or legal authority. Complainants do not complain about and, apparently, have accepted the benefit of substantial work that Respondent has performed.[18] The Registrar may resolve contractual disputes if such resolution is ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation cannot be remedied by corrective work.[19] Complainants have not established that Respondent is unable and should not be allowed to arrange for an appropriately licensed contractor to remedy the statutory violations proven at the hearing.[20] RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar suspend Respondent H and D Services, Inc.’s contractor’s license No. 134687, Class C-61 on the effective date of the order in this matter, forty days after service. It is further recommended that if, on or before the effective date of the Registrar’s order, Respondent furnishes to the Registrar proof in writing that it has hired and paid in advance an appropriately licensed contractor to correct Item Nos. 1, 2, 3, 4A, 4B, 4C, 6B, 8, 9, 10, 11, 14, and the telephone jack in the back bedroom (part of Item No. 5) on Inspector Duncan’s June 6, 2001 Corrective Work Order, no suspension take place and the Registrar may close Case No. 01-2741. Done this day, February 4, 2002.

______________________________________ Diane Mihalsky Administrative Law Judge

Original transmitted by mail this ____ day of February, 2002 to:

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

By ___________________________ ----------------------- [1] The caption at hearing to show both spouses, pursuant to Complainants’ motion and without objection from Respondent.

[2] See A.A.C. R2-19-119; see also Culpepper v. State, 187 Ariz. 431, 438, 930 P.2d 508, 515 (App. 1996). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

[4] Black’s Law Dictionary at page 1064 (6th ed. 1990).

[5] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.”

[6] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving written directive from the registrar.”

[7] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[v]iolation of any rule adopted by the registrar.” The rule violated here was A.A.C. R4-9-108, which requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”

[8] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.”

[9] The evidence is less clear with respect to electrical work because it appears that Respondent did hire a licensed electrical contractor, see Invoice No. 72068 quoted at Finding of Fact 11i, infra, although it is not clear what the electrical contractor did. Respondent is admonished to use properly licensed contractors in all future contracting work it may perform. [10] See A.R.S. § 32-1158(A) and (B).

[11] See A.R.S. § 32-1158(C).

[12] See Ariz. R. Evid. 801.

[13] See A.R.S. § 41-1092.07(F)(1).

[14] See Plowman v. Arizona State Liquor Board, 152 Ariz. 331, 337, 732 P.2d 222, 228 (App. 1986) (citing Begay v. Arizona Department of Economic Security, 128 Ariz. 407, 626 P.2d 137 (App. 1981).

[15] See State v. Cruz, 128 Ariz. 538, 540, 627 P.2d 689, 691 (1981) (“Even though an out-of-court statement may be used to case doubt on a witnesses’ credibility, when it contains the dual purpose of tending to prove a defendant’s guilt, it should not be admitted.”).

[16] See Finding of Fact No. 14, infra, Item No. 6. [17] See Finding of Fact No. 14, paragraph 7 (emphasis added). [18] Based on the invoices that Complainants had admitted into evidence as their Exhibit 2, this work includes interior and exterior painting, repair of an existing exterior wall, installation of a new exterior wall, front entry lighting, installing new tile in the bathroom, moving and widening the door between the kitchen and living room, installing a short extending wall in the kitchen, removal of kitchen cabinets, installing a new air conditioning unit, installing new shelving in the master bedroom, and numerous other renovations or upgrades to the house.

[19] See A.R.S. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (Ct. App. 1990).

[20] In Sunpower, the Arizona Court of Appeals upheld the Registrar’s power to order a contractor to return to a property owner the cost of a solar heater where, although the contractor had made several attempts to repair the heater, he could not make it provide a habitable degree of heat. See id.

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