ALJDEC

01F-M0185-ROC · Registrar of Contractors · 2001-03-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 22, 2001. APPEARANCES:. Charles and Marilyn Salomon appeared on their own behalf. Ray Respondent represented Respondent. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________ The issues in this matter center on allegations that Respondent violated the following statutory provisions regulating contractors: (1) A.R.S. §32-1154(A)(3) (violation of any rule adopted by the Registrar, namely, A.A.C. R4-9-108, work to be in a workmanlike manner), A.R.S. §32- 1154(A)(7) (committing a wrongful or fraudulent act that results in substantial harm to another), A.R.S. §32-1154(A)(20) (subsequent discovery of facts which if known at the time of issuance of a license would have been grounds to deny the license), and A.R.S. §32-1154(A)(23)(failure to comply with a corrective work order issued by the Registrar). Complainants have proven by a preponderance of the evidence that Respondent violated A.R.S. §32-1154(A)(3) and A.R.S. §32-1154(A)(7). For the reasons discussed below, it is recommended that the Director order Respondent to pay restitution to Complainants and further that the Respondent license be placed on a period of disciplinary probation. FINDINGS OF FACT 1. Complainants and Respondent entered into a contract on September 29, 1999, for Respondent to build custom cabinets and doors for Complainants’ home. According to the documents submitted into evidence, there was a contract to provide 469 linear feet of cabinetry at a cost of $16,402, a contract to provide doors at a cost of $5,800, and a contract to provide 112 feet of alder in the amount of $537.60. The total of these contracts amounts to $22,739.60. Modifications for additional work were made to the contract, bringing the total amount for all work to $29,866.60.

2. At the time of entering into these contracts, Respondent was not licensed to contract. According to Complainants, Respondent represented that he was licensed to contract and provided a license number, #143465. Complainants also testified that Respondent indicated to them that he was insured. Respondent testified that at the time of the signing of the contract he told Complainants that he was not licensed. 3. Respondent became a licensed contractor during January, 2000. 4. In July, 2000, Respondent delivered and installed the lower cabinets. The parties feverishly contested the issue of whether Respondent installed the cabinets. The undersigned finds by a preponderance of the evidence that Respondent did install the lower cabinets. On the day of the installation of the lower cabinets, a painter working on the project, Bill Handy was present at the site completing painting. Mr. Handy testified in the hearing in this mater that he saw Respondent and his assistants affixing the cabinets to the walls. Mr. Handy saw respondent and his assistants placing the cabinets next to the wall, he heard drills being used, and he saw that the cabinets had been attached by screws to the wall. The reasonable inference to be drawn from Mr. Handy’s testimony is that Respondent was affixing the cabinetry to the walls of the home. 5. Respondent also provided the upper cabinets, certain doors, the wood trim, and some tongue and groove paneling for the home. The workmanship on both the upper and lower cabinets, the entry way doors, wood trim, and paneling is poor. The workmanship on the cabinets fails to meet the standards set forth in R4-9-108. The trim material used for the project, particularly the base board, was split and had holes in it. Attempts at repairs on the cabinets were inadequate. One picture admitted at the hearing shows that Respondent used a white filler in alder wood to make a correction. The repair is cosmetically inappropriate. The cabinet doors and drawers came with all types of knot holes . Some of the door fronts were not attached and some were missing. Some of the shelves would not fit. Respondent designed the kitchen cabinets in an incorrect manner such that the dishwasher would had to have been in the wrong place. Because of the problems with the cabinets, certain cabinets in the kitchen and the hall cabinet had to be rebuilt. There were also problems with the tongue and groove paneling. Some of the pieces of the paneling were thicker than others. Furthermore, in certain areas it was not appropriately cut. 6. While the parties’ contract calls for the building of 469 linear feet of cabinetry, this amount was not sufficient to provide all of the cabinets that Complainants needed for the home. Respondent actually produced and delivered between 510 and 596.7 linear feet of cabinetry. Complainants agreed to pay Respondent for this additional amount of cabinetry. Complainants assert that they have paid to Respondent a total of $29,608.99 for all of the materials produced and do not dispute that they owe Respondent the sum of $467.00. Complainants further assert that they have incurred or will incur additional costs of at least $5,108.91 to correct the poor workmanship of the cabinets and doors. Respondent contests Complainants’ assertion regarding the amount he has been paid. Respondent contends that he is still owed $9,159.85. It is clear from the evidence adduced in this case that Respondent has been paid all monies due except the $467.00 amount. 7. Because of the poor workmanship and the inability of the parties to resolve their differences regarding amounts due to Respondent, Complainants filed a complaint with the Registrar of Contractors. Mr. Van Bagley, an inspector with the registrar, was assigned to this case. Mr. Bagley completed a job site inspection and on November 1, 2000, issued a corrective work order directing Respondent to complete repairs to some of the tongue and groove paneling in the great room and add trim. Mr. Bagley did not direct Respondent to correct any issues with the cabinetry, opining based on the limited information that he had that Respondent had not installed the cabinetry and therefore had no responsibility for them as a contractor. Mr. Bagly, however, candidly admitted that he did not want to resolve the “swearing match” between the parties with respect to whether Respondent had installed the cabinets. In addition, Mr. Bagley did not have the opportunity to hear the testimony posited by Mr. Handy in this case. 8. It appears from the evidence that Respondent was at one point willing to correct the problems with the cabinets and made some efforts in that regard. The situation between the parties deteriorated to such an extent that Respondent, believing the Complainants’ purpose in filing the instant complaint was to harangue Respondent into agreeing to a reduced price for the work completed, refused to undertake any additional repairs. Once the Registrar’s inspector issued his determination that Respondent was only a materialman with respect to the cabinets and, therefore, could not be compelled under the applicable contracting statutes to repair the work, Respondent had no incentive to do any repairs. 9. Complainants then sought out another person to complete the work. Complainants conduct in this regard was not unreasonable since Respondent, believing he had no liability for the cabinetry, and believing he was owed additional money, refused to complete the remedial work requested by Complainants. A portion of the remedial work has been completed by another person. At the time of the hearing, a portion of the remedial work had not been completed. Complainants have submitted bills and an estimate from Gene M. O’Neill to complete the work. The total amount sought for the cabinetry is $3226.96. This amount includes all amounts paid or remaining to be paid as reflected by plaintiff’s exhibit #10 for cabinetry repairs but does not include amounts sought for repairs to the entry way doors. The undersigned cannot ascertain from the evidence that Respondent is or should be held responsible as a contractor with regard to the doors. 10. The undersigned has considered the Respondent’s two year work history in fashioning the recommended decision. CONCLUSIONS OF LAW 1. A.R.S. §32-1154(A) provides in pertinent part: A. The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: * * * (3). Violation of any rule adopted by the registrar. * * * (7). The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

* * * (20). Subsequent discovery of facts which if known at the time of the issuance of a license . . . would have been grounds to deny the issuance . . . of a license. * * * (23). Failure 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 a written directive from the registrar.

AAC R4-9-108 specifically states that “[a]ll work shall be done in a workmanlike manner.” 2. Arizona Revised Statute §32-1121 exempts materialmen from the licensing requirement only where the materialman does not “install or attach such items” to a building. 3. The Complainants have the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). A "preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not." Morris K. Udall, Arizona Law of Evidence, §5 (1960). It "is evidence which is of greater weight or more convincing than the 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." Black's Law Dictionary, 1182 (6th ed. 1990). 4. As noted in Findings of Fact Paragraph Number Four above, the undersigned has found as a matter of fact that Respondent installed some or all of the lower cabinets in the home. Respondent’s poor workmanship therefore falls within the regulatory purview of the contracting statutes and provides just cause for the implementation of sanctions under the facts of this case. 5. The evidence as noted above in Findings of Fact Paragraph Number Five above establishes that Respondent violated A.R.S. §32-1154(A)(3) by failing to comply with the administrative requirement that work be performed in a workmanlike manner. 6. The evidence as noted in Findings of Fact Paragraphs Four and Five also shows a violation of A.R.S. §32-1154(A)(7). The poor workmanship is alone sufficient to demonstrate this violation. 7. Complainants have failed to demonstrate a violation of A.R.S. §32- 1154(A)(20). In addition, although it is a close call, the undersigned finds that Complainants have failed to demonstrate a violation of A.R.S. §32-1154(A)(23). It appears that an unfortunate set of circumstances combined to prevent Respondent’s return to complete the tongue and grove repairs, not any desire to disobey the corrective work order. 8. After first concluding, based solely on the evidence adduced at the hearing, that a violation had occurred, the undersigned then took into account the Respondent’s two year complaint history. The undersigned notes that one other complaint regarding workmanship was lodged against Respondent. In that case, after a finding of poor workmanship by the inspector, the matter was closed with respondent completing the necessary repairs. The existence of another case within the short span of one year merits the imposition of a period of disciplinary probation against the Respondent license. 9. It is unfortunate, but clear from the testimony adduced at the hearing, that the parties can no longer work together to resolve their differences brought about by Respondent’s poor workmanship in this case. Given that this is Respondent’s second citation and complaint regarding workmanship issues, the undersigned is concerned that simply ordering Respondent to affect repairs would not adequately impress upon Respondent the need to complete work in a professional and workmanlike manner. Moreover, it appears that some of the repair work has already been undertaken and completed by another party. The registrar of contractors, as an adjunct of its policing function, has the ability to order that restitution be made to a complainant. Sunpower v. Registrar of Contractors, 166 Ariz. 437, 803 P.2d 430 (App. 1990). In this case, ordering Respondent to pay restitution appears to be the only way to impress upon him the need to complete work in a professional and workmanlike manner. Accordingly, pursuant to authority granted by Title 32, the undersigned recommends that in addition to the sanctions recommended below, that Respondent be ordered to pay restitution to Complainants in the amount of $3,226.96. The undersigned has not included an offset for the $467.00 that Complainant still owes to Respondent. This is because the undersigned, given the limited scope of this proceeding, has not decided and cannot decide the issue of whether Respondent produced poor quality entryway doors. The undersigned has only determined that Respondent did not act as a contractor with respect to the entryway doors. The parties may wish to pursue this issue further in a different forum, such as small claims court or superior court. Adjudicating the issue of the offset in this case, given the unsettled nature of other potential claims is not appropriate. . . . RECOMMENDED DECISION Based on the foregoing, it is recommended that Respondent’s Class C license be suspended until Respondent submits written proof that it has paid or tendered to Complainants the amount $3226.96. If, prior to the effective date of this order, the Registrar receives written proof that Respondent has paid or tendered restitution to Complainants, then it is recommended that no license suspension take place. In addition, it is recommended that the Registrar impose disciplinary probation against the respondent license for a period of 30 days commencing on the effective date of the Order in this matter or the date on which notice of respondent’s compliance with the order is filed with the Registrar, whichever is later. Done this day, March 14, 2001.

______________________________________ Gregory L. Hanchett 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