ALJDEC

02F-0230-ROC · Registrar of Contractors · 2002-03-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 6, 2002 APPEARANCES: Complainants Andy and Patti Gebel appeared on their own behalf. Barry Flemming appeared on behalf of Respondent Flemming’s Remodeling Specialists, Inc., dba Remodeling Specialists. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ The issue presented by this matter is whether Respondent Flemming’s Remodeling Specialists, Inc., dba Remodeling Specialists, is subject to discipline for acts or omissions in violation of A.R.S. § 32-1154. Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order: FINDINGS OF FACT Respondent Flemming’s Remodeling Specialists, Inc., dba Remodeling Specialists (“Flemming’s”), is the holder of a Class B license (No. 131749) issued by the Registrar of Contractors (“ROC”). Prior to the cancellation of Flemming’s license on July 13, 2001, Barry Flemming was Flemming’s President and qualifying party. On or about September 20, 2000, Complainants Andy and Patti Gebel (the “Gebels”) entered into a contract with Flemming’s for the remodeling of the Gebels’ home. The original contract price was $44,600.00. This amount was increased by two subsequent change orders in the amounts of $3,930.00 and $14,985.00, for a total contract price of $63,515.00 To date, the Gebels have paid Flemming’s all but $12,100.00 toward the full contract price. In a complaint to the ROC dated August 2, 2001, the Gebels alleged several deficiencies in the remodeling of their home, as well as several wrongful acts, for which they believed Flemming’s was responsible. Specifically, the Gebels alleged as follows: e. Major uneven ridge between old foundation and new addition; f. Old cement floor was not evened out; g. Cement junctions are cracking; h. Roof is leaking in new addition; i. Water is coming in through new bay doors; j. Water is coming in through new bay windows; k. Wood under door is molding from moisture; l. Outdoor fascia wood above bay doors is warping and metal is rusting due to water; m. Roof over new door has no overhang; n. Soffit over vanity area is not level; o. Door jambs are not even; p. Drywall was very poorly done; q. Uneven areas where new drywall wall meets ceiling; r. Due to schedule not being met, we have incurred additional costs; and s. [Barry Flemming] assured us all fixtures had been ordered between November and January. We discovered in June, no orders had ever been placed nor were any deposits ever put down on anything. We have now discovered vendors have increased prices.

5. On or about October 24, 2001, the Gebels filed an addendum to their original complaint alleging seven additional items of complaint against Flemming’s with the ROC. 6. Specifically, the Gebels alleged as follows: i. Drywall cracks at bay windows; ii. Baseboard separating from walls at bay window; iii. Floor patch leveling material cracked at bay doors; iv. Concrete floor slab in master bedroom not level; v. Lippage at back between new and existing joint in master bath, master closet, master dressing area; vi. Drywall and baseboard damage in hall bath and south bedroom, due to leaking plumbing which contractor was to replace; and vii. Intermittent phone noise from electrical wiring.

7. ROC Inspector Warren Duncan investigated the Gebels’ complaint. 8. Inspector Duncan scheduled a jobsite inspection for August 23, 2001. The Gebels and Barry Flemming were present for that inspection. 9. On August 29, 2001, following the jobsite inspection, Inspector Duncan issued a Corrective Work Order (“CWO”) under which the ROC gave Flemming’s days to take corrective action with respect to all but six items of the Gebels’ initial complaint. 10. On November 7, 2001 Inspector Duncan conducted a second jobsite inspection in response to the addendum to the complaint filed by the Gebels. Only the Gebels were present for this inspection. 11. On November 14, 2001, as a result of the November 7, 2001 inspection, Inspector Duncan issued a second CWO under which the ROC gave Flemming’s 15 days to take corrective action with respect to all of the items listed on the addendum to the complaint. 12. Flemming’s commenced its work at the Gebels’ home in October 2000. In November 2000, Mr. Flemming was diagnosed with prostate cancer. In February 2001, Mr. Flemming underwent surgery. In the interim, Flemming’s employees ran Mr. Flemming’s business. 13. After he received his diagnosis, Mr. Flemming promised his wife that he would downsize the company. At this time, Flemming’s was in the process of working approximately twenty jobs. Mr. Flemming testified that when his employees realized he was downsizing the company and that they would soon be unemployed, his employees left the company. In consequence of this occurrence, all work had ceased on the Gebels’ remodeling project by January 2001. 14. Flemming’s does not contest the fact that the Gebels’ remodeling project was not completed. Mr. Flemming testified that Flemming’s only contests item numbers 1, 2, 3 and 6 on the November 14, 2001 CWO. Mr. Flemming testified that it is his belief that the drywall cracks at the bay windows, the separation of the baseboards, and the cracked floor patch, all could have been exacerbated by the fact that these items had not been repaired initially and the project remained unfinished and exposed to the elements for many months. Mr. Flemming testified that in regard to item number 6, concerning the plumbing, it cannot be determined when the leak occurred and that the damage caused by the leaking plumbing was an extension of a previously existing problem. 15. In June 2001, Mr. Flemming informed the Gebels that he was closing his company and that he wanted to transfer the Gebels’ project to another contractor by the name of Fred Warren, owner of Trinity Builders. 16. Mr. Warren conducted an inspection of the Gebels’ home, examined the existing contract between the Gebels and Flemming’s, as well as the change orders, and determined that in order to repair the deficiencies and complete the project, it would cost an additional $40,000.00. Mr. Flemming was going to pay Mr. Warren to perform the corrective work and complete the project. However, Mr. Warren was hesitant to take over the project due to what he considered to be questionable installation of the concrete slab in the addition. Mr. Warren advised the Gebels to file a complaint against Flemming’s with the ROC. Mr. Warren also informed the Gebels that he would take on the completion of the project after the conclusion of the administrative proceedings. No work has been performed on the project from the time Flemming’s ceased its performance in January 2001 through the date of hearing. 17. The Administrative Law Judge finds, based on the credible evidence of record, that Flemming’s performance of the Gebels’ remodeling project was substandard, that Flemming’s abandoned the project, and that Flemming’s failed to comply with both CWO’s issued by the ROC. CONCLUSIONS OF LAW In this proceeding, the Gebels bear the burden to prove, by a preponderance of the evidence, that Flemming’s is subject to discipline for violations of A.R.S. § 32-1154(A)(2), (A)(3), (A)(7), and/or (A)(23) as charged by the ROC in its September 20, 2001 Citation and Complaint. See Arizona Administrative Code (“A.A.C.”) R2-19-119. 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). Under A.R.S. § 32-1154(A)(2), a contractor is subject to discipline for “departure from or disregard of plans or specifications or any building codes . . . in any material respect which is prejudicial to another without consent of the owner . . .” The Administrative Law Judge concludes that the evidence of record failed to establish a violation of A.R.S. § 32- 1154(A)(2). Under A.R.S. § 32-1154(A)(3), a contractor is subject to discipline for “violation of any rule adopted by the registrar.” In this case, the ROC charged Flemming’s with a violation of A.A.C. R4-9-108, which, among other things, requires contractors to perform work in a professional and workmanlike manner and in accordance with any applicable building codes and professional industry standards. The Administrative Law Judge concludes, from the evidence presented, that Flemming’s failed to perform portions of its work at the Gebels’ home in a professional and workmanlike manner. Therefore, Flemming’s violated A.A.C. R4-9-108, and in turn violated A.R.S. § 32-1154(A)(3). Under A.R.S. § 32-1154(A)(23), a contractor is subject to discipline for “failure to take appropriate corrective action . . . without valid justification within a reasonable period of time after receiving written directive from the registrar.” The Administrative Law Judge concludes, from the evidence presented, that Flemming’s failed to comply with the ROC’s August 29, 2001 and November 14, 2001 CWO’s. Despite Flemming’s attempt to have Mr. Warren perform the remedial work and complete the project, when Mr. Warren declined to do so, it was Flemming’s responsibility to cause another properly licensed contractor to perform the work. Flemming’s failed to do so. Therefore, the Administrative Law Judge concludes that Flemming’s violated A.R.S. § 32- 1154(A)(23). Under A.R.S. § 32-1154(A)(7), a contractor is subject to discipline for “the doing of a wrongful or fraudulent act . . . as a contractor resulting in another person being substantially injured.” The Administrative Law Judge concludes, from the evidence presented, that Flemming’s committed several wrongful acts that substantially injured the Gebels, including failing to complete the project and failing to perform the portion of remodeling work done in a professional and workmanlike manner. Therefore, Flemming’s violated A.R.S. § 32-1154(A)(7). Although the ROC has not charged Flemming’s with a violation of A.R.S. § 32-1154(A)(1), which states that a contractor is subject to discipline for the “abandonment of a contract or refusal to perform without legal excuse”, the Administrative Law Judge concludes that Flemming’s abandoned the Gebels’ project without legal excuse. The Administrative Law Judge is not unsympathetic to Mr. Flemming’s health concerns. However, upon the realization that Flemming’s could no longer perform due to a shortage of employees, it was Flemming’s responsibility as a licensed contractor to cause another properly licensed contractor to correct the deficiencies and complete the project for the contract price. Based on the foregoing, it is appropriate for the ROC to impose discipline against Flemming’s license. The ROC’s September 20, 2001 Citation and Complaint advised Flemming’s that in the event of a finding of a violation against it, Flemming’s prior disciplinary record of final ROC orders could be considered in mitigation or aggravation. Accordingly, subsequent to the conclusion of the instant hearing, the Administrative Law Judge took notice of prior final disciplinary orders against Flemming’s in the ROC’s official records. Those records revealed that Flemming’s has been the subject of one ROC disciplinary order within the past two years, resulting in the suspension of Flemming’s license from December 17, 2001 through December 17, 2002. The official ROC public records further reveal that Flemming’s contracting license has been canceled since July 13, 2001. Such cancellation does not preclude this tribunal from conducting these administrative proceedings. A.R.S. § 32-1154(C). Moreover, Flemming’s existing canceled and suspended license status must be considered when determining appropriate penalties in this case. Upon consideration of all of the facts and circumstances presented by this case, the Administrative Law Judge concludes that the ROC should revoke Flemming’s Class B license. 15. The ROC’s authority in disciplinary matters such as the one presented herein includes the ability to impose reasonable conditions that allow the disciplined contractor to reduce the scope of the disciplinary action taken against it. The Administrative Law Judge deems the exercise of such authority to be appropriate in the instant case, and preferable to imposing discipline against Flemming’s license without providing a condition to reduce or eliminate same. 16. Upon consideration of all of the facts and circumstances presented by this case, the Administrative Law Judge concludes that the ROC should revoke Flemming’s Class B license subject to the condition that Flemming’s can avoid such revocation by fully complying with both CWO’s and completing the Gebels’ remodeling project pursuant to the terms of the parties’ contract and change orders. Due to the amount of work required, the Administrative Law Judge concludes that Flemming’s should be granted additional time to cause that work to be completed. RECOMMENDED ORDER The Administrative Law Judge makes the following Recommended Order: Commencing forty-five (45) days after the effective date of the Order entered in this matter, Flemming’s Class B license (No. 131749) shall be revoked. The foregoing revocation shall not take place, and this matter shall be closed, if, within forty-five (45) days after the effective date of the Order entered in this matter, the ROC receives written proof that Flemming’s has caused a properly licensed contractor to perform all remedial work as specified in both of the ROC’s CWO’s and the completion of the remodeling project pursuant to the parties contract and change orders. Flemming’s is advised that all work must be performed in a professional and workmanlike manner. Flemming’s is further advised that with the exception of the outstanding balance of $12,100.00, which the Gebels are responsible for paying, Flemming’s must cause all work to be accomplished at its own expense.

Done this day, March 22, 2002.

______________________________________ Sondra J. Vanella Administrative Law Judge

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

Michael P. Goldwater, Director Registrar of Contractors 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