ALJDEC decisions subject to certification as final

03F-1801-ROC · Registrar of Contractors · 2003-10-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 14, 2003. APPEARANCES: The Complainant appeared personally. The Respondent appeared through its member and qualifying party, Grant De Jong. 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. The Respondent is the holder of License No. 174178, a Class K-34 dual painting contracting license, issued by the Registrar of Contractors. 2. On or about January 12, 2003, the parties entered into a written agreement for painting work to be performed by Respondent at Complainant’s newly purchased existing house. 3. Respondent agreed to paint the following areas of Complainant’s residence:

a) Exterior stucco, doors, door frames, fence walls in front yard and balcony wrought iron. b) Interior ceilings, walls, baseboards and front doors.

4. Respondent specifically agreed to perform the following work:

a) thoroughly power wash all surfaces to be painted to allow new paint to have proper adhesion; b) all loose or peeling paint will be thoroughly scraped; c) caulk around windows and doors to seal out moisture and drafts; d) fill all cracks and gaps with a high quality electrometric stucco patching compound or caulking; e) missing stucco will be replaced, adding the appropriate texture so the repair will blend in; f) pull back loose gravel or dirt to paint below grade; g) bare surfaces of the wood and/or stucco will be primed with a high quality latex primer; rust on metal surfaces will be sanded/wire brushed and spot primed with a rust blocker; h) job site will be kept clean throughout the project; and i) non-painted areas covered with drop clothes, tape or plastic.

5. After the preparation had been completed, Respondent agreed to apply the following materials to the specified areas:

a) Dunn-Edwards, Flat, 100% Acrylic One Coat: exterior stucco; b) Dunn-Edwards, Satin, 100% Acrylic, Two Coats: interior ceilings and walls; c) Dunn-Edwards, Semi-Gloss, 100% Acrylic, One Coat: exterior doors, door frames, wrought iron; two coats to the interior baseboards and front door.

6. The total contract price for Respondent’s painting services was $5,775.00, payable “in full after work is completed and the customer is satisfied.” The contract price included tax, labor and materials. 7. Respondent warranted its workmanship for three years. 8. Prior to purchasing her home, Complainant hired Cactus State Home Inspections, Inc. to perform an inspection of the house, which resulted in a written report detailing the conditions of various elements of the house. 9. Respondent commenced performance of its work on or about January 16, 2003. Complainant had her household items in storage when Respondent commenced its work so that those items would not interfere with Respondent’s work and to avoid the risk of the items being damaged during the work. 10. On or about January 18, 2003, Respondent requested that Complainant have someone make a paint run to Dunn-Edwards Corporation to obtain supplies. Complainant’s daughter went to the supplier and delivered the ordered paint to Respondent’s workers at the job site. 11. A dispute developed between the Complainant and Respondent concerning the latter’s quality of workmanship, damage caused by Respondent’s workers, and the overall lack of progress of the job. 12. Complainant refused Respondent’s demand for payment of the contract price. Respondent’s position was that the work needing to be performed or corrected was warranty work which it was not obligated to perform until after being paid in full. Complainant’s position was, and is, that Respondent’s work deviated from specifications[1], does not meet minimum workmanship standards, and that the work caused damage to Complainant’s property. 13. In an undated letter[2] Respondent once again requested payment of the contract price. Respondent advised Complainant that if payment was not received by March 28, 2003, then Respondent would attach a lien against her property. 14. On or about April 7, 2003, Complainant filed a complaint against Respondent with the Registrar of Contractors. Complainant’s complaint was: poor paint job interior and exterior; paint drip on windows, blinds, carpet, tile, counters and sidewalks; paint runs on walls; cracks not filled in; Respondent used wrong paint; damages sun screens; and damaged roof tiles. 15. The Registrar’s assigned inspector, Scott Deering, performed a jobsite inspection at Complainant’s home on May 6, 2003 at 9:00 a.m. to view the complaint items. Also in attendance at the inspection was Complainant. No representative from Respondent appeared, nor was one required to be in attendance. 16. Inspector Deering sent Respondent a written notice of the May 6, 2003 jobsite inspection at its address of record with the Registrar. Respondent did not receive that mailing because it had changed its business address but it had not advised the Registrar of its new address as required. 17. On or about May 12, 2003, Inspector Deering sent a letter to the parties advising them of additional complaint items filed by Complainant. Inspector Deering advised the parties that another jobsite inspection would be performed on May 19, 2003, at 12:30 p.m. 18. On May 19, 2003, Inspector Deering performed a jobsite inspection at Complainant’s home. Also in attendance were the Complainant and Jeff Hawkins, Respondent’s sales manager. An inspection was performed of the new complaint items. 19. As a result of the inspections performed by Inspector Deering, he issued a Corrective Work Order dated May 29, 2003 directing Respondent to timely perform remedial repairs as outlined in the written directive:

a) “Complaint #1 Poor paint job on interior and exterior. Contractor shall correct runs in paint through out [sic]; variance in sheens on touch ups, debris in paint on walls, and baseboard areas of new paint not covering old paint in kitchen, and thin paint on exterior soffit over entry by appropriate means.” b) “Complaint #2 Paint drips on windows, shutters, blinds, carpet, tile, countertops, light fixtures, mirrored closet doors, bathtubs, toilets, bath vanity sinks and sidewalks. Contractor shall correct paint drips and excess paint at the listed areas by appropriate means.” c) “Complaint #3 Cracks not filled in prior to painting. Contractor shall correct prepping of cracks and voids prior to painting per industry standards.” d) “Complaint #4 Used wrong paint on exterior trim. Contractor shall correct exterior paint on trim and doors to semi-gloss per contract by appropriate means.” e) “Complaint #5 Damaged sunscreens. Contractor shall correct damaged sunscreens at the following locations by appropriate means[:] both upstairs front bedrooms above the garage, the west bedroom 5’0” X 5’0”, guest bathroom, front living room window, and master bathroom.” f) “Complaint #6 Damaged roof tile. Contractor shall correct damaged roof tile on 1st floor roof using an appropriately licensed contractor.” g) “Complaint #7 Carpet was cut to remove paint in master bedroom. Contractor shall correct damaged carpet through out [sic] house using an appropriately licensed contractor.” h) “Complaint #8 Scratches on car mirror from painter moving items by car. This inspector can not [sic] determine cause of scratches on the car mirror. No action required by contractor.” i) “Complaint #9 Exterior vent on fireplace dented. Contractor shall correct bent exterior horizontal fireplace vent by appropriate means.” j) “Complaint #10 Broken shutters in breakfast nook and fans on shutters not operating correctly after removal by painters. Contractor shall correct operation of shutters by appropriate means.”

20. Complaint granted Respondent reasonable access to her house to perform the required corrective work. 21. On June 13, 2003, Inspector Deering received an additional addendum to the complaint from Complainant. 22. On June 17, 2003, Inspector Deering sent the parties a letter forwarding the additional complaint items and scheduling another jobsite inspection on June 24, 2003 at 10:00 a.m. 23. On June 24, 2003, Inspector Deering performed a jobsite inspection. Complainant and Respondent’s qualifying party, Grant De Jong, were present. 24. As a result of the June 24, 2003 inspection, Inspector Deering issued a Corrective Work Order dated July 18, 2003, which was an addendum to the Corrective Work Order dated May 29, 2003, directing Respondent to timely perform additional remedial repairs as set forth in the written directive:

a) “Complaint #1 Kitchen and Foyer tile chipped and cracked. At the time of the jobsite inspection, one cracked tile and four chips in tiles in the entry foyer and hallway, and kitchen floor. This inspector cannot determine cause of damaged tile, no action required by contractor.” b) “Complaint #2 Front yard, paint fence walls and fill in patching compound. Contractor shall correct thin paint and peeling paint on the front stem wall and the west side by the gate and electrical panel by appropriate means.” c) “Complaint #3 Front door, poor job on paint. Contractor shall correct prep and paint front door by appropriate means.” d) “Complaint #4 Paint on rubber around front door. At the time of the jobsite inspection, the white paint on the brown weather- strip appeared to have been sprayed and was possibly from the original paint job, as the [P]ainting [C]ompany brushed this door. No action required by the contractor.” e) “Complaint #5 Rust on metal surfaces was not sanded. Contractor shall correct rust appearing on the master bedroom walk deck railing by appropriate means; not responsible for rust stains on stem walls below stucco weep screed.” f) “Complaint #6 Damaged rubber around family room door. This inspector could not determine cause of damage to the family room door weather-strip, no action required by the contractor.” g) “Complaint #7 Paint on the roof tile. Contractor shall correct paint drips and overspray on the roof tiles by appropriate means.” h) “Complaint #8 Paint on window and window frames. This complaint was addressed in the original corrective work order (complaint #2).” i) “Complaint #9 Laminated tinting was scraped on the living room arched window. This inspector cannot determine cause of the scrape on the living room arched window laminate tinting film, no action required by the contractor.” j) “Complaint #10 Used wrong paint on the garage. This complaint was addressed in the original corrective work order (complaint #4).” k) “Complaint #11 Paint on mist system on rear patio. Contractor shall correct paint on mist system by appropriate means.” l) “Complaint #12 Paint on light covers in the kitchen. Contractor shall remove paint on kitchen recessed can light trims and return to original finish by appropriate means.” m) “Complaint #13 Did not prime house. This was a repaint, primer not required per industry standards and manufacturer’s specifications. No action required by the contractor.”

25. Respondent failed to comply with Registrar’s two written directives to perform, or cause to be performed, the required remedial repairs to its deficient workmanship. 26. Respondent has had more than adequate time to perform the required remedial repairs. Respondent’s claim that Complainant denied reasonable access is not supported by the evidence. 27. Respondent’s stated willingness to perform remedial repairs to its deficient workmanship and to repair the damages caused by its deficient workmanship is not supported by the record. After nine months from entering into the contract with Complainant and despite two written directives from the Registrar of Contactors requiring Respondent to perform, or cause to be performed, remedial repairs to its deficient workmanship and to repair of damage caused by its deficient workmanship, Respondent has failed to perform. Respondent is found to be unwilling and/or unable to competently comply with the Registrar’s written directives. 28. Neither party wants anything to do with the other. In Complainant’s case, that position is more than justified. 29. Complainant has not paid any amount of the original contract price to Respondent. Under the terms of the parties’ contract and the evidence of Respondent’s deficient workmanship coupled with the damages it inflicted on Complainant’s property, she is found to be justified in withholding the contract price. However, she did pay $100.00 in cash to one or two of Respondent’s workers for work around a door performed on the project. 30. Respondent’s workmanship is found to be below minimum workmanship standards as determined by Inspector Deering. 31. Respondent is found to be responsible for the damages to Complainant’s property as determined in the Registrar’s two written directives. However, it is further determined, based on the evidence of record, that Respondent should not perform those repairs but instead should cause, at its sole cost and expense, properly licensed contractors to perform proper repairs to the damaged areas. 32. Respondent is not responsible for the complaint items contained in the Registrar’s two written directives as determined by Inspector Deering. As to those items, Complainant failed to present sufficient evidence to overcome Inspector Deering’s findings. 33. Respondent’s failure to perform the original scope of its work to minimum workmanship standards, its demand for payment in full from Complainant when it failed to complete its original scope of work to minimum workmanship standards and to repair the areas of damage caused by its deficient workmanship, and its failure to comply with the Registrar’s two Corrective Work Orders are wrongful acts which have substantially injured the Complainant.

CONCLUSIONS OF LAW

1. The Registrar of Contractors has jurisdiction over the Respondent and the subject matter in this case. 2. The evidence of record is adequate to establish that Respondent violated the provisions of A.R.S. § 32-1154(A)(7), (23) and (3); namely A.A.C. R4-9-108. 3. Pursuant to A.R.S. § 32-1156.01, the Administrative Law Judge concludes that Respondent should provide restitution to Complainant in the amount of $100.00 that being the amount she paid directly to Respondent’s worker(s), and restitution to Complainant in the additional amount of $5,775.00 in the form of a credit and release of the original contract price. Complainant can then use those funds to hire another licensed contractor to perform the original scope of work. However, the Administrative Law Judge further concludes that Respondent is responsible for causing properly licensed contractors to repair the damage to Complainant’s property caused by its deficient workmanship. 4. A.R.S. § 32-1154(B) authorizes the imposition of disciplinary action on a licensee found to have violated the provisions of A.R.S. § 32- 1154(A). The Administrative Law Judge concludes that serious disciplinary action against Respondent is warranted in this matter. 5. A.R.S. § 32-1154(D) authorized the imposition of a civil penalty in an amount not to exceed $500.00 for each violation of a licensee’s failure to comply with a written directive from the Registrar to take appropriate corrective action pursuant to A.R.S. § 32-1154(23). The Administrative Law Judge concludes that the record supports the imposition of serious civil penalties for Respondent’s failure to comply with the Registrar’s two Corrective Work Orders.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that Respondent’s Class K- license be revoked on the effective date of the entered Order in this matter. It is further recommended that if Respondent complies with the following requirements on or before the effective date of the entered Order in this matter, then the above-provided license revocation shall not take place:

a). Respondent make restitution to Complainant in the amount of the full original contract price by providing her with a written release of her obligation to pay the contract price. Respondent shall then have no obligation to perform the original scope of work under the parties’ contract. b) Respondent shall pay Complainant the sum of $100.00 for her payment to Respondent’s workers. c) Respondent shall hire, at its sole cost and expense, properly licensed contractors to repair the following damage caused by Respondent as determined by Inspector Deering as set forth in the May 29, 2003 Corrective Work Order:

1) Complaint #2 2) Complaint #5 3) Complaint #6 4) Complaint #7 5) Complaint #9 6) Complaint #10

d) Respondent shall hire, at its sole cost and expense, properly licensed contractors to repair the following damage caused by Respondent as determined by Inspector Deering as set forth in the July 18, 2003 Corrective Work Order:

(1)Complaint #5 (2)Complaint #7 (3)Complaint #11 (4)Complaint #12

e) The required repairs described above must be completed to minimum workmanship standards on or before the effective date of the entered Order in this matter to avoid the revocation of Respondent’s K-34 contracting license.

It is further recommended that if Respondent timely complies with the above-described requirements 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 K-34 license shall be suspended for a period of ten 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 disciplinary penalties, that Respondent pay the following civil penalties to the Registrar of Contractors pursuant to A.R.S. § 32-1154(D):

a) the sum of $500.00 for Respondent’s failure to comply with the Registrar’s Corrective Work Order dated May 29, 2003; and b) the additional sum of $500.00 for Respondent’s failure to comply with the Registrar’s Corrective Work Order dated July 18, 2003

The failure by Respondent to pay the entire amount of the said civil penalties on or before 30 days following the effective date of the entered Order in this matter shall result in the automatic revocation of Respondent’s K-34 contracting license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5). It is further recommended, if the alternative penalty is applicable and in addition to the above-provided disciplinary penalties, that any restoration of Respondent’s rights to resume contracting, whether or not probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of 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. 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 29, 2003

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2003, to:

Israel G. Torres, Director Registrar of Contractors ATTN: Jennifer Brown 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________ ----------------------- [1] Respondent has not been cited for this omission. [2] Exhibit 6. This letter also failed to list Respondent’s Arizona contractor license number.

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