ALJDEC decisions subject to certification as final

04F-G0122-ROC · Registrar of Contractors · 2003-12-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 20, 2003 APPEARANCES: Joe Rocco, Esq. appeared on behalf of Complainants; Marjorie Gulermovich, president of New Beginnings Interiors appeared on behalf of Respondent. ADMINISTRATIVE LAW JUDGE: Wendy S. Morton _____________________________________________________________________ The issue presented by this matter is whether Respondent New Beginnings Interiors 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 1. Respondent New Beginnings Interiors is the holder of a Class C-08 license (No. 150700) issued by the Registrar of Contractors (“ROC”). Marjorie Gulermovich is Respondent’s president. 2. Complainants Les and Steffani Skelton own a home located at 8907 W. Quail Avenue, Peoria, Arizona (“the Home”). 3. On February 22, 2003, Complainants signed a contract with Respondent to install Shaw laminate flooring in the downstairs area of the Home. The total contract price was $6,684.00. 4. On March 17, 2003, Respondent began its work. Respondent completed the installation on or about March 26, 2003. 5. After the first installation was completed, Mr. Skelton installed the baseboards. 6. In early April, 2003, shortly after the installation was completed, Complainants noticed that the floor was separating, peeling, chipping, bubbling and warping. The floor was also cupping and creaked when stepped on. 7. Respondent agreed to re-level the floor and to remove and replace chipped and/or warped boards. Between June 6 and July 30, 2003, Mark Silovic attempted to reinstall the floor for Respondent.[1] Mr. Silovic is not a licensed contractor, nor is he an employee of Respondent. Mr. Silovic testified at hearing that he works for “myself.” 8. Complainants continued to be dissatisfied with Respondent’s workmanship on the floor. On July 30, 2003, Complainants filed a complaint against Respondent with the ROC. In their complaint, Complainants alleged several deficiencies with the floor, including the stair nosing, trim and baseboards. 9. ROC Inspector Lee Deem investigated the complaint. 10. On August 14, 2003, Inspector Deem conducted a jobsite inspection at the Home. Complainants, Marjorie Gulermovich and Mark Silovic were present at the inspection. 11. Inspector Deem determined that Respondent had installed the wrong vapor barrier and pad underneath of the floor. Respondent agreed with Inspector Deem’s determination. 12. On August 15, 2003, Inspector Deem issued a Corrective Work Order (“CWO”) that read: “Wrong pad installed. Contractor to make appropriate repair per jobsite agreement.” Inspector Deem stated that there were other issues where the workmanship on the floor fell below industry standards, including chips, scrapes, loose transition strips and improper leveling. However, since Respondent needed to remove and replace the entire floor to change the vapor barrier and pad, Inspector Deem felt that the workmanship issues were moot and that there was no need to list them on the CWO. 13. Respondent had Mr. Silovic remove the floor and reinstall the correct moisture barrier and pad. Mr. Silovic then reinstalled the floor. Complainants were dissatisfied with Respondent’s corrective work. On September 2, 2003 Complainants requested the instant administrative hearing. 14. On September 11, 2003, the ROC issued Citation and Complaint No. G04-0122 against Respondent, alleging violations of A.R.S. § 32-1154(A)(3), (A)(7), and/or (A)(23). 15. On November 19, 2003, Inspector Deem conducted a prehearing inspection at the Home. Mr. Skelton, Ms. Gulermovich and Mr. Silovic were present during the prehearing inspection. 16. The instant administrative hearing commenced on November 20, 2003.[2] 17. At hearing, Inspector Deem testified that Respondent had installed the proper vapor barrier and pad pursuant to the CWO. However, Respondent’s workmanship on the new floor failed to meet minimum industry standards. 18. Inspector Deem testified that the new floor was not level. This was demonstrated by the fact that the floor went up and down and squeaked when it was walked on. This condition was most obvious in the following areas: in front of the pantry, in front of the bay window in the kitchen, by the baseboard at the kitchen island, against the baseboard area in the living room hallway. (See Exhibit C-22). Inspector Deem testified that he observed more areas where the floor was not level than were present during the initial jobsite inspection of the previous floor. Respondent argued that this condition could be caused by humidity in the Home. Inspector Deem testified that while humidity could be a factor, the only cause for the floor to squeak or go up and down when walked on is that it is not level. The Administrative Law Judge notes that none of the floors Respondent installed have been properly leveled. 19. Complainants testified that there were chips in the new floor. Respondent argued that any chips on the floor boards were small and that Mr. Skelton was overly critical of Respondent’s work. Mr. Silovic maintained that the boards were not chipped when Respondent completed its work on or about September 8, 2003. The Administrative Law Judge finds that the photographic evidence (taken by Mr. Skelton on September 8, 2003) of multiple deficiencies in the floor contradicts Respondent’s assertion that “there was nothing wrong with the job.” 20. Exhibits 2-6 depict chipped floor boards in the kitchen area and living room hallway. Mr. Silovic complained that he was constantly having to replace chipped boards during the installation and that “he’s [Mr. Skelton] making me replace for tiny little things that no body else would complain about.” Inspector Deem testified that the chips on the floor boards did not meet minimum industry standards. 21. Respondent next argued that Complainants caused the boards to chip by either dropping children’s toys on the floor, rolling a chair over the edges of the boards or allowing water from Complainants’ dog or dog dish to sit on the floor. The Administrative Law Judge finds that Respondent failed to provide any credible evidence to show that any of these events occurred, or, if they did, that they would cause the floor to chip in the manner described. Mr. Skelton testified that there are no chipping problems in the living room where he has moved furniture. Most of the chips are located in the kitchen where there is free walking space. The Administrative Law Judge notes that all 3 floors Respondent installed had chipped or warped boards. 22. Complainants alleged that Respondent’s workmanship on the baseboards was deficient. At the prehearing inspection, Inspector Deem found that two of the baseboards in the living room were pointed outward and one of the angles was cut incorrectly. Another inside baseboard did not come out far enough to hide the edge of the flooring. Additionally, there were excessive nail holes in some of the baseboards. (See Exhibits 7- 13). Mr. Silovic testified that he put more nail holes in the baseboards because he could not use the original holes. He stated that he then filled the new nail holes with filler. 23. The Administrative Law Judge finds that Respondent’s workmanship on the baseboards fell below minimum workmanship standards. Exhibit 8 depicts a piece of baseboard with excessive nail holes that were not filled with filler. Additionally, there appear to be dents next to the nail holes. Exhibits 9 and 12 depict baseboards with excessive nail holes that were filled, but are still obvious and do not blend in with the rest of the wood. In Exhibit 12, the filler itself appears excessively applied and is haphazardly smeared on the baseboard. 24. Respondent failed to install a piece of flooring behind the stove. (See Exhibit 16). The flooring does not extend up to the wall behind the stove. Inspector Deem observed this area during the prehearing inspection. 25. There was a broken transition strip and a poor cut in the hallway. (See Exhibit 18). Inspector Deem observed this area during the prehearing inspection. The Administrative Law Judge finds that Respondent is responsible to correct these deficiencies. 26. Respondent damaged the dry wall next to the refrigerator. This damage was approximately six feet high. Respondent stated that it had damaged some of the drywall during the installation but believed that it had repaired all of the damage. The aforementioned damage was still present at the time of the prehearing inspection. (See Exhibit 14). The Administrative Law Judge finds that Respondent is responsible to repair this damage. 27. Complainant alleged that Respondent improperly installed a piece of edge trim on the stair nose. Mr. Skelton testified that the stair nose stuck out past the round nose on the drywall. Exhibit 15 depicts the installation as it appeared on or about September 8, 2003. Exhibits 19 and depict the underside of the stair nosing. This piece of trim has since been stepped on and broken off. Based upon the aforementioned photographs, the Administrative Law Judge finds that Respondent’s installation of the stair nose was improper. 28. Mr. Skelton testified that one of the T-moldings was loose and was coming up. (See Exhibit 17). This condition is a potential safety hazard. The Administrative Law Judge finds that Respondent was responsible to correct this deficiency. 29. On September 23, 2003, Philip Fallek conducted an inspection of the floor and specifically examined 3 areas where the laminate was bridging over a depression in the substrate. The inspector found that the substrate did not meet industry standard for level. The movement in the flooring caused by the floor not being level could cause breaking apart, chipping and weakening of the joints. The report indicated that the defects in the floor were installation related. (See Exhibit 23). 30. Based upon this report, on October 30, 2003, Shaw Industries, Inc., the floor’s manufacturer, advised Complainants that there was no basis for a warranty claim because the subfloor was not properly prepared. 31. The Administrative Law Judge finds that Complainants’ floor needs to be removed and properly replaced. However, this work should not be done by Respondent as the relationship between the parties has irreparably broken down. Respondent has installed 3 different floors in the home, all with workmanship deficiencies. This has resulted in a significant disruption to Complainants whose home was subject to construction for an exorbitant period of time without a satisfactory result. Complainants indicated that they no longer trust Respondent. The Administrative Law Judge observed that Respondent was openly hostile toward Complainants at hearing. CONCLUSIONS OF LAW 1. In this administrative proceeding Complainants bear the burden to prove, by a preponderance of the evidence, that Respondent violated A.R.S. § 32-1154(A)(3), (A)(7) and/or (A)(23) as charged by the ROC in its August 13, 2003 Citation and Complaint. See A.A.C. R2-19-119. 2. 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). 3. 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 Respondent with violating 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 professional industry standards. The Administrative Law Judge concludes that Complainants sustained their burden to prove that Respondent failed to comply with the ROC’s minimum workmanship standards in installing the second floor that was subject of the CWO. Respondent also failed to comply with the ROC's minimum workmanship standards in reinstalling the floor pursuant to the CWO. Therefore, the Administrative Law Judge concludes that Respondent violated A.R.S. § 32-1154(A)(3). 4. Under A.R.S. §32-1154(A)(7), a contractor is subject to discipline for “the doing of a wrongful or fraudulent act…resulting in another person being substantially injured.” The Administrative Law Judge finds that Respondent violated A.R.S. § 32-1154(A)(7) by failing to provide Complainants with the benefit of their contract; a floor that can be properly warrantied by the manufacturer. Shaw Industries, Inc. has indicated that it will not warranty the floor due to its improper installation. Respondent’s poor workmanship also constitutes a wrongful act within the meaning and intent of the A.R.S. § 32-1154(A)(7) 5. 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 that although Respondent installed the proper vapor barrier and pad pursuant to the CWO, implicit in the CWO was that Respondent was to re- install the floor in a proper and workmanlike manner. Respondent failed to do so and therefore, the Administrative Law Judge concludes that Respondent failed to comply with spirit and intent of the CWO. Based upon the foregoing, the Administrative Law Judge concludes that Respondent violated A.R.S. § 32-1154(A)(23). 6. The Administrative Law Judge concludes that it is appropriate for the ROC to impose discipline against Respondent's Class C-08 License (No. 150700). RECOMMENDED ORDER In view of the foregoing, the Administrative Law Judge recommends that on the effective date of the order entered in this matter, Respondent’s Class 08 License (No. 150700) will be revoked. It is further recommended that if the ROC receives written confirmation that Respondent has paid Complainants $6,684.00, on or before the effective date of the Order entered in this matter, then the above- provided license revocation shall not take place but instead Respondent’s Class C-08 License shall be placed on active suspension for a period of 7 days followed immediately by a period of disciplinary probation for one year. This alternative penalty shall commence, if at all, on the effective date of the Order entered in this matter.

Done this day, December 5, 2003

______________________________________ Wendy S. Morton Administrative Law Judge

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

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

By ___________________________

----------------------- [1] Respondent agreed to remove and reinstall the baseboards as it removed and replaced the flooring. [2] During the presentation of Complainants’ case, Mr. Skelton testified that he was a police officer with the Arizona Department of Public Safety and worked in the Vehicular Crimes Unit at the time when the Administrative Law Judge served as a Deputy Maricopa County Attorney in the Vehicular Crimes Unit. The Administrative Law Judge questioned Mr. Skelton further about his employment. The Administrative Law Judge did not recall having any cases with Mr. Skelton and additionally found that Mr. Skelton’s being a D.P.S. officer would have no bearing on her ability to fairly and impartially evaluate the evidence presented. Both parties indicated that they believed that the Administrative Law Judge could be fair and impartial in rendering a decision in the instant case and the hearing proceeded.

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