ALJDEC decisions subject to certification as final

05F-G1184-ROC · Registrar of Contractors · 2005-11-07

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 3, 2005 APPEARANCES: Complainants: Charles and Judith Losasso appeared pro se. Respondent: Ernest Shaver, Attorney at Law, represented Upright Installations dba Two Blind Guys, L.L.C. Testifying were Grant Zimmerman, Qualifying Party, and Michelle Zimmerman, Comptroller. ADMINISTRATIVE LAW JUDGE: Gary B. Strickland _____________________________________________________________________ A Hearing was convened to determine whether Respondent Upright Installations dba Two Blind Guys, L.L.C. (hereinafter also, “Respondent” or “Two Blind Guys” or “the Contractor”) violated state law as has been alleged by Complainants Losasso and as has been cited by the Arizona Registrar of Contractors (hereinafter also, “ROC“). Evidence and testimony were presented. Respondent holds a Class K-05 (Dual Window Treatment) license issued by the Registrar of Contractors. Complainants allege that Respondent accepted money from Complainants for the installation of blinds and shades at the Losasso home and that Respondent has not performed as anticipated by the Losassos under their contract. Based upon an examination of the entire record,[2] the following Findings of Fact are made, Conclusions of Law rendered, and DECISION AND RECOMMENDED ORDER issued:

FINDINGS OF FACT 1. Respondent’s license (No. 188574) was initially issued on August 26, 2003. The license was in active status at all times herein relevant. 2. Grant Michael Zimmerman is the Qualifying Party identified on the Two Blind Guys, L.L.C. license. 3. The project at issue involved the installation of blinds and shades at the Losasso home situated at 17941 West Camino Real Drive,Surprise, Arizona. Since the products were installed for a sum greater than $750.00, the acts and omissions alleged fall within the requirements of Title 32, Article 3.[3] 4. Complainants Losasso entered into an agreement with Two Blind Guys, L.L.C. on or about March 1, 2005 whereby the Contractor agreed to install the blinds and shades at the Losasso residence at a cost of $2,402.15.[4] Complainants have paid Two Blind Guys, L.L.C. the total agreed upon contract price.[5] 5. The contract identified the installing company as Two Blind Guys & Keep It Cool – Solar Solutions; an ROC Lic. No. was not listed on the order form. The Losassos ordered [1] 9 2½” Exotic Woods Deluxe #1112 blinds @ $1,042.00; [2] 3 Vinyl Roller #4969 Almond Blackout Shades @ $428.00; and [3] 3 F.H. Verticals Fabric #9751 Sand/Quebec w/Upgraded Valance Trm #139/off-white @ $812.00 It is only orders [1] and [2] that have been found by the Losassos not satisfactory. 6. The parties stipulate that the amount disputed by the Losassos is $428.00 and $1,042.00, a $1,470.00 total. 7. The Losassos object that the [1] 9 2½” Exotic Woods Deluxe #1112 blinds are not what they anticipated when ordering. Although Mrs. Losasso admitted that the blinds were appealing to her when shown a sample and that they assertedly harmonized with her oak cabinets causing her at the time to express “that’s going to look really good,” when installed, the item was revealed not to be made of wood but of a wood/polyvinyl chloride (“PVC”) admixture. The “plastic” can peel away from the wood;. this, in itself, is unacceptable. The Losassos complain that they have not received the benefit of their bargain. Further, because the item is no longer manufactured, as the Losassos have learned since installation, there is concern lest the warranty may not be honored in the future. 8. Mr. Zimmerman asserts that the 9 2½” Exotic Woods Deluxe #1112 blinds conform to the product sample that had been shown to Mrs. Losasso and were installed according to her choice. In fact, after the blinds had been installed, Mrs. Losasso attempted to order more of the 2½” Exotic Woods Deluxe #1112 blinds for use in her entryway. 9. Mr. Zimmerman assures that the subject Exotic Woods Deluxe #1112 blinds are still under warranty; if replacements cannot be obtained in the event of future failure, Two Blind Guys will stand by the warranty to the purchasers’ satisfaction. 10. Mrs. Losasso affirms that the 9 2½” Exotic Woods Deluxe #1112 blinds are fully functional as installed. 11. “Exotic Woods” is a trade-name. 12. Further, the Losassos object that [2] the 3 Vinyl Roller #4969 Almond Blackout Shades are unsatisfactory as installed because their manifest opacity capability is insufficient for their needs. Mr. Losasso suffers from an undiagnosed condition that causes his eyes to be highly sensitive to light. Because the shades, installed in the master bedroom, do not shield the light to the degree anticipated, Mr. Losasso is not able to gain adequate rest (he has recently undergone treatment for leukemia and, because of the condition, requires additional sleep). 13. In furtherance of their efforts to persuade that the 3 Vinyl Roller #4969 Almond Blackout Shades are inadequate for their needs and not to the quality as was represented to them, Complainants Losasso offered six photographs[6] of the installed shades. The photos, in themselves, do not evince a lack of adequate opacity. 14. The Losassos opted to purchase the 3 Vinyl Roller #4969 Almond Blackout Shades, as opposed to alternative available options, because the pricing of the shades appealed to them. 15. Not satisfied with their purchase and because the Losassos felt that Two Blind Guys had not gone far enough to accommodate their desires, they filed a Complaint with the Registrar of Contractors on or about June 6, 2005 expressing therein their dissatisfaction with the shades and the blinds. They additionally alleged that Two Blind Guys had falsely advertised because its ROC license was then held in the name Upright Installations, L.L.C. 16. Mr. Zimmerman responded in writing to the Complaint on June 15, 2005 denying misrepresentation, the Losassos had received what they had ordered, denying false advertising, and denying the Losassos request for a refund noting the following language on the face of the contract:

I HAVE READ, CHECKED & APPROVED THIS ORDER. I UNDERSTAND THAT TWO BLIND GUYS & KEEP IT COOL WILL CUSTOM ORDER THE ABOVE PRODUCTS BASED UPON THE SIZES, COLOR, AND PRODUCTS LISTED ON THE MEASURE SHEET. DUE TO THE CUSTOM NATURE & RAPID DELIVERY OF THE PRODUCTS LISTED ABOVE, NO CHANGES CAN BE MADE & NO CANCELLATIONS TO BE ACCEPTED AFTER SIGNING BELOW. CUSTOMER AGREES TO THE TERMS SET FORTH IN THE STATEMENT OF POLICY ON THE REVERSE SIDE OF THIS FORM. [7] Mrs. Losasso signed the order form thereby manifesting awareness of and agreement with the terms and conditions stated in the agreement. 17. Thereafter, upon motion of the Complainants, the Registrar of Contractors issued a CITATION AND COMPLAINT against the Two Blind Guys license on July 28, 2005, alleging therein violations of A.R.S. § 32- 1154(A)(3), (7), (13), (15), and (16). It is those allegations that are herein considered in light of the evidence offered by Complainants and in consideration of the rebuttal offered by Respondent. 18. At the Hearing, the Losassos informed that they are not alleging workmanship deficiencies in the installation of the blinds and the shades. 19. The Losassos do argue, however, that Mr. Zimmerman acted wrongfully, if not fraudulently, by (1) not providing to them blinds and shades that qualitatively measured up to their expectations; (2) not revealing the true identity of the company in its advertising flyer and on its contract documents; and (3) not recording its ROC license number on advertising and contract documents. 20. The ANSWER to the CITATION AND COMPLAINT that Two Blind Guys filed on August 5, 2005, asserted general denials to the Complainants’ allegations. At the Hearing, Respondent further asserted that the Complaint was filed as a result of “sour grapes.” Because Complainants have regretted their choices made, they have attempted to create mischief for Respondent Two Blind Guys’ honest and inadvertent mistake. The mistake resulted from a sale of the former entity, Two Blind Guys, that ended in the purchaser’s default on the contract. Michelle Zimmerman, the company’s Comptroller and Office Manager, testified that when the error in advertising had been brought to the Contractor’s attention by the Registrar’s Inspector,[8] the company immediately, within one or two days, acted to comply. It now advertises and identifies itself on all contracting documents as Upright Installations, L.L.C. dba Two Blind Guys (ROC #188574). 21. Michelle Zimmerman, the company’s Comptroller and Office Manager, testified that Two Blind Guys, L.L.C.’s mistake in advertising in no way contributed to a misunderstanding on the part of the Losassos that resulted in their manifest dissatisfaction with the products purchased. Mrs. Zimmerman recounted in detail how she had acted immediately to correct the error when informed by the ROC of the Losasso Complaint and necessity to correct the company’s licensing records and advertising flyers. Mrs. Zimmermans’ testimony was credible and supported by ROC licensing records. 22. The weight and sufficiency of the evidence establishes that Mr. and Mrs. Losasso have exhibited “buyers’ remorse” in the purchase of the 9 2½” Exotic Woods Deluxe #1112 blinds @ $1,042.00 and the 3 Vinyl Roller #4969 Almond Blackout Shades @ $428.00 However, “buyers’ remorse” is insufficient to establish wrongful or fraudulent act or omission on the part of a Contractor. Likewise, “buyers’ remorse” does not establish workmanship deficiency (that the Losassos are not alleging workmanship deficiency is admitted).[9] 23. The evidence further establishes that, although Upright Installations, L.L.C. dba Two Blind Guys had failed properly to identify the company name and ROC licensure on its advertising flyer[10] that solicited the work for which the Losassos contracted, as well as on the written agreement that the parties seek to have enforced,[11] the omission (A) has immediately been addressed by the Contractor and (B) cannot be linked to the dissatisfaction expressed by the Losassos over the products for which they contracted. The primary purpose for ROC oversight is to protect the public from the acts of unscrupulous Contractors.[12] Further, the purpose of A.R.S. § 32-1153 (proof of licensure a prerequisite to civil action) is not to penalize Contractors, but "to protect the public from unscrupulous, unqualified, and financially irresponsible [C]ontractors."[13] The Losassos have not persuaded that they have been victimized by the acts and omissions of an unscrupulous Contractor in this transaction. 24. Under the authority of A.A.C. R4-9-117,[14] the administrative Law Judge has examined the record of Upright Installations, L.L.C. dba Two Blind Guys and has found that the Losasso Complaint is the sole Complaint that has been filed against Lic. No. 188574.[15] APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors charged Respondent with possible violations of A.R.S. § 32-1154(A)(3), (7), (13), (15), and (16). Those statutory sections require that a holder of a license or a person listed on a license not commit the following:

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. . . .

13. Failure in any material respect to comply with this chapter. . . .

15. Acting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth upon the license. . . .

16. False, misleading or deceptive advertising whereby any member of the public may be misled and injured.

CONCLUSIONS OF LAW 1. The Registrar of Contractors has jurisdiction over Complaint No. G05-1184 under A.R.S. § 32-1101, et seq., a section that authorizes the Registrar to impose disciplinary sanctions against licensees for violations identified at A.R.S. § 32-1154(A). Upright Installations, L.L.C. was licensed at the time that the subject construction work was undertaken. 2. The burden of persuasion generally at an administrative hearing falls to the party asserting a claim, right or entitlement, or an Agency seeking to impose a penalty.[16] Further, the standard of proof is that of the “preponderance of the evidence”.[17] Proof by a preponderance means that the evidence is sufficient to persuade the finder of fact that the proposition is “. . . more likely true than not.”[18] The evidence taken as a whole must convince the decision maker that the party who bears the overall burden of persuasion, in this case the Complainants, is more probably correct on the issue(s) in dispute. 3. Observing these standards, Complainants Losasso have not satisfied their burden, by a preponderance of the evidence, that Respondent Upright Installations, L.L.C. dba Two Blind Guys has violated statutory and regulatory provisions in its contractual transactions with them, based on the record created by the Losassos. By a preponderance of all of the evidence, Complainants Losasso have not persuaded that the Respondent Contractor violated A.R.S. § 32-1154(A)(3), (7), (13), (15), and (16) as charged in the CITATION AND COMPLAINT. No wrongful or fraudulent act or omission relating to ROC licensure has been proved. RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors dismiss Complaint No. G05-1184, Complainants not having borne their burden of persuasion on any and all allegations set forth in the CITATION AND COMPLAINT. In the event of the certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will fall forty days from the date of that certification.

Done this 17th day of November 2005.

______________________________________ Gary B. Strickland Administrative Law Judge

Original transmitted by mail this 17th day of November 2005 to:

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

By ___________________________

----------------------- [1] To correct paragraph numeration and proper identification of Complaint No. [2] The record consists of those documents found within the Agency’s case file, the contents of which the Administrative Law Judge has accorded Administrative notice, the exhibits offered by the Complainant and Respondent, and the digital record of the proceedings under A.A.C. R2-19- 121. Complainant offered four exhibits, identified 1 through 4. Respondent offered one exhibit, marked A.Each of the exhibits was received.

[3] See A.R.S. § 32-1121(A)(4).

[4] See Exhibit A.

[5] See the “Complaint” found within the Agency’s Hearing file, the contents of which the Administrative Law Judge has accorded administrative notice. [6] Exhibit 1.

[7] Exhibit A.

[8] The Inspector issued two letters to the Contractor on June 7, 2005, a form RC-C-089 letter (must display ROC Lic. No. on all advertising and contracting documents) and a form RC-C-013 letter (must act as a Contractor only under the name to which the ROC license had been issued). See the Agency’s Hearing file. [9] See ¶18, above.

[10] See Exhibit 3.

[11] See Exhibit A.

[12] See Beazer Homes Ariz., Inc. v. Goldwater, 196 Ariz. 98, 101, 993 P.2d 1062, P 14, 993 P.2d 1062, 1065 (App. 1999). [13] See Aesthetic Prop. Maint. v. Capital Indemnity, 183 Ariz. 74, 77, 900 P.2d 1210, 1213 (1995).

[14] R4-9-117. Prior Record

In any disciplinary proceeding conducted by the Registrar, the licensee's entire license file including the record of prior citations and decisions may be considered by the Registrar in making a decision and order in the case.

[15] See http://www.azroc.gov/clsc/AZROCLicenseQuery

[16] See Ariz. Admin. Code R2-19-119 (B).

[17] Culpepper v. Arizona Board of Nursing, 187 Ariz. 431, 930 P.2d 508 (App. 1997); See also Ariz. Admin. Code R2-19-119 (A).

[18] In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). See also J. LIVERMORE, R. BARTELS, & A. HAMEROFF, LAW OF EVIDENCE ( 301.1(4th ed. 2000) (One party bears the overall burden of persuasion on each fact material to the party’s claims and defenses. Further, the party with the burden of persuasion on a particular fact is required to satisfy the burden of production of enough qualitative evidence sufficient to support a finding of the existence of the fact, following a reasonable person standard.)

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