ALJDEC decisions subject to certification as final

06F-1811-ROC · Registrar of Contractors · 2006-11-13

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 13, 2006 APPEARANCES: Complainant : Carey Vandermeulen appeared pro se. Respondent : David Cutlip, Qualifying Party, represented Specialty Construction. Testifying was David Rosen, Inspector, Independent Inspection Service of Phoenix. ADMINISTRATIVE LAW JUDGE: Gary B. Strickland _____________________________________________________________________ A Hearing was convened to determine whether Respondent Specialty Construction violated state law as has been alleged by Complainants Carey and Lisa Vandermeulen and as cited by the Arizona Registrar of Contractors (hereinafter also, “the ROC”). Evidence and testimony were presented. Respondent Specialty Construction holds a Class B-03 (Residential General Remodeling and Repair Contractor) license issued by the Registrar of Contractors. Complainants allege that Respondent accepted money from Complainants for the installation of a Pergo floor but that Respondent installed the floor in a manner falling below workmanship standards. Based upon an examination of the entire record,[1] 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. 138077) was initially issued on August 30, 1998. The license was in active status at the time that the work was performed that led to the present Complaint. The license expired effective September 1, 2005.[2] 2. David Lee Cutlip is the Qualifying Party identified on the Specialty Construction (hereinafter also, “the Contractor”) license. 3. The project at issue involved the installation of Pergo flooring at the Vandermeulen residence in Scottsdale, Arizona. The work was performed on Arizona property, the contract under which the construction was performed was executed in Arizona, and the Contractor is licensed by the ROC. As such, the acts and omissions alleged in the Complaint fall within the requirements of Title 32, Chapter 10, Article 3. 4. Complainant Vandermeulen entered into an agreement with Specialty Construction on February 10, 2004 under which the company agreed to install Pergo flooring at the Vandermeulen residence for a $13,143.47 contract price. The work was performed and the contract price has been paid in full.[3] 5. Having become disconcerted over the quality of Specialty Construction’s performance, the Vandermeulens filed a Complaint before the Registrar of Contractors on or about February 24, 2006.[4] Thereafter, an inspection was conducted by an ROC Inspector on March 30, 2006 and a “Corrective Work Order”[5] was issued on April 7, 2006. The Order directed Specialty Construction to “[d]etermine [the] cause of the wood floor cupping on first level and correct by appropriate means.”[6] 6. Unbeknownst to the Inspector at the time that he issued his “Corrective Work Order,” Pergo had already approved replacement of the subject flooring on a “goodwill” basis.[7] 7. The floor has been replaced by Pergo, by and through Whelen Construction, a Pergo endorsed installer. The cost of the installation, along with materials used, has been paid by Pergo. Certain “extras” installed by Whelen Construction have not been paid by Pergo ($682.80).[8] 8. It is the cost for the “extras” that Mr. Vandermeulen desires to have Mr. Cutlip pay as a result of this Complaint. 9. Complainant Vandermeulen maintains that Specialty Construction has defied the directives of the Registrar’s Inspector’s “Corrective Work Order” by not performing as directed by that Order. 10. However, by the time that the “Corrective Work Order” was issued, License No. 138077 had already expired. That the flooring was replaced has mooted the issue of complaint. 11. Because the Vandermeulens had given notice that Specialty Construction allegedly had not performed the corrections delineated within the “Corrective Work Order,” the Registrar of Contractors issued a CITATION AND COMPLAINT against Respondent’s license on June 16, 2006 therein citing Specialty Construction for violation of A.R.S. § 32-1154(A)(3), (7), (13), and (23). 12. Specialty Construction filed an ANSWER to the CITATION AND COMPLAINT on or about July 28, 2006. The ANSWER defended that Mr. Cutlip had successfully assisted Mr. Vandermeulen in the efforts to have the Pergo flooring replaced.[9] 13. Thereafter, upon request of Mr. Vandermeulen because no resolution of the problem was forthcoming, the Registrar issued a NOTICE OF HEARING on or about October 5, 2006 and a Hearing was conducted pursuant thereto. 14. At the Hearing, Mr. Vandermeulen related that he felt that Specialty Construction had been unjustly enriched in the transaction, because it had been paid for initial installation that turned out deficient in workmanship. 15. David Rosen of Independent Inspection Service of Phoenix testified for David Cutlip/Specialty Construction. Mr. Rosen informed that he had conducted an inspection of the Vandermeulen residence on April 19, 2006, prior to the Pergo replacement. Having conducted extensive moisture testing, Mr. Rosen concluded that the evident “cupping” in the flooring was related to excess moisture, the cause thereof unaccounted for. Any deficiencies that he observed in the installation were unrelated to the “cupping.”[10] Mr. Rosen’s testimony and opinions were not contested. 16. The weight and sufficiency of the evidence does not persuade that Specialty Construction wrongly or fraudulently failed to respond to the directives of the ROC's Inspector’s “Corrective Work Order.” The issue was mooted by replacement by the manufacturer of the Pergo flooring. Further, without the ROC Inspector testifying, or anyone else with expertise in the field, Respondent’s expert’s testimony remains uncontroverted; there has been no demonstration of workmanship deficiency related to the necessity for the manufacturer to replace the flooring. What has been demonstrated is that the “cupping” of the flooring that justified replacement by the manufacturer resulted from excess moisture of unknown origin. . . . 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) (and A.A.C. R4-9-108, the “workmanship rule”), (7), (13), and (23). 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.

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. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held.

. . .

A.A.C. R4-9-108 is the rule violation charged under A.R.S. § 32- 1154(A)(3). The rule requires that all construction work be performed in a professional and workmanlike manner and in accordance with applicable building codes and professional industry standards.

CONCLUSIONS OF LAW 1. The Registrar of Contractors has jurisdiction over Complaint No. 06-1811 under the authority of A.R.S. § 32-1101, et seq., a section that enables the Registrar to impose disciplinary sanctions against licensees for the violations noted at A.R.S. § 32-1154. Specialty Construction is a licensee. 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.[11] Further, the standard of proof is that of the “preponderance of the evidence.”[12] 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.”[13] 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 Vandermeulens, is more probably correct on the issue(s) in dispute. 3. Observing these standards, Complainants Vandermeulen have not persuaded, by a preponderance of the evidence, that Respondent Specialty Construction has violated the cited statutory and regulatory provisions by failing to install the Pergo flooring in a workmanlike manner, according to industry standards. The Vandermeulens have not persuaded that Specialty Construction committed a wrongful act substantially[14] injurious to the Vandermeulen family. Further, the Vandermeulens have not persuaded that Specialty Construction refused to respond to the Registrar’s April 7, 2006 “Corrective Work Order.” 4. By a preponderance of all of the evidence, Complainants have not persuaded that, in the installation of the Pergo flooring at the Vandermeulen residence, Specialty Construction violated A.R.S. § 32- 1154(A)(3), (7), (13), and (23) as charged in the CITATION AND COMPLAINT. . . . . . .

RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors enter an Order dismissing Complaint No. 06-1811. In the event of the certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order shall fall forty days from the date of that certification.

Done this 13th day of November 2006.

_____________________________________ Gary B. Strickland Administrative Law Judge

Original transmitted by mail this 13th day of November 2006 to:

Fidelis V. Garcia, Director Registrar of Contractors Legal Department 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

----------------------- [1] 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 parties, respectively, and the digital record of the proceedings under A.A.C. R2-19-121. Complainant offered one exhibit, identified 1. Respondent offered four exhibits, identified A through D. All of the exhibits were received.

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

[3] See Vandermeulen Complaint within the Agency Hearing file.

[4] Within the Agency Hearing file.

[5] Within the Agency Hearing file.

[6] Within the Agency Hearing file.

[7] See Exhibit B.

[8] See Exhibit 1.

[9] Within the Agency Hearing file.

[10] See Exhibit D [11] See Ariz. Admin. Code R2-19-119 (B).

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

[13] 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.)

[14] Meaning, a material injury, one that is not illusory. See ”substantial”: WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 2280 (2002).

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