ALJDEC decisions subject to certification as final

06F-A0120-ROC · Registrar of Contractors · 2006-03-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 6, 2006 APPEARANCES: Complainant Kenneth P. Archer appeared on his own behalf; Jeffrey Coughlin, Esq. appeared on behalf of Respondent Kuffler Engineering, L.L.C. dba Liquid Vinyl Coatings of Arizona ADMINISTRATIVE LAW JUDGE: Marianne T. Bayardi _____________________________________________________________________ The issue presented by this matter is whether Respondent Kuffler Engineering, L.L.C. dba Liquid Vinyl Coatings of Arizona is subject to discipline for acts or omissions in violation of A.R.S. § 32-1154(A). 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 Kuffler Engineering, L.L.C. dba Liquid Vinyl Coatings of Arizona (“Respondent”) is the holder of a Class K-05 License (No. 198521) issued by the Registrar of Contractors (“ROC”). Carl Kuffler is Respondent’s qualifying party. 2. Complainant Kenneth P. Archer (“Complainant”) owns a log cabin home located at 1995 N. Holly Drive, Prescott, Arizona (the “Home”).

3. On July 8, 2005, Complainant entered into a contract with Respondent for the application of coating to the exterior of the Home. Work was to begin on or about August 18, 2005. The total contract price was $13,960.34. On July 8, 2005, Complainant paid Respondent a deposit of $6,960.34. 4. Respondent, through its employee/salesperson Tim Christner, verbally informed Complainant that there were 3 posts at the Home that needed to be replaced prior to Respondent performing the contracted work. Mr. Christner offered Complainant the option of hiring his own general contractor to replace the posts or having Respondent hire a general contractor to replace the posts.[1] Complainant opted to hire a general contractor himself. 5. Complainant hired Page One Construction Company (“Page One”) to replace the 3 posts.[2] On August 16, 2005, Johvonn Zito of Page One went to the Home for the purpose of replacing the 3 posts. However, upon closer examination, Mr. Zito identified numerous problems with the exterior of the Home. Mr. Zito and Complainant discussed Complainant’s pending contract with Respondent to coat the exterior of the Home. Mr. Zito informed Complainant that there was too much damage to the exterior of the Home for Respondent to perform the contracted work. 6. On August 16, 2005, Complainant telephoned Respondent, through Mr. Christner, to cancel the contract and request a full refund of his deposit. Mr. Christner went to the Home on August 18, 2005 to speak with Complainant about the contract and Complainant’s concerns. Complainant again requested a full refund of his deposit. Mr. Christner requested the opportunity to draft a new and more extensive proposal. Complainant agreed. Mr. Christner returned to the Home on August 24, 2005 with a new proposal, but without the refund check. Mr. Christner then informed Complainant that he would have to speak directly to Mr. Kuffler concerning any refund. 7. Complainant spoke to Mr. Kuffler in late August 2005 concerning the requested refund. Mr. Kuffler told Complainant that Respondent would refund $535.12 of Complainant’s $6,960.34 deposit. Complainant was dissatisfied with Respondent’s refund offer. 8. On September 1, 2005, Complainant filed the instant Complaint against Respondent with the ROC. The Complaint alleged: After hearing many radio ads re the advantages of liquid vinyl coatings I called the company. On July 8, salesman Tim Christner came to my LOG HOUSE, surveyed the situation and prepared a proposal to scrape and sand where necessary, power wash, caulk and seal, and apply two coats of liquid vinyl. I signed the proposal and gave him a deposit in the amount of $6,960.34.

On 8/16/05 a representative of PAGE ONE CONSTRUCTION, (ROC- 112837) came to evaluate some repair work to be done prior to the refinishing. This person, (Mr. Zito) was appalled that we were planning to power wash and put vinyl over the existing latex paint. This would trap moisture and promote deterioration of the logs. This opinion is confirmed by others familiar with log home maintenance. I immediately called Mr. Christner and told him to cancel the previous plan. He wished to meet and discuss the matter. We arranged to meet on 8/18 and he agreed to bring the refund of my deposit.

On 8/18 we met and he agreed that stripping the latex paint would be a much better option. He did not bring the refund as promised.

On 8/24 I again met with Mr. Christner and he presented another proposal which included stripping the latex paint. Again he did not bring the refund, but suggested that I contact Mr. Kuffler.

On 8/25 I contacted Mr. Kuffler. He maintained that application of liquid vinyl over latex was reasonable, and stated that any refund would be subject to deductions for handling, shipping and restocking of materials. MR. KUFFLER THEN TOLD ME THAT THE MATERIAL PURCHASED WAS ACRYLIC POLYMER, NOT THE LIQUID VINYL AS DESCRIBED TO ME BY HIS SALESMAN.

On 8/31 I again called Mr. Kuffler, and he insisted that I am obligated to buy the incorrect material that he purchased and he is willing to refund only $535 of my $6,960.

Although the contract states that the product to be used is Ultra Cote, which is evidently an acrylic polymer, it was clearly presented to me (multiple times) as liquid vinyl by the salesman. I feel that the contract was not accurately presented and should be invalidated. Of course I had no way of knowing the brand names of liquid vinyl or acrylic polymer.

In my opinion Mr. Kuffler’s position is grossly unfair and dishonest, and I am entitled to a full refund, and should not be required to pay for materials other than what was presented to me. I will appreciate any help that you can give me in this matter.

9. On October 11, 2005, Complainant requested the instant administrative hearing. On October 25, 2005, the ROC issued Citation and Complaint No. A06-0120 alleging that Respondent had violated A.R.S. § 32- 1154(A)(2), (A)(7), (A)(9), (A)(15) and (A)(17). 10. On November 4, 2005, Respondent filed a written Answer to the Citation and Complaint. 11. The instant administrative hearing took place on March 6, 2006. 12. At hearing, Complainant contended that Mr. Christner did not discuss multiple products Complainant could choose from in coating the Home. Complainant testified that he believed that he was contracting with Respondent for the application of a vinyl coating to the Home. Mr. Christner did not describe the attributes, weaknesses, prices or warranties of multiple products with Complainant, nor did Mr. Christner provide Complainant with written materials covering more than 1 type of coating, rather, the only materials Mr. Christner provided to Complainant was a single brochure for Chic Liquid Vinyl. Consequently, Complainant never made a choice between contracting for the application of vinyl coating or the application of an acrylic polymer. Complainant did not learn until late August, 2005, when he was attempting to secure a full refund from Mr. Kuffler, that the “Ultra Kote 7400” listed in the contract was not a liquid vinyl. 13. Respondent maintained that its salesperson, Mr. Christner, provided Complainant with information, both written brochures and verbal discussion, of the differences between Ultra Kote 7400, an acrylic polymer, and Chic Liquid Vinyl. Mr. Christner testified that he provided brochures on both products to Complainant on his first visit to the Home and that he discussed the differences in price and warranty, inter alia, between the two products. Mr. Christner further testified that he believed it was his professional input and the price difference between the products that led Complainant to choose the Ultra Kote.[3] 14. The Administrative Law Judge finds the testimony of Complainant to be more credible on the issue of whether Respondent provided clear information concerning the Ultra Kote 7400 as well as, and in contrast to, the vinyl coating, Chic Liquid Vinyl. The Ultra Kote 7400 “brochure” Respondent admitted as evidence at the instant hearing does not confer in any way that the product being described is not a liquid vinyl.[4] It simply refers to the product as a “coating” and does not include the term “acrylic polymer” anywhere on the sheet. Moreover, the term “Ultra Kote 7400” on the contract imparts no information whatsoever concerning the nature of the product, liquid vinyl or otherwise. Additionally, the Administrative Law Judge finds that Complainant entered into the contract having been led to believe by Mr. Christner that he was entering into a contract for the application of liquid vinyl to the Home. 15. Complainant also contended that Respondent did not provide information, prior to the parties entering into their contract, recommending or even addressing “Perma-Chink” stripping of the house or any other process of preparation besides simple pressure washing and scraping and sanding where needed. Complainant testified that the only input Mr. Christner gave concerning the condition of the wood related to the replacement of 3 posts. Mr. Christner offered to hire a general contractor to replace the 3 post or give Complainant the opportunity to hire a general contractor for the same purpose. Complainant chose the latter. It was not until Mr. Zito came and inspected the Home that Complainant learned he had substantial issues with the condition of the logs on the Home that would preclude him from going forward as contracted with Respondent. 16. Respondent alleged that Mr. Christner told Complainant that the Home needed to be entirely stripped before applying any new coating and that Complainant chose not to undertake that course of action. Mr. Christner testified that he provided a Perma-Chink catalogue to Complainant that fully describes the process for stripping all old materials off the wood and applying Perma-Chink products. Complainant denied receiving any such materials and denied having any discussion with Mr. Christner on this topic until after Complainant informed Mr. Christner that he wished to cancel the contract. 17. The Administrative Law Judge finds the testimony of Complainant more credible and probative concerning what specific information Respondent provided to him. Moreover, the Administrative Law Judge finds Respondent did not inform Complainant about the option of stripping the entire Home, as opposed to simply power washing and some scraping and sanding, prior to the time he entered into the July 8, 2005 contract with Respondent. 18. Complainant contended that Respondent could not have properly performed the contracted work due to the condition of the Home. To simply power wash the Home and perform some sanding and scraping prior to applying the coating, without fully stripping the Home and repairing damaged wood would require Respondent to perform work that would not comply with minimal workmanship standards in this situation. 19. Mr. Zito testified that the extremely poor condition of the Home was very apparent to him as soon as he began inspecting the Home. Mr. Zito testified further that, in his approximately 20 years of experience with log homes, the condition of this home is among the worst he has ever seen. Moreover, according to Mr. Zito, the poor condition of the Home should have been obvious to any person working with log homes. 20. Respondent contended that the contract, as executed, was appropriate and that it could have performed said contract in a workmanlike manner. Respondent maintained that it could have begun the work on the contract and that, if it found additional structural issues, those issues would be addressed as they were encountered. 21. Mr. Christner testified that he noticed right away areas of deterioration, which he described as “pretty badly deteriorated.” He stated that he “walked” the Home at least twice. Moreover, he testified that it was his impression that Complainant was only interested in having a coating applied. On July 8, 2005, Mr. Christner suggested a general contractor repair the 3 posts, but he did not recommend Complainant undertake any addition investigation concerning the condition of the Home. Mr. Christner acknowledged that, when Complainant chose the coating and pressure wash, instead of the Perma-Chink process, that Mr. Christner did not conduct as in-depth of an inspection of the Home. Mr. Christner’s perception was that Complainant wanted coating only and that if he didn’t write the contract for Complainant, someone else would get the job. Consequently, Mr. Christner claimed, he wrote the contract to perform a job that, in essence, he believed to be inadequate under the circumstances. 22. The Administrative Law Judge finds Complainant’s testimony more credible concerning whether Respondent ever provided him with information or a recommendation to strip the entire Home before applying any new coating or material. The Administrative Law Judge finds Respondent did not adequately inform Complainant of the deteriorated condition of the Home or the need for extensive preparation work at the Home. 23. Complainant maintained that it should not bear the cost of Respondent ordering the acrylic polymer material for this project. Respondent maintained that it was entitled to rely on the contract in purchasing supplies to perform the contract and that Complainant should have known it would do so. Mr. Christner, Complainant’s only contact with Respondent, testified that he himself did not know what happened with deposits after he turned them in to the office with the contract. 24. The Administrative Law Judge finds Respondent could not have properly performed the contract as written. As such, Respondent was not entitled to rely on the contract it authored to purchase the materials in this instance. CONCLUSIONS OF LAW 1. In this administrative proceeding, Complainant bears the burden to prove, by a preponderance of the evidence, that Respondent violated A.R.S. § 32-1154(A)(2), (A)(7), (A)(9), (A)(15) and/or (A)(17) as charged by the ROC in its October 25, 2005 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)(2), a contractor is subject to discipline for “departure from or disregard of plans or specifications or any building codes of the state…in any material respect which is prejudicial to another without consent of the owner…and without consent of the person entitled to have the particular construction project or operation completed in accordance with such plans or specifications…” In the instant hearing, Complainant failed to present credible evidence that Respondent departed from or disregarded plans or specifications or building codes. Complainant canceled the contract and, as a result, Respondent performed no work at all under the contract. Based on the foregoing, the Administrative Law Judge concludes that Respondent has not violated A.R.S. § 32-1154(A)(2). 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 concludes that Complainant present credible evidence that Respondent committed a wrongful or fraudulent act. Respondent did not provide Complainant sufficient information to make an informed decision concerning the condition of the Home and the best manner in which to proceed. Moreover, Respondent knew, or should have known, that the condition of the Home was deteriorated to the point that the contract it was entering with the Complainant could not be fulfilled in a workmanlike manner. Complainant sustained economic injury when he paid his deposit money to Respondent with a reasonable belief that he was contracting for liquid vinyl and that the contracted work was appropriate for the Home and, thereafter, when the condition of the Home and the nature of the product listed in the contract became known to Complainant, Respondent refused to refund Complainant’s deposit. Therefore, the Administrative Law Judge concludes that Respondent has violated A.R.S. § 32-1154(A)(7). 5. Under A.R.S. § 32-1154(A)(9), a contractor is subject to discipline for “failure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.” Based on the foregoing evidence, the Administrative Law Judge concludes that Complainant canceled the contract thus precluding Respondent from performing under the contract. Consequently, the Administrative Law Judge concludes Complainant failed to establish that Respondent violated A.R.S. § 32-1154(A)(9). 6. Under A.R.S. § 32-1154(A)(15), a contractor is subject to discipline for “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.” The Administrative Law Judge concludes that Complainant failed to present evidence concerning Respondent’s name and operating practices. Consequently, the Administrative Law Judge concludes Complainant failed to establish that Respondent violated A.R.S. § 32-1154(A)(15). 7. Under A.R.S. § 32-1154(A)(17), a contractor is subject to discipline for “knowingly contracting beyond the scope of the license or licenses of the licensee.” The Administrative Law Judge concludes that Complainant failed to present evidence that Respondent contracted beyond the scope of its license. Consequently, the Administrative Law Judge concludes Complainant failed to establish that Respondent violated A.R.S. § 32-1154(A)(17). 8. Based on the foregoing, the Administrative Law Judge concludes that Respondent has violated A.R.S. § 32-1154(A), and that grounds exist to impose discipline against Respondent’s Class K-05 License. 9. The Registrar of Contractors’ authority in matters such as presented herein, includes the ability to impose restitution, in whole or in part, as a reasonable condition to reduce any possible disciplinary action against contractors. The exercise of such authority is deemed appropriate in the instant case. Therefore, based upon all the evidence, a reasonable condition in this case would consist of the payment by Respondent to Complainant of restitution in the amount of $6,960.34.[5] Imposing such a condition is preferable to imposing disciplinary action against Respondent’s license without providing a condition to reduce or eliminate same. RECOMMENDED ORDER On the effective date of the Order entered in this matter, Respondent’s Class K-05 License (No. 198521) will be suspended until the ROC receives written proof that Respondent remitted payment to Complainant in the full amount of Complainant’s deposit, $6,960.34. If, on or before the effective date of the Order, the ROC has received written proof that Respondent has made the foregoing restitutionary payment to Complainant, then no suspension will take place. In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of that certification. Done this day, March 27, 2006.

______________________________________ Marianne T. Bayardi Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2006, to:

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

By ___________________________ ----------------------- [1] Respondent is not appropriately licensed to perform such post repairs. [2] Page One Construction Company is not a party to the instant administrative proceeding. [3] Mr. Christner testified that the Ultra Kote 7400 costs approximately $3.50 per square foot while the Chic Liquid Vinyl costs between $5.00 and $5.50 per square foot. [4] At hearing, Complainant strongly denied receiving the Ultra Kote 7400 “brochure” from Respondent at any time during this process. Rather, Complainant testified that he received a copy of the document from the Attorney General’s Office following the cancellation of the July 8, 2005 contract. [5] See A.R.S. § 32-1156.01.

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