ALJDEC decisions subject to certification as final

06F-A0220-ROC · Registrar of Contractors · 2007-01-09

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 9 and December 20, 2006 APPEARANCES: Dino Olivos and Sharon Olivos appeared at both hearings, pro per. Respondent: David Ubnoske, corporate officer and qualifying party, appeared at both hearing and was represented by counsel, William D. Sawkiw. Registrar of Contractors: Inspector Dan La Fond appeared at the August 9, 2006 hearing. Inspector John Prince appeared at both hearings on behalf of the Registrar of Contractors. ADMINISTRATIVE LAW JUDGE: Brian E. Smith _____________________________________________________________________ Evidence and testimony were presented and, based on the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. This matter first convened for hearing at the time, date and place set forth in the Registrar of Contractors’ Notice of Hearing dated June 14, 2006. The parties did not conclude the presentation of evidence at that time and the matter was scheduled for further hearings on December 20, 2006. 2. Complainants Dino Olivos and Sharon Olivos (“Complainants are the owners/occupants of a residence located at 3851 Coriander Ct., Prescott Arizona (“premises/project”). 3. Respondent Casa Bella Builders Inc. (“Respondent”) is a corporation which holds Arizona Contractor’s License No. 198714, Class B (General Residential) issued by the Registrar of Contractors (“ROC”) on August 20, 2004. David Wayne Ubnoske (“Ubnoske”) is a member and the qualifying party for the license. 4. Complainants filed a complaint with the ROC on October 24, 2005 wherein they alleged twenty problem items on the project requiring corrective work by Respondent. 5. The Registrar’s Inspector, Dan La Fond (“La Fond”), conducted a jobsite inspection on November 23, 2005 and issued a Corrective Work Order on December 7, 2005 (“CWO1”) wherein were addressed the twenty (20) items set forth in Complainants’ complaint. Inspector La Fond determined that corrective work was required on the following six (6) items: 3 (excessive stucco cracks); 4 (cracked caulking at interface of drywall and acrylic block); 7B (water leak at the master bedroom shower door frame); 7D (loose levers on the guest and master bathroom vanity valves); 16C (failure to install anti-tip device on stove); and, 18 (failure to install ceiling fans to allow for operational changes). (Exhibit R-8) Inspector La Fond further determined that no action was required of Respondent on Items 5, 6, 10, 13, 16A, 16B and 19 as Complainants related they had been corrected prior to the jobsite inspection. In addition, La Fond also required no corrective action by Respondent on Items 7C, 8, 12, 1, 2, 7A, 9, 11, 14, 15, 17 and 20 for the respective reasons stated in the Corrective Work Order. 6. Complainants filed an amendment to their complaint wherein were set forth nine (9) additional problem items. 7. Inspector La Fond conducted a second jobsite inspection on January 24, 2006 in response to Complainants’ amendment to complaint and issued a second Corrective Work Order on January 30, 2006 (“CWO2”). (Exhibit R-15) Therein, Inspector La Fond determined that corrective action was required of Respondent on Items 4A (mismatched paint on the stucco repairs); 10 (cracked caulking around windows); 4B (improper operation of office window); and 9 (improper support of gas pipe in attic). For reasons stated, La Fond required no corrective action on Items 1, 2, 3, 5, 6, 7 and 8. 8. On the basis of Complainants’ complaint and amendment, the Registrar of Contractors issued a CITATION AND COMPLAINT in Case No. A06- 0220 on March 27, 2006 charging Respondent with possible violations of A.R.S. §32-1154A 2, 7, 23 and 3 (namely, R4-9-108, the workmanship rule). 9. Respondent filed an answer on April 11, 2006 wherein it asserted a general denial to Complainants’ complaint and amendment and denial of access. 10. At the hearing, Complainants Dino Olivos (“D. Olivos”) and Sharon Olivos (“S. Olivos”), testified and submitted Exhibits C-1 through C- and R-8. Larry Reynolds (“Reynolds”) also testified on behalf of Complainants. 11. Ubnoske testified on behalf of Respondent and submitted Exhibits R-1 through R-7 and R-9 through R-25. Rex Reel (“Reel”) and Ken Carlson (“Carlson”) also testified on behalf of Respondent. 12. Inspector Dan La Fond testified on behalf of the Registrar of Contractors on August 9, 2006 and described his observations and conclusions regarding his November 23, 2005 and January 24, 2006 jobsite inspections. 13. Inspector John Prince (“Prince”)[1] conducted pre-hearing jobsite inspections on July 28, 2006 and December 19, 2006 and submitted written reports regarding same via facsimile to this tribunal along with the videoconference sign-in sheets for the hearings. Neither party moved to have such reports admitted as evidence though the August 9, 2006 report was referenced by Mr. La Fond. Neither party called Inspector Prince as a witness. 14. Inspector La Fond testified that, in accordance with Inspector Prince’s August 9, 2006 pre-hearing inspection and report, Complainants stated that nothing had been corrected and Respondent concurred and asserted denial of access. 15. Inspector La Fond testified that at the November 23, 2005 jobsite inspection “differences of opinion” arose between the parties. At that time, La Fond characterized the Complainants as “conceivably argumentative.” La Fond did not recall Ubnoske as “being aggressive in any manner.” 16. According to Inspector Prince’s December 20, 2006 pre-hearing report, only Complainants appeared at the pre-hearing jobsite inspection. Inspector Prince determined that of the six (6) items in Inspector La Fond’s CWO1 that required corrective work, three items remain at issue: Item 3 (excessive stucco cracks on front southwest corner, west wall and west end of rear patio); Item 4 (cracked caulking at interface of drywall and acrylic block; and, 7B (water leak at the master bathroom shower door frame). 17. Complainants asserted at the hearing that none of the items requiring corrective work as determined by Inspector La Fond had been corrected and/or adequately corrected. 18. Complainants testified regarding unworkmanlike conditions regarding CWO1: a. Item 17 (improper grade of driveway) – Complainants assert that grade of driveway is improper and cause scraping of and damage to vehicles and the street. b. Item 9 (installation of wrong light fixture in master bedroom walk in closet) – Complainants contend the original fixture did not operate properly at move in and that Respondent replaced it with one of lesser quality. c. Item 7B (water leak at master bathroom shower door frame). d. Item 3 (excessive stucco cracks in stucco). 19. Complainants also testified regarding unworkmanlike conditions regarding CWO2: a. Item 9 (improper support of gas pipes in attic) - S. Olivos stated that, according to their building inspector, these pipes were not adequately supported. S. Olivos acknowledged that Respondent had someone put additional supports in this location and Complainants’ realtor stated that there were now enough supports present. However, S. Olivos further testified that there the pipes still create a “shaking noise.” b. Item 4B (improper operation of office window) – S. Olivos believes the window is defective not that it doesn’t operate correctly. c. Item 10 (cracked caulking around windows) – S. Olivos acknowledged that Respondent caused re-caulking to be done but that it was not properly done. d. Items 2/20 (alarm/electrical system) – S. Olivos contends there should be one alarm station per window. 20. Complainants further testified that they never denied Respondent and/or its subcontractors access to the project but Respondent was dilatory in attending to its obligations under the Registrar of Contractors’ corrective work orders. Complainants further assert that issues regarding access arose due to scheduling conflicts and alleged theft by employees of Respondent and/or its subcontractors. As a result, Complainants insisted on limiting the number of subcontractors on the premises at one time to minimize and/or eliminate these concerns. 21. Reynolds was retained by Complainants to do work on the subject shower door and testified regarding the scope of such work. 22. Complainants further testified that Respondent’s counsel refused to communicate properly regarding scheduling of the corrective work. 23. Ubnoske testified that the premises Complainants purchased was a spec home and the items upon which they filed their complaint were punch list items Respondent was willing to repair. 24. Ubnoske testified that Respondent performed and/or offered to perform remedial work on all corrective work items required by the Registrar of Contractors. Reel and Carlson testified regarding the corrective work they performed and/or attempted to perform at project on behalf of Respondent. 25. Ubnoske further testified that Respondent was precluded from performing and/or completing certain corrective work items due to Complainants’ denial of access to it and its subcontractors. Ubnoske also related that because of the promblematic relationship existing with Complainants, he attempted to have the corrective work scheduled through counsel. Respondent submitted evidence in the form of letters from Complainants which reference scheduling conflicts, demands and refusals to communicate directly with Respondent’s counsel regarding these issues that ultimately resulted in a threatened Bar complaint. 26. Ubnsoske also testified that Respondent was at all times willing to complete all corrective work required by the Registrar of Contractors but was precluded from doing so only by Complainants’ denial of access.

APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors in Case No. A06-0220 charged Respondent with possible violations of A.R.S. §32- 1154A 2, 7, 23 and 3 (namely R4-9-108). Those statutory sections require that the holder of a license or person listed on the license shall not commit the following:

2. Departure from of disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or his duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications code. …

7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. …

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 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 violation of this paragraph until after a hearing has been held pursuant to the provisions of this article. … 3. Violation of any rule adopted by the Registrar.

A.C.C. R4-9-108 is named as the rule violation charged pursuant to A.R.S. §32-1154A (3). Rule R4-9-108 provides that all work shall be done in a professional and workmanlike manner and in accordance with any applicable building codes and professional industry standards

CONCLUSIONS OF LAW 1. The Registrar of Contractors has jurisdiction over this matter pursuant to A.R.S. § 32-1101, et. seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154. 2. To warrant such sanctions by the Registrar, Complainants must demonstrate by a preponderance of the evidence that Respondent violated any one, or more, of the statutory sections cited. 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.” In re Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also, Culpepper v. State of Arizona, 187 Ariz. 43, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (Rev. 6th ed. 1990). 3. The purpose of licensing Arizona contractors is to regulate the conduct of contracting and protect the public from unscrupulous acts. Beazer Homes Ariz., Inc. v. Goldwater, 196 Ariz. 98, 101, 993 P.2d 1062, 1065 (App. 1999); Better Homes Constr. v. Goldwater, 203 Ariz. 295, 300, 53 P.3d 1139 (App. 2002). The statutory purpose is to prevent unscrupulous or financially irresponsible contractors from deceiving and taking advantage of those who engage them to build. Sobel v. Jones, 96 Ariz. 297, 394 P.2d 415 (1964). 4. This tribunal determines and concludes that Complainants failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (2). Complainants submitted no plans, specifications, building codes or other evidence from which even an inference could be drawn of a violation by Respondent of any complaint item on the subject project. 5. It is further determined and concluded that Complainants established by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (3) and A.A.C. R4-9-108, the workmanship rule, as they pertain to CWO1 Items 3 (excessive stucco cracks on front southwest corner, west wall and west end of patio); Item 4 (cracked caulking at interface of drywall and acrylic block); and, Item 7B (water leak at master bedroom shower door frame). However, notwithstanding such unworkmanlike conditions on these items, this tribunal further determines and concludes that Respondent has complied with its obligations under the subject corrective work orders by Complainants’ unreasonable denial of access to the property. Though Respondent’s corrective work efforts exceeded the fifteen day period set forth in the corrective work orders, the evidence is clear that it continued in its attempts to satisfy its obligations thereunder. Moreover, it is also clear that Complainants unreasonably refused to communicate with Respondent and, thereafter, its counsel regarding the scheduling of corrective work as is evidenced by Complainants’ threatened Bar complaint. Given the foregoing, it is determined and concluded that Respondent did not violate A.R.S. §32-1154A (3) and A.A.C. R4-9-108. 6. This tribunal further determines and concludes that Complainants failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (23). From the evidence adduced at the hearing it is evident that, notwithstanding the factual dispute between the parties regarding access, Respondent performed, caused to be performed and/or attempted to cause to be performed and/or attempted to be performed corrective work on the premises in accordance with the Registrar of Contractors’ two corrective work orders. 7. It is further determined and concluded that Complainants failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (7). Based on Respondent’s attempts to comply with the subject corrective work orders, Complainants’ unreasonable denial of access to the premises and the want of any evidence to establish a departure from or disregard of plans, specifications and/or applicable governmental codes, it cannot be said that Respondent committed a wrongful or fraudulent act which cause Complainants substantial injury. Therefore, no violations of A.R.S. §32-1154A (7) have been proven. RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that the entire Citation and Complaint in Case No. A06-0220 be dismissed.[2] Done this day, January 9, 2007.

_________________________ Brian E. Smith Administrative Law Judge

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

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

By _______________________ ----------------------- [1] Inspector La Fond was the ROC inspector originally assigned to this complaint. Subsequently, Mr. La Fond retired from the agency and Inspector Prince assumed responsibility for this case. Thereafter, Mr. La Fond returned to the agency on a part-time basis. [2] In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order in this matter will be forty (40) days from the date of that certification.

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