ALJDEC decisions subject to certification as final

06F-M2270-ROC · Registrar of Contractors · 2007-07-03

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 13, 2007 APPEARANCES: Complainant: Tom and Anna Wolfe appeared, pro per. Respondent: Terry Brenner, customer service representative, appeared and was represented by counsel, Lance Johnson. Registrar of Contractors: Inspector Paul Terek appeared 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 convened for hearing at the time, date and place set forth in this tribunal’s Order Granting Continuance dated April 11, 2007. 2. Complainants Tom and Anna Wolfe (“Complainants”) are the owners or a residence located 6460 S. Magic Ct., Gilbert, Arizona (“premises/project”). 3. Respondent S H A Construction LLC (“Respondent”) is a limited liability company which holds Arizona Contractor’s License No. 160518, Class B (General Residential) issued by the Registrar of Contractors on November 25, 2000. Gregory Thomas Drascic is a member and the qualifying party for the license. A review of the licensing database maintained by the Registrar of Contractors (“ROC”) indicates that this license was suspended January 5 -12, 2005 (non-renewal) and July 17, 2004 through January 12, 2005 (lack of bond). 4. Complainants filed a complaint with the ROC on May 16, 2006 wherein they alleged various problem items on the project including, but not limited to, drywall, paint, tile installation, sink and plumbing (specifically, “undermount sink not installed correctly). 5. Registrar of Contractors Inspector Paul Terek (“Terek”) conducted a jobsite inspection on August 13, 2006 and issued a Corrective Work Order on September 20, 2006. In his Corrective Work Order, Inspector Terek required Respondent to perform corrective work on one item, excess grout from flagstone tiles in the master bedroom. Specifically, Terek further provided that Respondent was to remove such excess grout “[a]fter the complainant removes the grout sealer.” 6. On or about August 30, 2006, Complainants sent a correspondence to Inspector Terek (Exhibit F) wherein they alleged that “[a]fter careful review of the Registrars ‘Workmanship Standards for Licensed Contractors’ Dated August 2004, [they] discovered that…the tiles have been installed with excessive lippage and are very uneven.” As a result, Complainants requested that Respondent remove and replace all of the tiles. 7. Based on Complainants’ August 30, 2006 letter, Inspector Terek conducted a second jobsite inspection to review the alleged lippage problem. As a result of such inspection, Inspector Terek issued a letter on October 31, 2006 wherein he determined that Respondent was not required to correct the lippage variations “due to the natural characteristics of ‘split’ surface stone.” 8. On January 3, 2007, the Registrar issued a CITATION AND COMPLAINT in Case No. M06-2270 charging Respondent with possible violations of A.R.S. §32-1154A 7, 23 and 3 (namely, A.A.C. R4-9-108, the workmanship rule). 9. Respondent filed an answer on January 10, 2007 wherein it alleged a general denial of all allegations. Respondent also moved to have the complaint dismissed due to its not being filed within the two-year statute of limitations set forth in A.R.S. §32-1155. Respondent asserted that Complainants closed escrow on the purchase of the premises May 14, 2004 and did not file their complaint until May 15, 2006.[1] 10. At the hearing, Complainant Tom Wolfe (“T. Wolfe”) testified and submitted Exhibits A and F which were marked, admitted and considered. Exhibits B, C, D and E were admitted over objection. 11. Terry Brenner (“Brenner”), customer service representative, appeared on behalf of Respondent and submitted Exhibit 1 which was marked, admitted and considered. 12. Inspector Terek testified on behalf of the Registrar of Contractors and described his observations and conclusions on his August 13, 2006 and October 6, 2006 jobsite inspections and June 11, 2007 pre- hearing jobsite inspection. 13. From the evidence elicited at the hearing, the following salient facts are important to note: a. There are several accepted ways to mount an undermount sink. Inspector Terek testified that the subject undermount sink was installed properly. b. Inspector Terek further testified that Respondent was not required to perform corrective work, i.e., remove the excess grout on the master bathroom slate tile, until the sealer applied thereto by Complainants was removed or caused to be removed by Complainants which was not done. According to Inspector Terek, the application of the subject sealer constituted an “owner modification” which, pursuant to applicable minimum workmanship standards, relieves Respondent from any responsibility to perform corrective work thereon. c. Brenner testified that Respondent was prepared to correct the excess grout issue once Complainants removed the sealer they applied. d. Terek further testified that the slate tile lippage problem was not brought to his attention by Complainants until the September 2006 jobsite inspection.[2] Notwithstanding the effect of any possible statute of limitations argument, Terek further testified that the flaked, rough, split strata and striated surface characteristics of the slate tile inherently result in what appears to be “lippage” and do not violate minimum workmanship standards.

APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors charged Respondent with possible violations of A.R.S. §32-1154A 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:

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, 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. It is 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 (23) and (3) and A.A.C. R4-9-108 (the workmanship rule) by failing to perform corrective work on the subject undermount sink and excess grout on the master bathroom slate tile. The weight of the evidence presented established that the undermount sink was installed pursuant to acceptable minimum workmanship standards. The evidence adduced at the hearing also established that a condition precedent existed, i.e., Complainants’ removal of the sealer applied to the master bathroom slate tile, before Respondent was required to address the excess grout. Complainants did not remove the subject sealer. 5. 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 (23) and (3) and A.A.C. R4-9-108 (the workmanship rule) as it pertains to the alleged lippage problem with the master bathroom slate tile. Said problem was not presented by Complainants until the August 30, 2006 letter to Inspector Terek which was well beyond the two-year statute of limitations provided in A.R.S. §32-1155. Complainants’ contention that this problem was originally raised by their mention of “tile installation” in their complaint is unpersuasive. In point of fact, Complainants acknowledged in the referenced August 30, 2006 letter that such problem was “discovered” at that time after a review of the applicable workmanship standards. This item was clearly asserted well beyond the two-year statute of limitations period. 6. This tribunal further determines and concludes that Complainants failed to establish by a preponderance of credible, probative and relevant evidence that Respondent’s actions herein constituted wrongful or fraudulent acts which resulted in substantial injury to Complainants. Therefore, violations of A.R.S. §32-1154A (7) haven not been proven.

RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that the entire Citation in Case No. M06-2270 be dismissed.[3] Done this day, June 3, 2007.

______________________ Brian E. Smith Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2007, to:

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

By ___________________ ----------------------- [1] The instant complaint was actually filed May 16, 2006. Therein, Complainants state that they moved in to the premises June 12, 2004. A.R.S. §32-1155(A) provides that a complaint must be filed with the Registrar of Contractors within two (2) years of the commission of “an act that is cause for suspension or revocation of a license.” “[A] homeowner’s complaint is timely filed within two years of occupancy or discover of the defect, whichever first occurred. This standard remains the same regardless of whether it is the general contractor or a subcontractor against whom the complaint is made.” Repair attempts by either the general contractor or a subcontractor do not toll the statute of limitations with respect to a complaint filed by a homeowner.” [Emphasis in original.] Ariz. Op. Atty. Gen No. I79-119, 1979 WL 23188 (Ariz. A.G.) Other than as set forth in their complaint, Complainants presented no evidence at the hearing regarding their actual date of occupancy or discovery of the subject defects including the lippage issue of which the ROC was first apprised in Complainants’ August 30, 2006 correspondence to Inspector Terek. (Exhibit F) Based on the evidence presented, no determination could be made by this tribunal regarding the timeliness of Complainants’ complaint as it applies to the problem items set forth therein. [2] As noted previously in Finding of Fact 6, Complainants apprised Inspector Terek of their discovery of the lippage problem in their August 30, 2006 correspondence. [3] 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 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