ALJDEC decisions subject to certification as final

06F-RF0718-ROC · Registrar of Contractors · 2007-07-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 16, 2007 APPEARANCES: Plaintiffs Michael and Elvira Feliksa appeared on their own behalf. Patrick McGauley appeared on behalf of Defendant Distinctive Flooring, L.L.C. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ The question presented by this matter is whether Plaintiffs Michael and Elvira Feliksa are entitled to an award and payment from the Residential Contractors’ Recovery Fund pursuant to A.R.S. § 32-1132(A). Based on the evidence of record, the Administrative Law Judge renders the following Findings of Fact, Conclusions of Law and Recommended Order to the Director of the Registrar of Contractors. FINDINGS OF FACT 1. On or about October 31, 2001, Plaintiffs Michael and Elvira Feliksa entered into a contract with Defendant Distinctive Flooring, L.L.C. (“Distinctive”), for Distinctive to install wood and travertine flooring throughout the Feliksas’ home. The contract price was $44,737.20. The Feliksas paid Distinctive in full. 2. On or about June 15, 2004, the Feliksas filed a complaint against Distinctive with the Registrar of Contractors (“ROC”). The Feliksas alleged, in pertinent part, the following: “hardwood floor was refinished in Jan. 04 because of debris in finish & sanding marks & grooves which were excessive. During refinish process baseboards were damaged & touched up improperly, there is still debris in the floor & uneven sanding marks. There are bubbles in the finish & shiny spots where repairs have been made. There are dull spots on either side of seams. There are areas that squeek (sic) under hardwood and tile. There is also grout missing in areas of stone floor.” 3. On November 7, 2005, the ROC issued a Citation and Complaint in Case No. 04-3413, charging Distinctive with violations of A.R.S. § 32- 1154(A)(3), (A)(7), (A)(15), (A)(17), and (A)(23). 4. Distinctive failed to file a written answer to the Citation and Complaint and the ROC issued a default Decision and Order on January 11, 2006, ordering that Distinctive’s contracting license be suspended until the ROC received proof that Distinctive had appropriately rectified the items of complaint. 5. The ROC’s Order indicated that the Order would become effective on February 20, 2006 and that any request for rehearing must be filed on or before February 15, 2006. The Order also set forth that any appeal to the Superior Court must be filed and a Stay Order secured on or before February 20, 2006. 6. On or about February 13, 2006, Distinctive filed with the ROC a request for extension of time to comply with the ROC’s January 11, 2006 Order. On or about March 6, 2006, the Feliksas filed a response in opposition to Distinctive’s request. On March 24, 2006, the ROC denied Distinctive’s request for extension of time. 7. On March 24, 2006, the ROC suspended Distinctive’s contracting license. 8. On or about June 29, 2006, the Feliksas filed a claim with the ROC seeking payment from the Residential Contractors’ Recovery Fund (the “Fund”) in the amount of $8,942.14 for damages they alleged to have incurred as a consequence of Distinctive’s poor workmanship. 9. The ROC investigated the Feliksas’ claim against the Fund and pursuant to its April 16, 2007 Notice to Contractor of Claim for Administrative Payout, recommended a payout in the amount of $6,377.01. 10. On April 20, 2007, Distinctive requested a hearing regarding the Feliksas’ claim, and this matter was thereafter set for hearing before the Office of Administrative Hearings. 11. At the outset of the hearing, the Feliksas asserted that the ROC’s recommended payout from the Fund was insufficient to cover the expenses of repairing the damaged flooring. The Feliksas requested a payout in the amount of $7,615.06. The Feliksas explained that the cost to correct the deficiencies in the flooring would be $18,591.98, however, they had previously received a payout from the Fund in the amount of $22,384.94 in a claim against their general contractor, and as such they realized that the maximum amount they could receive from this proceeding would be the difference between $30,000.00 and $22,384.94, which calculates to $7,615.06. 12. Upon receiving the ROC’s Revised Good Faith Settlement Offer dated April 6, 2007, in the amount of $6,377.01, the Feliksas did not object to the offered amount, nor did they request a hearing. Had Distinctive not filed a request for hearing, the Fund would have issued a payment to the Feliksas in the amount of $6,377.01. 13. Distinctive objected to the Feliksas request for an additional payout from the Fund. 14. The Administrative Law Judge denied the Feliksas’ request for an additional payout from the Fund as neither Distinctive nor the ROC had any notice of the Feliksas’ request until the time of hearing. 15. At hearing, Phil Pettice, the ROC’s Recovery Fund Inspector, reviewed the Feliksas’ recovery fund claim. Mr. Pettice testified that he did not perform a jobsite inspection, however, ROC Inspector Bob Davies performed two inspections and found deficiencies in the wood flooring and the travertine tile. Mr. Pettice reviewed the file and the bids obtained by the Feliksas, and recommended that the Feliksas be awarded $6,377.01, the combined amount of the lowest bids for the wood and tile. See Exhibits 1 and 2. The low bid for the tile work includes the removal and replacement of the tile in the master bathroom, in the amount of $4,957.25. See Exhibit 2. Mr. Pettice credibly testified that when asking a contractor to repair another contractor’s deficient work, most will not simply make a repair, but instead will want to perform the work from beginning to end as the contractor’s license is at risk. Further, the Feliksas contend that the tile used for the master bathroom is no longer available, and as such, replacing only certain tiles would not be appropriate as they would not match the others. 16. Regarding the wood flooring, the lowest bid was in the amount of $1,419.76 to screen and coat 600 square feet. See Exhibit 1. 17. Mark Baich, with MC Interiors, testified on behalf of the Feliksas. Mr. Baich is not a licensed contractor, however, his installers are licensed. Mr. Baich testified that if the Feliksas had the work accomplished as described in Exhibit 1, the screening and coating of 600 square feet of wood flooring, the result would be a floor of two different colors, as cherry wood, the flooring installed in the Feliksas’ home, oxidizes quickly. Mr. Baich opined that this method of repair is unacceptable. Mr. Baich testified that the entire floor should be completely sanded as the wood in the hallway is wavy to the naked eye. Regarding the tile, Mr. Baich testified that the subfloor needs to be removed and replaced as there is too much movement in the subfloor. Mr. Baich further testified that tile to match the existing tile is unavailable. 18. Patrick McGauley, Distinctive’s qualifying party and member, testified that the Feliksas would not allow Distinctive to replace the tiles because Mrs. Feliksa would not agree on the replacement tiles. Mr. McGauley testified that the tiles he offered for replacement were from the same pallet as the original tiles. Mr. McGauley requested that Distinctive be allowed to repair the bathroom floor. Mr. McGauley did not contest the $1,419.76 amount for the refinishing of 600 square feet of wood flooring. 19. Mrs. Feliksa testified at hearing that she would not allow Distinctive to replace the affected tiles because Distinctive never informed her that the tile it proposed to install was from the original pallet, and because every time Distinctive came to perform the work, the tile it proposed to use did not match. Mrs. Feliksa further testified that she was also advised that during the process of removing the affected tiles, other tiles would crack. 20. Based on the credible evidence presented, the Administrative Law Judge finds that the Feliksas are entitled to receive an award from the Fund in the amount of $6,377.01. CONCLUSIONS OF LAW Under A.R.S. § 32-1132, the ROC is empowered to determine and award payment to the Feliksas from the Fund. The Feliksas meet all of the requirements of a “person injured” as that term is defined in A.R.S. § 32-1131(3). Pursuant to A.R.S. § 32-1132(A), “the residential contractors’ recovery fund is established, to be administered by the registrar, from which any person injured by an act, representation, transaction or conduct of a residential contractor licensed pursuant to this chapter that is in violation of this chapter or the rules adopted pursuant to this chapter may be awarded in . . . an amount of not more than thirty thousand dollars for damages sustained by the act, representation, transaction or conduct.” 4. The weight of the credible evidence presented at hearing demonstrated that the Feliksas were injured as a result of Distinctive’s poor workmanship and that in order to rectify the damages caused by Distinctive, the Feliksas are entitled to a payout from the Fund in the amount of $6,377.01. 5. Based on the foregoing, the Feliksas should be awarded a total payout from the Fund in the amount of $6,377.01, all of which should be charged against Distinctive and/or persons named on Distinctive’s Class C-08 license as set forth in A.R.S. § 32-1139(B). RECOMMENDED ORDER The Administrative Law Judge makes the following Recommended Order: On the effective date of the Order entered in this matter, the ROC shall commence and finalize payment procedures from the Fund to Michael and Elvira Feliksa in the amount of Six Thousand Three Hundred Seventy Seven Dollars and One Cent ($6,377.01). 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 will be 40 days from the date of that certification. Done this day, July 31, 2007.

______________________________________ Sondra J. Vanella Administrative Law Judge

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

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

By ___________________________

-----------------------

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