ALJDEC decisions subject to certification as final

07F-2153-ROC-com · Registrar of Contractors · 2010-01-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 28, 2009; the record closed on January 11, 2010 APPEARANCES: Mark Bogard, Esq. represented Complainants Daniel and Karen Harkins. Teresa Foster, Esq. represented Respondent First Choice, Inc. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ Based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made: FINDINGS OF FACT 1. The hearing in this matter convened on December 28, 2009 at 8:00 a.m., pursuant to a Notice of Compliance Hearing issued by the Registrar of Contractors (“ROC”), to determine whether Respondent First Choice, Inc. (“First Choice”) “has complied with the terms set forth in the Registrar’s June 10th Order, absent unreasonable interference or denial of access by Complainants.” Mark Bogard, Esq. represented Complainants Daniel and Karen Harkins. Teresa Foster, Esq. represented First Choice. 2. The initial hearing of this matter convened on April 28, 2008. David Farren, Esq. represented the Harkins and Ms. Foster represented First Choice. During the course of the hearing, primarily outside the presence of the Administrative Law Judge, the parties concluded a settlement agreement regarding all but one of the items of complaint and the Addendum to the filed complaint. The terms of the settlement agreement were read upon the record and correspond with the items as delineated in the Corrective Work Order issued in this matter. 3. The terms of the aforementioned settlement agreement were as follows: a. Regarding the stucco issue, the terms of the parties’ agreement are contained within an expert report that has been signed and initialed by the parties, a copy of which is attached hereto as Exhibit A; all of the work pertaining to the stucco issue will be performed within five weeks of the hearing date; b. Items 5a and 5b, regarding the scupper issue, will be corrected by First Choice within five weeks of the hearing date; c. Item 8, regarding water ponding, will be corrected by First Choice within six weeks of the hearing date; d. The Harkins withdraw their complaint without prejudice regarding item number 4 (water damage to billiard room), as they plan to litigate this item in a civil action; e. Item 3a will be repaired by First Choice within six weeks of the hearing date; and f. Regarding item number 9 a through e, First Choice will perform the stone work per the direction of Ted Brown, within five weeks of the hearing date. 4. The two items remaining to be adjudicated on the merits at the administrative hearing were the steel railings and the alleged improper charges. 5. On May 13, 2008, an Administrative Law Judge Decision issued recommending in pertinent part that within forty-five days of the effective date of the Order entered in this matter, First Choice’s contracting license “shall be suspended until the ROC receives written proof that First Choice has corrected in an appropriate, effective, and workmanlike manner the steel railings at the Harkins’ home, and issued an accurate billing statement to the Harkins.” 6. On June 10, 2008, the ROC adopted the Recommended Order. The June 10, 2008 Order advised the parties that any request for rehearing must be filed on or before July 15, 2008, and that any appeal to the Superior Court must be filed by July 20, 2008. Neither party filed a request for hearing or an appeal to the Superior Court. As such, the June 10, 2008 Order became final on July 20, 2008. 7. In February 2009, the parties participated in binding Arbitration regarding claims made by First Choice, and counterclaims made by the Harkins, some of which were the subject of the administrative hearing. On February 13, 2009, the Arbitrator issued a ruling. Regarding the Harkins’ counterclaim in connection with the steel railing, the Arbitrator found in pertinent part, “Judge Vanella’s ruling on this point clearly precludes re-litigation of liability, and together with the evidence presented by the Harkins, supports a ruling in the Harkins’ favor.” The Arbitrator awarded the Harkins $16,200.00 on this aspect of their counterclaim. However, the Arbitrator found in favor of First Choice in the principal amount of $37,408.10, which took into account offsets for the Harkins’ counterclaims. The Harkins have paid First Choice in full. 8. The parties stipulated at hearing that the steel railings have not been completed by First Choice. However, First Choice provided the billing statement to the Harkins. The Harkins contended at hearing that First Choice willfully and knowingly failed to comply with the ROC’s June 10, 2008 Order, and that the civil Arbitration award does not divest the ROC of its regulatory authority. First Choice asserted that the Arbitration award fully satisfied all claims between the parties and that First Choice complied with the ROC’s Order due to the credit for the steel railings having been awarded in the Arbitration.

9. Regarding the items of corrective work that were addressed in the settlement agreement, ROC Inspector Jeff Fleetham testified that he performed a pre-hearing inspection on December 16, 2009, and that all corrective work was performed with the exception of some stucco and grout issues, including some grouting of the columns and stone work. Inspector Fleetham testified that there were numerous voids in the grouting, that some areas of stucco continue to blister, and that the roof is bubbled at the northeast corner by the access door to the garage. However, the evidence of record established that the bubbling of the roof was first discussed at the pre-hearing inspection, and that the Harkins did not notify First Choice of this issue. 10. Stephen Moore, First Choice’s qualifying party and corporate officer, testified that First Choice met with the stucco manufacturer to discuss the blistering, power washed the stucco, scrubbed and prepared the surface with primer, and re-stuccoed the home to the Harkins’ satisfaction as of the time of the Arbitration. Regarding the roof, Mr. Moore testified that it is a flat roof system and blistering can occur due to the excessive heat, and that Mr. Harkins’ representative has contacted the roofing contractor directly to address this issue. Concerning the stone work, Mr. Moore testified that the dry stack stone that was installed at the Harkins’ residence has very little to no grout. However, the Harkins did not like that look. Consequently, First Choice spent four to five days grouting the stone and was not notified of any remaining voids. Regarding the steel railing, Mr. Moore testified that First Choice’s steel subcontractor, Bobe Steel, went out of business, and that First Choice did not have the financial wherewithal to complete the railing due to the Harkins’ failure to pay First Choice. 11. The Administrative Law Judge finds, based on the weight of the evidence presented at hearing, that First Choice failed to comply with the ROC’s June 10, 2008 Order as it relates to the steel railing. Pursuant to the ROC’s June 10, 2008 Order, First Choice had until approximately September 3, 2008, to comply with the Order. The Arbitration did not take place until February 2009, over five months after compliance was to have been achieved by First Choice. The Arbitration proceeding does not divest the ROC of its regulatory authority or its jurisdiction to discipline a contractor’s license for non-compliance with a final Order. Pursuant to the ROC’s Order, First Choice was required to correct in an appropriate, effective, and workmanlike manner the steel railings at the Harkins’ home, within forty-five days of the effective date of the June 10, 2008 Order. First Choice failed to do so. Further, the credible evidence of record established that while First Choice attempted to comply with the terms of the parties’ settlement agreement, full compliance was not achieved in regard to the blistering stucco, the voids in the grout, and the bubbling of the roof. The Administrative Law Judge further finds, based on the evidence presented at hearing, that the Harkins did not unreasonably interfere with First Choice’s attempts at compliance. To the contrary, First Choice made no attempts at compliance regarding the steel railings. CONCLUSIONS OF LAW 1. First Choice has failed to sustain its burden of proving that it has complied with the ROC’s June 10, 2008 Order, or that the Harkins unreasonably interfered with its attempts at compliance. See Arizona Administrative Code Rule R2-19-119. 2. In view of First Choice’s failure to fully comply with the terms of the June 10, 2008 Order, and in accordance with the November 2, 2009 Notice of Compliance Hearing, it is determined that disciplinary sanctions should be imposed against First Choice’s Class B- license. RECOMMENDED ORDER In view of the foregoing, it is recommended that commencing immediately, First Choice’s Class B- license (No. 055402) shall be suspended for a period of fourteen (14) days. It is further recommended, in addition to the foregoing license suspension, if any, that First Choice’s Class B- license be placed on disciplinary probation for a period of one year. This additional disciplinary penalty shall commence on the effective date of the Order entered in this matter. 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, January 19, 2010.

/s/ Sondra J. Vanella Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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