ALJDEC decisions subject to certification as final

07F-A0620-ROC · Registrar of Contractors · 2008-07-22

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 14, 2008 APPEARANCES: Complainant: Steve Sherman appeared, pro per. Respondent: Timothy R. Peterson, corporate officer and qualifying party, appeared, pro per. Registrar of Contractors: Inspector Cliff Fransden 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. These consolidated matters convened for hearing at the time, date and place set forth in this tribunal’s July 9. 2008 Order Granting Motion to Consolidate.[1] 2. Complainant Steve Sherman (“Complainant”) is the owner of two residences located at 496 Isabelle Lane (“Project 496”) and 492 Isabelle Lane (“Project 492”), Prescott, Arizona (“premises/projects”). 3. Respondent Timothy R. Petersen and Associates, Inc. (“Respondent”) is a corporation which holds Arizona Contractor’s License No. 147642, Class B (General Residential) issued by the Registrar of Contractors (“ROC”) August 17, 1999. Timothy Raymond Petersen (“Petersen”) is a corporate officer and the qualifying party for the license. A review of the licensing database maintained by the ROC indicates that this license was suspended September 1 through November 8, 2005 (non-renewal), July 25 through August 2, 2007 (lack of bond) and January 22-23, 2008 (A07-0474). 4. Complainant filed a complaint with the ROC on June 22, 2007 in Case No. A07-0620 regarding Project 496 wherein he alleged “(1) stained front porch and patio concrete and (2) possible water leak in wall in garage multiple attempts to have contractor resolve issues for 1+ year.” 5. Complainant filed a second complaint with the ROC on June 22, 2007 in Case No. A07-0622 regarding Project 492 wherein he alleged “(1) cracked concrete in driveway, (2) stained porch, (3) stained back patio, and, (4) water leak at great room picture window multiple attempts to have contractor resolve.” 6. Registrar of Contractors Inspector Cliff Fransden (“Fransden”) conducted a jobsite inspection of Project 496 on June 22, 2007 and issued a Corrective Work Order on July 24, 2007 which required Respondent to perform corrective work on three (3) items: (1) front entry concrete stain, (2) back patio concrete stains, and, (3) an “anomaly in the drywall finish on the garage wall.” 7. Inspector Fransden conducted a jobsite inspection of Project 492 on July 12, 2007 and issued a Corrective Work Order on July 24, 2007 which required Respondent to perform corrective work on items (1) cracks in concrete driveway, (2) stained concrete at the front entryway, and, (3) stains on back patio concrete. Inspector Fransden determined that item (4) window leak had been repaired and no further action was required. 8. On August 8, 2007, Complainant filed requests for hearing in both matters and asserted that, as pertains to Project 496 and 492, respectively, only items 1 and 2 (front entry concrete and back patio concrete stains) and 1, 2 and 3 (cracks in concrete driveway, front entryway concrete stains and back patio concrete stains) remain unresolved. 9. On January 16, 2008, the Registrar issued a CITATION AND COMPLAINT in Case No. A07-0620 (Project 496) 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). 10. On January 16, 2008, the Registrar also issued a CITATION AND COMPLAINT in Case No. A07-0622 (Project 492) charging Respondent with possible violations of A.R.S. §32-1154A 7, 23 and 3 (namely, A.A.C. R4-9- 108). 11. Respondent filed an answer on January 30, 2008 in Case Nos. A07- 0620 (Project 496) and A07-0622 (Project 492) wherein it asserted, inter alia, that it had “attempted to correct the issues that make up the aforementioned complaints [and during construction] did everything in our poser to minimize concrete cracking.” Respondent further asserted that “[Complainant] feels his approach to repairing concrete is the only way.” Respondent contended that it has agreed to perform certain remedial measures including, without limitation, using a product called “Ardex.” Respondent further contended “there is nothing we can do to correct the soils under this concrete, we have already taken all actions know [sic] to assure minimal cracking due to any type of soils condition.” 12. At the hearing, Complainant testified and submitted Exhibits C- 5, C11A-D, C12A, B, G, I, J, K and O, C13A – E, G, C14A, B, C G, K and M and C17 – 22 which were marked, admitted and considered. C12-C was admitted over objection. Roy Pena (“Pena”) also testified on behalf of Complainant. 13. Peterson testified on behalf of Respondent but submitted no exhibits. 14. Inspector Fransden testified on behalf of the Registrar of Contractors and described his observations and conclusions on his initial jobsite inspections in both matters and at his July 8, 2008 pre-hearing jobsite inspection. 15. Respondent, as the general contractor, constructed all homes located in the Blooming Hills subdivision located in Prescott, Arizona including Projects 496 and 492 which were completed in mid-2006. 16. Complainant was the investor for all homes located in the Blooming Hills subdivision including Projects 496 and 492. 17. With regard to Project 496 (Case No. A07-0620), no cracks were observed by Inspector Fransden at his original jobsite inspection. However, at the time of his pre-hearing inspection compound cracks were noticed and do not meet minimum workmanship standards. In addition, the stains on the porch and patio (items 1 and 2) remain and do not comport with minimum workmanship standards. 18. With regard to Project 492 (Case No. A07-0622), the cracks in the concrete driveway (item 1) have worsened and become compound in areas and the stains on the porch (item 2) and back patio (item 3) remain. 19. Respondent does not dispute that concrete cracks and stains exist at both projects but asserts that it is the manner of repair of such items that is the point of contention between the parties. Respondent proposes to perform certain remedial work, i.e., minor cracks and staining with an “Ardex” product. Complainant contends Ardex is not the proper method of repair and that more extensive repair of the concrete is needed in this instance. Complainant further asserted that he has never stopped Respondent from doing any repair work notwithstanding the latter’s request for access provided Respondent do the proper corrective work.

APPLICABLE LAW The CITATION AND COMPLAINTS issued by the Registrar of Contractors in Case Nos. A07-0620 and A07-0622 each 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, Complainant 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. It is determined and concluded that Complainant established by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (23) by failing to comply with those items delineated in Findings of Fact 17 and 18 regarding Project 496 (Case No. A07-0820) and Project 492 (Case No. A07-0622), respectively. 5. It is further determined and concluded that Complainant 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, by failing to construct in a workmanlike manner the items set forth in Findings of Fact 17 and 18 as referenced also in Conclusion of Law 4 hereof. 6. This tribunal further determines and concludes that based on the violations set forth in Conclusions of Law 4 and 5 above, Complainant established by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (7) as charged in the issued Citations in Case Nos. A07-0620 and A07-0622, respectively. 7. It is further determined and concluded that Respondent’s prior suspension as referenced in Finding of Fact 3 shall serve as a factor in aggravation in this matter.

RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that, commencing forty-five (45) days from the effective date of the Registrar’s Order entered in this matter, the Class B license of Respondent be suspended until the Registrar of Contractors receives written proof that Respondent has accomplished by appropriate action, by a licensed subcontractor as necessary, correction of those items set forth in Findings of Fact 17 and and Conclusions of Law 4 and 5 set forth above. The instant record failed to establish any grounds to justify a departure from a long-standing policy of the Registrar of Contractors to allow a contractor a reasonable opportunity, after a hearing, to correct any determined deficiencies in his work. Aside from the instant complaint and one prior two day suspension (A07-0674), no other disciplinary action has been taken against Respondent’s license. Moreover, from the facts elicited at the hearing, the essential issue in this matter according to the parties is and has been the type of remedial work to be undertaken on the subject projects by Respondent. It is evident that, but for such disagreement, Respondent would have performed corrective work pursuant to the Registrar of Contractors’ Corrective Work Order. Given this, Respondent’s uncontroverted offers to comply with the issued corrective work orders and Complainant’s insistence on dictating the manner in which corrective work is to be accomplished, Complainant has provided this tribunal with no legitimate reason to depart from the aforementioned Registrar of Contractors’ policy to afford Respondent an additional opportunity to correct its work. The parties are again reminded that manner of corrective work is left to the sole discretion of the contractor who undertakes such efforts at the peril of his license. Therefore, proof of unreasonable and unjustified denial of access by Complainant to allow performance of said remedial work by Respondent and/or its duly licensed subcontractors will constitute compliance with this Order. IT IS FURTHER RECOMMENDED that if Respondent and/or its duly licensed subcontractor(s) accomplish the above-described work in a proper workmanlike manner or is/are denied access to perform same, or alternatively, Respondent remits to Complainant a sum adequate to allow Complainant to retain a third party contractor to complete said items, on or before the expiration of forty-five (45) from the effective date of the Order entered in this matter then, in that event, no license suspension shall take place due to Respondent’s failure to comply with this portion of the Order. Respondent shall notify the Registrar of Contractors in writing of the denial of reasonable access to either or both of the projects.[2] Done this day, July 22, 2008.

_______________________ Brian E. Smith Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Registrar of Contractors Fidelis V. Garcia 3838 N. Central Ave., Ste. 400 Phoenix, AZ 85012-1906

By ________________________ ----------------------- [1] Docket No. 07F-A0620-ROC was scheduled to convene July 14, 2008 and Docket No. 07F-A0622-ROC on July 15, 2008 pursuant to Registrar of Contractors notices of hearing dated June 6 and 20, 2008, respectively. This tribunal’s Order Granting Motion to Consolidate provided that the hearing would convene July 14, 2008 and, if necessary, continue July 15, 2008 at the previously scheduled time. The parties concluded the presentation of evidence on July 14, 2008. [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