ALJDEC decisions subject to certification as final

07F-G1909-ROC · Registrar of Contractors · 2009-04-07

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 31, 2009 at 1:30 p.m.

APPEARANCES: >The Complainants were represented by their attorney, David Brnilovich, Esq. >The Respondent failed to appear.

ADMINISTRATIVE LAW JUDGE: Robert I. Worth _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order on Compliance Hearing are made.

FINDINGS OF FACT

1. The instant Compliance Hearing was duly scheduled on advance written notice duly sent to both parties. Although the start of the scheduled hearing was delayed for over twenty minutes to afford added time in which to make an appearance, the Respondent failed to appear either individually or through any proper, authorized legal representative.

2. In this case, a formal Citation had been issued based upon the complaint against Respondent that was filed by Complainants. Following a failure on the part of Respondent to file a timely answer to the issued Citation, a default Order was issued by the Registrar of Contractors finding that all of the allegations of the complaint were statutorily deemed to have been admitted and imposing a license suspension conditioned upon the receipt of proof by the Registrar that Respondent has accomplished all remedial measures with respect to the enumerated items set forth both in the complaint and in the Inspector’s written directive that had been issued.

3. A subsequently filed Petition for Rehearing filed by or on behalf of Respondent was ultimately denied by the Registrar, although the denial Order had also directed that the matter was to be scheduled for a Compliance Hearing. A previously imposed civil penalty of $500.00 additionally included as part of the default Order was to be paid by Respondent prior to that Order’s effective date to avoid a license revocation. The Order denying the Petition for Rehearing and confirming the need to timely transmit the civil penalty amount was allowed to become final and non-appealable on January 11, 2009.

4. In accordance with the Registrar’s Order denying the Respondent’s filed Petition for Rehearing, the above-entitled matter was to be and subsequently was scheduled for a Compliance Hearing to determine whether or not there was any unjustified denial of access by Complainants to Respondent.

5. The roofing work proposed by Respondent was to be completed for a total cost price to Complainant of $18,950.00 according to credible testimony at the Compliance hearing. It was not disputed that Complainant had paid Respondent an advance deposit in the sum of $12,317.50, leaving a balance payable under the parties’ contract of $6,632.50. It further appeared that the value of the roofing work received by Complainant from Respondent was far less than the deposit amount previously paid.

6. Following a jobsite visit soon after the filing of the underlying complaint, the Registrar’s assigned Inspector had issued a written Corrective Work Order to Respondent essentially confirming the need for appropriate remedial work on all but a very few of the 23 separate items of complaint. The noted deficiencies consisted of poor workmanship in the installation of various components of the installed roofing that was left largely incomplete as to the shingles that were to be furnished and applied. Additionally, many features of the installed roofing were determined not to conform to applicable manufacturer’s specifications and recommendations. The same items of complaint were identified and also confirmed as deficiencies by an independent roofing expert or specialist retained by Complainants at their additional cost.

7. Some of the specifically confirmed examples of Respondent’s unworkmanlike performance or of its impermissible deviations from applicable manufacturer’s recommendations included, but were not limited to, the following:

a) Nails had penetrated the overhang at several locations. b) No bleeder sheet was installed under the valley metal. c) Appropriately sized valley metal was not installed. d) Tile underlayment was not turned down over the rakes. e) Head wall flashing at gable ends was installed too low to accept tile plus the batten. f) A shingle service pad was not installed around the air- conditioning units. g) Required wood nailers for both sides of ridge to secure the ridge tile cap were not provided. h) The then-existing gap between battens was excessive. i) Battens had been installed incorrectly and were composed of wrong wood materials. j) The front low slope area that was to receive metal panel roofing did not have self-adhering underlayment at the eaves.

k) The rear low slope patio roofing did not have the required OSB foam backed insulation. l) The roof’s prior underlayment was not removed as required by the parties’ contract.

8. The filed complaint additionally sought to have Respondent pay the difference in cost to have the roof properly completed, the propriety of such item of restitution or reimbursement being also confirmed by the Inspector. The amount of payment demanded by Complainants, and deemed established as appropriate by the statutory admission following Respondent’s default in filing a timely answer to the issued Citation was in the total monetary amount of $17,977.50.

9. Despite their genuine and realistic concern about the unfinished and uncorrected condition of the roof over their home and its potential for causing serious water damage if left in such condition, Complainants’ uncontroverted testimony indicated that they waited until the expiration of the 15-day deadline date set forth in the issued Corrective Work Order plus another substantial time period of about one month during which time span Respondent failed to accomplish or even commence meaningful measures to rectify the confirmed roofing items that constituted deficiencies. With the realistic possibility of rainfall in the area that would almost certainly result in water intrusion into the dwelling, Complainants understandably and prudently resorted to other sources to achieve remedial measures, thereby also satisfying their applicable duty to mitigate their damages.

10. The credible testimony revealed that, after waiting for a significant and more than reasonable time duration while affording Respondent an adequate further opportunity to rectify the deficiencies, as well as to properly and fully complete the installation, a successor specialty contractor was obtained and paid by Complainants for the purpose of undertaking and completing necessary corrections to the

substandard and incomplete roofing installed by Respondent. The cost price of $23,375.00 incurred by Complainants based upon a written proposal received from the successor specialty contractor for the needed remedial work that entailed the virtual removal of most all of the prior work done by Respondent was shown to have been reasonable in scope and amount under all the circumstances.

11. The evidence further indicated that, considering the advance deposit amount paid to Respondent of $12,317.50, Complainants have paid out the combined aggregate sum of $35,692.50 for completion and correction of the project, which was to entail a far lesser total cost price that was to be not greater than the Respondent’s contracted cost price of $18,950.00. The aggregate total loss that Complainants have experienced was, therefore, shown to be not less than $16,742.50.

12. By way of a summary of the dealings between the parties to this administrative disciplinary action, the contractual agreement between Respondent and Complainants provided that payment of $18,950.00 would be made for the completed contemplated roofing work by Respondent. It was further demonstrated that not only was such work never fully completed, but also that Complainants were shown to have paid Respondent a significant advance deposit amount of $12,317.50, leaving only the sum of $6,632.50 remaining payable so as to satisfy Complainants’ payment obligation that would and should have entitled them to receive completed, correctly performed roofing installation work from Respondent. Instead, they were shown to have paid almost $17,000.00 more than the remaining contractual balance to have such completion and correction work performed by another contractor.

13. Respondent’s ongoing course of action or inaction in not promptly and effectively addressing and rectifying the reported and confirmed substandard and unacceptable roofing deficiencies is found to have reflected little or no regard for the

comforts and entitlements of the Complainant/homeowners as well as for its duties as a licensed contractor in this State.

14. By its failure to appear at and to participate in the scheduled Compliance Hearing, seemingly a continuation of its default history, Respondent did not present any evidence in support of its previously communicated assertion of being denied access nor was any showing made of other matters in mitigation.

15. Administrative notice is taken of the Registrar’s license records which reveal that Respondent’s class K-42 license was revoked on November 24, 2008 as a result of another separate disciplinary action (Case Number A08-0145) and such license was also suspended on January 5, 2009 as a result of failing to comply with another disciplinary Order in Case Number A08-0271. Respondent’s license was additionally revoked for failing to timely pay a civil penalty of $250.00 imposed in addition to the provisional suspension in Case Number A08-0271 and also again revoked for failing to pay the civil penalty of $500.00 imposed in the instant case Number G07-1909. Moreover, Respondent’s license has remained suspended by operation of law (non-disciplinary) since May 8, 2008 for lack of a proper license bond.

16. The above identified license revocations and suspensions do not prevent Complainants from continuing to pursue their available administrative remedies against Respondent nor does such license history preclude the Registrar from conducting these administrative disciplinary proceedings which are expressly authorized by statute.[1] Moreover, little or no valid reason is perceived under all the circumstances to include any remedial work or monetary payment conditions in the Order of the Registrar to be entered in this case. Belated compliance by Respondent with any work or payment terms of an imposed provisional suspension would not serve to restore Respondent’s

already-revoked contracting license. Instead, the Registrar should be prompted to modify the previously entered provisional suspension Order in this matter by instead imposing a license revocation penalty against Respondent, thereby enabling the within Complainants, as an injured party, to seek and obtain an award from the Residential Contractor’s Recovery Fund for their proven damages.

CONCLUSIONS OF LAW

1. The undisputed testimonial and documentary evidence of record adequately established that Complainants did not deny access to the premises so as to prevent Respondent from timely tendering and accomplishing performance of necessary remedial work. On the contrary, more than ample opportunity was afforded to enable Respondent to address all matters encompassed within the filed complaint and to comply with the Inspector’s issued directive.

2. Complainants were fully justified, after waiting for more than a reasonable time period, in resorting to other contractors to mitigate their damages caused by Respondent in the installing of a substandard and defective roof over their dwelling and in failing or refusing to timely undertake and complete necessary completion and remedial measures. The previously entered default Order was subsequently allowed to become final. The only way for Respondent to have complied with such Order after corrective work had been accomplished by Complainants through other sources was to pay or tender the added costs to Complainants, and no such tender was ever made. Respondent has not substantially or even minimally complied with the terms of the previously entered default Order.

3. Based upon the evidentiary presentation at the Compliance hearing, and further in view of the Respondent’s present revoked license status, it is determined that

no valid reason presently exists for the Registrar to provide conditions of any type so as to enable the elimination or reduction of an otherwise appropriate disciplinary penalty. The contracting license of Respondent should again be revoked.

RECOMMENDED ORDER ON COMPLIANCE HEARING

In view of the foregoing, it is recommended that Respondent’s Class B license shall be revoked on the effective date of the Registrar’s Order on Compliance Hearing 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 forty (40) days from the date of that certification.

Dated: April 8, 2009. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert I. Worth Administrative Law Judge

Original transmitted on ___________________

By ______________________________, to:

William A Mundell, Director Registrar of Contractors Legal Department 3838 North Central Avenue (Suite 400) Phoenix, AZ 85012 - 1906

----------------------- [1] See A.R.S.§32-1154(C).

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