ALJDEC decisions subject to certification as final

08F-0922-ROC · Registrar of Contractors · 2008-11-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 20, 2008. APPEARANCES: Sunrise Home Facility was represented by its owner, Lida Cubillos. Atlas Fire Protection, LLC was represented by its attorney, Kim Lane, Esq. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order:

FINDINGS OF FACT 1. Atlas Fire Protection, LLC (“Respondent”) is the holder of License No. 112902, a Class L-16 contracting license, issued by the Registrar of Contractors (“Registrar”). 2. Sunrise Home Facility (“Complainant”) is a licensed assisted living facility owned by Lida Cubillos. Complainant is licensed by the Arizona Department of Health Services (“ADHS”), the state agency authorized to license and regulate assisted living facilities. 3. On or about March 30, 2007, Respondent submitted a Bid Proposal Form to Ms. Cubillos for the installation of fire sprinklers and associated works at Complainant’s facility. 4. The contract price was $7,675.00. Ms. Cubillos paid Respondent the sum of $2,600.00 as a down payment on behalf of Complainant. 5. Pursuant to the parties’ contract, Respondent was to perform the following scope of work: a. Provide all labor, materials, and equipment to purchase and install new fire sprinkler piping and heads. b. Provide all labor, materials and equipment. c. Provide necessary coordination of work with all other subcontractors. d. Provide all Warranties required by specifications whether implied or not. e. Substitutions to be submitted if we desire if necessary as per our discretion within a reasonable time. f. The installation of the fire protection equipment as per City and State code and N.F.P.A. 13R g. The installation of new fire protection heads in accordance with N.F.P.A. 13R

6. The contract provided for the following specifications: “Installation of fire sprinkler to existing house only Plan design, plan review, permits included.” 7. The contract also excluded the following, among other items: “Proposal does not include guest house…Plumbing, meters done by others…Meter must meet requirements by [sic] jurisdiction having authority.” 8. The parties’ contract does not contain a commencement or completion date. It does not contain a “time is of the essence” provision. 9. The project was necessary so that Complainant could expand from a five- bed facility to a ten-bed facility, the latter requiring that Complainant have a sprinkler system. 10. Respondent had to have plans prepared and approved by the City of Scottsdale before a permit could be issued. 11. Ms. Cubillos requested that Respondent proceed with some work prior to obtaining a building permit because she expected a quadriplegic resident to move into Complainant’s facility in a short period of time. 12. Respondent removed portions of the facility’s ceilings to access the areas where the sprinkler system would be installed. The ceiling work did not require a permit. 13. The plans had to be redone several times before the city approved them. 14. Respondent obtained a building permit. 15. On June 8, 2007, the City of Scottsdale Fire Department approved the rough-in sprinkler inspection. 16. On or about June 25, 2007, the ADHS completed a survey at Complainant’s facility. 17. After completing its survey, the ADHS issued a survey report. The survey report found that Complainant violated the provisions of A.A.C. R9-10-718 (1)(a) as follows: R9-10-718. A licensee shall ensure that:

R9-10-718.1. A facility and facility grounds are:

R9-10-718a. In good repair.

18. The survey report listed the following factual basis for the above- provided violation: Based on observation during tour of facility and interview with Manager Designee D1, the licensee did not maintain the facility in good repair.[1] Findings: 1. The ceiling throughout the public areas of the building have [sic] been cut open for installation of the sprinkling system, which is installed. Some of the openings, eg in the kitchen, have been covered with paper taped in place, but the paper is hanging down in some places. 2. Manager Designee D1 acknowledged the sprinkler installation and stated that the installation is to be checked before the ceiling is repaired and the company has not been out to inspect it.

19. On September 6, 2007, the City of Scottsdale Fire Prevention issued an Occupancy Inspection/Test Certificate approving Respondent’s work. That document contained the following comments: R-4 Sprinkler final approved with repair Insulate exposed cpvc pipe on exterior riser.

General inspection approved with note: Dead bolt on front door not approved for use.

All else OK

20. Respondent performed the insulation of the exposed pipe. The dead bolt on the front door was not within Respondent’s scope of work. 21. Complainant paid Respondent the balance of the contract price by check. Respondent did not attempt to cash the check for several months. When it did present it to its bank, the check could not be honored due to insufficient funds in Complainant’s checking account. Apparently the funds to cover the check were used by Complainant for other matters. Complainant has not made the check good. 22. On or about October 22, 2007, Complainant filed a written Complaint with the Registrar alleging the following Complaint items: that Respondent began work without a building permit; that it took three months to obtain a building permit; during the period that it took to obtain a permit Complainant’s facility was torn apart resulting in lost revenue for the facility; and that a pipe was leaking and Respondent would not fix it. The Registrar designated the Complaint as Case No. 08-0922. 23. On or about May 15, 2008, the Registrar issued a Citation and Complaint in Case No. 08-0922 alleging possible violations by Respondent of A.R.S. § 32-1154(A)(7) and (3), namely A.A.C. R4-9-108. 24. The Registrar forwarded Case No. 08-0922 to the Office of Administrative Hearings, an independent agency, for formal hearing. 25. Complainant, as a licensee of ADHS, should have had knowledge as to what would be permitted by that agency when remodeling its facility to qualify to become a ten-bed facility. 26. The two pages of the ADHS survey report admitted into evidence do not contain any information under the “Provider’s Plan of Correction” section. 27. There is credible evidence that Complainant did not disclose the above- described regulatory violation found by ADHS to Respondent. 28. There is no credible evidence the Respondent intentionally or negligently delayed Complainant’s project. There is credible evidence that plumbing issues developed during the project with water valves which were the responsibility of Complainant to repair. 29. Complainant’s claim that the delay in completing the project caused it unspecified damages because she could not have residents living at the facility is speculative at best. That issue should be resolved by a civil court of competent jurisdiction rather than in a Registrar disciplinary action. 30. Complainant alleges that Respondent failed to correct leaks. There is credible evidence that Respondent performed remedial repairs to one leak after being notified by Complainant. However, Respondent was not notified of a second leak, which was repaired by other contractors hired by Complainant. 31. Complainant failed to establish that Respondent committed a wrongful or fraudulent act that substantially injured it. Ms. Cubillos testified that Complainant was fined by ADHS, but she presented no evidence as to the amount of any fine or the specific reason for any fine. The portions of the ADHS survey report admitted into evidence did not state that a fine would be issued for the regulatory violation. It did ask for Complainant’s plan of correction. There is no evidence of Complainant’s plan of correction presented to the ADHS. 32. There is no credible evidence that Respondent failed to meet minimum workmanship standards. While Respondent did remove portions of the ceiling to perform its work, the removal of portions of the ceiling did not require a permit. There is no credible evidence that Respondent did not have a permit to perform the sprinkler fire protection installation. On the contrary, there is credible evidence that Respondent did obtain a permit for its sprinkler work, and that such work was inspected and approved by the Scottsdale Fire Department.

CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.A.C. R2-19-119(B), Complainant has the burden of proof in this matter. The standard of proof is preponderance of the evidence. A.A.C. R2-19-119(B). 3. Respondent did not violate the provisions of A.R.S. § 32-1154(A)(7), as cited in the Citation and Complaint issued by the Registrar. Complainant failed to sustain its burden of proving that it was substantially injured by Respondent. 4. Respondent did not violate the provisions of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, as cited in the Citation and Complaint issued by the Registrar. The Administrative Law Judge concludes that Respondent performed its scope of work to minimum workmanship standards.

RECOMMENDED ORDER The Citation and Complaint in Case No. 08-0922 shall be dismissed 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, November 10, 2008

______________________________________ Brian Brendan Tully Administrative Law Judge

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

Armando Contreras, Director Registrar of Contractors 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________ ----------------------- [1] Only pages 18 and 19 of the survey report were introduced into evidence by Complainant. The Manager Designee D1 is not identified on those pages.

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