ALJDEC decisions subject to certification as final

08F-1824-ROC · Registrar of Contractors · 2009-08-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 5, 2009 at 9:00 a.m. APPEARANCES: Complainants Joleen Schultz and Trae Schultz appeared through Jonathan S. Collins, Esq., Collins & Collins, LLP; Respondent H and S Marble and Granite Inc. appeared through Safiullha Barekzay, Qualifying Party and Vice President. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On October 8, 2000, the Registrar of Contractors (“the Registrar”) issued License No. ROC150258, Class C-05 for residential natural stone to Respondent H and S Marble and Granite, a corporation. Hamid Barekzai is Respondent’s president; Safiullha Barekzay is Respondent’s qualifying party and vice president. On January 15, 2008, the Registrar received a complaint against Respondent’s license from Complainants Joleen and Trae Schultz, which alleged Respondent’s poor workmanship in the installation of porcelain tile floor and some stone work at Complainants’ residence. The Registrar referred the complaint to Respondent for its immediate attention. On February 7, 2008, the Registrar received a facsimile from Respondent, to which was attached a contract to install granite countertops in the kitchen, four bathrooms, the bar, and the laundry at Complainants’ residence. The contract showed Respondent’s license numbers as “RES. /C-05 159257 COM. /L-05 163453.” The letterhead of the cover letter did not show a license number. The Registrar assigned the complaint to Inspector Eric Ulinger for investigation. On February 6, 2008, Inspector Ulinger conducted a jobsite inspection and, on February 25 2008, issued a Corrective Work Order (“CWO”) to Respondent to correct certain items of complaint within fifteen days, in relevant part as follows: ** Notice: This contractor is not properly licensed to perform work in regards to items 1, 2, 3, 4, 5, 6, 8, 11, and 12 of the following corrective work order. The contractor is to hire a properly licensed contractor to perform the work as directed, or obtain the proper license to comply as directed.

1. Uneven grout lines. – Excessive variation in joint width is not acceptable. ** See notice above: Contractor is to have this item corrected by the appropriate means.

2. Chipped tile. – The presence of grout in the chipped tile is evidence that the damage occurred prior to completion. ** See notice above: Contractor is to have this item corrected by the appropriate means.

3. Width of g[r]out joints are not per agreement – This inspector was not present when the agreement was made and can not verify this item. No action required of contractor.

4. Bad cuts and rough edges at corners of floor tile. – See item #1

5. Extra tile not left at jobsite. – This inspector is not able to determine this item. No action required of the contractor.

6. Some cracked tiles were not replaced. ** See notice above: Contractor is to have this item corrected by the appropriate means. . . . .

8. Cracked g[r]out. ** See notice above: Contractor is to have this item corrected by the appropriate means. . . . .

11. Floor tile was installed prior to baseboards. – Scheduling of work is typically performed by the general contractor. No action required of this contractor.

* Note the following item was added at the jobsite with the contractor’s approval.

12. Lippage of tile. -- ** See notice above: Contractor is to have lippage exceeding 1/32” corrected by appropriate means.

[Emphases in original.] On February 25, 2008, Inspector Ulinger also sent a letter to Respondent, informing it in relevant part as follows: Our records indicate you have a current class C-05 NATURAL STONE license. However, we have information indicating you are performing or offering to perform work which would be covered under the scope of a class C-8 license regarding FLOOR COVERING.

[Emphases in original.] On April 4, 2008, Inspector Ulinger informed the parties that “[t]he above complaint is now closed because we have not received a reply from the complainant in response to our most recent correspondence. However, the complaint may be reopened upon receipt of a written request by the complainant . . . .” On August 12, 2008, the Registrar received Complainants’ request to reopen the complaint “because the contractor has failed to comply with the [CWO] and has not resolved the issues.” Complainants also requested that a citation be issued against Respondent’s license. On March 10, 2008, the Registrar issued a Citation and Complaint against Respondent’s license, which charged violations of A.R.S. § 32-1154(A)(2), (7), (17), (23), (3) (namely A.A.C. R4-9-108), and (13) (namely A.R.S. § 32- 1124(B)). Respondent timely filed a written answer to the Citation and Complaint, which denied any statutory violations and affirmatively alleged that it had repaired all the items on the CWO except the repairs to the porcelain tile floor. Respondent alleged that, because the manufacturer had discontinued the tile used on Complainants’ floor, it could not comply with the remainder of the CWO. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, to schedule and to conduct a fair hearing. A hearing was held on August 5, 2009. Complainants testified on their own behalf and submitted six exhibits, one of which consisted of numerous photographs of the floor. Respondent presented the testimony of its president Hamid Barekzai and submitted three exhibits. Inspector Ulinger also testified. Hearing Evidence Complainants acted as their own general contractor in the construction of their residence. Based on a referral, Complainants hired Respondent to perform the natural stone work in their residence in April 2007. After the parties signed the written contract for the natural stone work, Respondent offered to install the porcelain tile. The parties’ agreement for the porcelain tile work was oral. When Complainants agreed to have Respondent install the porcelain tile, they believed it was properly licensed to do so. The cost to Complainants for 20” x 20” porcelain tile was $2.49/square foot. Respondent installed porcelain tile in approximately 2366 square feet of Complainants’ house. The last time Respondent performed work on Complainants’ porcelain tile floor was in July 2007, just before they moved into the home. Complainant Mrs. Schultz testified that, originally, Respondent had approximately 500 square feet of tile left over for repairs. Mrs. Schultz testified that Respondent used some of the extra tile for repairs. At this time, Complainants do not have any extra tile. Respondent’s president Hamid Barekzai testified that it hired another contractor named Zack or Zachary to install the porcelain tile. Complainant Mrs. Schultz testified that Mr. Barekzai was on site to supervise installation of the porcelain tile floor. Mrs. Schultz testified that, immediately after installation, the grout was almost exactly the same color as the porcelain tile. The uneven grout lines were not apparent unless the grout was wet after mopping or until after it cured. On March 14, 2009, the parties entered into an agreement to settle Complainants’ complaint against Respondent’s license. Respondent would comply with the CWO with respect to the natural stone, would regrout all areas of the porcelain floor where cracks were appearing, would replace the chipped porcelain tiles, would seal the grout in the porcelain tile at no cost to Complainants, would refund to Complainants $1,245.00 for the 500 square feet of replacement tile, and would provide a granite table to Complainants, at no charge. Although Respondent corrected the natural stone work, it did not perform any other actions contemplated by the settlement agreement. Inspector Ulinger testified consistently with the February 25, 2008 CWO. Inspector Ulinger conducted a prehearing inspection on the day before the hearing in this matter, August 4, 2009. Although the items on the CWO that did not involve the porcelain tile floor had been corrected, none of the deficiencies in the porcelain tile floor noted in the CWO had been corrected. Inspector Ulinger testified that the grout lines of the porcelain tile floor did not line up throughout the area of the house where the floor had been installed. Applicable workmanship standards required straight grout lines in tile floors.[1] Inspector Ulinger testified that, in his opinion, the problems in the floor were so extensive that the only acceptable repair would be to remove the entire floor and replace it. Inspector Ulinger testified that Respondent’s license did not allow it to install porcelain tile or to subcontract the installation of porcelain tile to another contractor. When a contractor performs work that is beyond the scope of its license and the work requires correction, however, to resolve the issue between the parties the Registrar allows the contractor to subcontract performance of the corrective work to an appropriately licensed contractor. Complainant Mr. Schultz testified that comparable replacement porcelain tile cost between $2.50 and $3.50/square foot. Complainants had obtained an estimate from Fiesta Tile to remove and replace the porcelain tile, which was not submitted. According to Complainants, the cost of removing the tile was $3.00/square foot and the cost of installing replacement tile was $2.50/square foot. In addition, a dumpster would have to be rented for waste from the job, which would cost $500.00. Mr. Schultz testified that the approximate cost of the entire repair job was about $19,000.00. Respondent’s witnesses suggested that some of the tiles could have been broken by Complainants’ seven children. Inspector Ulinger testified that the broken tiles had grout in the fractures, which indicated that they had been broken before or during installation. The porcelain tile that Respondent contracted to install in Complainants’ residence was manufactured in Spain. The manufacturer discontinued the tile and it is no longer commercially available. Respondent attributed the uneven grout lines to differences in the size of the individual porcelain tiles. Respondent submitted a table that showed that the nominal size of porcelain tiles could vary ± 3%. Respondent argued that only a few tiles needed to be replaced but that it could not replace the tiles due to the manufacturer’s discontinuation. The Registrar’s records reveal that, if the Registrar accepts this recommended decision, it will be the only final order against Respondent on the current record. Respondent’s record therefore is considered as a factor in mitigation of the recommended penalty. CONCLUSIONS OF LAW The matter lies within the Registrar’s jurisdiction.[2] Complainants bear the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[5] Respondent’s C-05 residential natural stone license does not allow it to install porcelain floor tile, which requires a C-08 license. “‘Knowingly’ imports only a knowledge that the facts exist which brings the act or omission within the provisions of the statute using such word. It does not require any knowledge of the unlawfulness of the act or omission.”[6] “’Notice of facts and circumstances which would put a man of ordinary prudence and intelligence on inquiry is . . . equivalent to knowledge of all the facts a reasonably diligent inquiry would disclose.’”[7] Respondent should have known that its C-05 license did not allow it to install porcelain floor tile. Complainants therefore have established that Respondent violated A.R.S. § 32-1154(A)(17) with respect to having installed the porcelain floor tile.[8] Respondent’s arguments that Complainants’ children broke the tiles and that the tiles cannot be installed with straight grout lines were not credible or convincing. Complainants therefore also have borne their burden to establish that the porcelain tile was not installed in a professional and workmanlike manner or in a manner that complied with applicable workmanship standards, in violation of A.R.S. § 32-1154(A)(7)[9] and (3).[10] Respondent admitted that it did not comply with the CWO. The discontinuance of the tile by the manufacturer is not a legal excuse for the failure, especially since the evidence shows that very little of the porcelain tile can be salvaged in any event. Complainants therefore have established that Respondent violated A.R.S. § 32-1154(A)(23).[11] Respondent’s contract showed its license number but the number was not preceded by the acronym “ROC.” Respondent’s letterhead did not show its license number at all. Therefore, Respondent violated A.R.S. § 32- 1154(A)(13).[12] In general the Registrar should not dictate how contractors should remedy proven workmanship deficiencies. In this case, however, a finding that the defects in the porcelain tile floor are too numerous to remedy would avoid unnecessary expenditure of time and money and exacerbation of the parties’ dispute. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar suspend License No. ROC159257, Class C-05 previously issued to Respondent H and S Marble and Granite Inc. It is further recommended that the Registrar not suspend Respondent’s license and, instead, close Case No. 08-1824 if, on or before the effective date of the Registrar’s final order in this matter, the Registrar receives written notice from Respondent that it has performed the following actions: 1) Respondent has contracted with and paid an appropriately licensed contractor to remove the porcelain tile floor from Complainants’ residence; 2) Respondent has obtained Complainants’ approval of the comparable replacement porcelain tile; 3) Respondent has purchased the comparable porcelain tile in an amount sufficient to replace the porcelain tile in Complainants’ residence; and 4) Respondent has contracted with and paid an appropriately licensed contractor to reinstall the porcelain tile in Complainants’ residence. In the alternative, it is further recommended that the Registrar close the complaint without additional penalty if, on or before the effective date of the Registrar’s final order in this matter, the Registrar receives written notice from Respondent of the following: 1) Complainants have unreasonably withheld approval of the comparable porcelain tile that Respondent has presented to them; or 2) Complainants have denied Respondent and its properly licensed subcontractor access to the jobsite to comply with the Registrar’s final order; or 3) Respondent has otherwise resolved this complaint to Complainants’ satisfaction, for example, by payment of money to Complainants. If the Director of the Office of Administrative Hearings certifies this Administrative Law Judge Decision, the effective date of the order will be forty days from the date of certification. Done this day, August 12, 2009.

______________________________________ Diane Mihalsky Administrative Law Judge Original transmitted by mail this ____ day of August, 2009, to: William A. Mundell, Director Registrar of Contractors c/o Legal Department 3838 N. Central Ave. Phoenix, AZ 85012

By ________________________ ----------------------- [1] The Registrar’s Workmanship Standards for Licensed Contractors (February 2009) provides the following acceptable tolerances for ceramic and natural stone floor tile:

Tile surface should be straight and reasonably flat, allowing for individual characteristics of the tile. Nominal centerline of all joints should be straight and even width, with due allowances for hand-molded or rustic tiles. [2] See A.R.S. § 32-1101 et seq. [3] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [5] Black’s Law Dictionary at page 1220 (8th ed. 1999). [6] A.R.S. § 1-215. [7] Maricopa Utilities Co. v. Cline, 60 Ariz. 209, 214, 134 P.2d 156 (1943) (quoting Schneider v. Henley, 61 Cal. App. 758, 215 P. 1036, 1038). [8] This statutory subsection includes among the grounds for suspension, revocation, and other disciplinary action against a contractor’s license “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.” [9] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” [10] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[v]iolation of any rule adopted by the registrar.” The rule violated here was A.A.C. R4-9-108, which requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” [11] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure 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 a written directive from the registrar.” [12] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure in any material respect to comply with this chapter.” The specific statute violated is A.R.S. § 32-1124(B), which requires that licensed contractors to include their license number, which “shall be preceded by the acronym ‘ROC,’“ on “all written bids submitted by the license and . . . on all advertising, loan forms, lending institution forms, letterheads and other documents used by the licensee in the conduct of business regulated by this chapter.”

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