ALJDEC decisions subject to certification as final

08F-2132-ROC · Registrar of Contractors · 2009-01-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 31, 2008 APPEARANCES: Nicole and Ron Woehler, Complainants; Brenda Morales, Respondent’s president; Christian Morales, Respondent’s Superintendant; Jose Andujo, Respondent’s General Manager; Jeff Fleetham, Registrar of Contractors Inspector ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang _____________________________________________________________________ The Complainants in this matter have established that the Respondent violated relevant Arizona contracting statutes to the extent that the Registrar of Contractors should impose disciplinary action against its license in the form of a provisional suspension, a lingering three-day suspension, a period of probation and a civil penalty. FINDINGS OF FACT 1. On January 21, 2008, the Complainants contracted with the Respondent to install a colored concrete overlay inside the Complainants' home. The parties agreed that the coloring to the concrete would be mixed into the concrete, applied with a trowel and sealed. On January 26, 2008, the Respondent completed the job. 2. On January 31, 2008, the Complainants filed a complaint with the Registrar of Contractors stating, "1. The finished floor is not what we asked for, described, or showed to contractor in photos. 2. Have contacted contractor by phone, who will not come out to look at finished product or discuss any options". 3. On March 6, 2008, Registrar of Contractors Inspector Jeff Fleetham conducted a job site inspection of the project. Complainant Nicole Woehler was present. Ms. Woehler showed Mr. Fleetham magazine photos that she had shown the Respondent when negotiating the project. She also told him that she'd requested that the floor have the appearance of the floor at the Lowe's on McDowell Road. She said that the Respondent's representative, Jose Andujo, had said that he knew what she was talking about. 4. Mr. Fleetham found that the floor did not meet minimum workmanship standards. It was troweled too rough for an interior floor. It did not look like the examples the Complainants had provided. Its texture was not consistent. And it was unsightly. 5. Mr. Fleetham issued a Corrective Work Order on March 11, 2008 directing the Respondent to correct the matter by the appropriate means. On March 11, 2008, Mr. Fleetham conducted a pre-hearing inspection. No additional work had been done by the Respondent. Mr. Fleetham found that the surface of the floor had not changed but it appeared that the coloring under the floor (the original brown concrete) was coming up through the grey colored overlay. He also found that the finish appeared unsightly. 6. On September 30, 2008, the Registrar of Contractors issued a Citation and Complaint against the Respondent. The Respondent filed an Answer stating that the terms of the contract were fulfilled in their entirety. The Answer stated that the Complainants had not given Mr. Andujo any photographs. It also stated that the disclaimers on back of the contract notified the Complainants of what to expect and they simply wanted their money back because they have changed their minds. 7. The matter was set for hearing with the Office of Administrative Hearings, an independent agency authorized to conduct hearings in contested matters arising out of State regulation. 8. At the hearing, Mr. Fleetham testified as to the above facts and his opinion that the floors do not meet minimum workmanship standards. The Complainants offered photographs of the project as well as photographs of the Lowe's on McDowell Road. They testified that the floor is quickly showing marks and blemishes due to normal wear and tear. 9. The Respondent offered testimony as to the disclaimers that are written on the back of the contract. The disclaimers state that the finish will not be smooth or consistent, but they do state that the surface would resemble a stone finish. The disclaimers were not signed or initialed by the Complainants. The Respondent also offered testimony that the Complainants had the opportunity to approve the color prior to the application of the sealant and they did approve it. Once the sealant has been applied, according to the testimony and the disclaimers, there is no way to change the color. The Respondent offered photographs of other projects it has done. They did not look similar to the Complainants' project. Mr. Andujo testified that he was happy with the results of the project, though he had declined to see it in person. He argued that not everyone wants the appearance of concrete inside a home, but his company offers it to those who find it attractive. 10. The photographs of the Complainants' home show a very unsightly floor that shows premature wear and tear and an unattractive finish. It is not similar to the photographs of Lowe's or the photographs of other projects by the Respondent. Even if the disclaimers could be given full credit, they do not, in any way, prepare one for the actual appearance of the floor, which in no way resembles the appearance of natural stone and is incredibly unsightly. 11. According to the records of the Registrar of Contractors, the license in this matter has two open complaints against it and three complaints that have been resolved, settled or withdrawn. 12. Any allegation contained in the complaint not specifically addressed in the above Findings of Facts is found to either lack sufficient evidence of record to support a finding of a violation or meets minimum workmanship standards. CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§ 32-1104(A)(4), 32-1154(B) and 32-1156. 2. The Citation and Complaint issued by the Registrar of Contractors in this matter alleged potential violations of A.R.S. § 32-1154(A)(3), (7), (13)(specifically A.R.S. §§ 32-1124(B) and 32-1158), and (23) and A.A.C. R4- 9-108. 3. The Arizona Revised Statutes at § 32-1154(A)(3) provides grounds for suspension or revocation of a contractor’s license for “[v]iolation of any rule adopted by the registrar”. The Arizona Administrative Code requires contractors to meet minimum workmanship standards in the projects they undertake. A.A.C. R4-9-108. 4. The Arizona Revised Statutes at § 32-1154(A)(7) provides for suspension or revocation of a contractor’s license for the “doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured”. 5. The Arizona Revised Statutes at § 32-1154(A)(13) provides grounds for suspension or revocation of a contractor’s license for failure to comply with provisions of that chapter. A.R.S. § 32-1124(B) requires contractors to display their license number and the acronym “ROC” on the premises of their projects and on all documents they employ. A.R.S. § 32- 1158 sets forth the minimum elements of a contract. No evidence was offered in support of finding a violation for this portion of the contracting statutes. 6. The Arizona Revised Statutes at § 32-1154(A)(23) provides grounds for suspension or revocation of a contractor’s license for failure to take appropriate corrective action on a Corrective Work Order without valid justification and within a reasonable period of time. 7. The Respondent argued that it was not required to take action on the Corrective Work Order because the Complainants knew what the completed project would look like due to the disclaimers on the contract. However, disclaimers of liability are frowned upon in the law as being contrary to public policy. For a disclaimer to have any enforceability, it must be clearly established by substantial evidence that the matter being disclaimed was so carefully explained and accepted that little doubt remains as to the intent of the parties. In this case, the disclaimers themselves could not prepare anyone for the extremely unsightly appearance of the Complainants’ floors. Therefore, even if the Respondent had established that the Complainants had clearly understood the content of the disclaimers, it did not establish that the disclaimers were sufficient to excuse the Respondent for the unsightly appearance of the floor. 8. Based upon the evidence and testimony at hearing, the Complainants have established that the Respondent violated A.R.S. §§ 32- 1154(A)(3), (7) and (23). The actions by the Respondent justify the imposition of disciplinary action against its license. 9. The Registrar of Contractors may consider the prior record of a contractor in any disciplinary proceeding. A.A.C. R4-9-117. On standing motion by the Registrar of Contractors, the computer records of the Registrar of Contractors may properly be considered to be evidence in the event the Administrative Law Judge finds a violation of any of the statutory provisions cited in the Citation and Complaint. 10. In this case, the Complainants have established that Respondent violated A.R.S. § 32-1154(A)(2), (3), (7), and (23). The other potential violations were not addressed at hearing. RECOMMENDED DECISION Based upon the foregoing considerations, the undersigned Administrative Law Judge hereby recommends to the Registrar of Contractors that, commencing on the effective date of the Registrar’s Order, Respondent’s Class C-05 license be temporarily and actively suspended until the Registrar receives and accepts sufficient proof that Respondent has corrected the Complainants’ floor by the appropriate means unless the Complainants agree to an alternative arrangement. It is further recommended, in addition to the foregoing indefinite license suspension, if any, that Respondent’s Class C-05 license be placed on active suspension for a period of three (3) days, followed immediately by a period of l80 days disciplinary probation. This additional disciplinary penalty shall commence on the effective date of the Registrar’s Order or the date on which notice of Respondent’s compliance with the terms of this Order is filed with the Registrar, whichever is later. It is further recommended, in addition to the above-provided penalty, if any, that Respondent pay the sum of $ 225.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. § 32-1154(D). The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless payment of any outstanding prior civil penalty is tendered. Following the imposition of the above disciplinary penalties, Case No. 08F-2132-ROC shall be closed. 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, January 8, 2009 OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2009, to:

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

By ___________________________ -----------------------

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