ALJDEC decisions subject to certification as final

08F-2327-ROC · Registrar of Contractors · 2010-01-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 14, 2010 at 8:00 a.m. APPEARANCES: Complainant Lorraine T. Miller appeared through Ivan Kolesik, Jr., Esq., the Kolesik Law Group, PLLC; Respondent Perry Edwin Minetti dba Minetti Home Improvements and Repairs appeared on his own behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On February 8, 2006, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC217092, Class C-61 for residential limited remodeling and repair contracting to Respondent Perry Edwin Minetti dba Minetti Home Improvements and Repairs, a sole proprietorship. On February 8, 2008, the Registrar received a complaint against Respondent’s license from Complainant Lorraine T. Miller, which alleged that Respondent had performed poor work in 26 specifically enumerated respects and had abandoned a remodeling project at Complainant’s residence. According to the complaint, Respondent had contracted to perform the work in December 2007 for a contract price of $22,545.00, Complainant had paid Respondent $22,505.00, and Respondent had abandoned the work on February 1, 2008. The Registrar assigned the complaint to Inspector Philip Ulinger for investigation. Inspector Ulinger performed a jobsite investigation and, on April 4, 2008, issued a Corrective Work Order (“CWO”) to Respondent to correct certain items within fifteen days, as follows: 1. Contractor not properly licensed to perform electrical work. – Contractor is not to perform work outside the scope of his active license.

2. Ceiling fans not installed per contract. – Contractor to provide homeowner with 1 fan and install homeowner’s chandelier by the appropriate means per jobsite agreement.

3. Electrical outlets not operational. 4. Deadbolt not installed. 7. Laundry tub not installed. 8. Baseboards not complete. 12. Pony wall is not properly located. [13. An electrical outlet above the electric range, intended to power a microwave oven, has been powered with 220 volts instead of the required 110 volts.][1] Contractor is to correct items 3, 4, 7, 8, and 13 above by the appropriate means per jobsite agreement. (Note: item 12 above was added at the jobsite with the contractor’s approval.)

5. Garage wall not painted. – The homeowner’s representative agreed to dismiss this item.

6. HVAC not supplied to addition. – Installation of HVAC is not included in the proposal provided and this inspector was not present to verify a verbal agreement. No action required of the contractor.

9. Paint is uneven. – Contractor is to correct by the appropriate means.

10. Numerous code violations. 11. Permit not obtained. This inspector verified that a permit is required by most municipalities for alteration of load bearing walls. Therefore the contractor is required to pull all necessary building permits and have all required inspections and make any and all corrections as determined by the local building official.

[Emphases in original.] Complainant subsequently requested that Inspector Ulinger perform another jobsite inspection to investigate additional items of complaint. Inspector Ulinger performed a jobsite investigation and, on June 5, 2008, issued a second CWO to Respondent to correct certain items within fifteen days, as follows: 1. Ceramic tile was installed and not porcelain as contracted.

The contractor is to comply with the terms of the contract in an appropriate manner.

2. Tiles are humped in the middle and uneven. Lippage of 1/32” is considered excessive. The contractor is to correct by the appropriate means.

3. The door leading to the garage is not properly installed. Door margins are required to be 1/8” and even around the top and both sides. The contractor is to correct by the appropriate means.

4. Interior of garage is not painted. Although the homeowner representative agreed to drop this item at the previous jobsite inspection, it is this inspector’s opinion that painting would be typical to the industry for the type of work performed. The contractor is to correct by the appropriate means.

5. Garage door dead bolt does not operate properly. The contractor is to correct by the appropriate means per jobsite agreement.

6. Electrical outlets do not operate. This item was addressed on a previous [CWO] dated April 4, 2008. The contractor is to comply with the jobsite agreement.

7. HVAC not supplied to room addition. Per the documents provided this item does not appear to be included as part of the contract. No action required of the contractor.

8. Jobsite clean-up not performed. This inspector was not able to verify this item. No action required of the contractor.

[Emphases in original.] Complainant subsequently requested a hearing. On December 1, 2008, the Registrar issued a Citation and Complaint against Respondent’s license, charging A.R.S. § 32-1154(A)(2), (7), (17), (23), and (3) (namely A.A.C. R4-9-108). Respondent failed to file a written answer the Citation and Complaint. On March 16, 2009, the Registrar issued a final Decision and Order against Respondent’s license, finding that its failure to answer the Citation and Complaint established the charged statutory violations, requiring it to perform corrective work to comply with the CWOs, and imposing a civil penalty in the amount of $500.00. On April 4, 2009, Respondent filed a petition for rehearing, which Complainant opposed. On September 23, 2009, the Registrar issued an order granting rehearing. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, to schedule and to conduct a fair hearing. On December 4, 2009, the Registrar issued a Notice of Rehearing. A rehearing was held on January 14, 2010. Complainant presented the testimony of her expert witness, Frederick William Warren, who is a registered structural engineer and licensed contractor, and submitted 19 exhibits. Respondent presented the testimony of Mr. Minetti and his wife, Colleen Minetti, and submitted one exhibit. Inspector Ulinger also testified. Additional Hearing Evidence In December 2007, Complainant accepted Respondent’s proposal to perform substantial remodeling at Complainant’s residence in Sun City, Arizona, in relevant part as follows: ITEM DESCRIPTION PRICE

A. Remove Carpet from Bedrooms and Living $9,675.00 Room. Remove wood flooring from kitchen, Hallway and bathrooms. Install new Carpet (Carpet Depot – Color Beige Pebble) in 2 Bedrooms. Install 20” Porcelin [sic] Tile ( ) in Kitchen & Eating Area, Living and Dining Rooms, Hallway and 2 Bathrooms.

B. Scrape and Texture Ceilings, Remove Wall- $3,950.00 Paper and Patch Drywall where necessary. Paint entire house including ceilings – Color Dunn Edwards Frosting Cream

C. Electrician and 3 Ceiling Fans – New Hall $1,750.00 Light . . . .

E. Build Walls in Laundry Room – Include New $2,850.00 Exterior Door with Lock and Dead Bolt – Also Drywall Opening in Laundry Office/ Breakfast Area

F. Kitchen Area – Tear some Existing Cabinets $3,400.00 on east side & Appliances (excluding Refrigerator) Cut Hole to view Living Room – No Kitchen Cabinets * Tile Countertops & Back Splash . . . .

H. Install New Baseboards Throughout House $920.00

. . . .

BID TOTAL $22,545.00

Complainant had crossed out certain items on the proposal and added others, which are shown in italics above. Although the contracts submitted by each party were not identical, the parties did not show any material differences between them. Originally, Respondent had proposed to enclose Complainant’s patio for a so-called “Arizona room.” Complainant had not accepted that proposal and the parties’ contract did not include it. The amount of the original proposal was $42,223.00. Inspector Ulinger testified that the scope of Respondent’s C-61 license did not allow it to solicit remodeling contracts whose amount exceeded $25,000.00. Inspector Ulinger also testified that the scope of Respondent’s C-61 license did not allow it to perform electrical work. Even if Respondent possessed a B general residential remodeling contractor’s license, electrical, plumbing, and HVAC work would have been beyond the scope of the license. Mr. Minetti testified that he hired Gipson Electric to perform electrical work pursuant to a verbal contract and showed Home Depot receipts for the materials that Gipson Electric had installed. The date on the receipts was January 23, 2008. Mr. Minetti admitted that Gipson Electric had not performed any work after that date. Item E on the parties’ contract required Respondent to extend the interior of the house into the area that had formerly housed the washer and dryer in the garage. The wall that formerly stood between the interior of the house and the garage was a load-bearing wall. Mrs. Minetti testified that, at the beginning of the project, she had gone to the offices of the Maricopa County Planning and Development Department and applied for permits for the job. Mrs. Minetti testified that the application to enclose Complainant’s patio was denied. Mrs. Minetti also testified that the person behind the counter told her that Respondent did not need a permit to enclose the laundry in the former garage to make it part of the house. Mrs. Minetti testified that, at the beginning of the project, she took Complainant around to various suppliers to pick out carpet, tile, and other materials for the remodeling project. Complainant testified that she was shown a board containing eight tiles and told to pick one. No one had ever told her that the tile that she had selected was not porcelain, which the contract required. Mr. Warren testified that porcelain tile is superior to and generally more expensive than the ceramic tile that Respondent had installed at Complainant’s house. Mr. Warren and Inspector Ulinger testified that, before a contractor may substitute another product for a product specified in its contract, it must obtain a signed change order from the customer. Complainant did not sign any change orders or otherwise agree to the substitution of ceramic tile for porcelain tile. The only change order that Respondent submitted to Complainant was for additional work on the kitchen cabinets, which she refused to sign. Mrs. Minetti testified that Complainant continually requested changes and made it impossible for Respondent to complete the job. Because communication between Mr. Minetti and Complainant had “broken down,” Mrs. Minetti accompanied her husband on a visit to Complainant to explain the importance of change orders. Mrs. Minetti testified that communications again “broke down” and she and her husband left. On February 1, 2008, Respondent Mr. Minetti sent a certified letter to Complainant, returning her key and informing her that, “[d]ue to circumstances which I will not elaborate on at this juncture, I must inform you that I will not be on site at your project until further notice.” Both parties agreed that, at that point, Complainant had paid the full contract price to Respondent and that Respondent never returned any of this money to Complainant. Complainant contacted Maricopa County about whether a permit was required to extend the living area into the garage. On April 24, 2008, Maricopa County Code Enforcement Officer Bill Hoffman issued an on-site violation notification of Article 1502.1, which made it “[u]nlawful to erect, construct, reconstruct, alter, or use any building or structure without a building permit/inspections.” To remedy the violation, Complainant was required to “obtain a permit for remodel. Garage Interior wall moved.” Mr. Warren and Inspector Ulinger testified that modification of a load bearing wall usually required a permit. They would defer to the local building authority, however. Mr. Warren and Inspector Ulinger testified that, if a required building permit were not obtained before construction, the local building authority had discretion to require the contractor to tear out all of its work or to open up walls so that its work could be inspected. Complainant is 85 years old. She did not attend the first jobsite inspection because she had broken her hip and was in the hospital. Harvey Betsworth attended the jobsite inspection on her behalf. Complainant testified that Mr. Betsworth “did not know very much” about the matter. Respondent’s qualifying party Mr. Minetti and his wife Mrs. Minetti attended both jobsite inspections. Mr. Minetti broke his leg in April or May of 2008 and was on crutches at the second jobsite inspection. Inspector Ulinger testified consistently with the CWOs in this matter. Within respect to Item 12 on the first CWO, Inspector Ulinger testified that the pony wall was supposed to be on one side of the kitchen range. Respondent’s placement of the pony wall did not allow a standard sized 30” range to be placed in the opening in Complainant’s kitchen. Inspector Ulinger testified that, since the contract did not mention HVAC, he did not require Respondent to provide it. Mr. Warren testified that the size of the addition was approximately 150 square feet. Consideration the size and location of the addition, additional HVAC would have been required to make it fit for its intended purpose. Respondent apparently performed some work but did not fully comply with the first CWO. Mr. Warren testified that Respondent had installed the deadbolt, but it was not working properly, and had installed the laundry tub, but the water connections had not been approved by the county. Respondent performed no work and did not obtain a permit to comply with the second CWO. Mr. Warren testified that the remodeling project remained substantially as it was at the first jobsite inspection. In addition, Mr. Warren identified the following additional workmanship deficiencies in Respondent’s work: (1) The door between the new laundry and garage needed to be, but was not, a fire-rated door because that wall was a firewall; (2) The seams between pieces of crown molding were poorly matched; and (3) The landing outside the new garage door was sloped, with a drop of approximately 2” in 12”, which violated applicable building code and presented a trip hazard to Complainant, who was an elderly woman. Complainant testified that more than 15 months passed after Respondent had started the remodel, during which time she lacked a stove to cook on. She was losing weight. Although she feared that she would lose her right to a remedy in her complaint to the Registrar, she finally paid other contractors to correct and to finish Respondent’s work. Factors in Mitigation and Aggravation According to the Registrar’s record, Respondent canceled License No. ROC216092 on May 1, 2008. On May 1, 2008, the Registrar issued License No. ROC243734, Class B-03 for residential general remodeling and repair contracting to Minetti Home Improvements and Repair LLC, a limited liability company. Mr. Minetti is the qualifying party and a member on that license. On January 12, 2009, the Registrar administratively suspended Respondent’s License No. ROC216092, Class C-61 for lack of bond. On January 16, 2009, the Registrar administratively suspended Minetti Home Improvements and Repair LLC’s License No. ROC243734, Class B-03 for lack of bond. Complainant’s complaint is the only complaint pending against either license. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[2] Complainant bears the burden of proof and must establish Respondent’s statutory violations by a preponderance of the evidence.[3] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[4] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] 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.”[6] The canceled and administratively suspended status of Respondent’s license does not preclude Complainant from pursuing her administrative remedy nor preclude the Registrar from conducting these disciplinary proceedings.[7] If the Registrar accepts this recommendation and the Registrar revokes Respondent’s license, in due course the revocation will lead to a penalty being imposed against License No. ROC243734 and any other license on which Respondent or its qualifying party may be listed[8] and may prevent any new license from being issued.[9] Complainant has borne her burden to establish that Respondent violated A.R.S. § 32-1154(A)(7),[10] (3),[11] and (23)[12] with respect to the Item Nos. 3, 8, 12, 13, and 9 on the April 4, 2008 CWO and Item Nos. 1, 2, 3, 4, 5, and 6 on the June 5, 2008 CWO. Complainant also has borne her burden to establish the Respondent violated A.R.S. § 32-1154(A)(17)[13] with respect to Item No. 1 on the April 4, 2008 CWO. Complainant also has borne her burden to establish that Respondent violated A.R.S. § 32-1154(A)(2)[14] with respect to Item Nos. 10 and 11 on the April 4, 2008 CWO. Complainant has not borne her burden to establish that Respondent violated any statute by failing to provide additional HVAC work for the room addition. Respondent has a right to procedural due process in this forum, which includes notice of the specific workmanship and other deficiencies, as well as of the specific statutes thereby allegedly violated before its license may be penalized as a result of those violations.[15] Respondent had no notice before the hearing of the additional workmanship deficiencies about which Mr. Warren testified. Complainant therefore has not borne her burden of proof to establish that Respondent violated any contracting law with these additional items of allegedly deficient workmanship. Respondent’s canceled and administratively suspended license and Minetti Home Improvements and Repair LLC’s administratively suspended license would have prevented either one of them from performing or hiring another licensed contractor to perform any further corrective action in this matter.[16] In any event, it is no longer possible for Respondent to repair his deficient workmanship or to complete the contract because Complainant has paid another contractor to repair Respondent’s deficient workmanship and to complete the project. Complainant’s action in hiring another contractor to repair Respondent’s workmanship deficiencies and complete the project was justified. Although there is no disciplinary history against Respondent’s or Minetti Home Improvements and Repair LLC’s licenses, Respondent’s abandonment of the project, failure to return any money to Complainant, and failure to comply with the CWO’s, or even to attempt to comply with the second CWO, are serious violations and evidence poor business ethics. An unconditional revocation is warranted. RECOMMENDED ORDER Based on the foregoing, it is recommended that, on the effective date of the Registrar’s final order in this matter, the Registrar revoke Respondent Perry Edwin Minetti dba Minetti Home Improvements and Repairs License No. ROC216092, Class C-51. 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 20, 2010.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Inspector Ulinger’s CWO did not specifically identify Item 13 of the Complaint. The inserted material is from Complainant’s original complaint to the Registrar. [2] See 32-1101 et seq. [3] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] See A.A.C. R2-19-119(B)(2). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] Black’s Law Dictionary at page 1220 (8th ed. 1999). [7] See A.R.S. § 32-1154(C). [8] See A.R.S. § 32-1154(A)(21). [9] See A.R.S. § 32-1122(E). [10] 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.” [11] 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.” [12] 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.” [13] 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.” [14] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[d]eparture from or disregard of plans or specifications or any building codes of any state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner’s duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.” [15] “Procedural due process requires notice and an opportunity to be heard in a meaningful manner and at a meaningful time.” Webb v. Arizona Board of Medical Examiners, 202 Ariz. 555, 558, ¶ 9, 48 P.3d 505, (App. 2002) (citing Comeau v. Arizona State Board of Dental Examiners, 196 Ariz. 102, 106, ¶ 18, 993 P.2d 1066, 1070 (App. 1999)). Applicable statute requires the Registrar to include in its Notice of Hearing “[a] reference to the particular sections of the statutes and rules involved” and “[a] short and plain statement of the matters asserted.” See A.R.S. § 41-1092.05(D)(3) and (4). In this matter, Respondent received all the process that was due. [16] See A.R.S. § 32-1101(A)(7) (defining “residential contractor” as anyone who “does himself or by or through others” performs construction); A.R.S. § 32-1151 (making it unlawful for anyone without a contractor’s license in good standing to engage in contracting).

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