ALJDEC decisions subject to certification as final

08F-2727-ROC · Registrar of Contractors · 2009-02-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 14, 2009

APPEARANCES: Barbara Baughn, Complainant; Gus Garcia, Respondent's representative; Jeff Fleetham, Registrar of Contractors Inspector

ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang _____________________________________________________________________ After filing a complaint and two addendums with the Registrar of Contractors, the Complainant has failed to establish by a preponderance of the evidence that her allegations amounted to violations of the applicable Arizona licensing statutes and rules. The Registrar of Contractors Inspector did establish a violation of the statutes in that the Respondent’s contract did not contain the minimum elements of a contract, including the use of the ROC acronym with the Respondent’s license number. Generally, such a violation is considered minor. Therefore, it is recommended that a short probationary period of 15 days be imposed against the Respondent’s license, following which, this matter shall be closed. FINDINGS OF FACT 1. On April 27, 2007, the Complainant, Ms. Baughn, hired the Respondent to add a garage with a living space in it to her home and to remodel inside the existing home. The outside of the home was to be stuccoed and the Respondent was to add a new composition roof. There were delays in completing the work because Ms. Baughn is very ill and remains bed-bound for most of the day. In order to make her more comfortable, the Respondent kept her bedroom untouched and attempted to build and remodel around her, including retaining the ceiling of the room and building the roofing around it like a shell. 2. Ms. Baughn changed her mind during construction and wanted a tile roof instead of a composition roof. Respondent agreed but did not obtain a change order even though a tile roof is much more expensive. Respondent quoted an additional price, which the Ms. Baughn clearly agreed to because she gave him additional money at that time and she allowed him to order the tile and put it on the garage without objecting. 3. On February 14, 2008, Ms. Baughn filed a complaint with the Registrar of Contractors. The complaint contained a long list of allegations. On or about March 27, 2008, the Registrar of Contractors Inspector, Jeff Fleetham, conducted a job site inspection and went through the items of complaint. As a result, on or about April 4, 2008, he issued a Corrective Work Order directing the Respondent to do the following:

1) Provide a certificate of insurance. 2) Complete the project per the original contract agreement, plans, specifications and all local building codes and requirements. No additional charges are to apply unless properly executed change order is signed prior to commencement of work. 3) Boosted tile roof. Not color selected by homeowner. Not installed per manufacturer's specifications. Contractor to install homeowner selected color per manufacturer's specifications and all applicable building codes. 4) Hole in block wall. Per job site agreement contractor will correct by appropriate means. 5) Cement on Lion in front yard. Per job site agreement contractor will correct appropriate means. 6) Crack in garage floor at radius. No expansion or control joint installed. 7) Three skylights in garage installed instead or four. Per job site agreement between contractor and homeowner and additional sky light will be installed in the kitchen upon proper execution of a signed change order. 8) Five lights in garage instead of six. Per job site agreement contractor will correct by appropriate means. 9) No overhead cabinets in garage laundry area. Per job site agreement contractor will correct by appropriate means. 10) Did not saw cut concrete pad at front sidewalk and patio. Per job site agreement contractor will correct by appropriate means. 11) Windows to be installed per original agreement, plans, specifications. Window energy specifications are included in stamped plans. Any change from these specifications will require a signed change order prior to change.

4. Ms. Baughn filed amendments to her complaint on May 20 and August 21, 2008. On September 23, 2008, the Registrar of Contractors issued a Notice of Amendment stating that, if the matter went to hearing, the Inspector would address the additional items in his pre-hearing inspection. On October 1, 2008, the Registrar of Contractors issued a Citation and Complaint. 5. On January 13, 2009, Inspector Fleetham conducted a pre-hearing job site inspection. He found that the job was still not complete and none of the items on the Corrective Work Order had been completed except that a skylight had been added, the hole in the wall was repaired, and a line was cleaned. The additional 52 items of complaint were largely a reflection of the fact that the project was not completed. 6. At the hearing in the matter, Inspector Fleetham testified as to his findings. He also testified that he found that the contract between the parties did not contain the minimum elements of a contract as required by Arizona's contracting statutes and he had notified the Respondent of this at the time he issued the Corrective Work Order. He also noted the Respondent's license was suspended as of that time, so Respondent couldn't complete further work. 7. Ms. Baughn and Mr. Garcia offered extensive testimony, and their statements conflicted with each other extensively, making it necessary to determine which of them was more credible. Because of the numerous ways and the seriousness in which Ms. Baughn contradicted herself, her testimony cannot be considered reliable, and, although he too had some small contradictions in his testimony, the weight of the evidence supported the statements made by Mr. Garcia. 8. The most significant area where Ms. Baughn contradicted herself was in her statements that the Respondent put the wrong color of tile on her roof. She made this statement to Mr. Fleetham at the initial job site inspection and again at the hearing when she said she had wanted "Espania" but Mr. Garcia had ordered "California Mission Blend". However, when Mr. Garcia testified, he noted that the tile had laid out in Ms. Baughn's yard for weeks and she never said anything. Ms. Baughn admitted that she had seen the tile before it was put on the roof and did not complain, but she still insisted that it was Mr. Garcia who had erred in ordering the wrong color tile. She offered a photo of the tile that was ordered next to the tile she wanted. Mr. Garcia said that the name of the color was the same but the two different tiles had come from two different companies, which accounted for their dissimilar appearance. He said that "Espania" referred to the shape of the tile, which described both types. 9. Mr. Garcia stated that Ms. Baughn had initiated the issue of changing the roof from composition to tile because she had found some tile she liked on-line and brought it to him. Ms. Baughn denied this stating that she didn't know about computers and she couldn't have done that. Mr. Garcia then stated that he did not use the manufacturer of the tiles in question, but Ms. Baughn brought him the name of the company and the color she wanted, which she got from the web site, and, in serving his customer, he went to the manufacturer and brought back a sample of the color so that Ms. Baughn could see it. He said that she approved the color, so he ordered it, prepared the garage roof while the tiles sat in the yard, and installed it in the way she had requested. Ms. Baughn then said that she did not find the tile on-line, she saw the tile in a magazine and THEN went to the web site. She said that the web site had only one picture for her to choose from, so she chose that color. She said that Mr. Garcia only brought her one color to choose from, and when she saw the final product on her garage roof, it didn't look like she envisioned it. At this point, it was clear that Ms. Baughn had lied when she said that Mr. Garcia had put the wrong color on the garage. In fact, she had decided on the tile color herself, had either sent him to get a sample or let him show her the sample, had approved the sample, had seen the tile when it arrived, and had not complained about it until after she saw it on the roof. The reason she did not complain, it is clear, is because it was the color she had requested. It was also a very expensive item, but she did not speak up to correct her statement even after Inspector Fleetham ordered the Respondent to correct the color. Based on this and other contradictions in her statements, Ms. Baughn's testimony could not be considered reliable. 10. Mr. Garcia testified credibly even though there were some minor discrepancies in his recollection about time periods. He stated that, contrary to Ms. Baughn's claims, he submitted her plans to the City immediately, and, although they were sent back more than once for corrections, the architect did not make the same mistake over and over again. In the meantime, he prepared the ground, started demolition work and helped Ms. Baughn moved her furniture at no extra cost. 11. As soon as he got the permits, Mr. Garcia began work. Immediately, when he was not there, Ms. Baughn had Mr. Garcia's workers move a wall closer to the property line, which was not on the plans and which was against City code. This put Mr. Garcia, as the builder, in an awkward position because, if he continued building and this issue was not approved by the inspector, he might have to tear it all down and rebuild. Apparently, there was a delay because of this, but ultimately, it was resolved and Mr. Garcia continued working. 12. Progress was difficult because, Mr. Garcia said, Ms. Baughn complained constantly and wanted things done in the manner that she dictated. She also changed things on a continual basis as is clear from her numerous notes on the contract. (See Case File.) Because she lived there during construction, there were many more delays. Ms. Baughn insisted that the water could not be turned off for more than one hour in case she felt like using it. This limited the plumber's ability to complete his work. Ms. Baughn would not allow the electricity to be turned off so that the framers could complete their work. She requested a delay in the work so that her greenhouse could be reconnected with gas service. Mr. Garcia talked Ms. Baughn into renting some storage for some of her furniture so that the house renovations could move along and he helped her move into the garage so that she could be comfortable. She insisted that the air conditioning be vented from the house to the garage, covered vents in the garage, and had an outside worker connect the air conditioner to the swamp cooler, all actions that Mr. Garcia found was against code restrictions and was dangerous because of the gas appliances in the garage. She also became upset with a worker because he went to work inside the house when he had not completed the garage, even though it was agreed that the garage was not yet complete at that time. Still she continued to point out minor imperfections in the garage. Additionally, it took her a great deal of time to move to the garage, even with Mr. Garcia's help. Because of these issues, it was not established that Mr. Garcia was guilty of any wrongdoing because of the length of time it took to do the work that he did on the project. 13. After the Corrective Work Order was issued, Mr. Garcia went to the home to do the corrective work. He brought change orders to do the tile roof in the color Ms. Baughn had originally ordered, to install the swamp cooler in the garage, to put gates at the rear of the property, to change a door in the garage, to upgrade a window in the garage addition bathroom, to add a designated circuit for a new spa tub in the garage bath, and to change the bathroom tile to black Nero marble. (Exhibit 2.) Ms. Baughn refused to sign the change orders though she admitted that all of the work had already been done (except the roof was not completed and she disagreed with the color of the tile). On some change orders, she wrote that the work had already been done but Mr. Garcia had not told her it would cost extra money. She also wrote "Ripe-off" (rip-off) on many of them, including the roof tile quote. However, the evidence at hearing indicated that she had agreed to the tile quote without disputing it. 14. Mr. Garcia would not agree to put tile on the rest of the home without a signed change order and he did not agree that he had tiled the garage roof with the wrong tile color. When Mr. Garcia tried to do rest of the corrective work, Ms. Baughn insisted that her son, who lived with her, work for Mr. Garcia. Mr. Garcia testified that he often smelled marijuana when he went to the home and he did not know anything about Ms. Baughn's son. He did not want to be responsible for anything that Ms. Baughn's son might do, and he refused to hire him. However, Ms. Baughn continued to have her son work on the home when Mr. Garcia was gone, including electrical work. Finally, when Mr. Garcia told Ms Baughn that he would not touch the roof without a signed change order, Ms. Baughn ordered him off the property and would not allow him to do any more work. 15. Mr. Garcia determined that it would be more appropriate not to try to go back and work on the Corrective Work Order. He decided to take his instructions from the Registrar after the matter had gone to hearing. At hearing, he argued that Ms. Baughn breached the contract by having her son do the work he was contracted to do. He also argued that, after making her initial payment, Ms. Baughn did not pay him according to the contract. Rather, he said, she paid when she felt like it. Sometimes she paid subcontractors directly because she said she didn't trust Mr. Garcia. Mr. Garcia agreed to this on occasion because he believed that at least his workers could get paid and something would be paid on the contract. 16. Mr. Garcia said that he wants to see the project completed but he does not know how to proceed based on Ms. Baughn's actions. He said that he would comply with whatever the Registrar requires, but he wants to know what he should do now. He also asked that he be allowed to do any remaining work without Ms. Baughn or her family present. Ms. Baughn stated that she did not want the Respondent or Mr. Garcia to do any more work on the project. 17. Mr. Garcia stated that Ms. Baughn often appeared to him and his workers with a gun. She allowed her dogs and cats to run in the street where one of her dogs knocked a woman with a child off her bicycle. The dogs and cats often toileted on Ms. Baughn's carpet, so Mr. Garcia had to arrange his work so that the last item to go in would be the floors. Ms. Baughn continually complained about the prices Mr. Garcia quoted. Even though she accepted his prices on the original contract and his quote on the roof and allowed him to do a substantial amount of work for her, she attempted to show at hearing that he was "a crook" because his prices were too high. She went to his home and, when he wasn't there, she told his neighbor that he was a crook and that he stole from her. She stated at hearing that she notified the IRS of everything he did to her, and, because he has moved his private residence and she found out about it, she argued earnestly that this means he is running from her and the IRS. She has claimed the Mr. Garcia stole things and broke a cat tower but she's offered no proof of this. 18. Ms. Baughn stated that Mr. Garcia was claiming that he'd never had a complaint against his license directly after he had testified extensively about the one complaint he has had against another license that was in his name. She denied Mr. Garcia's statement that she had seen his work and had gotten his name from the project she had seen. Then she said that she had seen that "work was being done" on that project but she had not actually seen the work. And rather than getting Respondent's name from the Respondent, she had gotten it from Sam, an employee of Respondent. When questioned as to how she could say that she saw that work was being done but then claim that she had not actually seen the work, she said that she was not an expert. She also said that only $1,000.00 worth of work has been completed on the home. She said her son has now done a lot of work on the home, that he is competent in most areas of construction, and that his work is just fine. She stated that his work has passed inspection. 19. Ms. Baughn claimed that it was irrelevant whether it was she or Mr. Garcia who had erred in getting the wrong color tile because it had to be re-done anyway, however, the evidence show that only the boostings had been applied wrong, which can be corrected without replacing the roof. 20. Ms. Baughn stated that she has paid the Respondent $216,652.00 but Mr. Garcia wants over $300,000.00. The initial contract was for $248,175.00 and the tile roof was quoted at $72,000. The other extras on the proposed change orders totaled $3,620.00, so wanting over $300,000.00 would not be unreasonable. Mr. Garcia stated that he has put at least as much money into the home as he has received from Ms. Baughn. 21. The contract between the parties did not contain the addresses of the parties, the estimated date of completion, the dollar amount of progress payments, or the license number of the Respondent, which would also have been required to contain the acronym “ROC” in front of it. Although this would not prevent the contract from being enforced, these are considered minimum elements of a contract for the purpose of licensing discipline. 22. According to the records of the Registrar of Contractors, the license in this matter has been suspended since October 1, 2008 for nonrenewal. It has one open complaint on it, which would be the instant matter. Respondent is also recorded as having another license, which was canceled in 2006. It had one closed/settled/resolved complaint against it. 23. 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)( specifically A.A.C. R4-9-108), (7), (13)(specifically A.R.S. § 32-1124(B) and A.R.S. § 32-1158), and (23). 3. The burden of proof at an administrative hearing is generally upon the Complainant. Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). Further, the standard of proof at hearing is a “preponderance of the evidence”. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). 4. A.R.S. § 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. Because the project in this case was unfinished, it cannot be ascertained whether the finished work would have met minimum workmanship standards. Mr. Garcia did not dispute that the boostings on the garage roof needed correction; however, he was unable to do the corrective work because of Ms. Baughn’s refusal to sign the change order. Ms. Baughn, in turn, believed that she had been upheld on the issue of whether the roof tile should be changed to the tile she preferred because the Corrective Work Order did state that the tile color was wrong. It was established at hearing that Mr. Garcia actually installed the tile that Ms. Baughn had directed him to install, and she later changed her mind. Therefore, he prevailed on that issue, and he cannot be held responsible for the cost or replacing the entire garage roof with Ms. Baughn’s new tile preference. Had Mr. Garcia obtained a signed change order, the problem would not have occurred; however, there is no provision in the contract, statutes or rules that required Mr. Garcia to obtain a signed change order. And, although the Corrective Work Order directed him to obtain change orders, Mr. Garcia did submit them to Ms. Baughn and it was she who refused to sign them. 5. Construction work, such as that at issue herein, is not a perfect science. It is common in the industry to require corrections, repairs, or replacements of poor workmanship in order to bring the project up to appropriate industry standards. In this regard, the Registrar of Contractors generally allows contractors a reasonable opportunity to complete necessary remedial work. Since the project in this matter was not completed, Ms. Baughn was unable to establish that Mr. Garcia committed a violation of this portion of the statute, even if there were items that would have required correction before the project was complete. 6. A.R.S. § 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”. Ms. Baughn claimed that Mr. Garcia took advantage of her and took more money than he had dedicated to the project. She estimated that he had only put $1,000.00 into the project. However, she admitted that she is not an expert. Mr. Garcia, who is a contractor who would have more expertise on that issue, and who was the one doing the work, estimated that he had dedicated as much money and labor to the project as he had collected. Ms. Baughn was unable to meet her burden of proof by establishing by the greater weight of the evidence that Mr. Garcia did a wrongful or fraudulent act resulting in substantial injury to her. 7. A.R.S. § 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, which include stating the parties’ addresses, the contractor’s license number, the estimated date of completion and the dollar amount of progress payments. It was undisputed that these items were missing from the parties’ contract. Therefore, it was established that the Respondent violated A.R.S. § 32-1154(A)(13). However, A.R.S. § 32- 1158(C) provides that such a violation “shall not constitute a defense for either party in an action for compensation, damages, breach, enforcement or other cause of action based on the contract”. 8. A.R.S. § 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. In this case, Mr. Garcia began the corrective work that he was directed to do, but he was ordered off the property. While this was due to a dispute regarding which party should be responsible for any chance to the roof tile, Mr. Garcia has prevailed on that issue. And, although he would have been responsible to correct the remaining items, he cannot commit a trespass and remain on a customer’s property once he has been ordered off. Therefore, Ms. Baughn has not established that Mr. Garcia violated A.R.S. § 32-1154(A)(23). 9. There are times when the Registrar of Contractors may consider allowing a contractor to complete his work after a hearing; however, such a remedy would not be appropriate in this case because Ms. Baughn’s son has completed some of the work that was part of the contract. Further work on the project by Mr. Garcia would only blur the parties’ legal responsibilities and create further confusion, to the benefit of no one. 10. It was established at hearing by Inspector Fleetham that Respondent violated A.R.S. § 32-1154(A)(13) by not including the minimum elements of a contract or the acronym ROC with the company’s license number on the contract. However, Ms. Baughn did not meet her burden of proof by establishing by a preponderance of the evidence any other violation of the Arizona contracting statutes. 11. Mr. Garcia has a good record with the Registrar of Contractors, and failure to include the minimum elements of a contract or include the ROC acronym with one’s license number is generally considered a very minor violation supporting only the mildest of disciplinary actions. Therefore, it is recommended that only a short period of probation should be entered against the Respondent’s license in this matter, and the issue of all other alleged violations should not be sustained. RECOMMENDED DECISION Based upon the foregoing considerations, it is recommended that Respondent’s Class KB-02 license shall be placed on disciplinary probation for a period of 15 days commencing on the effective date of the Order entered in this matter, after which Case No. 08F-2727-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, February 2, 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