ALJDEC decisions subject to certification as final

09F-2495-ROC · Registrar of Contractors · 2009-09-15

STATE OF ARIZONA OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 25, 2009

APPEARANCES: Complainants appeared and testified on their own behalf; Respondent was represented by its Managing Member and Qualifying Party Gary Smith.

WITNESSES: For Complainants: Steven and Debra Adams Jim Dimond, ROC Inspector

For Respondent: Gary Smith David Echevarria, Contractor Kevin Smith, Carpenter

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainants bring this action against Respondent Woodsmith for failure to follow building codes, poor workmanship, and failure to perform corrective work ordered by the Registrar of Contractors. Respondent disputes parts of the order to correct and alleges that it was not allowed access to perform any of the corrective work. At the beginning of the hearing, the parties came to an agreement on items 1, 2, 3, 4, 5, and 12 of the Corrective Work Order[1] issued in this case by the Registrar of Contractors on January 9, 2009. Respondent agreed to correct those items by appropriate means before September 25, 2009 (30 days from the hearing) and Complainant agreed to allow reasonable access to do so. Therefore, those items were not addressed further in the hearing and will not be discussed herein. Furthermore, Respondent clarified that it is challenging only items 6, 7, and 11 of the CWO.[2] Therefore, those were the items presented and addressed at the hearing. In addition, Complainants challenged some of the CWO’s “no action required” items as discussed below. This tribunal entered the complaint file received from the Registrar of Contractors into the record,[3] along with other exhibits brought to the hearing by the parties.[4] The parties presented evidence and testimony at the hearing. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Decision finding that Respondent has violated contracting law. FINDINGS OF FACT 1. Respondent is the holder of a class B general residential contractor license (No. 231535) issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform general residential construction of a structure or appurtenance, except for certain specialty contracting such as electrical, plumbing, swimming pools, etc.[5] Gary Smith is Respondent’s Managing Member and Qualifying Party.[6] The license was issued on April 11, 2007. 2. In September 2006, Respondent proposed to remodel portions of a home owned by Complainants, including removing and rebuilding a patio and porch with roof and adding an addition to the home. The proposal was for a time plus materials payment schedule with $2,000.00 down and the remainder to be paid as billed by Respondent.[7] The work included electrical, plumbing, HVAC, and other specialty work that Respondent subcontracted out. Respondent was not licensed at the time, nor is there evidence that he had a pending application for licensure at the time, until perhaps March 2007. In addition, the work required permits from the local building authority. Respondent did not get plans for the project approved and the evidence does not show that the project was inspected by the local building authority as it progressed. 3. Respondent performed the work as a general contractor. Respondent Woodsmith, LLC received the ROC license described above in April 2007. A Certificate of Occupancy was obtained for the project in May 2007. 4. Complainants filed a complaint with the ROC in October 2008, complaining about the roof and other areas of Respondent’s work in a 20- item list. The ROC inspected the property and found that many of the items did not meet standards and other items for which no corrective action was needed. A Corrective Work Order (“CWO”) was issued that required Respondent to obtain permits for the work and correct some 11 items, some of which pertained to the porch roof. Ten other items were found to not need correction. 5. The evidence shows that after the CWO was issued Respondent hired an engineer to dictate the appropriate means of correction for the porch roof. Respondent obtained a permit for the porch roof work from the local authority. Respondent had trouble accessing the property to make corrections because Complainants were uncertain as to the efficacy of Respondent’s proposed correction and wavered in allowing Respondent access to the property. As noted above, the porch roof issues were settled at the hearing. 6. At hearing, Complainants maintained that CWO items 6 (wall support above the sliding doors), 7 (walls not straight), and 11 (drywall damage from roof leak) have not been properly corrected. Complainants also asserted that the CWO was wrong about several of the “no action required” items: 13 (concrete not level), 14 (warped doors), 15 (doors don’t seal closed), 16 (missing vanity doors), and 22 (missing pocket door). These eight items were the issues that the parties presented at the hearing. All other items are no longer at issue. 7. ROC Inspector Jim Dimond performed a pre-hearing inspection on August 19, 2009, and testified about his findings at the hearing. He did not observe any walls that were obviously not straight or outside standards (item 7). He did observe drywall damage that needed repair outside the double doors to the Master bedroom (item 11). He testified that the issue with the support above the sliding doors (item 6) requires that the header used in the support be verified in terms of what was used and whether it is sufficient to hold the load.[8] 8. Inspector Dimond also clarified that item 12 of the CWO is a directive to have the entire project inspected (not only the porch roof) by the local building authority and have Respondent’s work pass inspection. This was not obvious from the language in the CWO.[9] 9. Finally, Inspector Dimond testified about the “no action required” items. He testified that the concrete patio was fine (item 13) and that the pooling of water appeared to be caused by a grading problem that was not Respondent’s responsibility. The evidence supports this conclusion. 10. The Inspector also testified about the interior doors (items 14 and 15). He testified that these do not require correction because, under ROC workmanship standards, adjustments to doors are only required within the first year. These doors were installed more than one year before the complaint and, therefore, no action was required. The evidence and legal authorities support the CWO in this regard. 11. The other two ‘no action’ items that are in dispute (items 16 and 22) are questions concerning the terms of the agreement between the parties. The tribunal took evidence directly from the parties for those items. 12. Item 16 concerns vanity doors that are not installed and item 22 concerns a pocket door that is not installed. The contention by Complainants is that Respondent was to complete the vanity, but there is evidence (Proposal 207) that Respondent was only to complete the vanity if Complainants provided the hardware. Further, it does not appear from the evidence that Respondent was responsible for anything more than the installation of the pocket door kit, which Respondent completed. Because the agreements made between the parties were verbal and ongoing during the project, this tribunal cannot determine whether Respondent is responsible for these items or the extent of the responsibility, if any. Thus, the CWO’s “no action” conclusion for items 16 and 22 is supported. 13. With regard to item 6, the support above the sliding doors, Respondent presented evidence showing that permits were issued in January 2007 for “remodel” and “electrical,” and that a Certificate of Occupancy was issued in May 2007. From this evidence, Respondent asserted that item must be okay. However, there is no evidence firmly showing that the support was approved, either by pre-approved plans or on-site inspection, and okayed by the local building authority. Therefore, Respondent must still correct item 6 by appropriate means. 14. Additionally, Respondent testified that he believed that someone was on the roof and caused the leak that caused the drywall damage noted in item 11. However, this is too speculative. The conclusion reached by the CWO, which is that Respondent is responsible for the damage, is supported by the evidence. Thus, Respondent must correct item 11. 15. Respondent submitted evidence that shows that Respondent made efforts to comply with the CWO but was denied access by Complainants. The evidence is sufficient to show that Respondent made good faith efforts to comply with the CWO. 16. In conclusion, the evidence shows that corrective work as described above is needed for items 6 (support above sliding doors) and 11 (drywall damage), as well as inspections by the local building authority are needed for all aspects of the project. No other items at issue at the hearing (items 7, 13, 14, 15, 16 ,and 22) need corrective work. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[10] Further, the standard of proof at hearing is by preponderance of the evidence.[11] Therefore, Complainants bear the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint.[12] Complainants have met that burden with regard to several of the alleged violations. 2. The evidence shows that Respondent has performed with poor workmanship, has wrongfully harmed Complainant, and failed to comply with local building codes. These are violations, respectively, of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(3), (A)(7), and (A)(2). The evidence also shows that Respondent contracted without a license when he bid and began the project without a license. The evidence does not show that Respondent failed to comply with a Corrective Work Order. Because violations have been shown, Respondent’s license is subject to disciplinary action. 3. Respondent’s conduct in this matter shows serious violations with regard to contracting before Respondent obtained a license and the workmanship of the porch roof by failing to have engineered plans that were pre-approved by the local building authority. However, the evidence also shows good faith efforts by Respondent to make corrections once the problems were identified. This evidence supports a moderate disciplinary action. 4. Under the circumstances of this case, this tribunal concludes that the appropriate remedy is to require Respondent to correct the remaining matters (items 6, 11, and 12, as well as the agreement to correct items 1 through 5) or face suspension of the license. In addition to that, Respondent’s license should be placed on probation for 90 days. RECOMMENDED ORDER IT IS RECOMMENDED that Class B- license 231535, held by Respondent Woodsmith, LLC be suspended beginning the effective date of the Registrar’s Order until Respondent provides written proof of correction, by appropriate means, of the items in Conclusion of Law 4 above, and the Registrar of Contractors accepts such written proof. IT IS FURTHER RECOMMENDED that if Respondent provides such written proof on or before the effective date of the Registrar’s Order, the license suspension shall not take place. IT IS FURTHER RECOMMENDED that, in addition to any suspension that may take place, Respondent Woodsmith, LLC’s license be placed on disciplinary probation for a period of 90 days. Probation shall begin to run on the effective date of the Registrar’s Order or until suspension, if any, is lifted, whichever occurs last.

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 15th day of September 2009.

Office of Administrative Hearings

______________________________ Eric A. Bryant Administrative Law Judge

Copies mailed this ___ day of September 2009 to:

William A. Mundell, Director Registrar of Contractors c/o Legal Department 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________ ----------------------- [1] The CWO does not number the items. Numbers were added to the “bulleted” items by the ALJ during the hearing for ease of reference. [2] Items 8, 9, and 10 do not carry specific directives anyway. [3] This includes correspondence and documentation filed with the Registrar of Contractors after the complaint was filed (October 28, 2008) and before the Notice of Hearing was issued. [4] Respondent’s exhibits are contained in a notebook. [5] See, Arizona Revised Statutes (“A.R.S.”) § 32-1102 and Arizona Administrative Code (“A.A.C.”) R4-9-103 for a description of residential license classifications. [6] Hereinafter, “Respondent” will refer to either the company or Gary Smith, depending on context. [7] According to the complaint form, Complainants paid almost $160,000.00 in total for the work. [8] This should have been done during construction and may now require some damage to the drywall in order to observe the support. Respondent would be responsible for correction of that damage should it be necessary. [9] Item 6 overlaps with item 12. It is evident that the failure to obtain inspections has caused item 6. [10] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [11] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [12] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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