ALJDEC decisions subject to certification as final

09F-A0246-ROC · Registrar of Contractors · 2010-05-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 28, 2010 at 8:15 a.m. APPEARANCES: Complainant Joan Maloof appeared on her own and her husband Jack Maloof’s behalf; Respondent Ken Smirke Development LLC appeared through Ken Vincent Smirke, its qualifying party and managing member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On April 18, 2003, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC184703, Class B- for residential general contracting to Respondent Ken Smirke Development LLC, a limited liability company. On December 22, 2008, the Registrar received a complaint against Respondent’s license from Complainants Jack and Joan Maloof. The complaint alleged as follows: (1) On June 6, 2008, Respondent had contracted to construct a custom home on Complainants’ lot at 1500 Cougar Trail in Prescott for a total amount of $383,000.00; (2) Complainants had paid Respondent $268,310.89 and still owed $114,689.11; (3) The completion date for the project was March 10, 2009; and (4) Respondent had last performed work on December 11, 2008. The complaint also alleged eleven workmanship deficiencies, including the following: #1 Hardieplank ColorPlus siding installed incorrectly; entire home; see reports from James Hardie and pictures #9, 37-50 . . . .

#5 Wrong material used for all corner trim, fascia and fascia trim; see pictures #8 and 52.

Complainants attached to their complaint a copy of a letter to Complainants from Dawn Cole, Claims & Warranty for James Hardie Building Products, dated December 8, 2008, in relevant part as follows: As you are aware on 12/2/08, our representative Nestor Amaya conducted an installation audit on the above property. The following deviations from manufacturers’ [sic] installation instructions were noted:

1. Did not maintain a 2” clearance at wall to roof intersection. 2. Cut ends in field were not sealed. 3. Did not maintain a 2” clearance at decks, patios and/or porches. 4. Did not install flashing at windows, door trim or butt joints. 5. Improper fasteners used (our installation instructions prohibit the use of staples.)

The 50 year limited warranty covers the product but not the installation. However, should the installation not follow the manufacturer’s instructions and cause the product to be compromised, this would then be non-warrantable.

[Emphasis in original.] The Registrar sent a copy of the complaint to Respondent for its immediate attention. The Complaint was assigned to the Registrar’s Inspector Cliff Frandsen for investigation. Inspector Frandsen performed a jobsite inspection on January 13, 2009 at 10:00 a.m., which inspection Complainant and Respondent’s qualifying party and managing member Ken Smirke attended with Respondent’s roofing and framing subcontractors. On January 15, 2009, the Registrar received a letter from Complainants that was addressed to Mr. Frandsen, in relevant part as follows: Thanks for conducting the inspection of our concerns noted in the Complaint. . . . .

We had hoped that the pictures would provide further clarity as to what our concerns are, but apparently not. Unless the Complaint items could be pointed out during the inspection, we felt that you considered many of our concerns invalid.

When we requested a Builder’s Confidence Inspection on the roof, John Prince came to the property and visually inspected the roof himself and noted four items that “did NOT meet ROC workmanship standards.” He said that if the corrections were not made to meet ROC standards, we should file a ROC complaint and at that time, “an inspector would get on the roof and do a thorough inspection.” We followed his advice and filed the Complaint. . . . . . . .

We are including further information for you from James Hardie on correct installation of the products. This information is also available on their website . . . .

On January 27, 2009, on behalf of the Registrar, Inspector Frandsen issued a Corrective Work Order (“CWO”), requiring Respondent within fifteen days to take appropriate action to correct five items of complaint. Inspector Frandsen did not require corrective action on six items in the directive, in relevant part as follows: There is no action required of the contractor on these remaining items; basically they will be addressed during the completion of the home.

Item #1: There is no contractual document that specified the Hardie Plank lap siding should be Color Plus. The siding and trim shall be installed in a workmanlike manner and painted. . . . .

Item #5: The plans specified a type of corner trim that was not compatible with the design intent. The proper material was provided. The facia [sic] is per plan.

On February 11, 2009, the Registrar’s Prescott office received a letter addressed to Inspector Frandsen from Mr. Smirke on Respondent’s behalf, in relevant part as follows: I am writing this letter to inform you that I received a call from Mr. & Mrs. Maloof requesting that I not do any work on the siding (Hardie) which includes the painting. I am not able to complete the decking, stucco requirements and stone the fireplace as the result of their demand. In fact, the Maloofs said they would get a “No Trespassing” order from the Phoenix police dept. and a restraining order if I attempt to do this work . . . .

[Emphasis in original.] On February 11, 2009, the Registrar’s Prescott office also received a 5- page, single spaced letter addressed to Inspector Frandsen from Complainants that provided additional information on the manufacturer’s instructions for installing Hardie Plank Color Plus siding. The letter closed: Since the inspection conducted on January 13, we have contacted three companies to bid on the job to remove and reinstall the Hardie properly. All contractors agree that the initial install was done poorly. Another James Hardie official has viewed the pictures of the install and agrees that it was clearly not done according to Hardie’s very specific Installation Requirements.

On February 17, 2009, Inspector Frandsen provided to Respondent a copy of Complainant’s February 11, 2009 letter and informed both parties that he had scheduled a second jobsite inspection on February 26, 2009 on Complainants’ additional items of complaint. On February 26, 2009, the Registrar’s Prescott office received another 2- page single-spaced letter addressed to Inspector Frandsen from Complainants, in relevant part as follows: While we have requested a further inspection on our inappropriately installed HardiPlank ColorPlus siding, which is scheduled for today, we have some new information to give you before you begin this inspection.

In seeking bids from three qualified siding contractors, we have found that they are reluctant to assume liability for another contractor’s mistakes. They have reported that upon close inspection, the installation appears to be very substandard and the product damaged further by attempted “fixes”. . . .

Mr. Smirke has acknowledged that “the installation does not meet (his) standards”; has filed a claim against the subcontractor, who was ordered by the ROC to “remedy” the installation violations. Nothing was done by Far North Construction and we, the owners, filed a Complaint to have the siding replaced. No directive was issued and the opinion was to “install in a workmanlike manner and paint.” The attempts to “fix” the installation completely contradict the Installation Requirements provided by James Hardie. . . .

While we asked the contractor to remove and install new HardiePlank ColorPlus, . . . he refuses to comply with our request. In order to get bids for the Hardie replacement job, we asked the builder to refrain from painting the damaged Hardie and trim. . . . We asked him to proceed with all other work so as to not delay the build.

On February 26, 2009, the Registrar received from Respondent a copy of an inspection report on the HardiePlank siding written by Carl Johnson of Thunderbird Property Inspection, Arizona Registered Home Inspector #41116. The report noted as follows: The siding appears to be installed correctly, according to manufacturers’ installation instructions and is on track for proper completion. It appears that a complete tyvek vapor and air barrier has been installed correctly. All unprimed/cut edges must be painted/sealed. The pictures below show characteristics found and processes in progress but not yet complete.

The last four pictures of the report showed the following captions: (1) “All nail and staple holes need to be filled”; (2) “All recessed nail and staple holes need to be filled”; (3) “Gaps and spaces between windows to trim and siding to trim still need caulking”; and (4) “All penetrations and trim to trim connections need to be caulked.” On March 4, 2009, Inspector Frandsen issued a second CWO to Respondent, requiring it to perform certain corrective work within fifteen days, in relevant part as follows: This is an amendment to the previous [CWO] dated 1/27/09. The contractor shall take necessary and proper action to ensure that the installation of the lap siding is per industry standard.

1. All damaged areas should be repaired or replaced. 2. The entire home should be properly caulked. 3. All areas of the home shall be painted with a high quality product by a licensed contractor in good standing.

On March 16, 2009, Inspector Frandsen sent a letter to the parties, informing them 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” but that the Complainants could reopen the complaint by making a request in writing. On March 19, 2009, the Registrar received a written request from Mr. Smirke requesting an extension of time to comply with the second CWO because Respondent’s corrective work was “hindered by the Maloofs.” On March 25, 2009, the Registrar received Complainants’ request for a formal citation against Respondent’s license. Inspector Frandsen informed Respondent that the complaint had been reopened. Inspector Frandsen forwarded the complaint to the Registrar’s legal department so that a citation could be issued against Respondent’s license. Complainants later requested an inspection under the Building Confidence Program of Respondent’s installation of cultured stonework in the interior and exterior of their house. On July 2, 2009, Inspector Frandsen performed a courtesy inspection on Complainants’ concerns and issued a report, stating that “the majority of the masonry is not finished – the work done on the garage face is not too pretty.” Because the stonework had a poor appearance but was not yet finished, Inspector Frandsen’s report indicated that the stonework both met ROC workmanship standards and did not meet ROC workmanship standards. Pursuant to Complainants’ request, on July 24, 2009, the Registrar issued a Citation and Complaint against Respondent’s license, charging A.R.S. § 32- 1154(A)(2), (7), (23), (3) (namely A.A.C. R4-9-108), and (13) (namely A.R.S. § 32-1124(B)(4)). On July 30, 2009, the Registrar received Respondent’s written answer to the Citation and Complaint, which denied any statutory violation. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, to schedule and to conduct a fair hearing. On July 31, 2009, the Registrar received Complainants’ request to amend their complaint to allege that Respondent’s contract had violated A.R.S. § 32-1158(B), that the stonework violated applicable standards and manufacturer’s specifications, and that they had “concerns about the roofing paper used . . . and want[ed] to have the opportunity to submit findings on that phase of the job.” On December 10, 2009, the Registrar issued a Notice of Amendment to Complainants’ original December 20, 2008 complaint to include Respondent’s allegedly deficient application of Coronado cultured stone and use of deficient roofing paper and to charge another violation of A.R.S. § 32- 1154(A)(13) (namely A.R.S. § 32-1158(B)). A hearing was held on April 28, 2010. Inspector Frandsen testified telephonically. Complainant Joan Maloof appeared, testified, and presented the testimony of Pat Russell, who was employed by supplier Arizona Stone and testified pursuant to a subpoena that Complainants had had issued. Complainants also submitted six exhibits, which each consisted of numerous subparts. Respondent presented the testimony of four witnesses: (1) Ken Smirke, Respondent’s qualifying party and managing member; (2) Frank Richardson, the qualifying party and owner of Far North Construction, License No. ROC180430, Class B-3, the framing subcontractor on the project, which had installed the Hardie Plank siding; (3) Patrick Forrest, who was employed by Far North Construction and Respondent “alternately” to repair the Hardie Plank siding; and (4) Hector Gonzalez, who was employed by Respondent and had supervised installation of the cultured stone work. Hearing Evidence Mrs. Maloof indicated that Respondent had either resolved to her satisfaction or she accepted Inspector Frandsen’s opinion that no corrective action was necessary with respect to all items except the following four alleged deficiencies: (1) Respondent’s contract lacked a completion date or notice to Complainants of their right to make a complaint to the Registrar, in violation of A.R.S. § 32-1158(B); (2) Respondent had used the wrong trim; (3) Respondent had violated the Registrar’s standards and the manufacturer’s specifications in installing the Hardie Plank siding; and (4) Respondent had violated the Registrar’s standards and the manufacturer’s specifications in installing Coronado cultured stone. The Contract On May 14, 2008, Complainants signed to accept the Construction Agreement that Respondent had submitted. Respondent admitted that the agreement did not include a completion date or notification to Complainants of their right to make a complaint to the Registrar against Respondent’s license under A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A). The contract required Respondent to build the home according to plans and specifications “as drawn by Susan Hoover of The Drafting Edge, dated December 31, 2007 and accepted by the Owners” and according to manufacturer’s specifications. The Trim Respondent submitted copies of plans with the City of Prescott’s stamp, which indicated the plans had been approved on September 11, 2008. The plans originally called for “2x6 wood trim.” These words were crossed out on the plans that were submitted into evidence and the words “1x4 Choice Trim” handwritten next to the original trim description. Mrs. Maloof testified that she did not remember any conversation about changing the trim material. She also did not recall when she brought the trim issue to Respondent’s attention. Mr. Smirke testified that wood trim is vulnerable to damage from the elements. The Choice Trim product is not wood but looks like wood and is a better and more expensive product than wood trim. Mr. Smirke testified that Complainants had approved the change. Mr. Smirke testified that the Architectural Committee of the Hidden Valley Ranch Homeowners’ Association (“the HOA”) had requested and approved the change and pointed to the initial “M.C.” on the plan. Mr. Smirke testified that Morgan Craighead was the HOA Architectural Committee member who had initialed the changes after the committee had reviewed, approved, and recorded changes to the plans. Mr. Smirke testified that the copies of plans that were submitted were obtained pursuant to subpoena from the HOA Architectural Committee. He did not have access to the HOA Architectural Committee without the subpoena. Respondent submitted a letter from the HOA dated April 5, 2010, which stated that no fines or penalties had been assessed against Complainants or Respondent as of that date, although “[c]onstruction is still ongoing and the construction bond held by the [HOA] is still open.” Mr. Smirke testified that, if Respondent had departed from approved plans in any respect, the HOA would have imposed a penalty. The Hardie Plank Siding The plans called for “painted Hardi [sic] Plank siding over Bldg. wrap over ½” sheathing over 2x6 frame at 16” O.C.-brace as required.” Hardie Plank is a cement-like product designed to look like wood siding. After Complainants had provided the letter from Dawn Cole, Claims & Warranty for James Hardie Building Products, which was quoted supra at Finding of Fact No. 4, Respondent filed a complaint against Far North Construction, which complaint the Registrar designed Case No. A09-0242 or A09-0196. Mr. Richardson admitted that, when Far North Construction had first installed the Hardie Plank siding, it had deviated from the manufacturer’s specifications in the ways described on Ms. Cole’s letter. However, Mr. Richardson and Mr. Forrest testified that Far North Construction had complied with the CWO issued in Respondent’s complaint. The deficiencies noted in Ms. Cole’s letter had been corrected. That complaint had been dismissed. Mrs. Maloof submitted into evidence the product specifications from James Hardie that she had previously provided to the Registrar. Mrs. Maloof testified that Respondent’s repairs had “compromised” the Hardie Plank product. As a result, Mrs. Maloof testified that the Hardie Plank product needed to be removed and replaced. Without an order from the Registrar, however, Respondent refused to remove and replace the planking. Complainants did not present the testimony of an expert that Respondent’s repairs to the Hardie Plank siding had damaged it beyond the point that it could be salvaged. None of the documents that Complainants submitted stated that the Hardie Plank siding that Respondent had installed could not be repaired. Inspector Frandsen testified that he had performed a prehearing inspection on April 22, 2010, which was the fourth time he had been to Complainants’ house. He had asked Mrs. Maloof to show him the workmanship that she still considered to be deficient. Inspector Frandsen testified that Respondent had not fully complied with Items 1 and 2 of the March 4, 2009 CWO. Inspector Frandsen testified that Mrs. Maloof had shown him numerous photographs of the areas that still required repair[1] and that Mrs. Maloof and Mr. Smirke both knew which areas were still deficient. Mr. Smirke agreed that the areas of the Hardie Plank installation at Complainants’ house that Mr. Frandsen described in his testimony required additional repair, replacement, or caulking.

The Coronado Cultured Stone Complainants submitted numerous photographs of the cultured stone veneer that Respondent had installed on the interior and exterior of their house.

Mrs. Maloof testified that Respondent’s installation had “ruined” the cultured stone veneer. Complainants purchased actual stone to replace the cultured stone veneer. By the time of the hearing, Complainants had paid other contractors to remove the cultured stone veneer that Respondent had installed and to replace the veneer with actual stone. Respondent had not been allowed to complete installation of the Coronado cultured stone veneer or to repair the installation that it had started. Complainants submitted an unsigned letter from Bob Ratkovic, the Technical Director of Coronado Stone, which had manufactured the cultured stone veneer and is based on Fontana, California, dated April 22, 2010, in relevant part as follows: We have inspected the Coronado Stone installed at your residence and have found areas where we feel our installation guidelines, found on our website, have not been followed correctly. At this time, we do not know the mix design of the mortar or grout; however, the grout joints are showing signs of cracking. There are a few causes for this, but the most common stem from improper mortar mix designs and an unstable substrate. It is difficult to determine if any movement exists in the substrate, however, based of [sic] the visual signs of the stone and grout, the grout appears to be the problem. The grout is showing numerous cracks that look to be caused from mortar not adhering to the wall and breaking loose. There also appears to be different types of grout used throughout the installation as well as different techniques. Some areas are smooth, some rough. Some areas are deep raked and some areas are medium depth.

When installing stone veneer, after the stone is installed and the mortar is allowed to cure, a grout bag is used to fill the joints between the stones. When the grout is “thumbprint hard” the grout must be pushed into the joints to fill all voids. If the grout is cleaned too soon, the mortar will smear and stain the stone. If the grout is too dry, the grout will be uneven, inconsistent in color, and possibly lose strength. The grout joints should be raked to the desired depth using a wooden stick, wire brush or painted tool. Care should be taken not to scratch or damage the stone veneer. All grout debris should be cleaned off before grout dries completely. There are numerous areas observed where the grout was not cleaned off the stone. At this time, it would be impossible to clean off all the extra grout without damaging the stone veneer.

Proper drainage should always be considered when installing columns. The columns with the wood posts appear to have inadequate slope to keep water runoff away from the center of the columns. Typical installation of columns would have a postcap to help protect from water intrusion. Stone veneer, especially in freeze thaw environments, is not to be installed horizontally. Consideration should be made for flashing and caulking to keep water from entering the column.

Lastly, to maintain cohesiveness and give the appearance of real stone, corners should have been used throughout the installation.

According to the Registrar’s record, Respondent’s license was current and in good standing on the date of the hearing. There was no prior discipline against the license. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[2] Complainants bear 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] Complainants did not present any evidence about the roofing. Therefore, Complainants did not bear their burden to establish that Respondent had violated any statute with respect to the roofing. Complainants did not present any evidence to bear their burden to establish that Respondent violated A.R.S. § 32-1154(A)(13) (namely A.R.S. § 32- 1124(B)(4)).[7] Construction is not a perfect art and, generally, a contractor should be afforded an opportunity to complete its work and to correct deficient workmanship before the Registrar suspends, revokes, or otherwise disciplines its license. Respondent never had an opportunity to complete or repair the Coronado stone veneer before Complainants had it removed and replaced. The legislature has not empowered either the Office of Administrative Hearings or the Registrar to adjudicate or award money damages.[8] The Registrar may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation can no longer be remedied by corrective work.[9] Restitution may be appropriate when the workmanship deficiency is such that the property owner is justified in hiring another contractor to remedy a health or safety issue or to mitigate his damages.[10] That is not the case here. In addition, Mr. Ratkovic’s letter is hearsay.[11] Although hearsay may be admitted in an administrative hearing,[12] it should not be relied upon if it is unreliable or not the kind of evidence that reasonable persons would rely upon in serious matters.[13] Mr. Ratkovic did not testify at the hearing. His letter was dated after Complainants had had the cultured stone replaced. It is not clear whether the opinions in his letter were based on Complainants’ photographs or a personal inspection. His letter is not the kind of evidence that reasonable persons would rely upon to penalize a contractor’s license and livelihood. Therefore, Complainants have not established that Respondent violated A.R.S. § 32-1154(A)(2),[14] (7),[15] or (3)[16] with respect to its installation of the Coronado cultured stone at Complainants’ house. Respondent established that the change from 2”x6” wood trim to 1”x4” Choice Trim was approved in writing by the HOA Architectural Committee, presumably on Complainant’s behalf. Respondent also established that the Choice Trim is superior to the wood trim originally called for in the plans. Complainants therefore have not borne their burden to establish that Respondent violated A.R.S. § 32-1154(A)(2), (7), or (3) with respect to its use of Choice Trim at Complainants’ house. Complainants have borne their burden to establish that Respondent violated A.R.S. § 32-1154(A)(13), specifically A.R.S. § 32-1158(B),[17] because Respondent’s contract did not include a completion date or notify Complainants of their right to make a complaint to the Registrar. However, Complainants repeatedly exercised their right to make complaints against Respondent to the Registrar and had definite opinions about the completion date for their house. It does not appear that Complainants suffered any actual harm from either of those omissions. As a licensed contractor whose license is in good standing, Respondent is presumed to have the expertise to correct errors and workmanship deficiencies in the Hardie Plank that it installed. Complainants have not established that correction of the deficiencies in Respondent’s Hardie Plank installation requires removal and replacement of the siding. Complainants have borne their burden to establish that Respondent violated A.R.S. § 32-1154(A)(2), (7), (3), and (23)[18] by failing to fully and properly caulk the entire house and to repair or to replace all damaged areas where it had installed Hardie Plank siding, as Inspector Frandsen testified. 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 should suspend Respondent Ken Smirke Development LLC’s License No. ROC184703, Class B- until Respondent provides written proof that it has (a) fully and properly caulked the entire home and (b) repaired or replaced all damaged areas where it had installed Hardie Plank siding. It is further recommended that the Registrar should not suspend Respondent’s license and, instead, should close Complainants Jack and Joan Maloof’s complaint in Case No. A09-0246 if, on or before the effective date of the Registrar’s final order, the Registrar receives written proof from Respondent of either one of the following: 1) It has in a professional and workmanlike manner (a) fully and properly caulked the entire home and (b) repaired or replaced all damaged areas where it had installed Hardie Plank siding; or 2) Complainants have refused to provide reasonable access to Respondent to perform the corrective work required by the Registrar’s final order in this matter. It is further recommended that the Registrar require Respondent pay the sum of $250.00 as a civil penalty pursuant to A.R.S. §32-1154(D). If Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar should suspend Respondent’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. 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, May 5, 2010.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The photographs were admitted as part of Complainants’ exhibits 3 and 4. [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] 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 underlying provision charged was A.R.S. § 32-1124(B), which requires licensees to place their license number, preceded by the acronym “ROC” “on all advertising, letterheads and other documents used by the licensee in the conduct of business regulated by this chapter.” [8] See J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (Ct. App. 1984). [9] See A.R.S. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (Ct. App. 1990). [10] In Sunpower, the Arizona Court of Appeals upheld the Registrar’s power to order a contractor to return to a property owner the cost of a solar heater where, although the contractor had made several attempts to repair the heater, he could not make it provide a habitable degree of heat. See id. [11] See Ariz. R. Evid. 801(c) (“‘Hearsay’ is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.”). [12] See A.R.S. § 41-1092.07(F)(1). [13] See Plowman v. Arizona State Liquor Board, 152 Ariz. 331, 337, 732 P.2d 222, 228 (App. 1986) (citing Begay v. Arizona Department of Economic Security, 128 Ariz. 407, 626 P.2d 137 (App. 1981)). [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] This statutory subsection formerly included 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.” [16] 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.” [17] A.R.S. § 32-1158(B) provides that contracts entered after December 31, 2007 include certain minimum terms, including the following:

4. The estimated time of completion of all work to be performed under the contract. . . . .

9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. the contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in ten point bold type. . . . [18] 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.”

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