ALJDEC decisions subject to certification as final

10F-19364748-ROC · Registrar of Contractors · 2010-06-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 25, 2010 at 1:00 p.m. APPEARANCES: Complainant Nova Energy Solutions Inc. dba J J Bakosh Construction appeared through Joseph Bakosh, its qualifying party and an officer; Respondent Edsart LLC appeared through Edward Huetten, its qualifying party and managing member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On June 13, 2003, the Registrar of Contractors (“the Registrar”) issued License No. ROC186299, Class B-2 for commercial general contracting to Complainant Nova Energy Solutions Inc. dba J J Bakosh Construction, a corporation. Joseph Bakosh is Complainant’s qualifying party and an officer. On November 2, 2008, the Registrar issued License No. ROC250423, Class K-60 for dual finish carpentry to Respondent Edsart LLC, a limited liability company. Edward Huetten is Respondent’s qualifying party and managing member. On November 23, 2009, the Registrar received a complaint against Respondent’s license from Complainant, which alleged that, on June 16, 2009, Complainant had subcontracted to Respondent fabrication of mirror frames, display cases, a reception desk, and work stations at a salon located at 20910 N. Tatum Blvd. #120 in Phoenix for a total contract price of $23,795.00, which had been paid in full. According to the complaint, the decorative laminate that Respondent had applied to the furniture was delaminating and, after numerous unsuccessful attempts, Respondent had been unable to repair the delamination. The Registrar assigned the complaint to Inspector Jeff Wills for investigation. Inspector Wills performed a jobsite inspection and, on December 10, 2009, issued a Corrective Work Order (“CWO”) to Respondent, requiring it within 15 days to correct by appropriate means all four items of complaint, in relevant part as follows: 1. Replace mirror frames that are delaminating and have been repaired numerous unsuccessful times:[1] It is the opinion of this inspector that the frames can be repaired and should be corrected by the appropriate means.

2. Repair delaminating of all display cases: As pointed out by the Complainant and owners of the salon at the time of the jobsite inspection.

3. Repair delaminating of the reception desk: As pointed out by the Complainant and owners of the salon at the time of the jobsite inspection.

4. Repair delaminating of the work stations: As pointed out by the Complainant and owners of the salon at the time of the jobsite inspection.

[Footnote added.] On January 15, 2010, the Registrar received Complainant’s request for hearing. On February 18, 2010, the Registrar issued a Citation and Complaint against Respondent’s license, charging A.R.S. § 32-1154(A)(3) (namely A.A.C. R4-9- 108) and (23). Respondent timely answered the Citation and Complaint, denying any statutory violations. Respondent affirmatively alleged that it had complied with the CWO and that the mirror frames could not be repaired without taking them down, which Complainant and owner of the salon refused to permit. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, to schedule and to conduct a fair hearing. A hearing was held on May 25, 2010. Inspector Wills testified. Complainant presented the testimony of three witnesses: (1) Mr. Bakosh, Complainant’s qualifying party and officer; (2) Danny Harris, the co-owner of the Rowdy Hair Salon, where the work had been performed; and (3) Siegfried Heyden, Complainant’s shop manager for the job. Complainant also submitted 14 exhibits. Respondent presented the testimony of Mr. Huetten, its qualifying party and member. Respondent also submitted 18 exhibits. Additional Evidence Inspector Wills testified that he had performed a prehearing jobsite inspection on May 24, 2010. Inspector Wills testified that the mirror frames, Item #1 on the CWO, had been corrected by Complainant and Complainant’s contractors. Inspector Wills testified that, although work had been done on the display cases and reception desk (Items #2 and 3 on the CWO), Respondent’s attempts at repair had been unsuccessful and additional repairs were needed. Inspector Wills testified that Respondent had corrected the work stations (Item #4 on the CWO). Mr. Huetten did not dispute that the mirror frames, display cases, reception desk, and work stations had been delaminating and that Respondent’s attempted repairs to the mirror frames, display cases, and reception desk had been unsuccessful. The parties’ contract required Respondent to fabricate the mirror frames but required Complainant to provide and install the mirrors. Mr. Huetten testified that Respondent needed to take the frames down and take them to its shop to perform repairs, but Complainant and the owners of the salon would not allow the mirror frames to be taken down for repairs. The Rowdy Hair Salon is open Tuesday through Saturday, beginning at 9:00 a.m. Mr. Harris requested that repairs be performed on Sunday, Monday, or before 9:00 a.m. on Tuesday through Saturday, before the salon opened for business. Mr. Bakosh instructed Mr. Huetten to contact Mr. Harris or his wife to arrange times for Respondent to perform repairs. Complainant did not participate in Respondent’s repairs and was not involved in securing access for Respondent to perform repairs. Mr. Bakosh and Mr. Siegfried testified that Complainant should not be required to be involved in having its customer Mr. Harris provide access for Respondent’s repairs. Mr. Huetten felt that the delamination of the mirror frames had been caused by defective materials. On December 14, 2009, Mr. Huetten had contacted WilsonArt, the manufacturer of the laminate and the adhesive that Respondent had used to perform the job, and made a warranty claim for materials to complete repairs to the mirror frames. On December 22, 2009, Mr. Harris provided access for Respondent to repair the work stations, display cases, and reception desk. Mr. Huetten told Mr. Harris that clamps should be left on the reception desk and display cases for at least twenty-four hours to allow the repairs to be effective. Mr. Harris felt that the clamps presented a safety hazard and insisted that the clamps be removed. On January 13, 2010, Mr. Huetten informed Mr. Bakosh that WilsonArt had provided materials for repairs to the mirror frames and requested that time be scheduled for Respondent to perform the repairs. Complainant did not schedule a time for Respondent to perform the repairs. Complainant hired Custom Mirror & Furniture to repair the mirror frames. Complainant submitted an invoice from Custom Mirror & Furniture dated February 26, 2010 in the amount of $3,775.00. Complainant requested that the Registrar order Respondent to pay restitution in this amount. Complainant also submitted an invoice in the amount of $1,428.10 for its labor costs to remove the mirror frames from the Rowdy Hair Salon, remove the laminate, take the mirror frames to Custom Mirror & Furniture for repair, and replace the mirror frames on the wall of the Rowdy Hair Salon. Complainant also requested that the Registrar order Respondent to pay restitution in this amount. Mr. Harris testified that the problems with Respondent’s work in fabricating and repairing the custom work stations, mirror frames, reception desk, and display cases made it difficult to open a new business. Mr. Harris would prefer that Respondent not be allowed to perform the remaining repairs. Mr. Huetten testified that he did not know that Respondent’s repairs to the reception desk and display cases had failed until Complainant requested a hearing. According to the Registrar’s record, Respondent’s license is current and in good standing. This is apparently the only complaint pending against the license. CONCLUSIONS OF LAW The 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] Respondent did not dispute that the custom furniture that it constructed began to delaminate shortly after installation in the Rowdy Hair Salon and that the reception desk and display cases still require correction. Complainant therefore has borne its burden of proof to establish that Respondent violated A.R.S. § 32-1154(A)(23)[7] and (3)[8] in its initial construction of and failure to repair fully the display cases and the reception desk. With respect to the money that Complainant requested for repair of the mirror frames, the legislature has not empowered either the Office of Administrative Hearings or the Registrar to adjudicate or award money damages.[9] 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.[10] Restitution may be appropriate when the contractor does not immediately respond to a complaint and the workmanship deficiency is such that the complainant is justified in hiring another contractor to remedy a health or safety issue or to mitigate his damages.[11] That is not the case here. The laminate on the mirror frames was correctible and in fact has been corrected by another contractor. Commercial exigency does not justify self-help by a general contractor or transform into restitution what otherwise would be damages that are beyond the Registrar’s jurisdiction to award. Respondent has borne its burden to establish that Complainant failed to provide reasonable access for Respondent to repair the mirror frames by refusing to allow Respondent to take the mirror frames to its shop for repair or to allow Respondent to use the repair materials provided by the manufacturer under warranty. Complainant’s successful repair of the mirror frames required removal, which Complainant refused to allow Respondent to do. With respect to the issue of access to repair the reception desk and display cases, Respondent has not borne its burden to establish that it was denied reasonable access to comply with the CWO. Because Mr. Harris and his wife are not parties to this administrative complaint, Complainant is responsible for providing Respondent with access through Complainant’s customers Mr. and Mrs. Harris to the jobsite for Respondent to perform repairs to the reception desk and display cases. The requirement that Respondent perform repairs when the salon is not open for business is not unreasonable. As a licensed contractor, Respondent is presumed to have the expertise to determine the appropriate method of repair and to perform the repair. Neither Complainant nor Mr. and Mrs. Harris may dictate Respondent’s method of repair, such as the use of clamps for an extended period of time. The Registrar’s final Decision and Order in this case should be without prejudice to Complainant’s right to seek civil damages in a court of competent jurisdiction for the cost of repairing the mirror frames and, if Complainant or Mr. and Mrs. Harris decide not to allow Respondent access to repair the display cases and reception desk as it sees fit, the cost of repairing the display cases and reception desk. RECOMMENDED ORDER As a result of the statutory violations that Complainant established in this matter, on the effective date of the Registrar’s final order, it is recommended that the Registrar should suspend License No. ROC250423, Class K-60 previously issued to Respondent Edsart LLC until Respondent provides evidence that it has repaired in a professional and workmanlike manner the display cases and reception desk at the Rowdy Hair Salon or that Complainant or the owners of Rowdy Hair Salon have denied access for Respondent to perform such repairs. It is further recommended that the Registrar should not suspend Respondent’s license and, instead, should close Case No. 2010-19364748 if, on or before the effective date of the Registrar’s final order, Respondent provides proof in writing of one of the following: 1) Respondent has repaired in a professional and workmanlike manner the display cases and reception desk at the Rowdy Hair Salon; or 2) Complainant or the owners of Rowdy Hair Salon have denied reasonable access for Respondent to perform repairs to the display cases and reception desk. It is further recommended that the Registrar should 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 revoke 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. It is further recommended that the Registrar’s final Decision and Order be without prejudice to Complainant’s right to seek civil damages against Respondent in a court of competent jurisdiction for all unresolved items of complaint. 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, June 3, 2010. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: William A. Mundell, Director Registrar of Contractors ----------------------- [1] Inspector Wills’ CWO quoted Complainant’s original complaints at the beginning of each enumerated item in bold and underlined. [2] See A.R.S. § 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 “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” [8] 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.” [9] See J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (Ct. App. 1984). [10] 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). [11] 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.

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