ALJDEC decisions subject to certification as final

2008A-1265289-ROC · Registrar of Contractors · 2011-07-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

COMPLIANCE HEARING: June 28, 2011, at 8:00 a.m. APPEARANCES: Complainants Daniel Q. and Marisa B. Bradford appeared through Joel P. Borowiec, Esq., Borowiec, Borowiec & Russell, P.C.; Respondent appeared through Richard Hebl, its qualifying party and managing member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In January 1998, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC129107, Class C-11 for residential electrical contracting to Hometown Electric, L.L.C. doing business as (“dba”) Hometown Electric (“Respondent”). On or about January 9, 2008, the Registrar received a complaint from Daniel Q. and Marisa B. Bradford (“Complainants”) regarding Respondent’s failure to furnish a written contract and its performance of electrical work at Complainants’ home at 81 Wagon Wheel Lane in Sonoita, Arizona. The Registrar designated Complainants’ complaint as Case No. S08-0126. The Registrar’s inspector, Mike Nieves, performed a jobsite inspection in Case No. S08-0126. On February 8, 2008, Inspector Nieves issued a Corrective Work Order (“CWO”) to Respondent, requiring it to perform certain corrective work within fifteen days to eight items, as follows: (1) To make flush, as required by code, the electrical panel that was recessed approximately 1½” in the wall; (2) To repair several electrical outlets that did not function; (3) To correct the outlets that protruded ¾” beyond the face of the drywall; (4) To place appliance outlets in the kitchen in the correct locations; (5) To provide a finished wiring detail drawing; (6) To replace a 4-position light switch with the 5-position switch that the plans called for; (7) To make flush, as required by code, the electrical panel in the basement that was recessed approximately 1½” in the wall; and (8) To correct the ROMEX runs that were installed in the main panel without enough breaker space. Complainants requested a hearing. The Registrar issued a Citation and Complaint against Respondent in Case No. S08-0126, charging violations of A.R.S. § 32-1154(A)(2),[1] (3), namely A.A.C. R4-9-108,[2] (13), namely A.R.S. § 32-1158,[3] former (7),[4] and (23).[5] Respondent filed a timely written answer to the Registrar’s Citation and Complaint in Case No. S08-0126. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. An evidentiary hearing was held on March 5, 2009, at the OAH in Case No. S08-0126 before Administrative Law Judge (“ALJ”) Grant Winston. On March 12, 2009, ALJ Winston issued a decision in Case No. S08-0126, finding that Complainants established that Respondent had failed to comply with the CWO without valid justification and that Respondent violated all of the charged statutes, with the exception of former A.R.S. § 32- 1154(A)(7). As a result of Respondent’s violations, ALJ Winston’s recommended order provided in relevant part: In view of the foregoing Findings of Fact and Conclusions of Law, it is hereby recommended that Respondent’s Class C-11 License number 129107 be suspended until such time as the Registrar receives written proof that Respondent has caused another properly licensed contractor to complete all remaining items in the Inspector’s written [CWO] still in need of correction.

It is further recommended that in the event the Registrar receives written proof that the above-mentioned items have been corrected by another properly licensed contractor, on or before the effective date of this Order (40 days after the date of service appearing on the Registrar’s certification on the Order), then the above-provided license suspension shall not occur, and Citation and Complaint S08-0126 shall be closed . . . .

On April 8, 2009, the Registrar issued an order adopting ALJ Winston’s recommended decision in Case No. S08-0126, with an effective date of May 18, 2009. The Registrar’s order advised Complainants “that any unreasonable denial of access to the Respondent or the Respondent’s proper agents or employees to perform the required corrective work may be treated as compliance by the Respondent and may result in the case being closed without discipline, and the Complainant[s] may be denied access to the Residential Contractors’ Recovery Fund, even if otherwise eligible.” Respondent filed a petition for rehearing in Case No. S08-0126. On June 19, 2009, the Registrar adopted ALJ Winston’s Recommended Order Denying Petition for Rehearing and extended the effective date of the order adopting ALJ Winston’s recommended decision to July 29, 2009. Subsequently, the Registrar redesignated Case No. S08-0126 as Case No. 2008-1265289. Both parties filed letters to the Registrar on the issues of whether Respondent had complied with the Registrar’s final order in former Case No. S08-0126, or whether Complainants unreasonably had denied access for such compliance. In February 2011, the Registrar issued an Order Reopening Complaint and Setting Compliance Hearing in Case No. 2008-1265289 (formerly Case No. S08-0126), summarizing the parties’ letters in relevant part as follows: On or about July 9, 2009, Counsel for Complainants submitted a Motion for Modification of Judgment with the Registrar, requesting that the Registrar’s Order be amended, per the agreement of the parties, to allow Complainants to hire a licensed contractor of their choosing to complete the necessary corrective work, but that Respondent be required to pay the contractor.

On or about July 13, 2009, Counsel for Respondent filed its Response in opposition to the Motion for Modification requesting that the Registrar strike the Motion from the record.

On or about July 30, 2009, Counsel for Respondent submitted a Notice of Compliance alleging Denial of Access that Complainants have “refused or otherwise failed to permit Respondent’s contractor of choice access to the property to comply with the work cited in the Order of the Registrar of Contractors.” On or about August 21, 2009, Counsel for Complainants submitted a Response in opposition to the Notice of Compliance.

On or about August 27, 2009, Counsel for Complainants filed a Motion for Compliance Hearing due to “...a misunderstanding on the part of the Respondent of his obligations….”

Upon review and consideration of Complainants’ Motion for a Compliance Hearing, as well as the entire file in this matter, and with good cause appearing, IT IS ORDERED a Compliance Hearing be scheduled in the expedited course of docketing in the Phoenix area. At the Compliance Hearing, the parties may offer evidence and testimony as to whether or not Respondent has complied with the terms of Registrar’s April 8, 2009 Order, absent unreasonable interference or denial of access by Complainants. If it is determined that Respondent failed to fully comply with the terms of the Registrar’s Order, absent unreasonable interference or denial of access by Complainants, then its C-11.129107-R License shall be subject to the immediate imposition of discipline. If it is determined that Complainants unreasonably interfered with or denied access to Respondent or its representatives to comply with the terms of this Order, then no discipline will be imposed upon Respondent’s C-11.129107-R License, and this matter will be closed.

IT IS FURTHER ORDERED that Complainants’ Motion for Modification is DENIED.

Note: A review of the Registrar’s April 8, 2009 Order reveals that Respondent was to cause another properly licensed contractor to complete all necessary corrective work. Nothing in this Order provided that Complainants would be allowed to select the alternate contractor. The choice of an alternative contractor rests with Respondent.

(Emphasis in original.) The Registrar referred Case No. 2008-1265289 to the OAH for an evidentiary hearing on the issue of Respondent’s compliance with the Registrar’s final order in former Case No. S08-0126. A compliance hearing was held on June 28, 2011, in Case No. 2008-1265289 before the undersigned ALJ. Inspector Nieves testified. Respondent submitted six exhibits and presented the testimony of its qualifying party and managing member, Richard Hebl. Complainants submitted three exhibits and presented the testimony of Complainant Daniel Q. Bradford. Hearing Evidence After the Registrar adopted ALJ Winston’s recommended decision in Case No. S08-0126, on or about April 15, 2009, Respondent sent a letter to Complainants, offering to pay an electrical contractor of their choice to perform the work required by the Registrar’s order if Complainants furnished the contractor’s proposal to Respondent and Respondent approved both the amount that the contractor intended to charge and specific proposed repairs. Complainants paid $1,000.00 to Green Valley Electric and Construction, Inc., License No. ROC198832, Class K-11 (“Green Valley Electric”) to prepare the detailed proposal that Respondent requested. Mr. Bradford testified that he did not ask Green Valley Electric to expedite preparation of the proposal because Respondent filed the petition for rehearing, which delayed the effective date of the Registrar’s order. On or about May 15, 2009, Attorney Robert D. Stachel, Jr. sent a letter to Complainants, informing them that he represented Respondent and that Respondent had hired Wilson Electric Services Corp., License No. ROC181769, Class K-11 (“Wilson Electric”) to perform the repairs that the CWO required, and that Wilson was available to perform the work on May 20-22, 2009. Wilson Electric’s proposal to Respondent provided that “Wilson Electric will NOT be providing a warranty for the work as we were not the originally contracted company hired to complete the work in question.” Wilson Electric’s proposal also noted that “in the course of these repairs, existing surfaces may be damaged,” but that “[w]e will not be repairing drywall, or painting or completing any other repairs in conjunction with the electrical repairs.” On June 5, June 16, and June 25, 2009, Mr. Stachel sent letters to Complainants, informing them that their refusal to allow Wilson Electric to perform repairs constituted a denial of access. On July 28, 2009, Green Valley Electric submitted a proposal to Complainants in the amount of $14,769.43. The proposal did not limit Green Valley Electric’s warranty, but did disclaim responsibility for damage to the drywall and paint that its repairs to the recessed electrical panels might cause. Green Valley Electric’s proposal appeared to include some items that were not on the CWO, such as installing a new circuit in the dining room to separate it from the kitchen circuit, installing GFIs for the outside flood lights, rewiring the circuits for the microwave, wine cooler, and disposal, and installing new circuits for the floor heat in the guest bath and master bath. Green Valley’s proposal also did not include some items that were on the CWO, such as nonfunctional outlets, protruding outlets, and the five- way switch. Respondent did not pay Green Valley Electric, Wilson Electric, or another appropriately licensed electrical contractor to repair the items on the CWO. The CWO items have not been corrected. Inspector Nieves testified that repairs by a contractor who refused to provide a warranty for the repairs would not comply with the Registrar’s final order in former Case No. S08-0126. Inspector Nieves also testified that a contractor is responsible for correcting all collateral damage that his repairs cause, and that the Registrar’s order required Respondent’s electrical contractor to repair all collateral damage. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[6] Respondent bears the burden of proof to establish that it complied with or that Complainants unreasonably denied access for it to comply with the Registrar’s final order in former Case No. S08-0126.[7] Complainants bear the burden to establish that as a result of Respondent’s failure to comply with the Registrar’s final order in former Case No. S08- 0126, the Registrar should order Respondent to pay them restitution under A.R.S. § 32-1156.01 and to establish the amount of the restitution.[8] The burden of proof is a preponderance of the evidence.[9] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[10] Respondent acknowledged at the compliance hearing in Case No. 2008-1265289 that it did not comply with the Registrar’s final order in former Case No. S08-0126. Contracting statutes and professional industry standards require contractors to provide a two-year warranty for their work, regardless of whether they perform original work or repair another contractor’s work.[11] Contracting statutes and professional industry standards also require contractors to repair all collateral damage to property that their work causes.[12] Because Wilson Electric’s proposal included disclaimers of warranty and responsibility for collateral damage, Respondent did not establish that Complainants unreasonably denied access when they refused to allow Wilson Electric to perform the repairs required by the Registrar’s final order in former Case No. S08-0126. Respondent’s failure to comply with the Registrar’s final order in former Case No. S08-0126 might have supported an award of restitution under A.R.S. § 32-1156.01. However, Complainants did not present sufficient evidence to allow the Registrar to determine the amount of restitution to which they are entitled. RECOMMENDED ORDER Based on the foregoing, it is recommended in Case No. 08-1265289 that the Registrar immediately suspend Respondent Hometown Electric, L.L.C. dba Hometown Electric’s License No. 129107 until it provides written evidence that is satisfactory to the Registrar of either one of the following: 1) Respondent has hired an appropriately licensed electrical contractor to perform corrective work to comply with the Registrar’s final order in former Case No. S08-0126 in a professional and workmanlike manner, including providing a two-year warranty for its repairs and repairing all collateral damage caused by its repairs, or 2) Respondent has paid Complainants, and Complainants have accepted, an amount of money that is sufficient to allow them to hire an appropriately licensed electrical contractor to perform corrective work to comply with the Registrar’s final order in former Case No. S08-0126 in a professional and workmanlike manner, including providing a two-year warranty for its repairs and repairing all collateral damage caused by its repairs. 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 five days from the date of certification. Done this day, July 14, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] A.R.S. § 32-1154(A)(2) 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.” [2] A.R.S. § 32-1154(A)(3) 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.” A.A.C. R4-9-108 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.” [3] A.R.S. § 32-1154(A)(13) 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.” A.R.S. § 32-1158 requires licensed contractors to have a written contract with homeowners that includes certain elements for work that exceeds $1,000.00. [4] A.R.S. § 32-1154(A)(7) 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.” [5] A.R.S. § 32-1154(A)(23) 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.” [6] See 32-1101 et seq. [7] See A.A.C. R2-19-119(B)(2) and (3). [8] See A.A.C. R2-19-119(B)(1). [9] See A.A.C. R2-19-119(A); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [10] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [11] See A.R.S. §§ 32-1154(A)(3) and 32-1155(A); A.A.C. R4-9-108. [12] See A.R.S. § 32-1154(A)(3); A.A.C. R4-9-108.

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