ALJDEC decisions subject to certification as final

2009A-24096253-ROC-com · Registrar of Contractors · 2011-10-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 3, 2011

APPEARANCES: Complainant appeared on her own behalf and was represented by attorney Everett Butler, The Butler Law Firm; Respondent was represented by attorney Justin Niedzialek, Collins May Potenza Baran & Gillepspie, PC, accompanied by its Executive Vice President Rhonda LaNue.

WITNESSES: Geoff Galgan, ROC Inspector Brad Christensen, BC Renovations Paul LaNue, Respondent’s President Diane Sarnataro

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

This matter was set by the Registrar of Contractors as a second compliance hearing to determine whether Respondent is in compliance with a Compliance Hearing Order issued by the Registrar of Contractors. That Compliance Hearing Order (“CHO”) required Respondent to perform corrective work pursuant to an original Decision and Order dated December 7, 2009, and a Settlement Agreement entered into by the parties at the first compliance hearing held September 28, 2010. Respondent claims that it performed some of the work and that Complainant unreasonably denied access to perform part of the work. Complainant asserts that some work has been done but that some of the work remains incomplete and not up to workmanship standards. Procedural Background On December 7, 2009, the Registrar of Contractors (“ROC”) issued an Order adopting an Administrative Law Judge Decision that ordered Respondent to perform corrective work at Complainant’s house. Thereafter, a dispute as to compliance arose, and a compliance hearing was held on September 28, 2010. At the compliance hearing, the parties agreed to attempt compliance with the December 7, 2009 Order through a Settlement Agreement. This resulted in the issuance of the CHO dated November 10, 2010, that accepted the Settlement Agreement and closed the case. Disputes again arose. Sometime after June 9, 2011,[1] the ROC issued an order re-opening the case and setting a second compliance hearing. Introduction The ROC’s Order Reopening Complaint and Setting Compliance Hearing states that at the second compliance hearing the parties are to present evidence as to whether or not Respondent has complied with the Settlement Agreement and CHO: At the Compliance Hearing the parties may offer evidence and testimony as to whether or not Respondent has breached the terms set forth in the parties’ Settlement Agreement and thereby failed to comply with the terms of the December 7, 2009 Order. As was acknowledged by the assigned Administrative Law Judge and the Registrar in its November 10, 2010 Order, the parties are bound by the terms of the December 7, 2009 Order, whereby Respondent was found in violation of A.R.S. § 32- 154(A)(3), namely R4-9-108, as well as the terms of the parties Settlement Agreement. If the assigned Administrative Law Judge recommends that discipline is to be imposed upon Respondent’s License, and the Registrar adopts such recommendation, the discipline shall be imposed immediately, based upon a finding that Respondent breached the parties’ Settlement Agreement.

This tribunal entered the complaint file received from the Registrar of Contractors into the record, which includes documentation relating to the underlying complaint and relating to the question of compliance with the CHO. In addition, Complainant submitted Exhibits 1 (photographs), 2 (e- mail correspondence), and 3, which were admitted. Respondent submitted Exhibits A through H (photos and e-mails), all of which were admitted into evidence. The parties presented testimony from the witnesses listed above. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Decision finding that Respondent is not in compliance. FINDINGS OF FACT 1. Respondent is the holder of a class K-42 specialty dual (commercial and residential) contracting license (No. 205554) issued by the Registrar of Contractors (“ROC”). The license authorizes Respondent to perform installation and repair of roofs and decks and related work. Paul LaNue is the Qualifying Party on the license. The license has never been suspended. 2. As noted above in the Procedural Background section, the parties settled the first compliance hearing. The Settlement Agreement, adopted and set forth in the Administrative Law Judge Decision on Compliance, provided for a completion date and times of property access so that Respondent could perform the corrective work of the December 7, 2009 Order. The Settlement Agreement slightly modified the Order, but did not make any changes to the scope of the corrective work. The most specific provision of the Settlement Agreement concerned the corrective order for Respondent to remove roof tile so that Complainant could have work done by another on the underlying joists and then have Respondent replace the roof tile. That provision of the Settlement Agreement provided that “Complainant shall engage a licensed contractor for the structural work for the roof, e.g. joists, and Complainant will coordinate such work with Respondent. Complainant will notify Respondent when the structural work is completed.” In addition to the roof work, two other items needed correction. 3. In order to comply with the December 7, 2009 Order, three corrections were required: (1) replace 10 pavers in the yard; (2) fix the water stains in the drywall; and (3) the roof work. Each of these corrections is hereby addressed. 4. Replacing the pavers was a simple and easy task. Although Respondent replaced the pavers, the evidence shows that the replacement pavers are not as close to the original pavers as they could be. The replacement pavers are one inch thick and the original pavers were two inches thick.[2] When replacing an item that a contractor has damaged, it is workmanlike to have the replacement be as close as possible to the original. Respondent’s evidence that the replacement pavers Respondent used were the closest Respondent could obtain is not supported by the evidence submitted by Complainant, which shows that two inch pavers of the same type as the original were readily available at Home Depot.[3] Respondent failed this simple and easy task. 5. Repairing the water-stained drywall also should have been an easy task. The areas for repair had been identified in the original Administrative Law Judge Decision by reference to photographic exhibits that were part of the record. Thus, every stain in those photographs needed repair. Instead of using those photographs to perform the work, Respondent made its own assessment of what damage needed to be repaired. Complainant’s testimony and photographic exhibits at the second compliance hearing show that Respondent did not repair all the areas that had been clearly designated in the original Administrative Law Judge Decision. 6. Finally, the roof tile removal should have been simple. Under the CHO, Respondent was to remove the tile when told by Complainant and then replace it when told by Complainant. Instead, the evidence submitted, consisting of e-mail correspondence between the respective counsel for each party, shows that Respondent took an unreasonable stance, refusing to do the work unless Respondent could directly coordinate with Complainant’s general contractor who was doing the work on the joists. Because Complainant insisted that Respondent coordinate through her and Respondent refused, the work was not done. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the party asserting a claim, right, or entitlement.[4] Further, the standard of proof at hearing is by preponderance of the evidence.[5] Since Respondent was given the burden, under the original order, of showing compliance or facing suspension of the license, and since Respondent has asserted that it should be deemed to be in compliance, Respondent bears the burden of showing, by a preponderance of evidence, that it has complied with the ROC Orders identified above.[6] Respondent has failed to meet that burden. 2. Under the provisions of the December 7, 2009 Order, Respondent was to provide written proof that Respondent had properly corrected the items. The evidence shows that Respondent has not done so. Respondent failed to make simple corrections and also objected to reasonable directives from Complainant. Because the work is being done on Complainant’s property, Complainant has the right to put reasonable directives or restrictions in place. A contractor does not have carte blanche when working on a customer’s property, unless it is given by the owner. None of the directives from Complainant deprived Respondent of reasonable access to perform the repairs. 3. Respondent has failed to comply with the December 7, 2009 Order and CHO (Settlement Agreement). 4. A review of ROC records shows that Respondent’s license has never been disciplined since it was issued in 2005. It is not appropriate to revoke this license. 5. The record in this matter shows that the parties cannot work with each other. However, Complainant did not submit any request for restitution, so that remedy is not available on this record. Therefore, the appropriate discipline is a term of disciplinary suspension with leave to the Complainant to seek a remedy from the Residential Contractors’ Recovery Fund. RECOMMENDED ORDER IT IS RECOMMENDED that license K-42.205554-D, held by L R Acquisitions, Inc. dba Lyons Roofing, be suspended immediately for a term of 30 days.

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 day, October 24, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] This tribunal’s copy of the ROC records does not disclose when the order re-opening the case was issued. [2] Exhibit 1, photos 7 and 8. [3] Exhibit 1, photos 9 and 10. [4] Arizona Administrative Code (A.A.C.) R2-19-119(B). [5] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [6] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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