ALJDEC decisions subject to certification as final

2009A-54550772-ROC · Registrar of Contractors · 2011-10-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

COMPLIANCE HEARING: September 21, 2011, at 1:00 p.m. APPEARANCES: Complainant Troy Holscher appeared on his own and his wife, Jo Ann’s, behalf; Respondent Paladin Roofing, L.L.C. was represented by Kevin M. Kasarjian, Esq., Holden Willits, P.L.C. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In March 2006, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC218010, Class C-42 for residential roofing to Paladin Roofing, L.L.C. (“Respondent”). On April 16, 2009, the Registrar received a complaint from Troy Holscher and Jo Ann Holscher (“Complainants”) regarding Respondent’s tear-off of the old roof and construction of a new roof on Complainants’ residence at 17610 North 126th Drive in Sun City West, Arizona. Complainants enumerated 19 specific items of complaint, provided a copy of an inspection report from Rooftop Consultants, Inc. (“Rooftop Consultants”) dated Mach 17, 2009, and requested that the Registrar require Respondent to pay compensation for the complaints. The Registrar designated Complainants’ complaint as Case No. 09-5455. Case No. 09-5455 was assigned to the Registrar’s inspector, Eric Ulinger, for investigation. Inspector Ulinger performed a jobsite inspection. On June 18, 2009, Inspector Ulinger issued a Corrective Work Order (“CWO”) to Respondent requiring it to take certain corrective action with 15 days, in relevant part as follows: The contractor is to correct the following items by the appropriate means per the jobsite agreement. A-SHINGLE ROOF 2. Masitc [sic] separating at roof penetration flashings. 3. The shingles curling at the corners that is due to improper installation. 5. Exposed fasteners. 6. Protruding nails. 8. Missing flashing at the patio/shingled roof transition. 10. Hip cap shingles not installed per the manufacturers [sic] warranty specifications. B-PATIO 1. Open seams. 2. Missing primer at edge flashing. C-OTHER 1. Damage to driveway coating caused by dumpster. 3. Rework condensate line for the HVAC system to the roofs [sic] edge per verbal agreement. (Note: Per the assistant chief of inspections this can be performed as incidental to typical work performed by this license scope.)

No action is required of the contractor on the following items. . . . .

B-OTHER 2. Contractor agreed to provide all new roof metal. – Line 5 of the signed agreement that was provided to this inspector reads. Replace as needed; metal collars, pipe stacks and vents.

The contractor is to correct the following item by the appropriate means. A-SHINGLED ROOF 9. Edge flashing not properly cut at gutter attachments. – The flashing does not appear to be installed in a manner that will allow it to function as intended.

On August 21, 2009, the Registrar received Complainants’ attorney’s request for hearing in Case No. 09-5455 due to Respondent’s failure to “satisfy or settle Complainants’ claims.” On December 11, 2009, the Registrar issued a Citation and Complaint in Case No. 09-5455, charging Respondent with violations of A.R.S. § 32-1154(A)(2), (23), and (3), namely A.A.C. R4-9-108. Complainants’ complaint in Case No. 09-5455 proceeded to hearing before Administrative Law Judge (“ALJ”) M. Douglas of the Office of Administrative Hearings (“the OAH”), an independent state agency, on April 15, 2010. At the hearing, Complainants, through their attorney, agreed to withdraw their complaint in exchange for Respondent’s agreement to perform the following: (1) All work that the Registrar’s June 18, 2009 CWO required; (2) To provide all new roof flashing, which the CWO did not require under section “B-OTHER”; (3) To pay a licensed contractor of Complainants’ choice to repair damages to drywall, plus paint and texture, allegedly caused by roof leaks; and (4) To complete performance of the settlement agreement by May 30, 2010. Therefore, ALJ Douglas recommended that the Registrar close Complainants’ complaint as “resolved/settled/ withdrawn.” On May 27, 2010, the Registrar adopted ALJ Douglas’s recommendation and closed Case No. 09-5455. Subsequently, the parties submitted conflicting information to the Registrar regarding Respondent’s performance of the settlement agreement in Case No. 09-5455. The Registrar redesignated Case No. 09-5455 as Case No. 2009-54550772, and in July 2011, issued an Order Reopening Complaint and Setting Compliance Hearing, in relevant part as follows: On or about July 6, 2010, Complainants submitted written correspondence with the Registrar maintaining, among other things, “[Complainants] request the reopening of the [case] due to Respondent’s breach of the settlement agreement and other property damage resulting from [Respondent’s] corrective repair work.”

On July 12, 2010, the Registrar provided Respondent with an opportunity to respond to Complainants’ July 6, 2010 correspondence. On or about July 26, 2010, Counsel for Respondent filed a Response providing, among other things, that “[n]ot later than May 30, 2010 [Respondent] completed all of the items agreed [to] in the parties’ Settlement Agreement.” Counsel objected to the Registrar reopening this matter and setting a Compliance Hearing.

Upon review and consideration of Complainants’ Request to Reopen and Respondent’s Response, as well as the entire file in this matter, and with good cause appearing, IT IS ORDERED that Case No. 2009-54550772 be REOPENED. IT IS FURTHER ORDERED that a Compliance Hearing be scheduled in the expedited course of docketing in the Phoenix area. At the Compliance Hearing, the parties may present evidence and testimony as to whether or not Respondent has violated the provisions of A.R.S. §32-1154(A) as were alleged in the December 11, 2009 Citation and Complaint. Complainant[s] will bear the burden of proof to establish such violations by a preponderance of the evidence. 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 may be imposed immediately, based upon a finding that in addition to any violation of contracting laws that have been committed by Respondent, Respondent further breached the parties’ Settlement Agreement.

A Notice of Hearing shall be issued in due course.

Note: As of September 30, 2009, the mere breach of a Settlement Agreement no longer constitutes a violation of Arizona Contracting Law. See A.R.S. § 32-1154(A)(7) (removal of “wrongful” from the statute). Thus, in order for discipline to be imposed upon Respondent’s License, Respondent must be found to have violated the provisions of A.R.S. § 32-1154 as were set forth in the Citation and Complaint.

(Emphasis in original.) The Registrar referred Case No. 2009-54550772 to the OAH for a compliance hearing. A compliance hearing was held in Case No. 2009-54550772 on September 21, 2011. Inspector Ulinger testified. Complainants submitted two exhibits and presented the testimony of Dan Prince, who inspected Complainants’ roof for Rooftop Consultants after Respondent performed repairs. Respondent submitted six exhibits and presented the testimony of John Schreurs, Respondent’s qualifying party. Although Complainant Mr. Holscher did not testify and was not cross-examined, he was sworn in, cross-examined Mr. Schreurs and Inspector Ulinger, and made an opening statement and a closing argument on Complainants’ behalf. Hearing Evidence Workmanship Inspector Ulinger testified that he performed a jobsite inspection on the morning of the compliance hearing. Inspector Ulinger testified that two items on the CWO still did not comply with the Registrar’s workmanship standards for licensed contractors: (1) There were 18 exposed fasteners, or “shiners,” on the east and back side of Complainants’ roof; and (2) The primer still was not bonding on a small area of the metal flashing on the corner of the patio roof. Complainants submitted a report from Rooftop Consultants dated June 20, 2010, signed by Charlie Miller, “Registered Rooftop Observer #0546.” Mr. Prince testified that Mr. Miller drafted the report based on Mr. Prince’s observations and photographs at the jobsite. Mr. Prince testified that although he has never held a contractor’s license, he has worked as a roofer in the past and as a rooftop consultant for seven years. Inspector Ulinger testified that it was not unusual to have high fasteners that needed to be sealed or removed because construction was not “an exact science.” Inspector Ulinger testified that the high fasteners could be repaired by applying sealant. Mr. Prince testified that the high fasteners would eventually rust out. In Mr. Prince’s opinion, Respondent needed to reroof the east and back side of the roof to repair the fasteners. Since the new areas of the roof would not match the rest of the roof, which was over two years old, Mr. Prince recommended that Respondent replace all four sides of the roof. Inspector Ulinger testified that Respondent had corrected the edge flashing at the gutter attachments by installing new flashing over the previously installed flashing. Inspector Ulinger testified that although Respondent’s repair was not “typical,” because he did not think the repair would affect the performance of the roof, the repair was acceptable. Complainants submitted the application instructions published by Tamko Building Products (“Tamko”), the manufacturer of the shingles. Tamko’s instructions “recommended that metal drip edges be installed at eaves and rakes.” Mr. Holscher pointed out that the instructions did not mention use of a double layer of drip edge. Inspector Ulinger pointed out that even if Tamko did not recommend use of a double layer of drip edge, the recommendation was not an absolute prohibition. Inspector Ulinger testified that some shingles were torn, but that he could not say who had caused the torn shingles because he saw Complainants’ expert lift shingles at his jobsite inspection. Inspector Ulinger testified that Respondent’s overall installation of the roof was good, that the defects noted in the complaint were minor, and that if Complainants’ roof were on his house, he would not have made a complaint to the Registrar. Access Mr. Holscher acknowledged at the hearing that Respondent provided new roof flashing, paid a contractor of Complainants’ choice to repair damages to drywall, including paint and texture, and paid enough money to Complainants to allow them to hire a contractor to completely recoat the driveway. Mr. Schreurs testified that after the parties’ April 15, 2010 settlement, he called Complainants to schedule time for Respondent to perform the repairs that the settlement required. Complainants agreed that Respondent could start performing repairs on May 10, 2010. Mr. Schreurs testified that early in the morning of May 10, 2010, he went to Complainants’ house with four employees to perform repairs. Mr. Schreurs testified that at approximately 2:00 p.m., the crew stopped working because walking on a hot asphalt shingle roof could damage the roof, even though the crew had not completed all repairs. Mr. Schreurs testified that Mr. Holscher informed him on May 10, 2010, that the air conditioning unit mounted on the roof had not worked since Respondent constructed the new roof in February 2009. Mr. Schreurs testified that the air conditioning unit on Complainants’ house was approximately 20 years old and that Respondent’s work around the unit may have caused its “fragile wires” to short. Mr. Schreurs testified that Respondent arranged for a reputable air conditioning contractor to repair the air conditioner, and that the air conditioning contractor replaced a fuse that had gone bad. Mr. Schreurs testified that while the air conditioning contractor was repairing the air conditioning unit, he and a laborer were walking the roof, looking for “shiners.” Mr. Schreurs testified that at that point, he and Mr. Holscher “got into it” because Mr. Holscher blamed Respondent for damaging the air conditioner. Mr. Schreurs testified that at that point, Mr. Holscher ordered Respondent to leave the jobsite and not to come back. Mr. Schreurs testified that Respondent would have completed repairs if Complainants had allowed its crews to return. Mr. Holscher stated in closing that he would have allowed Respondent access to comply with the CWO and the parties’ settlement if he thought that Mr. Schreurs was an “honest man,” but that Mr. Holscher believed that Mr. Schreurs would just “cover up deficiencies.” Mr. Holscher argued that the roof could not be repaired “like a patchwork quilt.” According to the Registrar’s electronic record, Respondent’s license is current and in good standing. This complaint is apparently the only one pending against Respondent’s license. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[1] Complainants bear the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[2] Respondent bears the burden to establish affirmative defenses, such as the Complainants’ failure to provide reasonable access, by the same evidentiary standard.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] Complainants did not establish that Respondent’s construction or repair of the roof violated the manufacturer’s specifications or applicable code. Therefore, Complainants did not establish that Respondent violated A.R.S. § 32-1154(A)(2).[5] Complainants established that Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108,[6] by failing to seal 18 “shiners” on the east and back side of Complainants’ roof and by failing to apply primer to a small area of the metal flashing on the corner of the patio roof so that it bonded. Respondent established Mr. Holscher refused to allow Respondent reasonable access to complete its repairs to comply with the Registrar’s CWO and the parties’ settlement agreement. Because Complainants’ failure to provide reasonable access provides a legal justification for Respondent’s failure to comply with the CWO, Complainants have not established that Respondent violated A.R.S. § 32-1154(A)(23).[7] Respondent as a contractor whose license is current and in good standing is presumed to have the experience and expertise to determine how to correct its workmanship, and Complainants are not entitled to dictate the manner of Respondent’s corrective action. Because Respondent established that Complainants failed to provide reasonable access for it to complete its repairs as it saw fit after the settlement, Complainants have forfeited their right to further relief in this administrative forum. 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 close Case No. 2009-54550772 (formerly 09-5455) against Respondent Paladin Roofing L.L.C.’s License No. ROC218010. 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 11, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See 32-1101 et seq. [2] 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). [3] See A.A.C. R2-19-119(B)(2). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [5] 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.” [6] 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.” [7] 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.”

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