ALJDEC decisions subject to certification as final

2009A-7100402-ROC · Registrar of Contractors · 2011-02-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 25, 2011

APPEARANCES: Complainant appeared on his own behalf, accompanied by his wife; Todd Palmo, corporate President and Qualifying Party, appeared on behalf of Respondent; the Residential Contractors’ Recovery Fund did not intervene in this matter and did not appear.

WITNESSES: Todd Palmo Frank Diedrich

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Respondent challenges a proposed payout by the Residential Contractors’ Recovery Fund (“the Fund”). The Fund has issued notice that it intends to make a payout to Complainant of $7,632.00. Respondent requested a hearing, stating that the proposed payout amount is too high and that the scope of work to be done is too broad. This tribunal entered the Fund claim file received from the Registrar of Contractors into the record. The claim file includes the underlying complaint file, ROC Complaint Number 09-1221, which is the basis for the payout. Respondent appeared and testified, but did not submit any evidence in addition to that in the claim file. Complainant testified in support of the recommendation for payout. Based upon the record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order for payout in the amount of $7,632.00. FINDINGS OF FACT 1. Respondent Anozira Tile, Inc. was the holder of license K- 48.157105-D, a dual specialty contractor license issued by the Registrar of Contractors (ROC). Todd Palmo is Respondent’s sole corporate officer and was the Qualifying Party for the license. The license was placed on disciplinary suspension in November 2009 as a result of the underlying complaint (09-1221) filed by Complainant. Furthermore, the license was revoked in November 2009 for failure to pay the civil penalty imposed in case 09-1221. 2. Complainant filed the underlying complaint against Respondent in August 2008, complaining about tile work that Respondent had done at his home. ROC Inspector Eric Ulinger inspected the tile and issued a Corrective Work Order (CWO) in October 2008 that described the problem as “Missing and irregular grout.” The Inspector’s findings were stated as “Excessive grout, Exposure of the vertical face and missing grout is unacceptable.” The CWO then ordered Respondent to “correct by the appropriate means.” 3. Thereafter, Complainant requested a hearing. A Citation and Complaint issued, charging Respondent with violations of workmanship standards, failing to comply with the CWO, and failing to follow plans, specifications, or building codes. Respondent failed to timely answer the Citation and Complaint; therefore, the ROC issued a Decision and Order finding Respondent in violation of the cited provisions and ordering that Respondent’s license be suspended until Respondent had “appropriately rectified the items involved and detailed in the Complaint and the [CWO].” It also ordered Respondent to pay a $250.00 civil penalty, giving Respondent until late October 2009 to do so. When Respondent did not pay the civil penalty, the license was revoked. 4. Complainant filed a claim with the Fund in November 2009. He provided four bids from licensed contractors. Inspector Ulinger reviewed the claim and the bids, and recommended that the Fund pay the amount of $7,623.00. 5. All four bidders note that simply re-grouting the tile will not be adequate to correct the problems with the tile. The company with the highest bid of $10,115.00, Crown Carpet, Inc., sent Complainant an e-mail stating that there were areas of the tile with “lippage,” tile misalignment, and that the existing grout color had excessive variation. Thus, Crown Carpet’s proposal was to remove and replace the tile and grout. The next highest bidder, Carpet Corner with a bid of $10,058.00, gave a similar opinion: “Upon measuring Mr. Diedrich’s home, we found that the existing 1185 sq. ft. of tile was not properly installed. The tile has high and low areas which created lipage [sic] that could cause injury or be a tripping hazard. Also noted were uneven grout joints and different grout levels throughout.” Carpet Corner’s proposal was for removal and replacement of tile and grout. 6. The third lowest bid, from Floors ‘N More, Inc. at $7,632.00, notes that there is lippage, uneven grout joint sizes, and that the “grout itself is not consistent,” concluding that the tile needs to be replaced. 7. Finally, the lowest bid is from The Grout Doctor, given in March 2009.[1] The Grout Doctor’s bid was $2,500.00 for re-grouting only. The bid cautions Complainant, however, that re-grouting “will not remedy vertical offset between tiles (existing condition)” and that the “root cause of problem requires re-installation.” 8. All four contractors that provided bids for Complainant agree that simply re-grouting will not correct the problems with the tile. 9. As previously noted, the Fund proposes paying Complainant’s damages based on the third-highest bid from Floors ‘N More, Inc. at $7,632.00. Although the Fund clearly rejected the lowest bid from The Grout Doctor, there is no documentation that states why the bid was rejected. 10. At hearing, Todd Palmo argued for Respondent that the proposed payout was too high because the CWO only called for re-grouting and not removal and re-installation of the tile. That argument is not persuasive. 11. The CWO notes that the floor has excessive grout, exposure of the vertical face of the tile, and missing grout. Respondent was ordered to correct those problems by “appropriate means.” Based on the four contractors that have provided bids, the appropriate means for correcting the problems is to remove and replace the tile and grout. The contractors were unanimous in that opinion, as was Inspector Ulinger after his review of the bids. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon the person who brings the action.[2] Further, the standard of proof at hearing is by preponderance of the evidence.[3] The Notice of Claim for Administrative Payout states that Complainant bears the burden of proof to show entitlement to the amount in the Notice. Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that the proposed payout amount is reasonable and proper. Complainant has met that burden. 2. Complainant is an injured person within the definition in A.R.S. § 32-1131(3) and is, therefore, entitled to recovery from the Fund. 3. Under the facts and circumstances of this case, the Registrar of Contractors is empowered to determine and award, based on actual damages, an appropriate payment to Complainant from the Fund pursuant to A.R.S. §§ 32-1132 and 32-1154(F). 4. The evidence of record supports an award to Complainant in the amount of $7,632.00, all of which shall be chargeable against Respondent and persons on the license as set forth in A.R.S. § 32-1139(B). RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors make payment from the Residential Contractors’ Recovery Fund to Complainant in the amount of $7,632.00.

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 Decision will be 40 days from the date of that certification.

Done this day, February 25, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] ROC records show that The Grout Doctor’s license was revoked in August 2010. Because The Grout Doctor’s license was active at the time the bid was given, the bid is not rejected due to the later revocation of the license. The other three bidders’ licenses are current and in good standing. [2] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949); Arizona Administrative Code (A.A.C.), OAH Rule R2-19-119(B). [3] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); A.A.C. R2-19-119(A).

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