ALJDEC decisions subject to certification as final

2009A-7100664-ROC · Registrar of Contractors · 2010-06-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 16, 2010 at 8:00 a.m. APPEARANCES: Complainant Steven Quisenberry appeared on his own behalf; Respondent Summit Cabinets LLC did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On April 16, 2006, the Registrar of Contractors (“the Registrar”) issued License No. ROC219004, Class C30R for kitchen and bathroom components to Respondent Summit Cabinets LLC, a limited liability company. Dwight Means is listed as Respondent’s qualifying party. Respondent’s address of record is 8414 E. Lewis Ave., Scottsdale AZ 85257-2402. Complainant Steven Quisenberry made a complaint against Respondent’s license for deficiencies in the cabinets that Respondent had installed throughout Complainant’s home pursuant to a written contract that the parties had entered on or about March 5, 2006. The amount of the contract was $37,185.00. The Registrar denominated Complainant’s workmanship complaint as Case No. 08-0031. Case No. 08-0031 was assigned to the Registrar’s Inspector Randy Cason for investigation. Inspector Cason performed a jobsite inspection and issued a Corrective Work Order (“CWO”) in Case No. 08-0031 to Respondent to perform extensive corrective action to the cabinets. Complainant requested a hearing in Case No. 08-0031 because Respondent did not perform the corrective action required by the CWO. The Registrar issued a Citation and Complaint against Respondent’s license, charging A.R.S. § 32-1154(A)(7),[1] (3),[2] and (23).[3] A hearing was held in Case No. 08-0031 before Administrative Law Judge (“ALJ”) Brian Brendan Tully at the Office of Administrative Hearings on June 5, 2008. Complainant appeared on his own behalf. Respondent appeared through Mr. Means. Based on the evidence presented at hearing, ALJ Tully issued a recommended decision in Case No. 08-0031 to the Registrar, which found that the cabinets that Respondent installed exhibited extensive workmanship deficiencies, including “warped cabinet doors; uneven spalling throughout new cabinetry, mismatch staining; raw wood edges throughout the new cabinetry; and, holes in drawers.” Recommended Decision, Finding of Fact No. 13. ALJ Tully’s recommended decision specifically rejected Respondent’s defense that Complainant’s failure to pay Respondent the full amount of the contract provided a legal excuse for Respondent’s failure to comply with the CWO for the following reasons: That defense is not valid. There is credible evidence that Summit delivered defective or non-specified cabinet products to Complainant, as described in the above Findings and as noted in the [CWO]. Summit is not entitled to the second payment because it delivered defective cabinet products. Summit also caused the installation of the cabinet products to proceed prior to the second payment being made by Complainant.

Recommended Decision, Finding of Fact No. 16. Based on the evidence, ALJ Tully concluded that Complainant had established the violations charged in the Citation and Complaint in Case No. 08-0031. As a result, ALJ Tully recommended that the Registrar should revoke Respondent’s license (which had been canceled by the time of hearing). The Registrar accepted the recommended decision and, on September 18, 2008, revoked Respondent’s license as a result of statutory violations established in Case No. 08-0031. Complainant subsequently made a claim to the Residential Contractors’ Recovery Fund (“the Fund”) for the damages caused Respondent’s proven statutory violations in Case No. 08-0031. Inspector Cason performed a second jobsite inspection on February 1, 2010. Inspector Cason issued a report based on his second jobsite inspection and the five bids that Complainant had submitted with his claim to the Fund. Inspector Cason’s report noted that Complainant owed a balance of $16,185.00 on the contract amount. Inspector Cason’s report also noted that Complainant had paid $8,000.00 to another contractor to have a cabinet installed that was part of Respondent’s contract. Inspector Cason recommended a good faith offer to Complainant in the amount of $30,000.00, the maximum amount available, based on the February 1, 2010 jobsite inspection and the evidence that Complainant had submitted to quantify his damages. On February 25, 2010, the Registrar issued a Notice to Contractor of Recovery Fund Payout in the amount of $30,000.00. The notice was sent to Respondent’s address of record. On March 9, 2010, the Registrar received Respondent’s request for hearing on the payout. The Registrar referred the matter to OAH to schedule and to conduct a fair hearing on the amount of the Fund payout. On May 3, 2010, the Registrar issued a Notice of Recovery Fund Payout Hearing, which set a hearing on June 2, 2010. Inspector Cason sent a letter to the parties informing them that he would not be available to testify at the scheduled hearing. Inspector Cason sent a copy of his letter to Respondent at its address of record. Both parties filed requests that the hearing be rescheduled to allow Inspector Cason to testify. On May 17, 2010, the undersigned ALJ issued an order, continuing the hearing to June 16, 2010 to allow Inspector Cason to testify. A copy of the order was sent to Respondent at its address of record. A hearing was held on June 16, 2010. Inspector Cason and Complainant testified. Complainant submitted six exhibits. Although the beginning of the duly noticed continued hearing was delayed fifteen minutes to allow Respondent additional travel time, it did not appear through a duly authorized member, employee, or attorney and did not contact the Office of Administrative Hearings to request a continuance or that the time for the start of the hearing be further delayed. Respondent did not present any evidence to dispute the amount of Complainant’s damages. Complainant submitted the following five estimates from appropriately licensed contractors to repair the cabinets that Respondent had installed throughout Complainant’s residence: |Contractor Name |License No. |Date |Amount | |Visionary Concepts LLC |ROC252933 |03/20/09|$ 35,649.20| |Cabinets by C & F |ROC060747 |03/05/09|$ 43,593.00| |Burdette Cabinet Co., Inc.|ROC106325 |10/02/08|$113,153.69 | |Arizona Woodworks |ROC214075 |09/30/08|$ 37,372.00| |Visionary Concepts LLC |ROC252933 |04/02/08|$ 32,410.00|

Complainant pointed out that all of the bids provided a minimum price; all included a caveat that the quoted price would increase if additional problems were found or if reasonable attempts to repair unavoidably caused collateral damage to drywall or painted surfaces. Complainant testified that he had obtained a second bid from Visionary Concepts LLC to ensure that the bid was current. In addition, Complainant had arranged for the representative of Visionary Concepts LLC to be present at Inspector Cason’s jobsite inspection on February 1, 2010 so that Inspector Cason would understand the full extent of the necessary repairs and the potential for collateral damage during the repairs. Complainant also submitted a bid from Rock Solid Granite, License No. ROC 177849, dated March 14, 2009 in the amount of $6,872.00 to remove and replace the granite countertops on the cabinets. Complainant explained that, because the cabinets that Respondent had installed were so crooked, the contractors who had submitted bids to repair the cabinets would not guarantee that the countertops would not break during the repairs. Inspector Cason testified that none of the items on the original CWO had been corrected at the time of the February 1, 2010 inspection. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[4] The Notice of Recovery Fund Payout Hearing that the Registrar sent to Respondent at its address of record was reasonable and it appears that Respondent actually received notice of the hearing.[5] Likewise, the notice of the continued hearing, which was set in part at Respondent’s request, was reasonable; Respondent is deemed to have received notice of the continued hearing. Complainant bears the burden of proof and must establish the amount of the damages caused by Respondent’s proven statutory violations by a preponderance of the evidence.[6] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[7] 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.”[8] Complainant established at the hearing that Respondent’s statutory violations, which were proven in Case No. 08-0031, damaged Complainant in an amount that exceeded that the $30,000.00 statutory maximum that injured homeowners may recover from the Fund.[9] Complainant therefore has established that he is entitled to the maximum payout allowed from the Fund. RECOMMENDED ORDER In view of the foregoing, it is recommended that the Registrar of Contractors order the Residential Contractors’ Recovery Fund to pay $30,000.00 to Complainant Steven Quisenberry. It is further recommended that, pursuant to A.R.S. § 32-1139(B), the Registrar not reinstate Respondent Summit Cabinets LLC’s License No. ROC210004, Class C30R or issue any license to any person listed on the license until they reimburse the Fund for the amount of this payout plus interest at a rate of ten percent per year. 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 24, 2010.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] This statutory subsection 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.” [2] 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.” [3] This statutory subsection 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.” [4] See 32-1101 et seq. [5] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [6] See A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [7] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [8] Black’s Law Dictionary at page 1220 (8th ed. 1999). [9] See A.R.S. § 32-1132(A).

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