ALJDEC decisions subject to certification as final

2010A-13015792-ROC · Registrar of Contractors · 2010-05-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 18, 2010 at 8:00 a.m. APPEARANCES: Complainant Rocco Ingino appeared on his own behalf; Respondent Urban Ease Development Inc. appeared through Thomas Ross May, its President and qualifying party. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On November 3, 2008, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC250461, Class KB-2 for dual residential and small commercial contracting to Respondent Urban Ease Development Inc., a corporation. On October 2, 2009, the Registrar received a complaint against Respondent’s license from Complainant Rocco Ingino, which alleged six specific items of complaint about work that Respondent had performed at Complainant’s residence at 11014 East Sleepy Hollow Trail, Gold Canyon, Arizona. According to the complaint, on August 11, 2009, the parties had entered into a contract in the amount of $7,979.98, which amount had been paid in full, Respondent had last performed work on September 19, 2009, and Complainant felt that he was owed $400.00. The Registrar sent a copy of the complaint to Respondent for its immediate attention. The Registrar assigned the complaint to Inspector Geoff Galgan for investigation. Inspector Galgan performed a jobsite investigation and, on November 10, 2009, issued a Corrective Work Order (“CWO”) to Respondent, requiring it to correct the following items within fifteen days: 1. Television niche created in the kitchen wall is not large enough to house a specific television model as agreed to – contractor to correct by the appropriate means 2. Wall safe installed is not safe contracted for – contractor is to correct by the appropriate means . . . .

5. Granite countertops (used) were improperly removed from the site -- contractor stated that they would be returned, contractor to correct by the appropriate means . . . .

7. Respondent falsely advertised -- inspector could not affirm or deny, no action required of the contractor

[Emphases in original.] On December 9, 2009, the Registrar received Complainant’s request for hearing. On February 10, 2010, the Registrar issued a Citation and Complaint against Respondent’s license, charging A.R.S. § 32-1154(A)(2), (9), (16), (23), and (3) (namely A.A.C. R4-9-108). On February 23, 2010, the Registrar received Respondent’s written answer to the Citation and Complaint, which denied any statutory violation. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, to schedule and to conduct a fair hearing. A hearing was held on May 18, 2010. Inspector Galgan testified. Complainant presented the testimony of two witnesses: (1) Himself; and (2) Joe Bakudis, who was employed by Star Power Home Entertainment (“Star Power”), which had installed the television for which Respondent contracted to construct a niche. Complainant also submitted 19 exhibits. Respondent presented the testimony of two witnesses: (1) Thomas May, Respondent’s qualifying party and president; and (2) Jason Curran, Respondent’s employee who had installed the safe. Respondent also submitted five exhibits. Hearing Evidence In August 2009, Complainant first contacted Respondent to construct a niche above his refrigerator for a flat-screen television. When Respondent’s qualifying party arrived at Complainant’s house, he gave Complainant an advertisement for Respondent, which stated “35 Years Experience.” On August 11, 2009, Respondent gave Complainant Bid No. 08-1109, which described the work to construct the niche and provided a cost of $805.00. Complainant signed the bid to accept it. Respondent measured the television and built the niche. Complainant subsequently requested that Respondent perform the following additional work: (1) Repair a kitchen cabinet; (2) Install safety grab bars in the bathtubs in both bathrooms and at the pool; (3) Replace two fans with new fans that Complainant provided; (4) Replace plumbing fixtures with new fixtures that Complainant provided and install new water lines and valves for the new fixtures; (5) Install additional ductwork, insulation, and drywall to cool Complainant’s home theater more effectively; (6) Install Negro Marquina marble to replace Complainant’s factory-made granite kitchen countertops; and (7) Install a concealed safe in a closet. Respondent did not submit any written bids for any of the additional seven jobs. The parties’ agreements with respect to these seven items were strictly verbal. Respondent completed the additional seven items. On September 18, 2009, Respondent submitted six invoices to Complainant for the niche above the refrigerator and for the seven additional projects.

Complainant and Mr. May sat at Complainant’s kitchen table and went over the invoices. Respondent provided several hundred dollars in discounts from the initial prices stated on the invoices. Respondent’s price charged on the invoice for the niche was the full price stated on the bid, $805.00. Invoice No. 08-1112 for the safe that Respondent had installed in the closet provided as follows: ITEM DESCRIPTION PRICE

Amsec Safe CSC 1913 Comb $ 1, 161.27 Safe Install Materials 180.36 Framing Hidden Enclosure 375.00 Drywall Hidden Enclosure 375.00

Total Job Costs $ 2,091.60[1]

[Footnote added.] Respondent had discounted the cost of the framing and drywall $100.00 each, for a total discounted price of $1,891.60. Complainant authorized Respondent to charge the initial payment or payments on his credit card. Complainant made the final payment to Respondent in the amount of $2,600.00 in cash. Complainant paid a total of $7,979.98 to Respondent, which reflected the total of the discounted amounts on the invoices. Star Power attempted to install the television in the niche above the refrigerator and discovered it was too small. Mr. May initially told Complainant that Respondent had constructed the niche according to Complainant’s instructions, which caused a breakdown in trust between the parties. At the hearing, Inspector Galgan testified that he had performed a prehearing inspection on May 14, 2010. Respondent had corrected the niche above the refrigerator. Respondent had not returned the granite countertops or corrected the size of the safe that had been installed in the closet. Complainant testified that he had decided not to pursue Respondent’s alleged improper removal of the old granite countertops and no further evidence was offered regarding the granite countertops that had been removed from Complainant’s house. With respect to the safe, Inspector Galgan testified that Complainant had shown him Invoice No. 08-1112, which showed a model CSC1913 Combination Amsec Safe. That was not what Respondent had installed in the closet and, therefore, the CWO had required Respondent to correct the deviation. Mr. May and Mr. Curran testified that, when Complainant had asked Respondent to install the safe, his only requirement had been that the safe be concealed in the closet. Mr. May and Mr. Curran testified that Complainant had not requested any specific dimensions for the safe. Mr. May testified that Respondent had investigated the Amsec safes that would fit in the available area in the closet. Respondent submitted an Amsec brochure, which had marks next to two models (1) CSC1413, which had an outside dimension of 19.5” high x 18” wide x 19.9” deep; and (2) CSC1913, which had an outside dimension of 23.8” high x 18” wide x 19.9” deep. Mr. Curran and Mr. May testified that the space available in the closet only allowed for installation of the CSC1413 model safe because any higher safe would intrude into an art niche in the hall on the opposite side of the wall. In addition, Respondent had concealed the safe with an air return grill. Mr. Curran had to install CSC1413 safe at a slight angle to allow room between the safe and the wall of the closet to open the grill and the door of the safe. Mr. May testified that putting model CSC1913 on Respondent’s Invoice No. 08-1112 had been a “typographical error.” He had simply picked up the wrong model number from the brochure on the invoice. Mr. Curran testified that Complainant had complimented him on the installation of the concealed safe when he had finished the job. Mr. May testified that Complainant had never indicated that he needed a minimum sized safe. Complainant testified that the model CSC1413 safe did not allow room for all the items that he wanted to put in the safe, which he declined to identify because they were “personal.” Complainant testified that he had contacted Hicks, the supplier of the Amsec safe, and learned that the model CSC1413 safe retails for only $830.00. Both Complainant and Mr. May testified that they would never again enter into transactions without a written contract. Complainant also testified that he never would have hired Respondent if he had known that Respondent had only been licensed since 2008. He understood Respondent’s advertisement to mean that Respondent had been in business for 35 years. Mr. May testified that he has worked in construction for 35 years. Cumulatively, Respondent’s employees who worked on the various projects at Complainant’s house had more than 60 years of experience. Complainant testified that he believes that Respondent overcharged him for the work it performed. Complainant submitted photographs of some of the projects, which he testified did not justify the amounts that Respondent had charged. Complainant testified that he tried to dispute the charges to his credit card but that the credit card company had paid the charges anyway. Complainant testified that he canceled the credit card. According to the Registrar’s current record, Respondent’s license is current and in good standing. No previous discipline has been taken against the license. Two complaints are pending against the license. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[2] Complainant bears the burden of proof and must establish Respondent’s statutory violations by a preponderance of the evidence.[3] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[4] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] 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.”[6] Complainant has not borne his burden to establish that Respondent violated A.R.S. § 32-1154(A)(16)[7] by claiming to have 35 years’ experience. The advertisement did not say that Respondent has been in business for 35 years. Individuals, not business entities, have experience. Mr. May credibly testified that he personally has 35 years’ experience in construction. Complainant also has not borne his burden to establish that Respondent violated A.R.S. § 32-1154(A)(9)[8] by failing to complete the job for the amount stated in the contract or any modification of the contract. Complainant has not established that Respondent ever agreed in advance to perform any of the projects, with the exception of the niche above the refrigerator, for any sum certain. In addition, Complainant paid the amounts of the discounted invoices without protest until an issue arose with respect to the size of the niche. With respect to the size of the safe in the closet, both parties testified that they regretted not having made a formal written contract with setting forth the job specifications. Unlike Complainant, however, Respondent as a licensed contractor is required to make a written contract for all jobs whose cost exceeds $1,000.00.[9] Although this violation was not charged in the Citation and Complaint, Respondent’s failure to put its initial agreement regarding the safe with Complainant in writing, Complainant’s testimony about the parties’ agreement, and Respondent’s written invoice support a conclusion that Invoice No. 08-1112 sets forth the terms of the parties’ agreement. Therefore, Complainant has borne his burden to establish that Respondent violated (23)[10] and (2)[11] by installing the wrong safe and by failing to correct or resolve as directed by the CWO the size of the safe installed in Complainant’s closet. If the configuration of the closet does not permit Respondent to install and conceal the model CSC1913 safe in the closet and the Respondent cannot otherwise resolve the complaint to Complainant’s satisfaction, Respondent may remove the model CSC1413 safe, repair the closet, and refund $1,891.61 to Complainant as restitution under A.R.S. § 32-1156.01.[12] Complainant has not borne his burden to establish that Respondent violated A.R.S. § 32-1154(A)(3).[13] 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 suspend Respondent Urban Ease Development Inc.’s License No. KB-2, 250461-D until Respondent corrects its installation of the model CSC1413 safe rather than the model CSC1913 it contracted to install in Complainant Rocco Ingino’s closet. It is further recommended that, if on or before the effective date of the Registrar’s final order, the Registrar may close the complaint in Case No. 2010-13015792 if it receives written proof that Respondent has done one of the following: 1) Corrected its installation of the model CSC1413 safe rather than the model CSC1913 that the contract required in Complainant’s closet in a professional and workmanlike manner; or 2) Removed the model CSC1413 safe from Complainant’s closet in a professional and workmanlike manner and refunded $1,891.60 to Complainant as restitution; or 3) Reached some other agreement with Complainant to resolve Respondent’s installation of the wrong safe in Complainant’s closet. It is further recommended that the Registrar should require Respondent to pay the sum of $250.00 as a civil penalty pursuant to A.R.S. §32-1154(D). If Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar should revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. §32-1101(A)(5), unless payment of any outstanding prior civil penalty is tendered. 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, May 20, 2010.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The amounts set forth in the invoice do not add up exactly to the total. The record does not contain any explanation for the apparent discrepancy. [2] See 32-1101 et seq. [3] 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). [4] See A.A.C. R2-19-119(B)(2). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] Black’s Law Dictionary at page 1220 (8th ed. 1999). [7] This statutory subsection includes among the grounds for suspension, revocation, and other disciplinary action against a contractor’s license “[f]alse, misleading or deceptive advertising whereby any member of the public may be misled and injured.” [8] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.” [9] See A.R.S. § 32-1158(B). [10] 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.” [11] This statutory subsection 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.” [12] See Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (Ct. App. 1990). [13] 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.”

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