ALJDEC decisions subject to certification as final

2010A-13511974-ROC · Registrar of Contractors · 2010-08-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 3, 2010 at 8:00 a.m. APPEARANCES: The Complainants appeared through their attorney, Adam B. Campbell, Esq. The Respondent appeared through its attorney, Michael W. Thal Esq. ADMINISTRATIVE LAW JUDGE: M. Douglas

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT

1. The Respondent is the holder of License No. KB-2.225805-D issued by the Registrar of Contractors. 2. This is a residential matter where the parties entered into a construction agreement for the extensive remodeling of the Complainants’ residence for the total sum of $496,258.00. 3. During the course of construction the parties’ personal relationship deteriorated rapidly, culminating in several sharp onsite personal confrontations between the Complainants and the Respondent’s Qualifying Party. 4. The Complainants were dissatisfied with the Respondent’s workmanship and with the Respondent’s failure to properly complete and correct its work to their satisfaction despite their repeated requests that it do so. 5. When the Respondent failed to comply with the Complainants’ repeated requests the Complainants filed a formal Complaint against the Respondent with the Registrar of Contractors. 6. Pursuant to the filing of the formal Complaint, an assigned Agency Inspector conducted an on-site inspection and issued a lengthy written Corrective Work Order directing the Respondent to perform designated corrective work on the Complainant’s residence. 7. The Complainants then filed an addendum to their complaint and the assigned Agency Inspector conducted another onsite inspection and issued an Addendum to the Corrective Work Order. 8. There was no dispute that the Corrective Work Order and the Addendum to the Corrective Work Order have not been fully complied with. 9. The Respondent asserts that its failure to comply with the terms of the Corrective Work Order and the Addendum to the Corrective Work Order is do to an unreasonable denial of access by the Complainants in this matter. 10. The credible evidence of record is insufficient and fails to support a finding of an unreasonable denial of access by the Complainants. 11. The Registrar of Contractors does not specify methods of performing corrective action nor does it delegate this responsibility to the homeowner, instead the decision as to the method of performing directive corrective action is left to the licensed Respondent which makes such decision at its peril. All completed corrective work must comply with applicable workmanship and industry standards. 12. The nature and extent of the designated corrective action set forth in the Corrective Work Order and the Addendum to the Corrective Work Order does not warrant extensive prior meetings and approval by the Complainants of the Respondent’s chosen method of performing the directed corrective work. 13. Although the Complainants’ concerns, frustrations, and aggravation regarding the problems they have experienced with the remodeling work on their new home are understandable, construction work, such as that at issue herein, is not a perfect science and it is not uncommon in the industry to have corrections, repairs, or replacements of resultant poor workmanship prior or subsequent to completion of a specified project, in order to bring the final work product up to appropriate industry standards. In this regard, a contractor must be given a reasonable opportunity to complete necessary remedial work. 14. Credible evidence established that the Respondent’s actions over a prolonged period of time are not indicative of a good faith desire to resolve this matter by complying with the terms and conditions of the Corrective Work Order and the Addendum to the Corrective Work Order. On the contrary, credible evidence of record establishes that the Respondent has repeatedly failed to properly accomplish compliance with the terms and conditions of the Corrective Work Order and the Addendum to the Corrective Work Order despite a thirty (30) day extension that had been granted in this matter. 15. Both parties demonstrated an ongoing inability to effectively communicate or to schedule their onsite work and both repeatedly resorted to the use of Registrar of Contractors personal to act as intermediaries. This is not an appropriate agency function. The parties are all adults and are fully capable of scheduling the directed corrective work. 16. The instant record failed to establish sufficient grounds to justify a departure from a long-standing policy of the Registrar of Contractors to allow a contractor a reasonable opportunity, after a hearing, to correct any determined deficiencies in its work. 17. The Complainants seek restitution for their costs in causing the proper correction of the steam shower in the master bathroom and for the proper correction of the installation of the propane tank for the gas fireplace. 18. The credible evidence of record is insufficient and fails to support a finding that the installation of the propane tank for the gas fireplace required any correction in order to comply with applicable workmanship and industry standards. 19. Credible testimony and evidence established that there was a water leak above the steam shower which was causing moisture damage to the area surrounding the steam shower and that if the Complainants had not acted promptly and caused the problem to be properly corrected further damage would have occurred and that there would have be far more extensive costs involved with the water leak. 20. Credible testimony and evidence established that the Complainants paid an alternative licensed contractor $5,264.00 to correct the leakage problem with the steam shower and to properly correct the damage caused by the water leakage. 21. Credible testimony and evidence established that the cost of $5,264.00 for the correction of the leakage problem with the steam shower and the correction of the water damage in and around the steam shower was reasonable and justified under the circumstances. 22. In their filed Complaint the Complainants acknowledged that they have not yet paid the final $16,400.00 owed to the Respondent. 23. Notice is taken of the Respondent’s prior excellent License record with the Registrar of Contractors. CONCLUSIONS OF LAW

1. The credible evidence of record established violations by the Respondent of the charged provisions of A.R.S. § 32-1154 (A) (23) (Failure to take appropriate corrective action) and A.R.S. § 32-1154A (3); namely, Rule R4- 9-108 (Failure to perform work in a professional and workmanlike manner). 2. A.R.S. § 32-1156.01 provides as follows: After a hearing pursuant to this article, an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee.

RECOMMENDed order

In view of the foregoing, it is recommended commencing on the effective date of the Registrar’s order that the Respondent’s License No. KB-2.225805-D shall be suspended until the Registrar of Contractors receives and accepts written proof that the Respondent has properly complied with the terms and conditions of the written Corrective Work Order and the Addendum to the Corrective Work Order issued in this matter and that the Respondent has, as restitution, properly given the Complainants a credit for their expenses for causing the correction of the steam shower and the water damage in the Complainants’ master bathroom in the sum of $5,264.00 which will be deducted from any final amount due to the Respondent. It is further recommended that if the Respondent properly accomplishes the above described actions, on or before the effective date of this Order, then the above provided License suspension shall not take place and this matter be closed. It is further recommended, in addition to the above-provided penalties, if any, that Respondent pay the sum of $500.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32- 1154D. The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s contractor’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. §32-1101A (5), unless payment of any outstanding prior civil penalty is tendered. In the event of certification of this 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 the certification. Done this day, August 10, 2010.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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