ALJDEC decisions subject to certification as final

2010A-19943581-ROC · Registrar of Contractors · 2010-09-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 1, 2010 and September 14, 2010 at 8:00 a.m. APPEARANCES: The Complainant appeared on her own behalf. The Respondent appeared through its authorized representative, Jeffrey Shaughnessy. 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. B.095713-R issued by the Registrar of Contractors. 2. On April 29, 2009 the Complainant entered into a construction agreement with Shaughnessy Contracting, Inc., wherein the Respondent agreed to remove and replace the Complainant’s roof in a professional manner for the total sum of $12,458.90. 3. Credible testimony and evidence established that the construction contract was presented to the Complainant by an individual identified as Mike Lee. 4. Credible testimony and evidence established that Mike Lee gave the Complainant one of the Respondent’s business cards which displayed the names of both Mike Lee and Jeffrey Shaughnessy. 5. There was no dispute that Mike Lee then installed the new roof on the Complainant’s residence. 6. There was no dispute that when Mike Lee completed the installation of the new roof on the Complainant’s residence, the Complainant paid the Respondent the agreed upon sum of $12,458.90. 7. There was no dispute that Mike Lee is not, and at the time of the roof installation was not, a licensed contractor. 8. Credible testimony and evidence presented at hearing established that Mike Lee was not an employee of the Respondent when Mike Lee installed the Complainant’s roof. 9. Credible testimony and evidence established that Mike Lee knowingly made representations to the Complainant that Mike Lee was a roofing contractor working with the Respondent when Mike Lee installed the new roof on the Complainant’s residence. 10. When the new roof leaked and allowed water into the interior of the Complainant’s residence, the Complainant notified the Respondent of the problems with her new roof and requested an immediate response. 11. Credible testimony and evidence established that the Respondent failed to respond to the Complainant’s complaint and failed to resolve the problems with the Complainant’s roof despite the Complainant’s repeated demands that the Respondent do so. 12. Credible testimony and evidence established that the leaking roof allowed water into the interior of the Complainant’s residence. 13. Credible testimony and evidence established that the Complainant has suffered extensive interior damage to her residence as a result of the leaking roof. 14. On November 25, 2009, the Complainant filed a formal complaint against the Respondent with the Registrar of Contractors. 15. On December 10, 2010, the Complainant filed an Addendum to her complaint. The Addendum provides, in pertinent part, as follows: On December 7, 2009 there was a rain storm that resulted in still more damage to laundry room ceiling and new leaks. After three months of calling Jeff and Mike, and then having to file this complaint on November 25, 2009, Mike Lee did finally come out (on December 8th) and has resealed and caulked around skylights, vents, etc. however [sic] there was much more damage done with this storm and the roof still needs to be tested. 16. Pursuant to the filing of the Complaint and the Complaint Addendum, an assigned Agency Inspector, J. Hennessy, conducted an onsite inspection and on December 24, 2009, issued a written Corrective Work Order to the Respondent. 17. On December 30, 2009, J. Hennessy issued a second Corrective Work Order which provides, in part, as follows: AMENDMENT [sic] NOTE THE CORRECTIVE WORK ORDER DATED DECEMBER 24, 2009 IS RESCINDED AND REPLACED BY THIS ORDER. • Correctly tie-in, seal roof over gaps under underneath and around the two sky lights that the contractor replaced that leaked. The contract [sic] is to determine the cause and correct by in [sic] the appropriate manner using a properly licensed contractor. • Test roof with water especially around skylights and vents.

After water testing roof for approximately 30 minutes there were leaks in various areas. Therefore the contractor is to determine the cause and correct by the appropriate manner using a properly licensed contractor. Note the following complaint items the contractor per jobsite agreement will correct by the appropriate manner using a properly licensed contractor. • Replace damaged drywall in laundry room caused by the water leak. • Repaint over stains in laundry room. • Repair paint/coating on block wall caused by leak in the kitchen. • Remove bugs, ect. [sic} from solar-tub [sic] light in the living room. Note the complainant added these items to the complaint at the jobsite inspection in agreement with the contractor. The following complaint items the contractor is to determine the cause and correct by the appropriate manner using a properly licensed contractor. • The skylight in the garage leaks. • Around the solar tube light there is a leak. 18. On January 20, 2010, the Complainant filed a second Addendum to her complaint against the Respondent. 19. On January 26, 2010, the Complainant filed a third Addendum to her complaint against the Respondent. 20. Pursuant to the filing of the new Addendums, a second Agency Inspector, P. Coscia, and the first Agency Inspector, J. Hennessy, conducted another onsite inspection of the Complainant’s entire roof, including all items set forth in the Complaint and all of the Complaint Addendums and on February 16, 2010, P. Coscia issued a new Corrective Work Order. 21. The February 16, 2010 Corrective Work Order provides, in pertinent part, as follows: Examination of the roof by the agency’s inspector found that many shingles were installed with side laps of 4” and less in succeeding courses. Some areas were found to have side laps less than 2” in succeeding courses. In view of the above, it is the inspector’s opinion that the contractor should remove and properly replace the roof in accordance with manufacturer’s specifications and the installation [sic] meet compliance with the “State of Arizona Registrar of Contractors’ Workmanship Standards for Licensed Contractors.” In addition, the roof was found to have the following defects which should be corrected when the roof is removed and replaced:

• The lower portions of the self-flashing skylights in the kitchen and hall bathroom have visible openings exposing allow can see [sic] light where Skylight is attached to the roof. • A/C supply duct located on roof damaged by tear off crew causing leak in Arizona Room at ceiling vent resulting in damage to drywall. A/C flange/flashing in front of elbow not properly secured; (nailed down). • Asphalt emulsion (black), applied to the base of (3) Skylights, (1) Solar tube (west), (1) Whirlybird (West), at minimum should be painted a close match to Asphalt shingles so as not to stand out and seal the black Asphalt Emulsion applied. • Dormer vents, roof jacks, and solar tubes not properly installed, the leading edge not installed flat of [sic] the roof. Complaint item: The Contractor did not apply Torch down roofing on the patio roofs (3) as per contract. The Contractor is not properly licensed to in stall [sic] Torch down roofing. Therefore the Contractor is to resolve by the appropriate means. Complaint item: Leak in Laundry room at windowsill. Note the leak was not confirmed. Therefore there is no action required by the contractor at this time. Complaint item: Satellite dish taken by the Contractor. The Satellite dish is installed at this time. Therefore there is no action required by the contractor at this time. Complaint item: Exterior duct tape and tapped [sic] with duct tape and damaged by the Contractor during tear off. The duct appears to be properly tapped [sic] at this time and not able to verify that the Contractor damaged the exterior duct. Therefore there is no action required by the contractor at this time. Complaint item: Ceiling drywall damaged in the Arizona Room due to ceiling vent leak. It appears that the damage is due to A/C supply duct not being properly reinstalled. Therefore the contractor is to correct by appropriate means. Complaint item: Flashing not properly installed in various locations of roof. It appears that all step flashing viewed to be correctly installed. Therefore there is no action required by the contractor at this time. Complaint item: Skylight in garage water stained due to leak. Skylight not reported to leak at this time and area pointed out is covered by [sic] appears to be aluminum foil. Therefore not able to verify or confirm who or what caused [sic] if any damage. No action required by the Contractor at this time. Complaint item: Contractor did not supply the Complainant a copy of warrantees for materials used on this project. The Contractor is to supply the complainant copies of materials used for this project by the appropriate means. Complaint item: Contractor used an unlicensed contractor to install new asphalt shingles. Violation of A.R.S. section 32- 1154, subsections a [sic], paragraph 10. Note this item was referred to investigation as per Registrar of Contractors standard operating procedure. Also note that the licensed Contractor has taken responsibility for the project and stated that his Employee was authorized to enter into contracts at that time. The type of discipline will be determined by investigations and the appropriate action taken. 22. Credible testimony and evidence established that the Respondent failed to comply with the terms of the Corrective Work Orders issued in this matter. 23. Credible testimony and evidence established that the workmanship on the Complainant’s roof fails to comply with applicable workmanship and industry standards and that the entire roof requires proper removal and replacement. 24. The Respondent is found to be fully responsible for the interior water damage in the Complainant’s residence caused by the leaking roof installed by Mike Lee. 25. Credible testimony and evidence established that there was no unreasonable denial of access by the Complainant in this matter. 26. Credible testimony and evidence established that the Respondent knowingly aided and abetted an unlicensed person to evade the state’s contracting laws by allowing Mike Lee to act as the Respondent’s agent, partner, or associate in the construction of the Complainant’s new roof. 27. The Respondent’s actions, in knowingly aiding and abetting an unlicensed person to perform roofing work on the Complainant’s residence resulting in a leaking roof that fails to comply with applicable workmanship and industry standards and that has caused extensive interior damage in the Complainant’s residence, are found to constitute a fraudulent act. 28. Credible testimony and evidence established that the Respondent knowingly entered into a contract with the Complainant for the performance of construction work that the Respondent knew or should have known was beyond the scope of the Respondent’s Class B- License. 29. Although the Registrar of Contractors normally allows a contractor a reasonable opportunity to correct its own construction deficiencies and errors subsequent to hearing, under all of the salient facts and circumstances presented herein, this Respondent should not be allowed to wreak any further havoc in the life of this homeowner. Thus, any condition placed into this Order for the purpose of allowing the Respondent to accomplish corrective work as a means to reduce or eliminate otherwise appropriate disciplinary penalties should include the requirement that the Respondent cause another properly licensed contractor of the Complainant’s choice to fully comply with the December 30, 2009 the February 16, 2010 Corrective Work Orders issued in this matter.. 30. Notice is taken of the Respondent’s prior good License record with the Registrar of Contractors. CONCLUSIONS OF LAW Credible testimony and evidence supported findings which establish violations by the Respondent of the charged provisions of A.R.S. § 32- 1154 (A)(7) (Fraudulent Act), A.R.S. § 32-1154(A) (10) (Aiding or abetting a unlicensed person to evade this chapter), A.R.S. § 32-1154(A) (23) (Failure to take appropriate corrective action) and A.R.S. § 32- 1154(A) (3); namely, Rule R4-9-108 (Failure to perform work in a professional and workmanlike manner). RECOMMENDed order It is recommended that, on the effective date of the Registrar’s Order, the Respondent’s License No. B.095713-R be revoked unless the Registrar of Contractors receives and accepts written proof that the Respondent has caused a properly licensed contractor of the Complainant’s choice to fully comply with the terms of the November 30, 2009 and the February 16, 2010 Corrective Work Orders that have been issued in this matter. It is further recommended that if the Respondent, utilizing a properly licensed contractor of the Complainant’s choice, causes the proper accomplishment of the above described corrective action, on or before the effective date of this Order, then the above provided License revocation shall not take place and that instead the Respondent’s License No. B.095713-R be placed on disciplinary probation for a period of thirty (30) days. 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. It is further recommended, in addition to the above provided penalties, if any, that any continuation or restoration of the Respondent’s contracting rights, whether or not probationary, shall be subject to a condition that the Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of twenty- four (24) months, including future renewal periods, in the amount of $1,000.00, such bond or deposit to be for the sole benefit of persons injured as defined in A.R.S. § 32-1131 (3) and to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. § 32-1152 (D). Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above-provided twenty-four (24) month period and only if no claims are then pending. 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, September 28, 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