ALJDEC decisions subject to certification as final

2010A-22377333-ROC · Registrar of Contractors · 2010-10-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 6, 2010 at 8:00 a.m. APPEARANCES: The Complainant appeared through its attorney, Beth Mulcahy. The Respondent appeared through its authorized representative, Robert Samuelson. 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.254737-R issued by the Registrar of Contractors. 2. The existing east block wall around the Complainant’s property was in very poor condition and the Complainant wanted to have the existing east block wall properly removed and replaced in a professional and workmanlike manner. 3. The Complainant authorized the Complainant’s management company to solicit and accept bids for the removal and replacement of the east block wall. 4. The Complainant’s management company accepted a bid from Antonio Martinez, an individual identified as an unlicensed contractor, and then submitted the bid to the Complainant for the Complainant’s approval. 5. Credible testimony and evidence established that the Complainant refused to contract with an unlicensed contractor and insisted that a bid from a licensed contractor would have to be obtained. 6. Credible testimony and evidence established that the unlicensed person, identified as Antonio Martinez, contacted the Respondent, and the Respondent and Antonio Martinez then submitted a bid to perform the construction work at a total cost of $19,300.00. 7. Credible testimony and evidence established that the Respondent’s bid was the lowest bid for the construction project from a licensed contractor and that the Complainant accepted the Respondent’s bid and entered into a construction agreement with the Respondent for the removal and replacement of the east block wall. 8. Credible testimony and evidence established that the Respondent and Antonio Martinez represented that they would be working together on the construction project. 9. The Complainant authorized the Complainant’s management company to pay the Respondent for the removal and replacement of the east block wall in accordance with the parties’ construction agreement. 10. Credible testimony and evidence established that the Respondent removed and replaced the east block wall at issue, and the Complainant’s management company paid the unlicensed person, identified as Antonio Martinez, the total sum of $19,300.00 for the removal and replacement of the east block wall. 11. Credible testimony and evidence established that the Respondent and the unlicensed person, identified as Antonio Martinez, operated as a joint entity in the removal and replacement of the Complainant’s east block wall. 12. On July 6, 2009, the Complainant received a COMPLIANCE NOTICE from the City of Scottsdale wherein the Code Enforcement Department of the City of Scottsdale informed the Complainant that no permit had been obtained, that the new east wall was not in compliance with applicable code requirements, and that the new east wall required proper correction. 13. The Complainant then hired a structural engineer to actually inspect the new block wall and to prepare recommendations for the proper correction of the new block wall. 14. On July 14, 2009, the Complainant filed a response to the COMPLIANCE NOTICE with the City of Scottsdale which provides, in pertinent part, as follows: We had a section of wall continue to fall apart from age and being hit by the lid of our waste bin. Based on the written bids and conversations, we wrongly thought, based on the information or lack thereof, that a permit was not necessary for replacement of the existing wall. While the vendor of choice was told the size of the footer prior to bidding, he did not relate that this would not be in compliance with standard code for a 6’x6”x16” block wall. The wall was therefore constructed without a permit and not in compliance with current City codes. We received your compliance violation after the wall was finished much to our dismay. We have hired a structural engineer to inspect and evaluate what modification would be needed to make the wall structurally safe and strong. We are submitting his recommendations for your consideration and approval. 15. The Complainant then notified the Respondent of the problems with the new block fence and requested that the Respondent take immediate action to rectify the situation.. 16. On July 20, 2009, the Respondent sent the Complainant a written response that provides, in relevant part, as follows: Shaw Remodeling takes great pride in our project quality and customer satisfaction. We regret that there were some misunderstandings and miscommunications with regard to the code required by the City of Scottsdale during this project. I personally pledge to you that we will do everything necessary to make things right and finish the job to your complete satisfaction. 17. The Respondent then submitted a bid to correct the newly constructed block wall for the additional sum of $5,385.00. 18. When the bid to correct the newly constructed east block wall was not accepted, the Respondent offered to reduce the cost of correcting the newly installed east block wall if the Respondent were awarded a contract to repair or replace the Complainant’s south block wall. 19. Credible testimony and evidence established that at no time in any of the parties’ written or oral communications did the Respondent indicate in any way that the Respondent did not construct the new block wall or that the Respondent was not responsible for the proper correction of the new east block wall. 20. On November 16, 2009, the Complainant sent the Respondent a letter in response to the Respondent’s new proposal which provides, in relevant part, as follows: The last proposal heard by the Board on or around September 17, 2009 suggested that we contract with you for the south wall in order to receive a reduction in the cost of repairing the east wall. At this point in time, the east wall and south wall are two different and separate issues not to be combined with one another. Therefore, looking at the cost of the east wall repair, we find your proposal to be unacceptable. The Board suggests this: Shaw Remodeling repair the east wall to City of Scottsdale code at its’ [sic] own expense. The board has already had the wall assessed by a structural engineer who has rendered a determination regarding the repair. This report was paid for at the Board’s expense and was given to the City of Scottsdale as part of our attempt to correct the problem. 21. On December 4, 2009, the Respondent filed a written response to the Complainant’s letter. The written response provides, in pertinent part, as follows: I run my business with a strong commitment to a few principles that are very important to me. I try to be very clear so that expectations are met and typically exceeded. I strive to always do the right thing and provide a great value to my customers. …. When we became aware of the permitting issue, we were as surprised as you were. We responded with a very fair offer to comply with the city’s newly determined requirements based on specific requirements of your location and the wind load the wall was expected to be under, NOT the standard commonly understood code used to build such a wall. Our offer to make the situation right still completed the job more than $20,000 less than the competing bids that were WITHOUT the corrections for city requirements. 22. The Respondent did not indicate in any way in its response that the Respondent did not construct the east block wall or that the Respondent was not responsible for the proper correction of the east block wall. 23. On December 21, 2009, the Complainant filed a formal complaint against the Respondent with the Registrar of Contractors. 24. Pursuant to the filing of the formal Complaint, an assigned Agency Inspector conducted an on-site inspection and issued a written Corrective Work Order directing the Respondent to perform designated corrective work on the Complainant’s residence. 25. The Corrective Work Order provides, in relevant part, as follows: With the information gathered at the jobsite meeting and in view of the documents provided in the written complaint, it appears to the inspector that Shaw Remodeling was aiding and abetting an unlicensed contractor, Antonio Martinez, and is in violation of Arizona Revised Statutes, Article 3, section 32-1154, paragragh [sic] 10, which clearly sets out grounds for suspension or revocation of a contractor’s license. Among other ground, paragraph 10 reads: “Aiding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one’s license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter.” In view of the above, Shaw Remodeling and Home Improvements would bear the responsibility of correcting defects with the construction of the masonry wall, which are as follows: #1.Starting construction of the wall without first obtaining the required building permit from the City of Scottsdale. (#2). Had the permit been obtained it would not have resulted in the wall being constructed in a manner that did not meet the code requirements of the City. #3. Correcting the footing and reinforcement required to support the size of the masonry block. #5. Correcting problems with the wall within a reasonable amount of time, from the date of this corrective order; to ensuring compliance with building codes of local jurisdiction. Note: Regarding the matter in Complaint #4, i.e. “Contractor to pay City of Scottsdale, all other vendors, and La Buena Vida II HOA, for all fines and fees associated with completing the wall properly, including but not limited to, fines/violations, all engineering cost…attorney’s fees…” The inspector lacks the authority to award monetary compensation. Complaint #6 has been addressed under Complaint #1, above. 26. Credible testimony and evidence established that the Respondent failed to comply with the terms of the Corrective Work Order. 27. When the Respondent failed to comply with the terms of the Corrective Work Order, the Complainant retained an alternative licensed contractor to properly correct the east block wall. 28. Credible testimony and evidence established the east block wall has now been fully corrected and that no further corrective action on the east block wall is required. 29. The Complainant’s actions, in retaining an alternative contractor to properly correct the east wall when the Respondent failed to comply with the terms of the Corrective Work Order, are found to be reasonable and necessary under the circumstances. 30. At the hearing, the Respondent’s representative, Robert Samuelson, asserted that the Respondent had nothing to do with the construction of the wall and that the Respondent received none of the money that the Complainant paid Antonio Martinez for the construction of the east wall. 31. Credible testimony and evidence established that the Respondent and the unlicensed person, identified as Antonio Martinez, acted as a joint entity at the construction site. 32. Credible testimony and evidence established that the Respondent knowingly aided and abetted an unlicensed person, identified as Antonio Martinez, to evade the State’s contracting laws in violation of the charged provisions of A.R.S. § 32-1154 (A) (10) (Aiding or abetting an unlicensed person to evade the provisions of this chapter). 33. The Respondent is found to be fully responsible for the errors and omissions of the unlicensed person, identified as Antonio Martinez, that the Respondent aided and abetted to avoid the State’s contracting laws.

34. Credible testimony and evidence established that the cost of correcting the east block wall exceeded the $19,300.00 that the Complainant paid the Respondent and the unlicensed person, identified as Antonio Martinez, to construct the east block wall. 35. Credible testimony and evidence established that the Complainant received nothing of value for the $19,300.00 that the Complainant paid to the Respondent and the unlicensed person, identified as Antonio Martinez, for the construction of the east block wall. 36. Credible testimony and evidence established that the construction of the east block wall failed to comply with applicable code requirements. 37. Credible testimony and evidence established that the construction of the east block wall failed to comply with applicable workmanship and industry standards. 38. Credible testimony and evidence established that the Respondent acted in the capacity of a contractor under its contractor’s license in a name other than as set forth upon its contractor’s license. 39. Notice is taken of the Respondent’s prior good License record with the Registrar of Contractors. CONCLUSIONS OF LAW 1. The credible evidence of record supported findings which establish violations by the Respondent of the charged provisions of A.R.S. § 32- 1154 (A) (2) (Departure or disregard of building codes), A.R.S. § 32-1154 (A) (10) (Aiding or abetting a unlicensed person to evade this chapter), A.R.S. § 32-1154 (A) (15) (Acting in the capacity of a contractor under nay license issued under this chapter in a name other than as set forth upon the license), 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). 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. B.254737-R be revoked unless the Registrar of Contractors receives and accepts written proof that the Respondent has paid, as restitution, the sum of $19,300.00 to the Complainant. It is further recommended that if the Respondent properly accomplishes the above described restitutionary 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.254737-R shall be placed on disciplinary probation for a period of ninety (90) 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. 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, October 18, 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