ALJDEC decisions subject to certification as final

2010A-26018277-ROC · Registrar of Contractors · 2011-06-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 31, 2011, at 8:00 a.m. APPEARANCES: Complainant Reita J. Hutson appeared on her own behalf; Respondent D and A Flooring, Inc. dba Pinnacle Flooring appeared through Robert Dennis Berry, its qualifying party and president. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In March 2001, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC163105, Class K-8 for dual floor covering to D and A Flooring, Inc. doing business as (“dba”) Pinnacle Flooring (“Respondent”).

On February 1, 2010, the Registrar received a complaint from Reita Hutson (“Complainant”) regarding Respondent’s installation of a tile floor at her residence at 7726 East Pasadena Avenue in Scottsdale, Arizona. According to Complainant’s complaint, the amount of the parties’ contract was $8,966.91 and the amount of her payments to Respondent was $4,463.46. The Registrar assigned the complaint to its inspector, Jeff Fleetham, for investigation. On February 17, 2010, Inspector Fleetham performed a jobsite inspection. On February 22, 2010, Inspector Fleetham issued a Corrective Work Order (“CWO”) to Respondent, directing it within fifteen calendar days to correct by appropriate means the following: 1. Item #2 – Tile is not level to standards. • Floor, at entry, kitchen-living room transition, south and east of patio shutters, is out of level in excess of ¼” in feet. • Floors should be level within ¼” in any 12’ run. • When an inadequate or defective substrate is present prior to installation of tile, the general contractor and/or the owner should be notified in writing by the tile contractor that a specific surface area is unacceptable for installation.

1. Item #4 – Damaged wall paper in bathroom. Ripped wallpaper upon removal of tape. • Respondent in email correspondence to complainant dtd [sic] 12-24-2009 writes “the masking tape on the wallpaper is why we are having to replace the wallpaper for you”

3. Item #5 - Told it would take 4 days to install the tile and it was double that. • Contract does not comply with A.R.S. § 32-1158 – B 4, & 9 • Warning letter R-C-C-058 dated 2-19-2010 • No estimated completion date included in contract – check ARS [sic] § 32-1158

4. Item #10 – Trash compactor and dishwasher were not removed prior to tile installation. • The are [sic] appliances “tile locked”. • Appliances cannot be readily removed for maintenance or replacement without damage to tile.

(Emphasis in original.) The CWO did not require Respondent to take any corrective action with respect to the remaining specific items of complaint. On March 9, 2010, Inspector Fleetham sent a letter to the parties, informing them that the Registrar was closing the complaint pursuant to his recent telephone conversation with Complainant. On December 13, 2010, the Registrar received Complainant’s requests to reopen the complaint and to schedule a hearing. On January 24, 2011, the Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(2), (3), namely A.A.C. R4-9-108, (13), namely A.R.S. § 32-1158, and (23). Respondent timely answered the Citation and Complaint, denying any statutory violations and affirmatively alleging that Complainant chose not to pay Respondent and that if Complainant paid Respondent $4,483.46, it would repair the floor. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. A hearing was held on May 31, 2011. Inspector Fleetham testified. Complainant testified and submitted five exhibits. Respondent’s qualifying party and president, Robert Dennis Berry (“Mr. Berry”), testified on its behalf and submitted eight exhibits. Additional Evidence Respondent submitted a proposal to Complainant to install tile at Complainant’s house on May 5, 2009. The proposal did not include the estimated date of completion or apprise Complainant of her right to file a complaint to the Registrar. Complainant and Mr. Berry signed Respondent’s proposal on November 19, 2009, and the proposal became the parties’ contract. Respondent’s subcontractor, Bob’s Floor Covering, Inc. dba Berry Floor Covering (“Berry Floor Covering”),[1] installed the tile at Complainant’s house. Mr. Berry’s father, Robert George Berry, is Berry Floor Covering’s qualifying party and president. Inspector Fleetham testified consistently with the CWO. Inspector Fleetham testified that he performed a prehearing jobsite inspection and that only the wallpaper in the bathroom (CWO Item # 2) was corrected. Inspector Fleetham testified that he did not know whether Respondent or Complainant corrected the wall paper. Complainant did not present any evidence on the items of her complaint that the CWO did not require Respondent to correct. Inspector Fleetham testified that he closed the complaint after Complainant told him that she had reached some sort of resolution of her complaint at the end of February 2010. Mr. Berry, on Respondent’s behalf, submitted a copy of its e-mail to Complainant dated March 9, 2010, which states in relevant part the following: I will be happy to still complete issues listed on the [CWO] . . . . Once done, then the balance due will still need to be paid. If you choose to keep all money owed for balance of tile installation & new base purchase and install you can due [sic] so if you prefer to take care of all complaints as you wish to. Also I will not act on the property pre lien and will send you lien release as well.

Mr. Berry testified that when the Registrar closed the complaint, he assumed that Complainant had accepted Respondent’s settlement offer not to seek the full contract price from Complainant as consideration for Complainant accepting Respondent’s subcontractor’s work and withdrawing her complaint to the Registrar. Mr. Berry testified that therefore, he did not file a complaint against Berry Floor Covering or require it to correct the floor at Complainant’s house. Mr. Berry urged the Registrar to hold Complainant to the alleged settlement agreement and close the complaint. Complainant denied having received Mr. Berry’s e-mail or agreeing to withdraw her complaint against Respondent to the Registrar. According to the Registrar’s record, on August 6, 2010, the Registrar revoked Respondent’s license as discipline in an unrelated case. CONCLUSIONS OF LAW The 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] The revoked status of Respondent’s license does not deprive Complainant of her right to prosecute her complaint against Respondent or prevent the Registrar from determining the merits of Complainant’s complaint.[6] Complainant did not present any evidence that Respondent’s installation of the tile floor violated any building code or was not according to plan. Therefore, Complainant did not establish that Respondent violated A.R.S. § 32-1154(A)(2).[7] Because Respondent’s contract did not include an estimated date of completion or apprise Complainant of her right to file a complaint to the Registrar, Complainant established that Respondent violated A.R.S. § 32- 1154(A)(13), namely, A.R.S. § 32-1158(B).[8] If a licensed contractor performs construction, it must perform the construction in a professional and workmanlike manner regardless of payment. Therefore, Respondent’s offer to release Complainant from her contractual obligation to pay unpaid contract amounts if she agreed to accept Respondent’s deficient work does not bar prosecution of her complaint to the Registrar for poor workmanship. Complainant established that Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108,[9] and (23)[10] with respect to its initial construction of and failure to repair the unlevel floor and tile-locked dishwasher and trash compactor at Complainant’s house (respectively, CWO Items #1 and #4). Respondent’s revoked license status prevents it from performing or from hiring others to perform any further corrective work.[11] RECOMMENDED ORDER In view of the foregoing, it is recommended that on the effective date of the Registrar’s final order, Respondent D and A Flooring, Inc. dba Pinnacle Flooring’s License No. 163105 be revoked. It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(D).

It is further recommended that 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 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 Respondent tenders payment of any outstanding prior civil penalty. In the event of certification of the 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 that certification. Done this day, June 20, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The Registrar issued License No. ROC092974, Class C-8 for residential floor covering to Berry Floor Covering. [2] See A.R.S. § 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] See A.R.S. § 32-1154(C). This statute provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . . .” [7] A.R.S. § 32-1154(A)(2) 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.” [8] A.R.S. § 32-1154(A)(13) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” A.R.S. § 32-1158(B) requires that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved after December 31, 2007 must be in writing and have certain minimum terms, including the following:

4. The estimated date of completion of all work to be performed under the contract. . . . .

9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in ten point bold type. . . . [9] A.R.S. § 32-1154(A)(3) 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.” A.A.C. R4-9-108 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.” [10] A.R.S. § 32-1154(A)(23) 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] It is unlawful for anyone without a contractor’s license in good standing to engage in contracting. See A.R.S. § 32-1151. “Contractor” is defined as anyone who “does himself or by or through others” performs construction. A.R.S. § 32-1101(A)(3) (emphasis added).

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