ALJDEC decisions subject to certification as final

2010A-308472970-ROC · Registrar of Contractors · 2011-02-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 27, 2011, at 8:00 a.m. APPEARANCES: Complainant Sagi Saati appeared through Edward Rubacha, Esq., Jennings Haug & Cunningham; Respondent Yariv Homes, L.L.C. appeared through Donald G. Yearin, Esq., Mitchell & Yearin, P.L.C. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In February 2008, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC241673, Class B for residential general contracting to Yariv Homes, L.L.C. (“Respondent”). Elazar Yariv is the qualifying party, managing member, and only person listed on Respondent’s license. On May 11, 2010, the Registrar received a complaint against Respondent from Sagi Saati (“Complainant”) concerning Respondent’s substantial remodeling of Complainant’s residence at 3125 S. Laguna Drive in Chandler, Arizona. Complainant alleged that Respondent’s workmanship was deficient in 13 enumerated respects and that it had failed to obtain necessary permits for the remodeling project. On May 13, 2010, the Registrar received a letter from Complainant, authorizing Robert Graff “to take care of all issues at my house.” The Registrar assigned the complaint to Inspector Randy Cason for investigation. Inspector Cason performed a jobsite inspection on May 24, 2010. Mr. Graff attended the jobsite inspection on behalf of Complainant, and Mr. Yariv attended the jobsite inspection on behalf of Respondent. At the jobsite inspection, Mr. Graff amended the complaint to allege 26 additional items. After Mr. Yariv agreed that the Registrar could amend the complaint, Inspector Cason inspected the additional items. On June 14, 2010, Inspector Cason issued a Corrective Work Order (“CWO”) to Respondent that required it to correct certain workmanship deficiencies within fifteen days, but that it “obtain the proper building permit from the City of Chandler prior to addressing this Corrective Work Order.” The CWO required Respondent to correct 35 items of complaint. Since Respondent did not dispute 32 of those items at the hearing, those items are incorporated herein by reference and not addressed further. The CWO also included the following specific items of workmanship: Stairs – Was not able to determine if the overlay material used on the stairs through out [sic] the house was to be Oak or Pine wood material. However, the Respondent has exceeded the building codes [sic] requirements regarding the risers and treads on all the stairs through out the house. The Respondent had installed Pine wood material over the stairs and some of the stair treads are splitting. . . . .

Addendum Complaint Items – . . . .

#21 – In hall bathroom[,] ceiling lights and exhaust fan are on the same switch. Comply with building code requirements.

#22 – In hall bathroom[,] the shower wall are [sic] are not installed per codes. Comply with building code requirements.

The CWO did not require Respondent to correct four items complained of, or a subpart of another item. Because Complainant did not dispute at the hearing the items that the CWO did not require Respondent to correct, they are also incorporated herein by reference and not addressed further. On July 8, 2010, Mr. Graff on Complainant’s behalf requested a hearing. On September 28, 2010, 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. § 32-1124(B)), and (23). Respondent timely answered the Citation and Complaint, denying any statutory violations and affirmatively alleging that Complainant had failed to allow reasonable access for Respondent to comply with the CWO. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on January 27, 2011. Inspector Cason testified. Complainant testified on his own behalf and submitted seven exhibits. Respondent presented the testimony of Mr. Yariv and submitted ten exhibits. Although Mr. Graff attended the first part of the hearing, he did not testify. Additional Hearing Evidence Mr. Graff introduced Complainant to Mr. Yariv because Complainant was thinking about remodeling his house. After Complainant hired Respondent to perform the remodeling project, Respondent paid a $2,000.00 commission to Mr. Graff. On or about January 16, 2009, Respondent entered into a contract to remodel the guest bedroom, guest bathroom, bathroom on the main floor, master bathroom, kitchen, floors, and fireplace at Complainant’s house. Mr. Yariv testified that the contract was about a page and a half long and contained “few details.” Mr. Yariv also testified that the “simplicity of the agreement was supposed to signify the level of trust” between the parties. Neither the original contract nor the subsequent addendum was submitted at the hearing. Between March 2009 and September 12, 2009, Complainant was in Israel. He communicated with Mr. Yariv through telephone calls. Before he moved to Arizona, Mr. Graff had been a contractor in New York. While Complainant was in Israel, he asked Mr. Graff to oversee the remodeling project on his behalf. In September 2009, while Complainant was still in Israel, he asked Respondent over the telephone to add construction of a patio cover to the remodeling project. At some point, the patio cover became a walking deck. Mr. Yariv testified that while Complainant was in Israel, Mr. Graff became a “thorn in his side,” calling him numerous times a day and interfering with Respondent’s workmen by screaming and cursing at them. Mr. Yariv testified that eventually Mr. Graff’s involvement in the project caused his relationship with Complainant to “break down.” Before Complainant filed the complaint against Respondent to the Registrar, Mr. Yariv knew that he would need an architectural drawing to obtain a permit from the City of Chandler. On or about May 9, 2010, Mr. Yariv entered into a contract with Thomas Bragg, an architect, for drawings of Complainant’s house. Respondent subsequently paid $2,000.00 to Mr. Bragg for the drawings of Complainant’s house. After Inspector Cason issued the CWO, Complainant did not allow Respondent to perform any corrective action until it obtained a permit from the City of Chandler for the work, on Mr. Graff’s advice, even though most of the items on the CWO did not require a permit. On or about June 22, 2010, Mr. Yariv applied to the City of Chandler Development Services Department (“City”) for a building permit for Respondent’s remodeling project at Complainant’s house. On or about June 25, 2010, Respondent paid $227.83 to the City for an application for a permit for “electrical, patio, flooring, paint, plumbing A/D [sic] Duct” at Complainant’s house. Mr. Yariv testified that the City required him to wait ten days while it decided what work in the remodeling project required a permit. Mr. Yariv testified that the City eventually informed him that only the patio cover/walking deck required a permit. Mr. Yariv testified that the City still required Mr. Bragg to prepare a complete plan for Complainant’s house, as well as the patio cover/walking deck, for review before the City would issue a permit for the patio cover/walking deck. Mr. Yariv asked Inspector Cason to allow Respondent additional time to comply with the CWO due to the delay occasioned by the requirement that Respondent obtain a permit before beginning any corrective work. Because Complainant did not agree to an extension of time, Inspector Cason did not modify the CWO. On August 10, 2010, Respondent paid an additional $355.75 to the City for a permit to “re-build 2nd floor patio/deck” at Complainant’s house. On that same date, the City issued a building permit to “re-build 2nd floor patio/deck” at Complainant’s house. The permit shows a total cost of $583.58. After Respondent obtained the necessary permit for the patio cover/walking deck, Complainant did not allow Respondent to perform any repairs because Complainant believed that Respondent also needed a permit for the electrical work. Inspector Cason testified that after he issued the CWO, he contacted the City to determine the aspects of the job that required a permit. Inspector Cason testified that in his opinion, only the change of the patio cover to a walking deck required a permit. Inspector Cason testified that he performed a prehearing inspection on January 24, 2011. Inspector Cason testified that although the parties informed him that Respondent had not performed any of the work on the CWO, he could not verify four items on the CWO at the prehearing inspection, as follows: (1) A vanity backsplash had been installed in the basement bathroom (part of eighth item on the original complaint); (2) There was no hole in the wall in the laundry room (tenth item on the original complaint); (3) A wall switch in the kitchen operated the garbage disposal (Addendum Complaint Item #5); and (4) The GFI outlet in the master bathroom had been raised (Addendum Complaint Item #12). Inspector Cason testified that he did not know whether Complainant had corrected these items or whether they were included on the CWO through an oversight. Inspector Cason testified that each municipality determines what work requires a permit. If Chandler follows the International Residential Code, contractors may perform some work, such as painting, floor installation, and minor electrical and plumbing work, without a permit. Inspector Cason testified that he defers to the specific municipality on the question of whether a permit is required for a particular project. Mr. Yariv did not dispute most of the items on the CWO that Inspector Cason testified had not been corrected and testified that Respondent was ready, willing, and able to correct most of the remaining items. Inspector Cason testified that the CWO required Respondent to correct the stairs because the risers in the stairs measured 7¾” and the treads measured 10”, and that both measurements exceeded what applicable building code allowed. Mr. Yariv testified that Respondent should not be required to repair the risers and tread on the stairs because it only replaced the flooring on the stairs that were in the house when Respondent began the remodeling project and that Respondent did not alter the dimensions of the risers or tread. Mr. Yariv testified that the CWO only required Respondent to ascertain whether the switch for the ceiling lights and exhaust fan and shower walls in the hall bathroom complied with code. Mr. Yariv testified that these items complied with code, but did not submit any code excerpts to support his testimony or question Inspector Cason about Complaint Addendum Items #21 and #22. According to the Registrar’s record, Respondent’s license is current and in good standing. This is the only complaint pending against the license. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[1] Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[2] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] 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.”[5] Complainant did not submit any document that Respondent used in its contracting business that did not bear his license number preceded by the acronym “ROC.” Therefore, Complainant did not establish that Respondent violated A.R.S. § 32-1154(A)(13) (namely A.R.S. § 32-1124(B)).[6] Respondent established that it obtained all necessary permits from the City to complete the remodeling project at Complainant’s house. Therefore, Complainant did not establish that Respondent violated any statute by failing to obtain necessary permits. Respondent established that it was impossible to obtain the necessary permits in the time that the CWO allowed, that Complainant did not consent to extend the time allowed by the CWO, and that Complainant did not otherwise allow Respondent a reasonable opportunity to comply with the CWO. Therefore, Respondent established a valid justification for its failure to comply with the CWO, precluding any finding that it violated A.R.S. § 32- 1154(A)(23).[7] A contractor may refuse to perform work if the owner refuses to pay to remedy a pre-existing code violation. However, once a contractor accepts a surface prepared by a previous contractor by building on that surface, he must warrant that the surface is acceptable and complies with all applicable codes. If not, the successor contractor is liable for perpetuating the previous contractor’s code violation. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(2)[8] by laying flooring on stairs that did not comply with the building code. Complainant also established that Respondent violated A.R.S. § 32- 1154(A)(2) in the hall bathroom by putting the ceiling lights and exhaust fan on the same switch and in its construction of the shower walls (respectively, Addendum Complaint Items #21 and #22 of the CWO). Complainant established that Respondent violated A.R.S. § 32-1154(A)(3) (namely A.A.C. R4-9-108)[9] by deviating from applicable workmanship standards or code requirements in its construction of the items that the CWO required Respondent to correct, except for the items that Inspector Cason testified no longer required correction (“the remaining items on the CWO”). 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 Yariv Homes, L.L.C.’s License No. ROC241673, Class B until Respondent corrects the remaining items on the CWO. It is further recommended that the Registrar not suspend Respondent’s license and, instead, close Sagi Saati’s complaint in Case No. 2010- [number redacted] if on or before the effective date of the Registrar’s final order, Respondent provides to the Registrar written proof that is satisfactory to the Registrar of one of the following: 1) Respondent has corrected in a professional and workmanlike manner the remaining items on the CWO; or 2) Complainant has failed to provide reasonable access to allow Respondent to correct the remaining items on the CWO. 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, February 14, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See 32-1101 et seq. [2] 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). [3] See A.A.C. R2-19-119(B)(2). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [5] Black’s Law Dictionary at page 1220 (8th ed. 1999). [6] This statutory subsection 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.” The specific statute charged was A.R.S. § 32-1124(B), which requires that licensed contractors include their license number, which “shall be preceded by the acronym ‘ROC,’“on “all written bids submitted by the license and . . . on all advertising, loan forms, lending institution forms, letterheads and other documents used by the licensee in the conduct of business regulated by this chapter.” [7] 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.” [8] 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.” [9] 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 cited 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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