ALJDEC decisions subject to certification as final

2010A-308474693-ROC-rhg · Registrar of Contractors · 2012-12-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

REHEARING: December 21, 2012, at 8:00 a.m. APPEARANCES: Complainant Mike Woods appeared on his own behalf; Respondent Bloom Design and Landscape LLC appeared through Stephen R. Reichmuth, its qualifying party and member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure The Arizona Registrar of Contractors (“the Registrar”) issued License No. C- 21.207969-R for residential landscaping and irrigation systems to Bloom Design and Landscape, LLC (“Respondent”). Mike Woods (“Complainant”) filed a Complaint with the Registrar regarding Respondent’s performance of a contract to renovate the pool and to install hardscape at Complainant’s residence at 3489 North 301st Drive, Buckeye, Arizona. The Registrar assigned the Complaint to its inspector, Rick Oelke, for investigation. Inspector Oelke issued a Corrective Work Order that required Respondent to correct certain deficiencies within fifteen days, including the following: The complaint of the poorly finished bull nosed [sic] coping has been verified. It is this Inspector[’]s opinion that the contractor’s philosophy of utilizing the same material for the pool coping as the paver field is sound, however; it is also reasonable to expect the material to have a clean consistent finish on all exposed areas. Any deviations from “normal/reasonable” expectations should be conveyed to, and approved by the customer. Contractor should correct the bull nosed edge scoring marks by appropriate means.

Complainant subsequently requested a hearing. The Registrar issued a Citation and Complaint against Respondent, charging possible violations of A.R.S. § 32-1154(A)(2), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, A.R.S. § 32-1154(A)(7), A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1158, A.R.S. § 32-1154(A)(17), and A.R.S. § 32-1154(A)(23). After Respondent filed a timely written answer, the Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. A hearing was held on June 27, 2011. Respondent presented evidence that it hired Caribbean Pools and Spas Inc. DBA: Caribbean Pools, License No. B- 5.118783-R (“Caribbean Pools”) to perform the repairs that the CWO required that were beyond the scope of Respondent’s C-21 License. The Administrative Law Judge summarized Inspector Oelke’s testimony at the initial hearing as follows: [T]he repairs to the bullnose coping did not comply with the Registrar’s standards, and . . . repair might not be possible, especially due to the fact that Respondent’s initial fabrication of the bullnose was beyond the scope of its C-21 license. Inspector Oelke testified that it was uncommon for contractors to attempt to fabricate bullnose travertine tile in the field, and that the bullnose tiles at the jobsite had a different profile and showed more imperfections than factory-fabricated bullnose tiles. Inspector Oelke noted that if Caribbean Pools attempted repairs, it was required to warranty its repairs for two years. . . .[1]

Based on Inspector Oelke’s testimony, Complainant agreed to allow Respondent and Caribbean Pools to attempt to repair the bullnose tile. After they were unable to repair the bullnose tile to Complainant’s satisfaction, a further hearing was held on October 14, 2011. The Administrative Law Judge summarized Inspector Oelke’s testimony at the further hearing as follows: [Inspector Oelke] performed a second prehearing jobsite inspection on or about September 28, 2011. Inspector Oelke testified that although the project was not perfect, repairs that been made to the bullnose travertine coping around the pool and to the gaps in the pavers, and that the project now met the Registrar’s minimum workmanship standards.[2]

Complainant submitted 12 photographs into evidence at the further hearing that showed that the color of the travertine bullnose coping appeared to be orange or gold. Complainant also attempted to submit a compact disk that contained numerous additional photographs that showed the alleged deficiencies, but Complainant did not bring his own computer and could not open the disk on OAH’s computer. Because Complainant did not submit any evidence to establish that Respondent violated code, departed from specifications, or was guilty of fraud, the Administrative Law Judge concluded that Complainant did not establish a violation of A.R.S. § 32-1154(A)(2)[3] or A.R.S. § 32- 1154(A)(7).[4] The Administrative Law Judge concluded that Respondent contracted beyond the scope of its C-21 License, in violation of A.R.S. § 32-1154(A)(17),[5] and that Respondent’s violation of A.R.S. § 32-1154(A)(17) provided grounds to discipline its license. The Administrative Law Judge also concluded that Respondent violated A.R.S. § 32-1154(A)(13),[6] namely A.R.S. § 32-1158(B),[7] by failing to include in its written contract an estimated date of completion, the advance deposit or progress payments that Complaint was required to pay, or notice of Complainant’s right to make a complaint to the Registrar for possible violations of A.R.S. § 32-1154(A). With respect to the charged violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108,[8] and A.R.S. § 32-1154(A)(23),[9] the Administrative Law Judge concluded that Complainant had not established any violation for the following reasons: Because construction is not a perfect science, contractors generally must be allowed an opportunity to correct their work, and the Registrar’s workmanship standards do not require that contractors achieve perfection in their corrections. Although Complainant’s photographs showed some degree of color variation on the bullnose edges of the travertine coping, Inspector Oelke opined that the repairs met the Registrar’s standards, and lighting conditions can be manipulated to emphasize minor color variations in photographs.[10]

On or about December 8, 2011, the Registrar substantially adopted the Administrative Law Judge’s recommended decision. Complainant filed a petition for rehearing because the OAH was unable to open 95% of the photographs that he had taken of the bullnose travertine tile at the pool project. Complainant did not assert that he was unable to present any other evidence at the initial and further hearing. The Administrative Law Judge recommended that the Registrar grant Complainant’s petition for rehearing under A.A.C. R4-9-120(C)(1) “to allow Complainant to present additional evidence on the issue of whether the appearance of the bullnose travertine tile on the edge of Complainant’s pool complies with the Registrar’s and industry standards” and that the Registrar “require Inspector Oelke to perform another jobsite inspection before the rehearing and to attend the rehearing to testify whether Complainant’s photographs are an accurate representation of conditions at the jobsite and whether such conditions comply with the Registrar’s and industry standards.” The Registrar granted Complainant’s petition for rehearing to allow him to present the photographs. Before the rehearing, Complainant attempted to submit an affidavit from a contractor who was licensed in California that the bullnose travertine coping and other aspects of Respondent’s work were deficient. After Respondent objected to the evidence, the Administrative Law Judge issued an order, in relevant part as follows: Respondent objects to expansion of the issues or evidence at rehearing because the affidavits are not newly discovered evidence that could not have been presented, with reasonable diligence, at the initial hearing under A.A.C. R4-9-120(C)(4), Respondent cannot cross-examine the affiants, as it has the right to do under A.R.S. § 41-1062(A)(1) (and A.R.S. § 41- 1092.07(B), which governs hearings before the Office of Administrative Hearings), and to the extent that the affidavits raise new matters, Respondent has not had an opportunity to inspect the work under A.R.S. § 32-1155(C) and the new complaints were filed beyond the two-year limitations period set forth in A.R.S. § 32-1155(A).

The Administrative Law Judge notes that she recommended that the Registrar of Contractors grant Complainant’s petition for rehearing solely to allow him to present certain photographs at the rehearing, because technical difficulties prevented such presentation at the initial hearing, and that Complainant’s request goes far beyond the scope of the rehearing set forth in the Registrar’s order. For the additional reasons set forth in Respondent’s opposition to Complainant’s motion,

IT IS ORDERED denying Complainant’s motion to expand the issues and evidence at the rehearing. The issue at the rehearing will be limited to whether the bull-nose edge on Complainant’s pool complies with applicable workmanship standards and Complainant’s new evidence will be limited to the photographs and observations by the Registrar’s inspector, Complainant, and Respondent’s representative.

Subsequently, Complainant submitted a second affidavit from another California contractor that the bullnose travertine tile had eroded and did not meet workmanship standards. Respondent objected to the admission of the new evidence, and the Administrative Law Judge excluded the second contractor’s affidavit. Evidence Presented at the Rehearing Because Inspector Oelke had left state service, a second inspector employed by the Registrar, Jeff Wills, performed a prehearing jobsite inspection. Inspector Wills testified that he performed a jobsite inspection on the day before the rehearing. Inspector Wills testified that Complainant attended the prehearing inspection, but that no representative of Respondent attended. Inspector Wills testified that Complainant had explained to him at the prehearing inspection that Respondent had fabricated the bullnose travertine coping at the jobsite rather than using bullnose travertine coping from a factory. Inspector Wills testified that he saw scoring on the bullnose travertine coping that in his opinion, did not meet the Registrar’s standards. The Administrative Law Judge noted that the scope of Inspector Wills’ testimony exceeded the scope of the order granting Complainant’s petition for rehearing. The Administrative Law Judge stated that although two inspectors may disagree about whether specific work meets the Registrar’s standards in a close case, after one inspector has rendered an opinion on a specific alleged workmanship deficiency, parties may not seek a second opinion from another inspector.[11] Inspector Wills’ role at the rehearing was limited to viewing the photographs and testifying whether the photographs accurately depicted conditions at the jobsite and if so, whether the photographs evidenced a departure from the Registrar’s workmanship standards. Complainant did not submit at the rehearing the photographs that he had been unable to present at the initial and further hearing and did not question Inspector Wills about whether the color of the travertine coping shown in the photographs accurately represented the conditions at the jobsite or whether the color of the travertine met the Registrar’s standards. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[12] Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[13] Complainant did not submit at the rehearing the only evidence that he established in his petition for rehearing he could not submit at the initial hearing due to technical difficulties. Therefore, Complainant did not establish at the rehearing that Respondent violated A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-018, or A.R.S. § 32-1154(A)(23). 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 Bloom Design and Landscape LLC’s License No. C-21.207969-R until it remedies its violation of A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1158(B). It is further recommended that the Registrar not suspend Respondent’s license and, instead, close the complaint in Case No. 2010-[number redacted] if on or before the effective date of the Registrar’s order, Respondent provides written proof that is satisfactory to the Registrar that Respondent has revised its contract form(s) to comply with A.R.S. § 32-1158(B). It is further recommended that, in addition to any license suspension that may result from this matter, Respondent’s Class C-21 license be placed on disciplinary probation for a period of 90 days, commencing on the effective date of the Registrar’s order or the date on which Respondent files notice of compliance, whichever is later. 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, December 24, 2012.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Recommended Decision at Finding of Fact No. 11. [2] Recommended Decision at Finding of Fact No. 14. [3] See Recommended Decision at Conclusion of Law No. 4. 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.” [4] See Recommended Decision at Conclusion of Law No. 4. A.R.S. § 32- 1154(A)(7) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[t]he doing of a fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” [5] See Recommended Decision at Conclusion of Law No. 6. A.R.S. § 32- 1154(A)(17) includes among the grounds for suspension, revocation, and other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.” [6] See Recommended Decision at Conclusion of Law No. 7. 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.” [7] The specific statute charged, A.R.S. § 32-1158(B), provides 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 include certain minimum terms. [8] 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.” [9] 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.” [10] Recommended Decision at Conclusion of Law No. 5. [11] Property owners may present the testimony of other contractors or experts. Although Complainant attempted to present such evidence before the rehearing, because he did not offer the evidence at the initial and further hearing and did not establish that he could not, with reasonable diligence, have discovered the evidence and presented it at the initial hearing and further hearing under A.A.C. R4-9-120(C)(4), such evidence was not allowed at the rehearing. The record in the rehearing does not allow an inference to be drawn that the deficiencies that Inspector Wills described were the result deterioration of Respondent’s repair to the travertine coping rather than disagreement with Inspector Oelke’s October 2011 opinion as to workmanship. Because Complainant works full-time as a professor at a college in California and was only available for hearing dates on school holidays, the initial hearing, further hearing, and rehearing dates were continued numerous time, delaying resolution of the issues. [12] See A.R.S. §§ 32-1151 to 32-1169. [13] 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).

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