ALJDEC decisions subject to certification as final

2010A-308476434-ROC · Registrar of Contractors · 2011-06-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING DATES: June 6, 2011, at 1:00 p.m. and June 14, 2011, at 1:00 p.m. APPEARANCES: Complainants Doris Susca and Rick Semerenko appeared on their own behalf; Respondent A J R Construction, Inc. appeared telephonically through Gregory A. Schmidt, its qualifying party and officer. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In January 2004, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC192511, Class KB-1 for dual building contracting to A J R Construction, Inc. (“Respondent”). On or about December 27, 2006, Respondent contracted with Rick Semerenko and Doris Susca (“Complainants”) to construct a custom home at 6114 South Los Lagos Circle, Fort Mohave, Arizona. On October 13, 2010, the Registrar received a complaint from Complainants that alleged three specific complaints about Respondent’s construction of their home. According to the complaint, Respondent completed construction on November 17, 2008, Complainants closed escrow on December 21, 2008, Complainants moved into the home on July 18, 2009, and Respondent’s repairs were “ongoing.” The Registrar assigned the complaint to its inspector, Cliff Corlett, for investigation. After Inspector Corlett performed a jobsite inspection, he issued a Corrective Work Order (“CWO”) on October 29, 2010, that required Respondent to correct certain items within fifteen days, in relevant part as follows: All decisions herein are based on standard practices for similar work in the construction industry and or the adopted Workmanship Standards for Licensed Contractors (WSLC). These standards cover performances of those construction items of major concern to the buyer. The effective date for the start of these standards should begin with the close of escrow, when the buyer occupies the structure or the date of discovery, whichever occurs first, unless otherwise stated.

Complaint’s Allegations from Complaint Form are Underlined.

1. Hollow floor tile on floor and master shower floor. Registrar of Contractors (ROC) ***** The WSLC states that “Hollow sounding tile are acceptable, IF not extensive and tile is solidly bonded to floor membrane”. At the onsite inspection, numerous tiles were found to be hollow sounding in both the flooring and the shower pan. Respondent (R/P) should determine cause and correct by appropriate methods.

2. Powder coat on exterior railings. Rust, uneven, etc. ROC ***** Railings were being corrected prior to inspection. R/P should properly complete repairs.[1]

(Emphasis in original; footnote added.) On November 15, 2010, the Registrar received Complainant’s request for hearing, and Inspector Corlett referred the matter to the Registrar’s Legal Department. On December 9, 2010, the Registrar issued a Citation and Complaint, charging Respondent with violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, and (23). On December 10, 2010, Complainants asked the Registrar to amend their complaint to allege four additional items, including that the gas fireplace would not light, that Respondent had damaged stucco during repairs of the exterior railing, and that the ceiling lights over the catwalk went off after they were left on for more than 30 minutes.[2] Respondent filed a timely written answer to the Citation and Complaint, denying any statutory violations and asking the Registrar to combine Complainants’ complaint with Respondent’s complaint regarding the hollow- sounding tile against its subcontractor, Quest Builders, Inc. (“Quest”),[3] in Case No. 2010-[number redacted]. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent state agency, for an evidentiary hearing. On February 24, 2011, the Registrar issued a Notice of Amendment, adding Complainants’ new complaints for additional potential violations of A.R.S. § 32-1154(A)(3). A videoconference hearing was held from the Registrar’s Lake Havasu City office on June 6 and 14, 2011. Inspector Corlett testified. Complainant Doris Susca testified. Respondent’s qualifying party and officer, Gregory Alan Schmidt, testified telephonically. Hearing Evidence The Registrar did not forward to the OAH Respondent’s complaint against Quest in Case No. 2010-[number redacted]. Inspector Corlett testified that the Registrar had issued a Decision and Order in Case No. 2010-[number redacted] with an effective date of March 22, 2011, based on Quest’s default. Inspector Corlett performed a prehearing jobsite inspection on June 17, 2011. Inspector Corlett testified about his opinion of the five items of workmanship that remained at issue, as follows: (1) Certain tiles on the floors and in the showers still sounded hollow and had poor adhesion to the substrate (CWO Item #1); (2) The powder coating on the exterior railing had been repaired, with the exception of a small damaged area where one bracket showed rust (CWO Item #2); (3) The gas fireplace could be lit, but after 20 or 30 minutes, the fireplace blower did not turn on (Addendum Item #2); (4) Respondent had damaged a small area of stucco in its repair of the exterior railing and had not repaired it (Addendum Item #3); and (5) The ceiling cam lights over the catwalk went off spontaneously after they were left on for a certain amount of time (Addendum Item #4). Mr. Schmidt testified the hollow sounding and loose tile was a “nuisance,” not a structural defect, but that if Respondent was required to repair the tile, he would seek payment from Quest’s bond. Mr. Schmidt testified that any outdoor metal will rust eventually. Mr. Schmidt acknowledged that Respondent had repaired the powder coating on the exterior railing within two years of the time that Complainants filed their complaint to the Registrar. Mr. Schmidt acknowledged that Respondent had repaired the fireplace a year before Complainants asked the Registrar to amend their complaint. Mr. Schmidt testified that the blower on the fireplace at his house does not come on for 15 or 30 minutes after the fireplace is turned on. Mr. Schmidt testified that be believed that the cam lights went off because they overheated due to improper installation of ceiling insulation and that he would contact Respondent’s insulation subcontractor to repair the lights. According to the Registrar’s record, Respondent’s license is current and in good standing. Two complaints have been resolved, settled, or withdrawn. This complaint is apparently the only complaint pending against Respondent. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[4] Because Respondent as general contractor is responsible to Complainants as homeowners for its subcontractors’ work, Respondent’s complaint against Quest in Case No. 2010-[number redacted] does not affect Complainants’ right to prosecute their complaint against Respondent in this matter. Because Complainants filed their various complaints within two years of the time they moved into the house, their complaints are timely under A.R.S. § 32-1155(A).[5] Complainants bear the burden of proof and must establish cause to discipline Respondent’s license by a preponderance of the evidence.[6] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[7] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[8] Complainants established that Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108,[9] in its construction of the hollow-sounding, poorly adhered tile, the small rusted area on the exterior railing bracket, the blower on the gas fireplace, the damaged stucco near the exterior railing, and the cam lights over the catwalk. Complainants also established that Respondent violated A.R.S. § 32- 1154(A)(23)[10] by failing to comply with the CWO with respect to the hollow-sounding, poorly adhered tile and the small rusted area on the exterior railing bracket. 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 A J R Construction, Inc.’s License No. ROC192511 until it has repaired in a professional and workmanlike manner the hollow-sounding, poorly adhered tile, the small rusted area on the exterior railing bracket, the blower on the gas fireplace, the damaged stucco near the exterior railing, and the cam lights over the catwalk at Complainants Rick Semerenko and Doris Susca’s house. It is further recommended that the Registrar not suspend Respondent’s license and, instead, close Case No. 2010-[number redacted] if on or before the effective date of the Registrar’s order, Respondent provides written evidence that is satisfactory to the Registrar that it has repaired in a professional and workmanlike manner the hollow-sounding, poorly adhered tile, the small rusted area on the exterior railing bracket, the blower on the gas fireplace, the damaged stucco near the exterior railing, and the cam lights over the catwalk. It is further recommended that the Registrar require Respondent to pay the sum of $250.00 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 30, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Respondent resolved the third item on the original complaint before the hearing. [2] Respondent resolved the fourth item on the amended complaint before the hearing. [3] According to the Registrar’s electronic record, Quest holds License No. ROC147045, Class B. As of the date of the hearing, Quest’s license was current and in good standing, with one complaint pending against it. [4] See 32-1101 et seq. [5] See Arizona Attorney General Opinion I79-119 (citing Lyons v. Great American Insurance Company, 4 Arizona App. 576, 422 P.2d 724 (1967)). [6] 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). [7] See A.A.C. R2-19-119(B)(2). [8] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [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.”

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