ALJDEC decisions subject to certification as final

2010A-308477319-ROC · Registrar of Contractors · 2011-05-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 10, 2011, at 8:15 a.m. APPEARANCES: Complainants Lisa Fuhrman and Ray Piles appeared through T’shura-Ann Elias, Esq., Gregory & Elias, P.L.C.; Respondent José Lewis Bona dba Islander Construction appeared on his own behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In June 1992, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC093819, Class B for residential general contracting to José Lewis Bona doing business as (“dba”) Islander Construction (“Respondent”).

On or about January 4, 2007, the Registrar received a complaint from Lisa Fuhrman and Ray Piles (“Complainants”) regarding 36 specific alleged deficiencies in Respondent’s construction of Complainants’ residence at 2689 Plaza Hermosa in Lake Havasu, Arizona. The first specific item of complaint was that there was a moisture problem in the finished concrete floor. The Registrar designated Complainants’ first complaint against Respondent as Case No. L07-0312. The Registrar assigned Case No. L07-0312 to its inspector, Cliff Corlett, for investigation. Inspector Corlett performed a jobsite inspection and on January 17, 2007, issued a Corrective Work Order (“CWO”) to Respondent, requiring him to correct within fifteen days certain items of workmanship, including the moisture problem in the finished concrete floor. Complainants requested a hearing in Case No. L07-0312 and the Registrar issued a Citation and Complaint against Respondent. Respondent failed to file a timely written answer to the Citation and Complaint in Case No. L07-0312 and on September 13, 2007, the Registrar issued a Decision and Order. The Registrar deemed Respondent’s failure to file a timely written answer to be an admission of the charges contained in the Citation and Complaint, suspended Respondent’s license until the Registrar received proof that Respondent had appropriately rectified the items in Complainants’ complaint, and required Respondent to pay a $250.00 civil penalty.[1] On November 29, 2010, the Registrar received a second complaint from Complainants regarding Respondent’s repair of the finished concrete floor at their residence. According to the complaint, Respondent had last performed work at the residence on April 9, 2009. The Registrar designated Complainants’ second complaint against Respondent as Case No. 2010- [number redacted]. Inspector Corlett performed a jobsite inspection in Case No. 2010-[number redacted] and on December 14, 2010, issued a CWO to Respondent, requiring him within fifteen days to perform the following corrective action: Floor finishing system appears to have clouding/ discoloration rough areas and or finish failures. Respondent should determine cause and correct by appropriate methods. All work to be performed by properly licensed contractors.

(Emphasis in original.) On December 22, 2010, Respondent filed an “Appeal from Corrective Work Order and Request for Hearing” in Case No. 2010-[number redacted], alleging that Complainants were responsible for the finish on the concrete floor because they had hired and paid directly three different contractors to finish the concrete floor, including the last contractor to work on the floor, Extreme Measures. Complainants requested a hearing and on January 14, 2011, the Registrar issued a Citation and Complaint in Case No. 2010-[number redacted] charging Respondent with violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9- 108, (10), and (23). Respondent filed a timely written answer to the Citation and Complaint in Case No. 2010-[number redacted], denying any statutory violations and making the same affirmative allegations made in his Appeal from Corrective Work Order and Request for Hearing. The Registrar referred Case No. 2010-[number redacted] to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. A hearing was held in Case No. 2010-[number redacted] via videoconference from the Registrar’s office in Lake Havasu City on May 10, 2011. Inspector Corlett testified. Complainants submitted eleven exhibits and presented the testimony of two witnesses: (1) Complainant Lisa Fuhrman; and (2) Jim Roundtree, a former contractor in Washington and Arizona[2] who had inspected the floor. Respondent submitted one exhibit and presented the testimony of three witnesses: (1) Himself; (2) Lazaro Cardenas, the qualifying party and president of L H C Construction, Inc. (“L H C”),[3] Respondent’s concrete subcontractor who poured the slab at Complainants’ residence; and (3) Gary Cox, Respondent’s on-site supervisor for the construction of Complainants’ residence. According to the Registrar’s electronic records, on April 4, 2011, Respondent’s license was suspended by operation of law for lack of bond.

Hearing Evidence in Case No. 2010-[number redacted] On or about August 23, 2004, Respondent contracted to construct Complainants’ new residence on Tract 231513, Block 02, Lot 16, later assigned the address of 2689 Plaza Hermosa in Lake Havasu, Arizona, for a total contract price of $354,395.00. The construction specifications incorporated into the contract required Respondent to install carpeting in all bedrooms, the sitting room, and hallway and to install tile in the bathrooms. Respondent did not contract to install any flooring in the remaining areas of the house. Complainants planned to personally install gridlines on the concrete slab that Respondent constructed and to install a finished concrete floor in the remaining approximately 2,500 square feet of their new residence. On or about November 15, 2004, Respondent’s subcontractor, L H C, poured the slab for Complainants’ residence using concrete that its supplier, Campbell Redi-Mix, delivered to the jobsite. L H C did not add water or any other substance to the concrete that Campbell Redi-Mix delivered. After the slab was poured, Respondent and its other subcontractors constructed Complainants’ residence. At Complainants’ insistence, Respondent kept the concrete covered in the areas where Complainants planned to install a finished concrete floor. Ms. Fuhrman testified that Respondent used roofing paper with petroleum in it to cover the floor and that she could see tire marks in the dining room and office where Respondent or its subcontractors had driven a bobcat across the concrete floor. After Respondent constructed the residence, Complainants hired some of Respondent’s laborers to clean the areas of the concrete where Complainants planned to install the finished concrete floor. Mr. Cox testified that the laborers that Complainants hired used excessive water to clean the floors and that after the floors were cleaned, Complainants used fans to dry the floors. Mr. Cox testified that concrete cures over 25 years. Mr. Roundtree testified that concrete cures over 99 years, when it starts to decompose. Both parties agreed that in most cases, concrete is sufficiently cured after 30 days to install most types of flooring. Complainants started staining the concrete floors at their residence in the office. After Complainants encountered some difficulty, at Complainants’ request, Respondent referred them to Arizona Decorative Concrete, L.L.C. (“Arizona Decorative Concrete”).[4] Complainants hired Arizona Decorative Concrete and in January 2006, Arizona Decorative Concrete applied a decorative finish to the remaining concrete floors at Complainants’ residence. By 2007, the finished concrete floors at Complainants’ residence showed a whitish residue and other deficiencies. On or about April 24 and April 27, 2007, Arizona Decorative Concrete performed two moisture tests, resulting in moisture readings of 10.4 lbs. of MVE[5] in the master bath and 7.0 lbs. of MVE in the entryway. According to the manufacturer of the moisture tests, rubber, solid vinyl, or wood flooring usually requires 3.0 lbs. of MVE or less for installation, but vinyl composition tiles only require 5.0 lbs. or less of MVE for installation. In 2007, the moisture levels of the floors at Complainants’ residence only allowed installation of carpet or tile flooring, not the finished concrete floor that Complainants desired. On or about September 5 and September 7, 2007, Arizona Decorative Concrete performed two more moisture tests, resulting in moisture readings of 9.4 lbs. of MVE in the master bath and 6.5 lbs. of MVE in the kitchen. Arizona Decorative Concrete advised Complainants that although the test results were lower, the results were still too high to attempt repairs to the finished concrete floor. After the Registrar issued the Decision and Order in Case No. L07-0312 that required Respondent to correct the finished concrete floors at Complainants’ residence, Respondent hired Southwest Technologies, Inc. (“Southwest Technologies”) to perform additional moisture tests. On or about October 8, 2007, Southwest Technologies measured moisture in various areas of the slab at Complainants’ residence at between 5.65 and 9.59 lbs. of MVE. Based on the results of the October 8, 2007 moisture tests, on December 7, 2007, Southwest Technologies issued a report to Respondent, in relevant part as follows: We . . . are unsure how the moisture vapors were trapped in the concrete. It may have been during the period of constructing of the home. In [the] last and early parts of 2004 and 2005 the Mohave Desert area was having it a “50 year” rainy season which may have contributed to the moisture build-up. The other reason may be that prior to acid staining the floor, it was cleaned using a large amount of water. It could have been that the floor was not adequately dry prior to staining. . . . .

Based on the results of testing, which includes past (verbal) and present conditions, it is concluded that the moisture is trapped within the concrete itself. The moisture has continued to drop over the past months at a very slow pace and we think it will continue to drop.

We recommend that areas of the floor that does [sic] not have tile or carpet be stripped either below the acid stain or maybe a light sanding of its sealer to allow the concrete to continue it [sic] hydration process. Various sealers are made now that will to [sic] allow the concrete to hydrate but at [a] slower rate and not allow the calcium chloride to penetrate or rise up through the concrete slab.

After the striping [sic] is complete or just allowing the floor to continue to hydrate [sic]. The floor should continue to be monitored over the next 4 to 6 months or longer until the proper moisture vapors are achieved and are consistence [sic] over a period of time.

In December 2007, and January 2008, Respondent stripped the sealer from the finished concrete floors at Complainants’ residence. On or about March 30, 2009,[6] Respondent signed a contract for Extreme Measures Construction (“Extreme Measures”) to polish and repair the finished concrete floors at Complainants’ residence for a total contract price of $10,000.00. Complainant Mr. Piles also signed the contract. Extreme Measures is not a licensed contractor in Arizona. Complainants paid Extreme Measures $7,500.00 and Respondent paid Extreme Measures $2,500.00 for the job. After Extreme Measures polished and repaired the finished concrete floor in Complainants’ residence, the appearance of the floor deteriorated and Inspector Corlett issued the December 14, 2010 CWO, quoted supra at Finding of Fact No. 7. Mr. Roundtree testified that he inspected the slab at Complainants’ residence and that in his opinion, L H C’s workmanship on the slab was “one of the better jobs” that he had seen. Mr. Roundtree testified that excess moisture was causing minerals to come up as the concrete cured, resulting in a white haze and other flaws in the finished concrete floor. Mr. Roundtree testified that to repair the floor, the house may need to be torn down, the slab repoured, and the house rebuilt, or that Complainants would have to accept flooring that was different from the finished concrete that they wanted. Mr. Bona argued that Respondent was not responsible for the poor appearance of the floor because it did not add anything to the concrete that Campbell Redi-Mix provided for the slab, was not involved in Complainants’ installation of the finished concrete floor, and did not contract with Extreme Measures. Mr. Bona testified that it never met Extreme Measures before he signed the contract and that he only signed the contract because Extreme Measures “doesn’t like to deal with homeowners.” CONCLUSIONS OF LAW The administratively suspended status of Respondent’s license does not preclude Complainants from pursuing their administrative remedy nor preclude the Registrar from conducting this disciplinary proceeding.[7] This matter lies within the Registrar’s jurisdiction.[8] Complainants bear the burden of proof and must establish Respondent’s statutory violations by a preponderance of the evidence.[9] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[10] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[11] Because the Registrar’s default Decision and Order in Case No. L07-0312 finding Respondent to be responsible for the moisture problem in the concrete floor was not appealed or set aside, Respondent is precluded from arguing in this matter that events that occurred before the complaint was filed in Case No. L07-0312 rendered it not responsible for the floor.[12]

Complainants established that Respondent contracted with Extreme Measures to comply with the Registrar’s CWO in Case No. 2010-[number redacted] and that Extreme Measures did not repair the floor in a professional and workmanlike manner. Therefore, Complainants established that Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108,[13] (10),[14] and (23).[15] With respect to the remedy, the suspended status of Respondent’s license currently prevents him from performing any corrective work or hiring others to perform corrective work to avoid discipline against his license.[16] RECOMMENDED ORDER In view of the foregoing, on the effective date of the Registrar’s final order, it is recommended that the Registrar revoke License No. ROC093819, Class B previously issued to Respondent José Lewis Bona dba Islander Construction. It is further recommended that the Registrar not revoke 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 satisfactory written proof to the Registrar of either one of the following: (1) Respondent has reinstated his license and repaired in a professional and workmanlike manner the finished concrete floors at Complainants’ residence; or (2) Respondent has resolved Complainants’ complaint to the Registrar in Case No. 2010-[number redacted] through payment of a financial settlement that Complainants have accepted. 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, May 23, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The record in this matter does not contain the proof that Respondent submitted to the Registrar in Case No. L07-0312 to establish that it had corrected the specific workmanship deficiencies or proof of its payment of the civil penalty. According to the Registrar’s electronic record, the Registrar did not discipline Respondent’s license as a result of the admitted contracting law violations in Case No. L07-0312. [2] According to the Registrar’s electronic records, Mr. Roundtree is listed as qualifying party and an officer or member on the following three licenses: (1) License No. ROC190203, Class B for residential general contracting that was cancelled on December 12, 2008; (2) License No. ROC191301, Class B-2 for commercial general contracting that was cancelled on April 12, 2007; and (3) License No. ROC231222, Class B-2 for general small commercial contracting that was placed on inactive status on April 6, 2010. [3] According to the Registrar’s electronic record, L H C holds License No. ROC173191, Class KB-2 for dual residential and small commercial contracting. [4] In July 2003, the Registrar issued License No. ROC187223, Class K-5 for dual concrete resurfacing to Arizona Decorative Concrete. In November 2007, the Registrar issued License No. ROC239290, Class K-9 for dual concrete to Arizona Decorative Concrete, and in December 2007, License No. ROC187223 was cancelled. [5] The record in this matter does not contain the words that the acronym “MVE” stands for. The formula for the result explains that the number quantifies the moisture emission over a 1000 square foot area in a 24-hour period after the testing materials were applied. Both parties accepted the accuracy and significance of the test and measurement. [6] The record in this matter is not clear about why more than a year elapsed between the times that Respondent stripped the floors and Extreme Measures contracted to repair the floors. Other contractors may have attempted to repair the floor, or the parties may have wished to allow additional time for the floor to hydrate, or some combination thereof. [7] See A.R.S. § 32-1154(C), which 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 . . . .” [8] See A.R.S. § 32-1101 et seq. [9] 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). [10] See A.A.C. R2-19-119(B)(2). [11] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [12] In any event, Respondent is responsible for the quality of the materials, including the concrete that it obtained from Campbell Redi-Mix and used to construct Complainants’ residence. Respondent may make a claim for contribution against Campbell Redi-Mix in a court of competent jurisdiction. [13] 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.” [14] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]iding or abetting a licensed or unlicensed person to evade this chapter, knowingly combining or conspiring with a licensed or unlicensed person, allowing one’s license to be used by a licensed or unlicensed person with intent to evade this chapter.” [15] 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.” [16] 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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