ALJDEC decisions subject to certification as final

2011A-3539-ROC · Registrar of Contractors · 2011-12-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 30, 2011, at 1:00 p.m. APPEARANCES: Complainant Wayne Anderson appeared on his own behalf; Respondent S and L Roofing, L.L.C. appeared through Stephen Hancock, its qualifying party and member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In October 2008, the Arizona Registrar of Contractors (“the Registrar”) issued License No. K-42.249954-D for dual roofing to S and L Roofing, L.L.C. (“Respondent”). Stephen Samuel Hancock is Respondent’s managing member and qualifying party. On or about June 3, 2011, the Registrar received a complaint from Complainant against Respondent, alleging seven specific deficiencies in Respondent’s construction of a metal roof at Complainant’s house at 5100 Primrose Circle, Flagstaff, Arizona. On July 5, 2011, the Registrar received Complainant’s request that a citation be issued against Respondent. On September 6, 2011, the Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(1), (2), and (3), namely A.A.C. R4-9-108. Respondent filed a timely written answer to the Citation and Complaint, denying any statutory violations. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A videoconference hearing was held in the Registrar’s Flagstaff office on November 30, 2011. Complainant submitted nine exhibits, testified on his own behalf, and presented the testimony of Bill Sanborn of All Services Unlimited, Inc., License No. KB-1.256310-D (“All Services”), Complainant’s general contractor for the construction of the house. Mr. Hancock testified on Respondent’s behalf and submitted one exhibit. Hearing Evidence On January 13, 2011, All Services and Respondent entered into a subcontract for Respondent to install the roof on Complainant’s house for a total contract price of $20,000.00, payable $10,000.00 down and $10,000.00 after Respondent completed the roof installation and All Services, Complainant, and the architect accepted its roof installation. The subcontract required Respondent to “carry on said work promptly, efficiently and at a speed that will not cause delay in the progress of [All Services’] work,” but did not contain a definite completion date. The subcontract defined Respondent’s scope of work as “to perform the work necessary or incidental to complete roofing at the Anderson House . . . in strict accordance with the Contract Documents,” but did not set forth the roofing components that Respondent was required to install. Shortly thereafter, Respondent received the $10,000.00 down payment and ordered the custom roofing metal panels from Sidewinders Supply in Show Low, Arizona (“Sidewinders”). Complainant asked Mr. Hancock to have Respondent’s crew install the felt underlayment for the roof, but to wait to install the metal panels until after All Services completed the stone chimney because Complainant feared that rocks from the chimney might damage the roof. Several snowstorms hit the Flagstaff area while the roof was only felted. At Complainant’s or All Services’ request, Respondent repaired the leaks that appeared after the snowstorms. Mr. Hancock testified that a felt underlayment was not intended to protect the house for the length of time that Complainant delayed Respondent’s installation of the metal roof panels. Because Respondent had not received more than $50,000.00 in payments on an unrelated job, its credit account at Sidewinders was in arrears. Sidewinders refused to fabricate the roof panels for Complainant’s house unless Respondent made payments on its account or paid cash for the panels. Because Complainant wanted to expedite the job, the parties agreed that Complainant would pay Sidewinders $5,667.00 for Respondent’s first order of panels for the roof. In May 2011, the chimney was complete and Complainant asked Respondent to install the roof panels. After Respondent’s crew started the installation, Mr. Hancock realized that Sidewinders had provided insufficient panels to complete the roof, either because he did not order enough panels or because Sidewinders did not properly process his order and fabricate enough panels. Respondent made a second order to Sidewinders to complete the roof on Complainant’s house. Although Complainant claimed that he paid Sidewinders $4,521.04 for the second order, he did not submit copies of any cancelled checks. Respondent submitted a copy of its check for $4,409.04 to Sidewinders that it eventually negotiated, although Respondent’s bank returned the check at least once for insufficient funds. Complainant’s house is octagonal. Mr. Hancock testified that Respondent’s crew completed all the felt underlayment and the panels on all but one side of the house. Complainant submitted photographs that showed what he alleged to be Respondent’s poor workmanship in cutting the panels. Mr. Hancock testified that the cut panels would be covered by a ridge-cap. Complainant testified that Respondent also installed sun-tube skylights incorrectly so that they leaked. Mr. Hancock testified that Respondent had never been allowed to correct the installation of the sun-tubes. Complainant testified that in August 2011, he lost faith in Respondent’s ability to install a weatherproof roof and terminated Respondent’s subcontract. Complainant testified that he paid $1,030.00 to Sidewinders for a third order of materials and $3,474.24 to Dale Burns of Droptine Rain Gutters to complete the roof.[1] Complainant requested that the Registrar order Respondent to pay a total of $28,042.24 to Complainant as a condition of allowing it to keep its license in good standing.[2] CONCLUSIONS OF LAW Because Respondent is a licensed contractor in Arizona, the Registrar has jurisdiction to determine whether Respondent violated the charged statutes in its contracting activities. Complainant bears the burden of proof to 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 subcontract did not contain a completion date, most of Respondent’s delay in installing the roof panels was attributable to Complainant’s instruction to Respondent to wait until after the chimney was completed, and in August 2011, Complainant terminated the subcontract and ordered Respondent’s crew to leave the jobsite. Under the circumstances, Complainant did not establish that Respondent abandoned its performance of the contract in violation of A.R.S. § 32-1154(A)(1).[6] Complainant also did not establish that Respondent departed from plans, specifications, or building codes when it partially installed the roof. Therefore, Complainant did not establish that Respondent violated A.R.S. § 32-1154(A)(2).[7] Construction is not a perfect art, and generally, a contractor should be afforded an opportunity to correct deficient workmanship and complete a project before the Registrar suspends, revokes, or otherwise disciplines its license for a violation of A.R.S. § 32-1154(A). Because Complainant did not allow Respondent to correct workmanship deficiencies or to complete the project, Complainant did not establish that Respondent performed its work in an unprofessional manner that did not conform to the Registrar’s or industry standards, in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.[8] With respect to the remedy that Complainant seeks, it appears that Respondent may be civilly liable to Complainant for consequential damages caused by delay due to Respondent’s acknowledged inability and later failure to order sufficient materials to complete installation of the roof panels quickly. Because the legislature has not empowered the Registrar to adjudicate or award consequential money damages,[9] Complainant must resolve his claim for consequential damages in a court of competent civil jurisdiction. / / / / 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 dismiss Case No. 2011-3539 against Respondent S and L Roofing, L.L.C.’s License No. K- 42.249954-D. 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 13, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] According to the electronic record, on or about September 20, 2004, the Registrar issued License No. K-45.199912 for dual sheet metal to Dale Burns doing business as (“dba”) Droptine Rain Gutters. A K-45 license does not permit the licensee to install metal roofs. Although on October 15, 2011, the Registrar issued License No. K-42.275399-D for dual roofing to Dale Burns dba Droptine Roofing and Rain Gutters, the record in this matter does not show that Mr. Burns was properly licensed when he completed installation of the roof on Complainant’s house. [2] Complainant’s claimed damages are comprised of many items, including the following: (1) $10,000.00 for the down payment to Respondent; (2) $5,667.00 for the first payment to Sidewinders; (3) $4,521.00 for the second payment to Sidewinders; (4) $1,030.00 for the third payment to Sidewinders; (5) $200.00 for additional felt underlayment; (6) $3,474.24 to Droptine Rain Gutters; (7) $1,000.00 for the rain gutters that have not been installed; (8) $250.00 to repair damage to the walls that the roof leaks caused; (9) $200.00 to repair damage to the windows that the roof leaks caused; (10) $200.00 for damage to the sun-tube skylights; (11) $1,000.00 for Respondent’s “gross over-purchase” of flashing and other roofing materials; and (12) $500.00 for the charge for two semi-trucks to deliver the second and third orders from Sidewinders. Complainant did not establish that he actually incurred most of these claimed expenses or explain why Respondent should be responsible for the entire cost of the roof. [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] A.R.S. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” [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)(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] See J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (App. 1984).

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