ALJDEC decisions subject to certification as final

2011A-375-ROC · Registrar of Contractors · 2011-06-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 26, 2011, at 10:00 a.m. APPEARANCES: Complainants Joe and Sherry Kinchen appeared through Robert C. Kozak, Esq.; Respondent Palmer Custom Homes, Inc. appeared through Gary Allen Palmer, President. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT On December 27, 2006, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC228123, Class B for residential general contracting to Palmer Custom Homes, Inc. (“Respondent”). On or about September 26, 2008, the Registrar received a complaint against Respondent from Joe and Sherry Kinchen (“Complainants”) regarding Respondent’s construction of Complainants’ house at 4600 West Desierto Court, Prescott, Arizona. According to the complaint, the date of the parties’ contract was May 25, 2004, and Respondent completed construction on approximately December 19, 2006. The Registrar designated Complainants’ complaint as Case No. A09-0125. The Registrar assigned Case No. A09-0125 to its inspector, Cliff Frandsen, for investigation. Inspector Frandsen performed a jobsite inspection. On November 4, 2008, Inspector Frandsen issued a Corrective Work Order (“CWO”) that required Respondent to correct within 20 calendar days roof leaks and other water intrusion through various windows and doors and to repair collateral damaged caused by the leaks. Complainants did not request that the Registrar issue a citation against Respondent. On December 18, 2008, Inspector Frandsen sent a letter to the parties informing them that the complaint in Case No. A09-0125 was closed because Complainants had not requested a hearing. On August 25, 2010, the Registrar received a second complaint from Complainants regarding Respondent’s failure to correct the leaks and collateral damage caused by the leaks at their house. According to the complaint, Respondent last performed work at the house in December 2009. The Registrar designated Complainants’ second complaint as Case No. 2011- 375. Inspector Frandsen performed a jobsite inspection in Case No. 2011-375. On December 2, 2010, Inspector Frandsen issued a CWO that again required Respondent to correct within 15 calendar days roof leaks and other water intrusion through various windows and doors and to repair collateral damaged caused by the leaks. According to the Registrar’s record, on December 30, 2010, Respondent placed its license on inactive status. On January 11, 2011, Complainants requested a hearing in Case No. 2011-375. On January 21, 2011, the Registrar issued a Citation and Complaint against Respondent in Case No. 2011-375, charging violations of A.R.S. § 32- 1154(A)(1), (3), namely A.A.C. R4-9-108, and (23). Respondent’s president, Gary Palmer, filed a timely written answer to the Citation and Complaint in Case No. 2011-375, informing the Registrar that “I do not intend to challenge the complaint.” Mr. Palmer stated further that Respondent had filed a complaint in Case No. A09-0125[1] against J D Quality Roofing, Inc. (“J D Quality Roofing”),[2] Respondent’s roofing subcontractor on Complainants’ house, and that the Registrar should have determined that Respondent’s complaint against J D Quality Roofing was timely. Mr. Palmer finally stated that due to the current state of the economy, he did not have the resources to repair the leaks at Complainants’ house. The Registrar referred Case No. 2011-375 to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. A videoconference hearing was held from the Registrar’s office in Flagstaff on May 26, 2011. At the hearing, Mr. Palmer agreed with Complainants’ attorney that Respondent had not violated A.R.S. § 32-1154(A)(1),[3] that Respondent was unable to repair the roof leaks because the problems with the roof were too severe to correct. Inspector Frandsen testified that the leaks at Complainants’ house were from the windows in the living room, bathroom, and master bedroom, as well as from various locations on the roof. Inspector Frandsen testified that Respondent made numerous attempts to repair the leaks, but that all of Respondent’s attempts were unsuccessful.

CONCLUSIONS OF LAW The matter lies within the Registrar’s jurisdiction.[4] Complainants bear the burden of proof and must establish Respondent’s statutory violations by a preponderance of the evidence.[5] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[6] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[7] The inactive status of Respondent’s license does not deprive Complainants of their right to prosecute their complaint against Respondent or prevent the Registrar from determining the merits of Complainants’ complaint.[8] Because a general contractor is responsible for its subcontractors’ work, Respondent cannot avoid responsibility to Complainants for the leaks through the roof and windows at their house through a complaint against J D Quality Roofing. Respondent also cannot contest in this matter the Registrar’s decision that Respondent’s complaint against J D Quality Roofing was untimely. Therefore, Complainants established that Respondent violated A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108,[9] and (23)[10] in its subcontractors’ initial construction of the roof and windows and in its failure to comply with the December 2, 2010 CWO by repairing the leaks and collateral damage at Complainants’ house. Respondent’s inactive license status legally prevents it from attempting further repairs at Complainants’ house.[11] RECOMMENDED ORDER In view of the foregoing, it is recommended that on the effective date of the Registrar’s final order, the Registrar revoke License No. ROC228123, Class B previously issued to Respondent Palmer Custom Homes, Inc. It is further recommended that the Registrar not revoke Respondent’s license and, instead, close Case No. 2011-375 if on or before the effective date of the Registrar’s order, Respondent provides satisfactory written proof to the Registrar that it has paid Complainants Joe and Sherry Kinchen, and that they have accepted payment, of an amount of money that is sufficient to resolve the outstanding issues in their complaint in this case. 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, June 15, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The Registrar assigned Case No. A09-0125 to Complainants’ first complaint against Respondent. The record in this matter does not contain the case number that the Registrar assigned to Respondent’s complaint against J D Quality Roofing, Inc. [2] According to the Registrar’s public record, J D Quality Roofing holds License No. 169333, Class C42R for roofing shingles and shakes. On the date of the hearing, License No. 169333 was current and in good standing. [3] 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.” [4] See A.R.S. § 32-1101 et seq. [5] 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). [6] See A.A.C. R2-19-119(B)(2). [7] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [8] See A.R.S. § 32-1154(C). That statute 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 . . . .” [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.” [11] 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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