ALJDEC decisions subject to certification as final

2011A-5025-ROC · Registrar of Contractors · 2012-04-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 22, 2012, at 1:00 p.m. APPEARANCES: Complainant Felipa Alvarez appeared on her own behalf; Respondent All In Construction, L.L.C. dba Audubon Remodeling & Restoration appeared through Paul Brian Higgins, its member; Complainant’s son, Gilbert Alvarez, provided Spanish translation.[1] ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure The Arizona Registrar of Contractors (“the Registrar”) issued License No. KB-2.237389-D for dual residential and small commercial contracting to All In Construction, L.L.C. doing business as (“dba”) Audubon Remodeling & Restoration (“Respondent”). The Registrar received a complaint against Respondent from Felipa Alvarez (“Complainant”) regarding Respondent’s installation of roll roofing at a property that Complainant owned at 3924 West Cypress Street, Phoenix, Arizona (“the project”). Complainant did not complain about ponding on the roof. The Registrar assigned the complaint to its inspector, Rick Oelke, for investigation. Inspector Oelke issued a Corrective Work Order (“CWO”) that required Respondent within fifteen calendar days to perform certain corrective work. The Registrar issued a Citation and Complaint against Respondent, charging 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)(13), namely A.R.S. § 32-1124(B), and A.R.S. § 32-1154(A)(23). Respondent filed a timely written answer to the Citation and Complaint, denying any statutory violations and affirmatively alleging that it had performed the corrective work that the CWO required. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on March 22, 2012. Inspector Oelke testified. Complainant submitted five exhibits and presented the testimony of two witnesses: (1) Herself; and (2) Gilbert Alvarez, her son, who provided Spanish translation during the time that Respondent worked on the project and at the hearing. Respondent submitted six exhibits and presented the testimony of Paul Brian Higgins, its member. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website. Such prior License record reflects that on April 11, 2012, Respondent’s license was current and in good standing, three complaints were pending against the license, and two complaints had been closed as resolved, settled, or withdrawn. Hearing Evidence The house at 3924 West Cypress Street is a rental that had roll roofing. In October 2010, a hailstorm damaged the roof. Complainant had purchased a policy from State Farm to insure the house against storm damage. Respondent’s salesperson approached Complainant. As a result, on May 7, 2011, Complainant authorized Respondent to negotiate with State Farm for repair of the storm damage if Respondent paid her $500.00 to post a sign in the yard of the rental property. The authorization form that Complainant signed displayed Respondent’s license number, but the number was not preceded by the acronym “ROC.” The rental is an older house that had 1’ x 8’ roof decking. Inspector Oelke testified that many areas of the roof deck lacked a flat plain, causing the roll roofing that was applied over the deck to have a poor appearance and to allow ponding. Inspector Oelke testified that the current code does not allow a 1’ x 8’ base for roll roofing. Respondent recommended to Complainant and State Farm that either the roof deck be replaced before new roll roofing was installed or that a foam roof be installed instead of roll roofing. Both options would increase the cost of repairs. State Farm did not agree to pay to remediate the roof deck or to install foam roofing. Because the house was a rental and Complainant did not have funds to pay out-of-pocket to remediate the roof deck, she rejected Respondent’s proposals to replace the roof deck or to install a foam roof. Respondent submitted a proposal to State Farm to install 2,247.38 square feet of roll roofing, to remove and replace the drip edge, to remove and replace flashing on a pipe jack, to remove and replace an exhaust cap, to detach and reset an evaporative cooler, and to detach and reset a meter mast for overhead power on the roof.[2] State Farm used a computer program called Xactimate to generate a scope of work and to itemize the cost of the individual items in the scope of work. The Xactimate program is based on average regional costs to perform certain work, but does not consider specific conditions at the jobsite, materials that are currently available, or current construction practices. The scope of work that State Farm generated using the Xactimate program specified a hot mop application for the roll roofing. The CWO required Respondent to perform corrective work on four of Complainant’s six items of complaint, as follows: Contractor is required to complete all items included in the executed agreement, as defined by the State Farm Insurance dwelling claim 03-X910-189 or other executed supplement or change document. . . . .

1) Per State Farm Insurance dwelling claim 03-X910-189, replacement roofing was to be “roll roofing – hot mop application[.]”… Work has not been completed per the executed agreement, roll roofing – nail down application has been used. Contractor should complete the work as contracted.

2) IF the applied roofing is to remain in place, the material must be installed in a professional, workmanlike manner and in compliance with all applicable building codes and manufacturer requirements. Exposed nail heads must be sealed. Side lap areas are to be completed according to manufacturer requirements.

3) Roofing material applied appears to meet the specifications of the State Farm Insurance dwelling claim, however; application method of the material does not (see #1 above). No action required by the contractor at this time regarding the roofing material.

4) Drip edge has been installed. The State Farm Insurance dwelling claim does not specify the type or size of drip edge that is to be used. No action required by the contractor at this time regarding the drip edge material.

5) Per State Farm Insurance dwelling claim 03-X910-189, “R & R Flashing – pipe jack (3 EA)” and “R & R Exhaust cap – through roof (3 EA)” was to be included. Roof jacks observed were either re-used or missing. Contractor should complete the work as contracted and to comply with applicable building code requirements.

6) Per State Farm Insurance dwelling claim 03-X910-189, “Detach and re-set A/C unit” was to be completed. The A/C unit has not been re-set in a professional, workmanlike manner. Contractor should properly block, level, and secure the A/C unit to the roof.

Inspector Oelke testified that although the Xactimate scope of work specified a hot mop application, Respondent installed the roll roofing using a nail down application with cold adhesion. Inspector Oelke testified that a hot mop application results in 100% adhesion of the roll roofing to the roof deck and was more expensive than a nail down application. Inspector Oelke testified that hot mop applications currently are not commonly used in the Phoenix area. Inspector Oelke testified that due to movement in the roof deck, he saw that the roll roofing was bubbling. Inspector Oelke declined to testify that the bubbling on the new roll roofing evidenced deficient workmanship.

Complainant testified that after Respondent replaced the roof, she asked her brother, who performs roofing construction in Mexico, to inspect the roof. Complainant testified that she made the complaint because her brother told her that Respondent’s work on the roof was not proper. Complainant’s brother did not testify and the record does not include his qualifications. Inspector Oelke testified that if Respondent had used a hot mop application on the roof, the roof would have failed immediately or in the near future because the movement of the roof deck would have caused the roll roofing to tear. Mr. Higgins testified that if Respondent had used a hot mop application on the roll roofing, it would have failed within three months. Inspector Oelke testified that the CWO required Respondent to install roll roofing using a hot mop application, or to produce a written clarification or modification of the application method from State Farm. Mr. Higgins testified that after Complainant filed the complaint to the Registrar, State Farm refused to respond to Respondent’s communications on the claim. Mr. Higgins testified that the contract specified a hot mop application to obtain more money for the adjuster and for Respondent, but that the intent was to replace the roll roof with the same application as the previous roof, a nail down application. Mr. Alvarez testified that Mr. Higgins asked him for Complainant’s permission to contact State Farm for a new scope of work. Mr. Alvarez testified that Complainant did not grant permission to contact State Farm because he did not understand what a new scope of work meant. Inspector Oelke testified that because State Farm had done a disservice to both Complainant and Respondent by failing to specify an appropriate material or method of construction for the roof, he did not believe that Respondent should be held responsible for failing to repair the roof deck to make it comply with applicable code.[3] Inspector Oelke testified that he performed a prehearing jobsite inspection on March 21, 2012. Inspector Oelke testified that the roofing material had not been replaced and Respondent did not produce documentation to show that State Farm had modified the scope of work. Inspector Oelke testified that at the prehearing inspection, the exposed nail heads and seams were sealed, new roof jacks were installed, and the evaporative cooler had been reset and secured to the roof in a professional and workmanlike manner. Complainant testified that she was not satisfied with the roof and requested that the Registrar require Respondent to return all monies that she had paid it to repair the roof because she had lost confidence in its abilities. Mr. Higgins testified that Complainant still owed $1,636.99 for Respondent’s repair of the storm damage and that he knew that she had received monies from State Farm for all of the repairs. Respondent’s invoice to Complainant did not show its license number preceded by the acronym, “ROC.” CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[4] Complainant bears the burden of proof to 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] With respect to the roof deck that did not comply with code, the evidence established that Respondent called the deck to State Farm’s and Complainant’s attention, but they refused to authorize work to remediate the deck. Requiring Respondent to remediate the roof deck or to return any money would result in a windfall to Complainant. Under the circumstances, the Administrative Law Judge defers to Inspector Oelke’s opinion that Respondent should not be held responsible for installing the roll roofing over the roof deck that was not code compliant. With respect to Respondent’s failure to use the hot mop application on the roll roofing, as suggested by CWO Items Nos. 1 and 3, Respondent established that Complainant prevented it from contacting State Farm to modify or clarify the specification in State Farm’s scope of work. Respondent also established that State Farm’s scope of work intended to specify a nail down application, because a hot mop application would cause the roof to quickly fail. Therefore, Complainant did not establish that Respondent departed from specifications in violation of A.R.S. § 32- 1154(A)(2)[8] by failing to use a hot mop application. Respondent established that it complied with CWO Item Nos. 2, 5, and 6 by sealing exposed nail heads and seams, installing new roof jacks, and blocking, leveling, and securing the evaporative cooler to the roof in a professional and workmanlike manner. Therefore, Complainant did not establish that Respondent violated A.R.S. § 32-1154(A)(23)[9] by failing to comply with the CWO with respect these deficiencies in the nail down roofing or that Respondent violated A.R.S. § 32-1154(A)(3), namely, A.A.C. R4-9-108[10] by failing to perform these aspects of the nail down application of the roll roofing in a professional and workmanlike manner. Complainant did not complain about and the CWO did not expressly require Respondent to correct ponding on the roof. No evidence was presented to establish that if ponding occurred, how long the water took to evaporate. Therefore, Complainant did not establish that Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, by installing the roll roofing with a nail down application over an unlevel roof deck, resulting in potential ponding, or A.R.S. § 32-1154(A)(23) by failing to correct this condition. The record establishes that Respondent violated A.R.S. § 32-1154(A)(13), namely A.R.S. § 32-1124(B),[11] by not including its license number, preceded by the acronym “ROC,” on its invoice and not including the acronym “ROC” on its authorization form. 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 All In Construction, L.L.C. dba Audubon Remodeling & Restoration’s License No. KB-2.237389-D until Respondent provides written proof that is satisfactory to the Registrar that it has remedied its violation of A.R.S. § 32-1124(B). It is further recommended that the Registrar not suspend Respondent’s license and, instead, close Complainant Felipa Alvarez’s complaint in Case No. 2011-5025 if on or before the effective date of the Registrar’s final order, Respondent provides written proof that is satisfactory to the Registrar that Respondent has revised its website, contract form, invoice form, proposal form, business cards, letterhead, advertising, and any other documents used in its contracting business to comply with the requirements of A.R.S. § 32-1124(B). 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, April 11, 2012.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Although Mr. Alvarez is not trained or certified as a translator, Complainant requested that he be allowed to act as interpreter and Respondent did not object when it was given the opportunity to do so.

[2] Respondent also proposed, and State Farm authorized, performing work to repair other storm-related damage to the house, including priming and painting ornamental handrails, removing and replacing a mailbox, cleaning, patching, and painting stucco, removing and replacing a window screen, cleaning and painting fascia, and replacing a window. Complainant did not complain about Respondent’s repairs of those items. [3] Because Respondent replaced the old roll roofing with new roll roofing and did not change the method of roof construction, no permit was required for the project and no governmental authority ever inspected the new roof. [4] See 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] 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.” [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] 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.” [11] 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.” A.R.S. § 32-1124(B) requires that licensed contractors include their license number “preceded by the acronym ‘ROC’“ on “all written bids submitted by the licensee and . . . on all advertising, loan forms, lending institution forms, letterheads and other documents used by the licensee in the conduct of business regulated by this chapter.”

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