ALJDEC decisions subject to certification as final

2011A-6400-ROC · Registrar of Contractors · 2012-05-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 23, 2012, at 8:15 a.m. APPEARANCES: Complainant George Griffin appeared on his own behalf; Respondent John Jay Fox dba Fox Development appeared on his own behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure The Arizona Registrar of Contractors (“the Registrar”) issued License No. B.152891-R for residential general contracting to John Jay Fox doing business as (“dba”) Fox Development (“Respondent”). On or about November 7, 2011, the Registrar received a complaint from George Griffin (“Complainant”) alleging that Respondent abandoned its contract to repair structures that Complainant owned at 337 and 329 Hillcrest Trail in Forest Lakes, Arizona (“the project”) after Complainant paid Respondent $5,320.00 of the contract price of $10,675.00. Complainant also alleged that Respondent had used an unlicensed contractor to repair and reconstruct the deck. The Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(1) and A.R.S. § 32-1154(A)(10). Respondent filed a timely written answer to the Citation and Complaint, denying that it had abandoned the project and affirmatively alleging that Complainant told him “to get the hell off his property.” The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A videoconference hearing was held on April 23, 2012, from the Registrar’s office in Show Low, Arizona. Complainant submitted thirty exhibits and testified on his own behalf. Respondent testified on his own behalf. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website. As of May 10, 2012, such prior License record reflects that on April 4, 2011, Respondent’s license was suspended for lack of bond and remains suspended. One complaint is pending against the license. Hearing Evidence In January 2009,[1] Complainant joined the properties at 329 Hillcrest Trail and 337 Hillcrest Trail into a single parcel. Complainant planned to use the house at 337 Hillcrest Trail (“the main house”) as his vacation home and to renovate the smaller house at 329 Hillcrest Trail (“the guesthouse”) for his son. In August 2009, Coconino County Building Department Inspector Steve White issued a Correction Notice to Complainant for the structures on the combined parcel for repairs. Complainant obtained required permits for the repairs. On or about November 10, 2009, the parties signed a contract that required Respondent to perform the following work: (1) Constructing a permanent foundation for and installing four augers at the corners of the shed adjacent to guesthouse for electrical service; (2) Repairing the deck around the guesthouse to comply with building code; (3) Fixing the post on the street staircase at the guesthouse; (4) Connecting the existing decks on the south side of the guesthouse; (5) Replacing one set of stairs at the guesthouse; (6) Repairing the bathroom floor in the guesthouse; (7) Replacing the glass in the back door of the guesthouse; (8) Removing the greenhouse debris from the area around the main house; (9) Replacing the roof of the shed that was next to the main house; (10) Stripping and staining the guesthouse and shed that was next to the guesthouse; and (11) Repainting the fascia board on the guesthouse. The contract included prices for each item of construction, for a total contract price of $10,675.00. The contract stated that Complainant wished the services to be performed as quickly as possible, but that the stain could not be applied if the outside temperature was below 50˚ Fahrenheit. On or about November 22, 2009, Complainant paid Respondent $1,720.00 to begin work on the contract. On or about January 14, 2010, Complainant paid Respondent $3,600.00 to begin repairing and reconstructing the deck. Because Complainant’s primary residence is in Phoenix, Arizona, he was not regularly onsite to monitor Respondent’s progress on the project. Several large winter storms hit Forest Lakes during the winter of 2010. In February 2010, Respondent informed Complainant that he could not start work on the project due to the snowy weather. In mid-April 2010, Leonard Sniff constructed the frame for the deck. Respondent acknowledged that Mr. Sniff is not a licensed contractor or Respondent’s employee, but that Mr. Sniff is Respondent’s friend who works for him from time to time. In mid-April 2010, Respondent’s painting subcontractor, Prizm Painting, L.L.C., License No. K-34.248592-D (“Prizm”), began preparing the house and shed for repainting and painting the posts for the deck. On May 28, 2010, Complainant attempted to call Respondent to ascertain the status of the project. After Complainant was unable to contact Respondent, he called Mr. Sniff. Mr. Sniff informed Complainant that the stairs were in, but that there was a shipping problem with the Trex material that would be used to construct the deck.[2] In addition, Mr. Sniff told Complainant that Prizm needed to finish painting the posts for him to continue constructing the deck. On June 14, 2010, Respondent informed Complainant that Respondent could not complete the deck until Complainant paid for the painting. In response, Complainant repeated Mr. Sniff’s statements that a shipping problem and Prizm’s failure to paint the posts had delayed repair and reconstruction of the deck. Complainant also pointed out that Respondent had not issued an invoice for painting. On or about June 23, 2010, Complainant sent a letter to Respondent expressing concern about the lack of progress on the project, the problem in obtaining Trex, Prizm’s failure to completely paint the shed and guesthouse, and Respondent’s failure to provide invoices for Mr. Sniff’s and Prizm’s work. Complaint closed the letter by requesting that Respondent expedite the project. On July 1, 2010, Complainant sent via facsimile to Respondent a copy of his June 23, 2010 letter and requested to meet with Respondent. On July 6, 2010, Complainant received Respondent’s invoices for $1,350.00 for painting the shed and guesthouse and $611.00 for starting the connection of the deck and replacement of the deck posts. On or about July 9, 2010, Complainant traveled to Forest Lakes and took photographs of the project. Complainant saw that Respondent had made little progress and that many of the repairs that it had undertaken were deficient, including that Prizm had not stripped the guesthouse and shed, as the parties’ contract required, the paint that Prizm used was flat stain, rather than the gloss stain that Complainant had requested, the deck stairs that Mr. Sniff had constructed were narrower than the original stairs, and the former cement pad for the stairs was exposed and had rebar poking out of it. Complainant and Respondent met at the jobsite on July 11, 2010, to discuss Complainant’s dissatisfaction with the project. Respondent said that he would remedy the workmanship deficiencies and expedite completion of the project. Respondent told Complainant that Prizm would return on July 12, 2010, to complete its work to Complainant’s satisfaction. Complainant remained at the property in anticipation that Prizm would complete the painting portion of the project. However, Prizm did not return on July 12, 2010, to address Complainant’s concerns or to complete painting on the project. On July 24, 2010, Complainant sent an e-mail to Allan Bencomo of Prizm, requesting to meet with him because although Respondent had sent Complainant an invoice for the painting, he did not believe that the painting was complete. On July 27, 2010, Complainant met with Mr. Bencomo at the jobsite. Mr. Bencomo said that Respondent did not instruct Prizm to use gloss stain, but provided a verbal estimate to Complainant to repaint the guesthouse and shed. On July 29, 2010, Complainant informed Respondent that Prizm had given a verbal quote of $600.00 to repaint the guesthouse and shed with gloss stain and that this quote appeared to be the most cost-effective way to resolve the painting issues. Respondent said that he would consider Prizm’s proposal. On August 11, 2010, Complainant sent via certified mail a letter to Respondent regarding Complainant’s dissatisfaction with Respondent’s work at the project and difficulty communicating with Respondent. As a gesture of good will, Complainant enclosed his personal check to Respondent in the amount of $611.00 to cover the initial costs of replacing the staircase and connecting the decks. Complainant returned to the jobsite to monitor Respondent’s progress on the project. On or about August 16, 2010, Mr. Bencomo informed Complainant that Prizm’s subcontract with Respondent did not require stripping the guesthouse or shed or using gloss stain. Mr. Bencomo said that Prizm completed its subcontract and that Complainant should address to Respondent his failure to complete the work described in his contract with Complainant. On or about August 16, 2010, Complainant called to Mr. Sniff to inquire about his plans to complete the deck repairs. Mr. Sniff stated that he had no plans to complete the deck repairs and that he did not work for Respondent, but only helped him out from time to time. Mr. Sniff stated that Complainant should address his questions to Respondent. On or about August 16, 2010, Complainant returned to Phoenix and found on his answering machine a message from Respondent that Complainant’s complaints about the paint were “a bunch of horses—t,” that he did not want Complainant’s $611.00, and that he would send back the check and job permit. Respondent instructed Complainant not to call him or his “boys” again. On September 2, 2011, Complainant received from Respondent the key to the guesthouse, the original deck plans, and Complainant’s check for $611.00. In the meantime, Complainant contacted the Coconino County Building Department and arranged for Inspector White to inspect Respondent’s work on the project. On August 31, 2010, and September 7, 2010, Inspector White inspected the project and identified numerous code violations, some of which consisted of Respondent’s failure to obtain any inspections on the project. On September 6, 2010, Complainant signed a proposal in the lump sum of $9,540.00 submitted by Roger Beckett, Jr. dba Burnt Timber Construction, License No. KB-2.199808-D (“Burnt Timber”), for the following scope of work: Replace existing beams w/ 3 1/8” x 7 1/2” Glulamb [sic]

Replace 2x6 joist to comply w/ plans to correct indicated spans and centers

Fix all handrail up to code @ 36” height

Lag down all hadrail [sic] post w/ 1/2” lags

Bring stairs and stair-railing up to code

Pour 4’X4’ conrcete [sic] pad for stair landing, all up to code

Lag down ledger w/ 1/2" lags @ 32” OC

Replace 2”X8” bottom plate w/ Coconino County approved greenplate, app. 6pcs.

Satisfy code requirements for piers w/ straps and redheads to secure the deck

Install new trex [sic] decking (brown) according to plans @ app. 568 [square feet]

Replace bathroom floor sheetingin [sic] house w/ 3/4" sheets

Replace door glass piece

Lag down existing shed w/ augers(lags) [sic] on all corners for electrical service to be provided to the shed[3]

Burnt Timber and Complainant added to the scope of work the following items: (1) Removing of greenhouse debris from the main house’s yard and sealing water flooding area; (2) Replacing a small retainer wall at the main house; (3) Removing the concrete stair foundation at the guesthouse; (4) Sanding and staining the deck railing at the main house; (5) Sanding, priming, and painting the window frames and fascia on the main house; and (6) Repairing the screen doors at the main house. Complainant eventually paid Burnt Timber a total of $10,000.00. Complainant requested that the Registrar require Respondent to reimburse the full $10,000.00 paid to Burnt Timber. Respondent requested that the Registrar dismiss the complaint because Complainant did not file the complaint until more than a year after Burnt Timber had completed the project and Respondent never had a chance to perform repairs or complete its work. 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] A.R.S. § 32-1155(C) provides that if a contractor is not afforded an opportunity to inspect his work or if the contractor’s work has been modified, “[t]he registrar shall not issue a citation for failure to perform work in a professional and workmanlike manner or in accordance with any applicable building codes and professional industry standards . . . .” (Emphasis added.) The Registrar’s Citation and Complaint did not charge Respondent with performing work that did not comply with the professional industry standards, in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108,[8] or applicable code requirements, in violation of A.R.S. § 32- 1154(A)(2).[9] Therefore, A.R.S. § 32-1155(C) does not bar Complainant’s complaint. Complainant established that Respondent abandoned the contract in violation of A.R.S. § 32-1154(A)(1)[10] when it returned Complainant’s check, key, and plans for the project, instructed Complainant not to contact Respondent or its subcontractors, and refused to complete the project. Complainant also established that Respondent violated A.R.S. § 32- 1154(A)(10)[11] by using Mr. Sniff, who was neither a licensed subcontractor nor Respondent’s employee, to repair and reconstruct the deck at Complainant’s project. The legislature has not authorized the Registrar to adjudicate or award money damages.[12] The Registrar may resolve contractual disputes if such resolution is ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution under A.R.S. § 32- 1156.01 if a proven statutory violation can no longer be remedied by corrective work.[13] Respondent cannot remedy its abandonment by completing the project because his license is administratively suspended and Burnt Timber completed the project. Restitution in a regulatory context is similar to the criminal context, where a defendant may be required to pay restitution to reimburse his victim for any economic loss that the defendant’s conduct caused.[14] “‘Economic loss’ means any loss incurred by a person as a result of the commission of an offense. . . .”[15] Complainant did not establish that he is entitled to an award of the monies that he paid to Burnt Timber. First, because Complainant did not pay Respondent $5,355.00 of the contract price that would have been due if Respondent had completed performance of the contract,[16] this amount must be deducted from the monies that Complainant paid to Burnt Timber to complete the project. Second, the items on Burnt Timber’s contract did not exactly correspond to the items on Respondent’s contract.[17] Burnt Timber’s contract did not include itemized prices. Therefore, Complainant did not establish that Burnt Timber only performed the work necessary to complete Respondent’s contract and did not provide evidence that would allow calculation of the costs to repair and complete the items that were the same on both contractors’ contracts. RECOMMENDED ORDER It is recommended that as discipline for Respondent’s proven violations of A.R.S. §§ 32-1154(A)(1) and 32-1154(A)(10), on the effective date of the final order in this matter, the Registrar revoke Respondent John Jay Fox dba Fox Development’s License No. B.152891-R. 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 10, 2012.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Dates for specific events are based on Complainant’s credible testimony, Exhibit C4 (“Chronological List of Events”), and supporting documentation submitted at the hearing. Respondent did not dispute at the hearing Complainant’s testimony about the dates or sequences of events. [2] Trex is the trademarked name for a manufactured material that looks like wood but is designed to withstand weather without sealing or treatment. [3] Registrar’s electronic file, Complaint Submission at page 69/76. [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 A.A.C. R2-19- 119(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)(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] 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.” [10] 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.” [11] A.R.S. § 32-1154(A)(10) 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.” [12] See J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (App. 1984). [13] See Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990). [14] Cf. A.R.S. §§ 13-603(C) and 13-804(A). [15] A.R.S. § 13-105(16). [16] $10,675.00 (contract amount) - $1,720.00 (November 22, 2009 payment) - $3,600.00 (January 14, 2010 payment) = $5,355.00 [17] For example, Respondent’s contract included installing a new roof on the shed at the main house and Burnt Timber’s contract included sanding and sealing the deck railing at the main house, sanding, priming, and painting the window frames and fascia at the main house, and repairing the screen doors at the main house. In addition, although some of the items in Burnt Timber’s contract apparently were required to comply with applicable code, it is not clear that they were included in Respondent’s contract.

----------------------- ()1237E~ž´µ½¾¿ÁÜÝ - < = > I J Ê Ë Ì ä å =MNfgj øìåÚìÔÊÔÊÔìå¿ìÔøÔøÔ¶ÔøÔ¤ÔøÔ›ÔøÔ?„xnhæ~ˆ@ˆþÿCJaJhÅ.ÿhæ~ˆ:?CJaJhæ~ˆ5?:?CJa Jhêoehæ~ˆ5?>*[pic]CJhÀÆhæ~ˆCJhówihæ~ˆCJhæ~ˆ5?>*[pic]CJhMhæ~ˆCJ[18]?jd[pic]hæ ~ˆU[pic]hówihæ~ˆ5?CJhæ~ˆCJ[19]?j25

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