ALJDEC decisions subject to certification as final

2011A-6550-ROC · Registrar of Contractors · 2012-06-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 11, 2012

APPEARANCES: Complainant was represented by corporate Members Kent Akbay and Raed Suleiman; Respondent was represented by corporate President Jason Ball.

WITNESSES: Ted Gerold, ROC Inspector Kent Akbay Richard Ball, Arizona Booth and Seating LLC Jason Ball

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action against Respondent alleging poor workmanship with regard to work done at Complainant’s frozen yogurt shop. The Citation and Complaint also alleges that Respondent aided and abetted an unlicensed contractor and contracted while the license was suspended or inactive. Respondent does not deny that its license was suspended at the time of the job. Respondent otherwise answered the complaint by stating that it is willing to do corrective work if given access to the property. This tribunal entered the complaint file received from the Registrar of Contractors (Registrar or ROC) into the record, along with Complainant’s Exhibit A. Testimony was presented from the witnesses listed above. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding violations and recommending sanctions. FINDINGS OF FACT 1. Respondent is the holder of License No. L-60.266792-C, a specialty commercial contracting license issued by the Registrar. The license authorizes Respondent to operate as a finish carpenter for commercial projects. 2. Complainant owns and operates a frozen yogurt shop. On August 13, 2011, Complainant hired Arizona Booth and Seating LLC (“Arizona Booth”) to fabricate and install custom furniture and fixtures in the frozen yogurt shop, as evidenced by a written contract attached to the ROC complaint filed by Complainant against Respondent. Arizona Booth is a former ROC license holder (License No. 214392), whose L-60 finish carpentry license expired on January 1, 2009.[1] Arizona Booth does commercial millwork for shops like the one Complainant owns. 3. Richard Ball, Managing Member of Arizona Booth, testified that Arizona Booth hired Respondent as a subcontractor to do some of the work. He testified that there was a written agreement between Arizona Booth and Respondent, but Respondent did not submit that agreement into evidence. 4. Administrative notice is taken of Respondent’s prior license record as reflected on the ROC’s public website on June 28, 2012. That prior record shows that Respondent has held the license since July 2010 and that the license was automatically suspended for lack of bond from August 11, 2011 to December 6, 2011. This was during the time that Respondent worked on Complainant’s job. 5. After Complainant filed a complaint about workmanship, Inspector Ted Gerold inspected the jobsite on December 20, 2011, and found the following items that needed correction: 1) Toppings bar lower refrigerator access door chain broken/loose. 2) Cove base bottom right of front door counter not secure. 3) The foot rests of bar stools #2 and #3, counting right to left, are loose. 4) 3 plastic bin drawers are broken. 5) The laminate seam on the picture frame above the yogurt machine is not filled properly. 6) The seams on the corion [sic] bar top, south wall of store, should not be visible.

He issued a Corrective Work Order (“CWO”) dated December 27, 2011, containing the six items listed above. He also listed two items that he inspected but found not to need correction: 7) a seam on the lower face of the toppings bar; and 8) damage to bin drawers, front face of toppings bar, and rear trash cabinet that he could not determine the cause of.[2] The next day, December 28, 2011, he issued an amendment to the CWO stating that item 4 (damaged plastic bin drawers) should have been included in item 8 as a “no action” item. 6. Inspector Gerold testified that Complainant filed an addendum to the complaint and, on February 1, 2012, he performed another inspection to look at LED lights underneath a translucent counter. The allegation was that 9) the under counter LED lights did not work.[3] However, the malfunction could not be demonstrated at that time. On June 8, 2012, Inspector Gerold performed a prehearing inspection and observed the malfunction. He also observed that no corrective work had been performed on any of the items. Complainant’s representatives confirmed that Respondent had not been given access to do any corrective work. 7. Inspector Gerold testified that it was difficult to determine Respondent’s scope of work without seeing the contract between Respondent and Arizona Booth. He testified that his understanding was that only portions of the work in the contract between Arizona Booth and Complainant were Respondent’s responsibility. The record also shows that Complainant was not informed that Arizona Booth had subcontracted work out to Respondent. Complainant did not know of Respondent’s existence until just before the complaint was filed. 8. Inspector Gerold also testified that the “aiding and abetting” charge in the Citation and Complaint should be dismissed. He stated that he first recommended citation of that violation due to the lack of license for Arizona Booth, but that he had been informed after the issuance of the Citation and Complaint that, as a materialman or manufacturer, Arizona Booth can enter into contracts like the one with Complainant as long as the installation is subcontracted out to a licensed contractor and is not performed by Arizona Booth. He could not give a legal citation upon which that ruling is based. 9. Finally, Inspector Gerold testified as to item 6 that if the bar top material is Corian, then no seam should be visible. But, if it is some other material, a visible seam is acceptable. 10. Richard Ball testified that Arizona Booth manufactured the bar top and that the material was not Corian. This was verified by the description of the countertops in the contract between Arizona Booth and Complainant. Also, he testified that Arizona Booth was responsible only for “seating” and Respondent had been hired to install the fixtures and do “cabinetry.” He testified that Item 3 regarding the bar stool foot rests is the responsibility of Arizona Booth, not Respondent. 11. Without a copy of the written contract between Arizona Booth and Respondent, it is difficult to determine any limits to the scope of Respondent’s work. Furthermore, Respondent did not inform Complainant of its duties on the job, or even that Respondent was a separate entity from Arizona Booth. Because of this lack of notice to Complainant and lack of documentation in the record, this tribunal finds that Respondent’s workmanship was effectively intertwined with Arizona Booth’s workmanship on this job and Respondent is responsible for workmanship as to all facets of the job. This ruling applies only to workmanship and not to any contractual disputes that may exist between Complainant and Arizona Booth. 12. Jason Ball, Respondent’s principal and Richard Ball’s nephew, testified that he was unaware that his license bond had lapsed and his license was suspended in August 2011. He did not become aware of it until early December 2011, when he immediately obtained a new bond, after which the suspension was lifted. 13. Kent Akbay, Complainant’s principal, admitted at hearing that Respondent was not given an opportunity to make corrections because Complainant had lost trust in Arizona Booth. He described in his testimony the reasons for the lost trust. They have to do with alleged lack of responsiveness and timeliness by Arizona Booth. These reasons, however, raise contractual issues between Complainant and Arizona Booth that are not within the scope of this hearing. There is no record that Respondent was unwilling to perform corrective work. 14. The greater weight of credible evidence supports Inspector Gerold’s conclusions. CWO Items 1, 2, 3, 5, and 9, as described above, are in need of correction by Respondent. CWO Items 4, 6, 7 and 8 have not been shown to be in need of correction by Respondent. 15. Complainant submitted an estimate from another contractor in support of its request for a monetary award rather than an order for correction.[4] However, the evidence does not support a finding that Respondent should be precluded from an opportunity to correct the workmanship problems that exist. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[5] Further, the standard of proof at hearing is by preponderance of the evidence.[6] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint.[7] Complainant has met that burden with respect to several of the alleged violations. 2. The Citation and Complaint alleges violations of A.R.S. § 32- 1154(A)(3) by way of A.A.C. R4-9-108 (prohibiting poor workmanship) and A.R.S. § 32-1154(A)(23) (requiring compliance with a CWO). The poor workmanship allegation is supported by the evidence. However, Respondent was not allowed access to comply with the CWO. Therefore, that allegation is not supported by the evidence. 3. The Citation and Complaint also alleges violation of A.R.S. § 32- 1154(A)(18) (prohibiting contracting under a license that is suspended or inactive). The evidence shows a violation of that provision. 4. Finally, the Citation and Complaint alleges violation of A.R.S. § 32-1154(A)(10) (prohibiting aiding and abetting unlicensed contracting). Inspector Gerold recommended dismissing that allegation. He could not state the legal basis for that opinion, but the Administrative Law Judge believes it is based on the exemption for materialmen and manufacturers found in A.R.S. § 32-1121(A)(4), which exempts from licensure “[a]ny materialman, manufacturer or retailer who furnishes finished products, materials or articles of merchandise and who does not install or attach such items. . . .” Arizona Booth falls into a strict reading of that exemption, even though it subcontracted part of the work, including installation, out to Respondent in the same way that a licensed contractor would. Based on that, the Administrative Law Judge does not find a violation of A.R.S. § 32-1154(A)(10). 5. The evidence does not support a monetary award in lieu of an opportunity for correction by Respondent. Respondent should be given a chance to correct the work. 6. The appropriate sanctions in this matter are (1) suspend Respondent’s license unless and until Respondent has properly performed, or caused another to perform, correction of CWO Items 1, 2, 3, 5, and 9 as described above; and (2) impose a civil penalty of $500.00 on Respondent for operating while its license was suspended. RECOMMENDED ORDER IT IS RECOMMENDED that License No. L-60.266792-C, held by Ball Manufacturing, Inc., be suspended beginning the effective date of the Registrar’s Order until the Registrar receives written proof that Respondent, or another at Respondent’s expense, has performed correction of CWO Items 1, 2, 3, 5, and 9 as described above, and the Registrar of Contractors accepts such written proof. IT IS FURTHER RECOMMENDED that if Respondent provides such written proof on or before the effective date of the Registrar’s Order, the license suspension shall not take place. IT IS FURTHER RECOMMENDED that, along with the sanction provided above, Ball Manufacturing, Inc. pay a civil penalty of $500.00 to the Registrar of Contractors pursuant to A.R.S. §32-1154(E) for contracting while the license was suspended or inactive. Failure to pay the entire amount of the civil penalty on or before 30 days following the effective date of the Registrar’s Order entered in this matter shall result in the automatic revocation of Respondent’s license, effective on the 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 payment of any outstanding prior civil penalty is made.

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, July 2, 2012.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Administrative notice is taken of Arizona Booth’s prior license record as reflected on the ROC’s public website on June 28, 2012. That prior record shows that Arizona Booth’s L-60 license was suspended for non- renewal on January 1, 2008, and then expired one year later. [2] In the CWO, these items were numbered as “1” and “2” under a section for “No action is required.” They have been renumbered for this Decision. [3] The parties presented testimony about access to the LED lights. However, the added complaint was not about access, but about non-working lights. Therefore, the only relevant complaint about the LED lights is whether or not they are working properly. [4] Exhibit A. The estimate as a whole is broader than the scope of the CWO. [5] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [6] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [7] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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