ALJDEC decisions subject to certification as final

2012A-2111-ROC · Registrar of Contractors · 2012-11-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 14, 2012, at 8:00 a.m. APPEARANCES: Complainant Melody D. Simon appeared telephonically on her own behalf; Respondent Top Of The Hill Electric Inc. appeared through Keith Bernstein, its qualifying party and officer. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. The Arizona Registrar of Contractors (“the Registrar”) issued License No. C-11.236604-R to Top Of The Hill Electric Inc (FN) (“Respondent”). 2. The Registrar received a Complaint from Melody D. Simon (“Complainant”) alleging that Respondent had performed poor work and violated code when it had installed an electric line to the pool heater and had charged for, failed to install, and then removed a second chandelier from a house that Complainant owned at 5471 West Quail Avenue in Glendale, Arizona. 3. According to the Complaint, the parties’ contract was verbal. Complainant attached to her Complaint Respondent’s invoice #2686, dated November 7, 2011, in the amount of $2,000.00. The invoice did not show Respondent’s license number preceded by the acronym “ROC.” 4. The Registrar’s assigned inspector, James Hennessy, performed a jobsite inspection. On May 10, 2012, Inspector Hennessy issued a Corrective Work Order (“CWO”) that required Respondent to take certain corrective action within fifteen calendar days, in relevant part as follows: 1. Electric is suspect as it runs along ground in plastic conduit, and had two electricians look at the work and stated not to code. Note the Respondent did not pull a permit prior to installing the wiring and there are other probable code violations. Therefore the contractor is to pull permit [,] have any and all required inspections and make any and all required corrections ordered by the Building Official in the appropriate manner.

2. Two chandeliers were to be installed and second is not done and missing. At the time of the inspection it was determined that the two chandlers [sic] were installed, and the complaint is that the CTR per verbal contract was to give the Homeowner the old light fixtures not keep them.

3. Contractor verbally agreed that the wiring was to all be buried and wiring in garage was to go through the roof of the garage. Note the wiring runs along the stoop in the garage and out the wall under the step of garage side door, through the block fence wall and then again buried and to the pool heater. Although not able to confirm verbal agreement [because I was] not present during it, the way it is done there may be other code violations, and in this [CWO] item #1 states that the Respondent is to pull all required permits and have any and all require[d] inspections and make any and all required corrections ordered by the City Building Official in the appropriate manner.

5. The Registrar issued a Citation and Complaint against Respondent charging possible 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 32-1158, and A.R.S. § 32-1154(A)(23). 6. Respondent filed a timely written answer to the Citation and Complaint, denying any statutory violations. 7. The Registrar referred the matter to the Office of Administrative Hearings, an independent State agency, for an evidentiary hearing. 8. A hearing was held on November 14, 2012. Because Inspector Hennessy had retired from state service, the Registrar’s inspector, Jeff Wills reviewed Inspector Hennessy’s notes and testified regarding the Registrar’s standards and procedures. Complainant testified on her own behalf and submitted sixteen exhibits. Respondent’s qualifying party and officer, Keith Bernstein, testified on its behalf. Hearing Evidence 9. Complainant’s primary residence is in Merritt, British Columbia, in Canada. Complainant and her husband purchased the house on West Quail Avenue for their future retirement and for use as a vacation rental in the interim. 10. Complainant hired Brian Ostrum and Jason Pratte of Westwing Rentals to manage and maintain the rental. 11. In October 2011, Complainant and her daughter flew to Phoenix to meet with Mr. Ostrum about necessary repairs to the rental. On or about October 17, 2011, Complainant met with Mr. Ostrum and Mr. Pratte. Mr. Pratte brought Mr. Bernstein to the meeting to advise Complainant about running an electric line to a new pool heater and replacing lights at the rental. 12. Mr. Bernstein testified that he informed Complainant that a permit was required to run the electric line to the pool heater. Mr. Bernstein testified that because Complainant had time and budgetary constraints due to tenants who planned to move into the rental in November 2011, Complainant instructed him to perform the work without a permit. Mr. Bernstein testified that Complainant, Mr. Ostrum, and Mr. Pratte discussed the ramifications of proceeding without a permit.

13. Complainant testified that Mr. Bernstein never mentioned a permit and that in Canada, the contractor usually secures necessary permits. Complainant testified that because she was required to return to Canada to care for her two young sons and her husband, who has a demanding job, she left Arizona before Respondent completed the work. Based on Westwing Rentals’ employees’ assurances that Respondent had completed the work satisfactorily, Complainant paid Respondent in full. 14. Inspector Wills testified that in Arizona, generally it is up to the property owner or the owner’s agent to pull necessary permits. However, a licensed contractor should follow the rules and not perform work for which a permit is required unless a permit is posted on the jobsite. 15. Complainant testified that she hired Respondent to replace a chandelier that was a model that had been discontinued but that was still available at Home Depot. Complainant testified that although she instructed Mr. Bernstein to leave the fixture that Respondent removed at the property, she never saw it again. 16. Complainant submitted a product description for a Progress Lighting 3-light forged bronze chandelier that was available online from Home Depot at a price of $213.93. 17. Mr. Bernstein testified that he left the chandelier at the property for Complainant’s agent, Westwing Rentals. 18. Inspector Wills testified that if the parties’ contract is verbal, ascertaining the terms of the parties’ agreement is difficult. 19. In the spring of 2012, Complainant had a falling out with Mr. Ostrum and Westwing Rentals and prohibited them from coming onto the rental property. 20. On or about May 9, 2012, Mr. Bernstein sent a letter to Inspector Hennessy, informing him that Respondent’s agent had attempted to schedule repairs to comply with the CWO, but that Complainant had sent a text message to the agent, threatening to call the police if the agent set foot on the rental property. 21. Complainant testified that she would have allowed Respondent onsite to perform work to comply with the CWO. On or about May 10, 2012, Complainant sent a letter to Mr. Bernstein, requesting that he contact her to schedule repairs to comply with the CWO. 22. Mr. Bernstein testified that Respondent followed the scope of the parties’ verbal contract and that the work Respondent performed at Complainant’s rental was safe, even if he did not comply with code. He testified that he chose not to perform additional work at Complainant’s rental until the Registrar determined after the hearing what work was necessary. 23. Inspector Wills testified that he did not perform a prehearing jobsite inspection because Complainant informed him that another contractor had repaired Respondent’s work. 24. Complainant testified that because she needed the pool heater at the rental to be operational so that tenants could use the pool, in October 2012, she arranged for other contractors to repair Respondent’s work. Complainant submitted two invoices dated October 12, 2012, in the amounts or $2,602.34 to rerun the electrical line to the pool heater and $191.19 for the permit and related fees. Although the invoices did not identify the contractor who had issued them, Complainant testified that Wes Ramsey[1] performed the work and issued the invoices. Complainant also submitted a Service Proposal dated October 26, 2012, from Mr. Handyman of Deer Valley/Anthem/Carefree[2] in the amount of $393.46 to remove the conduit that Respondent had installed that due to Mr. Ramsey’s work, was abandoned. Complainant requested that the Registrar award her $3,486.99 in restitution.[3] 25. 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 November 29, 2012, Respondent’s License No. C- 11.236604-R was current, that Respondent’s license was suspended for lack of bond between June 28, 2011, and November 17, 2011,[4] and that one complaint was pending against the license. / / / / CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[5] Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[6] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[7] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[8] As Inspector Hennessy’s CWO noted and Inspector Wills testified, a licensed contractor is required to comply with all applicable codes and to avoid performing any work unless necessary permits are obtained. If the property owner is not willing to pay the additional costs to secure a permit and comply with applicable code, the contractor should decline the job. Mr. Bernstein acknowledged that a necessary permit was not obtained and that Respondent did not comply with applicable code. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(2)[9] and A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.[10] Mr. Bernstein acknowledged that Respondent did not comply with the CWO. Respondent did not establish that Complainant failed to provide reasonable access to allow it to comply with the CWO. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(23) by failing to comply with the Registrar’s directive.[11] Respondent’s Invoice #2686 to Complainant did not show its license number preceded by the acronym “ROC.” Therefore, Respondent violated A.R.S. § 32- 1154(A)(13), namely by violating A.R.S. § 32-1124(B).[12] Although Respondent’s contract with Complainant was for more than $1,000.00, it was verbal. Mr. Bernstein did not allege that Respondent verbally provided an estimated date of completion or informed Complainant of her right to file a complaint with the Registrar. Therefore, Respondent committed a second violation of A.R.S. § 32-1154(A)(13), namely by violating A.R.S. § 32-1158.[13] Complainant did not establish that Respondent misappropriated or lost the light fixture. Complainant did not establish that any health or safety issue required her to have the required corrective work performed a month before the hearing. The record does not establish that Complainant hired a properly licensed electrical contractor to correct Respondent’s work. Complainant’s desire to maximize her rental income does not justify an award of restitution. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order, the Registrar suspend Respondent Top Of The Hill Electric Inc.’s License No. C-11.236604-R until Respondent has modified the documents that it uses in its contracting business to comply with A.R.S. § 32-1124(B) and has conformed its contracting practices to the requirements of A.R.S. § 32-1158. It is further recommended that if on or before the effective date of the Registrar’s Order, Respondent provides written proof, and the Registrar accepts such proof, that Respondent has modified the documents that it uses in its contracting business to comply with A.R.S. § 32-1124(B) and that it has conformed is contracting practices to the requirements of A.R.S. § 32- 1158, no license suspension take place and, instead, Complainant Melody D. Simon’s Complaint in Case No. 2012-2011 be closed. 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 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. It is further recommended, in addition to the above penalties, that any continuation or restoration of Respondent’s contracting rights, whether or not probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of twelve months, including future renewal periods, in the amount of $500.00, such bond or deposit to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. § 32- 1152. Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two-year period following the above-provided twelve-month period and only if no claims are then pending. If Respondent fails to post the additional required surety bond/deposit on or before the effective date of this Order, Respondent’s C- 11.236604-R License shall be suspended until such bond or deposit is posted. 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, November 30, 2012.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The Administrative Law Judge has not located a Wes Ramsey on the Registrar’s public website. Mr. Bernstein testified that Mr. Ramsey was not licensed. [2] According to the Registrar’s public website, Big A Investment Group Inc. DBA: Mr. Handyman of Deer Valley Anthem Carefree holds License No. C- 62.263939-R. [3] Complainant calculated the restitution as follows: (1) $300.00 for the light fixture (including taxes, shipping, and installation); (2) $2,793.53 for Mr. Ramsey’s two invoices; and (3) $393.46 for Mr. Handyman of Deer Valley/Anthem/Carefree’s invoice. [4] Complainant alleged at the hearing that Respondent’s license was administratively suspended during the time it performed contracting work on her rental. However, because Complainant did not make that allegation before the hearing, the Registrar did not charge Respondent with a violation of A.R.S. § 32-1154(A)(18), which includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[c]ontracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.” [5] See A.R.S. §§ 32-1151 to 32-1169. [6] 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). [7] See A.A.C. R2-19-119(B)(2). [8] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [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)(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)(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.” [12] 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.” [13] A.R.S. § 32-1158(B) provides that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved after December 31, 2007 must be in writing and include the following minimum terms:

1. The name of the contractor and the contractor’s business address and the license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract. 9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar’s telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in ten point bold type. . . .

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