ALJDEC decisions subject to certification as final

2012A-2499-ROC · Registrar of Contractors · 2013-01-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 17, 2012, at 8:00 a.m. APPEARANCES: Complainant Loretta Greazzo appeared on her own behalf; Respondent Phoenix Custom Builders LLC appeared through Frank Stephen Cuculich, its qualifying party, member, and Chief Executive Officer. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. The Arizona Registrar of Contractors (“the Registrar”) issued License No. C-61.240995-R to Phoenix Custom Builders LLC (“Respondent”). 2. The Registrar received a Complaint from Loretta Greazzo (“Complainant”) against Respondent that alleged six specific complaints about its construction of a large patio cover at Complainant’s property at 7316 North 79th Avenue, Glendale, Arizona. 3. Complainant attached to the Complaint a copy of Respondent’s proposal that became the parties’ contract when Complainant signed it on September 14, 2011. The proposal provided Respondent’s name, business address, and license number, an estimated date of completion, a description of the work to be performed, and a total price of $5,800.00 for the job, with $2,900.00 down to start the job and $2,900.00 due upon completion, but did not advise Complainant of her right to file a complaint with the Registrar if she felt that Respondent had violated A.R.S. § 32-1154(A). 4. The Registrar assigned the Complaint to its inspector, Jim Dimond, for investigation. On May 25, 2012, Inspector Dimond performed a jobsite inspection. Complainant and Respondent’s customer service manager, Pete Deneni, attended the jobsite inspection. 5. At the May 25, 2012 jobsite inspection, Mr. Deneni on behalf of Respondent agreed to perform repairs to address Complainant’s specific complaints on or before June 8, 2012, and Complainant agreed that the Registrar could close her Complaint. 6. As a result of the parties’ agreement, Inspector Dimond did not issue a Corrective Work Order (“CWO”) but, instead, on May 31, 2012, sent a letter to the parties informing them that the Registrar was closing the Complaint. 7. On or about June 12, 2012, Complainant requested that the Registrar reopen her Complaint because Respondent had failed to perform any repairs to the patio cover. 8. Inspector Dimond sent a letter to the parties informing them that the Registrar had reopened the Complaint and scheduled a jobsite inspection on July 10, 2012. Complainant and Mr. Deneni on Respondent’s behalf attended the July 10, 2012 jobsite inspection. 9. On July 15, 2012, Inspector Dimond issued a CWO to Respondent that required it to perform certain corrective action within sixteen calendar days, in relevant part as follows: NOTE: AN ADDENDUM WAS USED TO REOPEN THIS COMPLAINT. ALL BUT ONE ITEM IS ADDRESSED WITH THE ITEMS OF ORIGINAL COMPLAINT. ADDENDUM ITEM 3 IS INCORPORATED AND ADDRESSED IN THIS CORRECTIVE WORK ORDER AS ITEM NUMBER 7.

Item 1- The patio rolled roofing they installed is lifting and ripping off the patio roof. This item has been corrected and no action is required of the contractor.

Item 2- Sloppy concrete footings they drilled in my concrete slab to support the patio cover. No action is required of the contractor at this time. As a result of item 9, if the footings are not in compliance with the City of Glendale requirements the contractor shall make the necessary corrections to gain compliance.

Item 3- They said they had to “remove” [bougainvillea] bush because the roots were lifting up concrete slab and it would make it worse especially because the privacy wall they were putting up was going to be there. They didn’t remove the bush they only cut it down [so] now it is growing again into the privacy wall. The contractor has removed the bush[;] however, they damaged numerous privacy wall slats in the process. Contractor is to correct the privacy wall in an appropriate manner.

Item 4- The gutter spout is facing towards the front of my house when they were to face it to the side (south) of the house because I told them I was putting gravel in the front and did not want water running off into the gravel causing gravel to wash away and weeds to grow. Contractor has corrected the direction of the emitter but has damaged a slat in the privacy wall and the gutter is not up against the fascia and therefore will not function as intended. Contractor is to correct the condition in an appropriate manner.

Item 5- Cracked beams. This is a normal condition for wood and no action is required of the contractor.

Item 6- Nails coming through roof. Numerous nails are in excess of 1/8th” projection and need ‘nipped’. Contractor is to correct the condition in an appropriate manner.

Item 7- (Addendum item 3) they did not repair the concrete correctly so that now it is not only more dangerous, they cracked the existing concrete. Contractor is to correct the condition in an appropriate manner.

The following items were added by the Inspector as administrative violations of Arizona state contracting laws (ARS 32-1154):

Item 8- The contract does not contain all the items required as set forth in ARS 32-1158.B. The contract does not contain the notice of a consumer[’]s right to file an ROC complaint as set forth in ARS 32- 1158.B.(9). Contractor is to correct his contract in an appropriate manner. (violation letter sent[).]

Item 9- The contractor constructed a patio cover without obtaining a permit from the City of Glendale in violation of ARS 32-1154.A.(2). Contractor is to obtain the proper permit from Glendale and comply with any Inspections and/or requirements set forth by the city. (Notification letter sent to the [C]ity of Glendale).

10. On or about July 16, 2012, Inspector Dimond sent a letter to Respondent notifying it that A.R.S. § 32-1158 required it to include certain information in its contracts with property owners in amounts of more than $1,000.00. 11. On or about August 3, 2012, Complainant requested a hearing because Respondent had not corrected any of the items on the July 15, 2012 CWO. 12. The Registrar issued a Citation and Complaint charging Respondent with 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. § 32-1158, and A.R.S. § 32-1154(A)(23). 13. Respondent filed a timely written answer to the Citation and Complaint that denied any statutory violations and affirmatively alleged that although Respondent had attempted to comply with the CWO, Complainant made false accusations, demanded work that was not included in the contract, and left a post-it note for Respondent at her house, instructing Respondent not to touch anything. 14. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 15. A hearing was held on December 17, 2012. Inspector Dimond testified. Complainant submitted three exhibits, including numerous photographs of the patio cover and related work, and testified on her own behalf. Respondent submitted seven exhibits and presented the testimony of Frank Stephen Cuculich, its qualifying party. Hearing Evidence 16. Inspector Dimond testified that he performed a prehearing jobsite inspection on December 11, 2012, that Respondent did not attend the prehearing jobsite inspection, and that none of the items on the CWO had been repaired. 17. Inspector Dimond testified that he performed a water test on the gutter (CWO Item No. 4), that Complainant pointed out two areas that leaked, and that there were numerous areas where water was coming down between the downspout and the roof. 18. Complainant testified that Respondent’s employee, Tom, informed her that because the vinyl gutter that Respondent installed was too warped to be repaired, Respondent would install an aluminum gutter. Complainant pointed out that Respondent’s written answer stated that “[t]he job was to provide and install a 24 x 22 patio cover to include rolled roofing and gutter system as well as include a privacy wall and aluminum gutters.” 19. Mr. Cuculich testified that although Respondent’s employees advised Complainant that a preexisting concrete slab should be replaced, she declined to pay for the replacement (CWO Item No. 7). 20. Complainant denied that any of Respondent’s employees had ever asked her for more money. Complainant pointed out that the employees’ written statements of the amounts that Respondent would charge Complainant for additional work were inconsistent. 21. Inspector Dimond testified that if a preexisting uplifted concrete panel would prevent Respondent’s project from complying with the Registrar’s standards, its contract should have stated, “Homeowner was offered replacement of panel, but declined” and Respondent should have required Complainant to initial the statement. Inspector Dimond testified that the CWO did not require Respondent to take any action with respect to the preexisting concrete panel that had heaved. Instead, Inspector Dimond testified that at the prehearing jobsite inspection, he saw that Respondent had taken appropriate action to extend the ramp by pouring additional concrete to eliminate a trip hazard, but that Respondent still needed to correct the poor finish on the concrete that it had poured. 22. Inspector Dimond testified that he called the City of Glendale on December 13, 2012, and confirmed that a permit was required for the project because Respondent replaced a light-weight aluminum patio cover with a wooden patio cover that had a large span (CWO Item No. 9). 23. Inspector Dimond testified that applicable code makes a property owner responsible for obtaining necessary permits, but that the contractor is responsible for informing the homeowner that a permit is required. Inspector Dimond testified that a contractor’s contract should either state, “Permit by others,” or include a line item for the permit. 24. Mr. Cuculich testified that Respondent’s employees Mr. Deneni, Adrian Vasquez, and Joel Bernal informed him that Complainant would not allow them access to perform repairs to comply with the CWO. Respondent submitted Mr. Deneni’s, Mr. Vasquez’s, and Mr. Bernal’s signed statements that Complainant did not allow Respondent access to perform the repairs that the CWO required. 25. Complainant submitted a photograph of her post-it note that stated, “PHX CUSTOM BLDRS DO NOT DO ANYMORE WORK WITHOUT CALLING ME FIRST,” and her telephone number. Complainant testified that she wrote the note because Respondent’s employee, Tom, looked at the work and said that the vinyl gutter was too warped to repair and that it needed to be replaced with an aluminum gutter, but that he had no tools to perform the work. Complainant testified that no one ever called her to arrange a time for Respondent to perform repairs. Complainant testified that her front yard, where the patio cover is located, is open and that Respondent could have performed repairs to comply with the CWO at any time. Complainant testified that all she wants is to have the patio cover repaired. 26. Complainant submitted photographs of the items that the CWO required Respondent to correct. Mr. Cuculich acknowledged that he was not aware of conditions at the jobsite and stated that because he has been undergoing treatment for cancer, he has been forced to rely on employees to run Respondent’s business. Mr. Cuculich testified that he has had to fire one of the employees whose statement Respondent submitted. 27. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on January 4, 2013. Such prior License record shows that Respondent’s License No. C- 61.240995-R was current, six complaints were pending against the license, and two complaints had been closed as resolved/settled/withdrawn. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[1] Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[2] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[3] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] Complainant established that Respondent built the patio cover without obtaining or advising her of the need to obtain a permit and inspections by the City Glendale’s building inspectors, in violation of A.R.S. § 32- 1154(A)(2).[5] Complainant established that Respondent failed to comply with the Registrar’s workmanship standards, in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108,[6] with respect to the damaged privacy wall slats (CWO Item No. 3), the gutter (CWO Item No. 4), the nails through the roof (CWO Item No. 6), and the poor finish on the concrete ramp (CWO Item No. 7). The evidence established that Respondent violated A.R.S. § 32- 1154(A)(13),[7] namely A.R.S. § 32-1158, because its contract did not inform Complainant of her right to file a complaint with the Registrar and provide the Registrar’s telephone number and website address.[8] Complainant established that Respondent failed to comply with the July 15, 2012 CWO. Respondent did not establish that Complainant refused to provide reasonable access for it to comply with the CWO. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(23).[9] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order, Respondent Phoenix Custom Builders LLC’s License No. C-61.240995-R be suspended until Respondent has remedied the statutory violations established in this case. It is further recommended that the Registrar not suspend Respondent’s License but, instead, close Complainant Loretta Greazzo’s Complaint in Case No. 2012-2499 if on or before the effective date of the Registrar’s Order, Respondent provides written proof to the Registrar and the Registrar accepts such proof that Respondent has remedied its statutory violations by doing all three of the following: (1) Respondent has obtained a permit from the City of Glendale for Complainant’s project, has obtained necessary inspections to comply with the permit’s requirements, and has corrected any work that the City of Glendale’s building inspector determined did not comply with applicable code; (2) Respondent has corrected in a professional and workmanlike manner the damaged privacy wall slats (CWO Item No. 3), the gutter (CWO Item No. 4), the nails through the roof (CWO Item No. 6), and the poor finish on the concrete ramp (CWO Item No. 7); and (3) Respondent has modified its contract form to comply fully with the requirements of A.R.S. § 32-1158(B). It is further recommended that the Registrar require Respondent to pay the sum of $250.00 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 30 days following the effective date of the Registrar’s Order, the Registrar shall 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, January 7, 2013. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: William A. Mundell, Director Registrar of Contractors ----------------------- [1] See A.R.S. §§ 32-1151 to 32-1169. [2] 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). [3] See A.A.C. R2-19-119(B)(2). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [5] 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.” [6] 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.” [7] 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.” [8] A.R.S. § 32-1158(B)(9) requires 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 to be in writing and to include the following information: 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. . . . [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.”

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