PDF copy: ALJDEC decisions subject to certification as final
2012A-3467-ROC · Registrar of Contractors · 2013-08-05
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Pam Gulczynski No. 2012A-3467-ROC
COMPLAINANT -v-
License No. K-8.179638-D of ADMINISTRATIVE Enterprise Floors LLC LAW JUDGE DECISION
RESPONDENT
HEARING: February 1 and March 25, 2013 APPEARANCES: Complainant appeared and was represented by attorney Guy Bluff; Respondent appeared on February 1 through LLC Member Michael Rafi1 and attorney Kathy O’Quinn. No one appeared for Respondent on March 25. WITNESSES: Pam Gulczynski ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________ Complainant brings this action against Respondent alleging that Respondent
falsely advertised, overcharged her, and performed work outside the scope of its
license. Respondent denies the allegations.
This tribunal entered the complaint file received from the Registrar of
Contractors (“ROC” or “Registrar”) into the record, along with Complainant’s Exhibits
C1 through C45. Complainant was the sole witness. Based upon the entire record, the
Administrative Law Judge makes the following Findings of Fact, Conclusions of Law,
and Recommended Order finding a violation with respect to working outside the scope
of the license. Revocation of the license is recommended.
FINDINGS OF FACT
1 At the hearing on February 1, 2013, Michael Rafi identified himself to the tribunal as the Qualifying Party on the license. (2/1/13 Hearing Record at 0:01:27.) However, that statement was not true. Administrative notice is taken of Respondent’s prior license record as reflected on the Registrar’s public
Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826 1. Respondent is the holder of License No. K-8.179638-D, a dual (residential and commercial) specialty contractor’s license issued by the ROC. It authorizes Respondent to perform installation and repair of floor covering materials and
accessories. Tara Rafi is the Qualifying Party on the license.
2. In June 2012, Complainant responded to a “flyer” admitted into evidence as
Exhibit 5. Exhibit 5 is an advertisement entitled “CTW Flooring Discounters Summer
Specials!” At the bottom of the advertisement is a website address:
“www.CTWFlooringDiscounters.com” and “ROC#179638.” While that license number
is Respondent’s ROC license number, Respondent’s name does not appear on the
flyer/advertisement, only the name “CTW Flooring Discounters.”
3. Of particular note to Complainant was a box/coupon on the flyer stating
“Laminate Wood Flooring $2.99/SQ FT Reg. $7.99.” The flyer also advertised granite
countertops with free installation. Complainant testified that after contacting the
company on the flyer, a man who identified himself as “Tony Gevani” came to her
house to show her flooring product samples. She also went to a location that was a
large warehouse in order to look at the flooring selection. She was directed by “Tony
Gevani” to a certain area where flooring material that was within the $2.99 sale price was displayed. She testified that she picked out laminate flooring that had been shown to her at her home and that had been in the “sale area” of the warehouse. She also picked out tile for flooring in other areas of her home and material for granite countertops. 4. At hearing, Complainant testified that the person who introduced himself to her as “Tony Gevani” appeared before this tribunal as Michael Rafi. She also testified that she was never told the name “Enterprise Flooring” by Respondent. She always knew them as “CTW.” 5. On June 8, 2012, Complainant signed a contract with “CTW Flooring Discounters.”2 Again, Respondent’s license number appears on the contract, but not Respondent’s name. The description of work on the contract includes “wall to wall website on April 10, 2013. It shows that since November 2002, when the license was issued, Tara Rafi has been the Qualifying Party on the license. laminated floor” in specified rooms with a description of the product, and “wall to wall ceramic tile” in specified rooms. The contract gives a lump sum price of “$7,195.00” plus tax, which totaled “$7,816.82.” Complainant put down $4,000.00. The flooring
was then installed by “CTW.”
6. The contract does not state the dimensions of the project in square feet or
any other measurement. The “salesman” is identified on the contract as “Tony” and the
contract is signed for “CTW” by “Tony Gevani.”3
7. Complainant also paid “CTW” for, and “CTW” installed, granite countertops in
her home for $2,100.00.4
8. On July 11 and 13, 2012, both Respondent and “CTW” filed preliminary lien
notices against Complainant’s house for the remaining balance due on the flooring
contract: $3,816.82.5 Respondent then ran the amount on Complainant’s credit card
that was on file, which Complainant testified was an unauthorized transaction because
she was disputing the charge. In total, then, Complainant has paid the full contract
price for the flooring.6
9. None of the paperwork for Complainant’s project uses Respondent’s name.
The evidence shows that Respondent was operating under the name “CTW Flooring Discounters”7 and that Respondent performed the flooring and countertop installation at Complainant’s house under that name. 10. The evidence also shows that Michael Rafi (“Rafi”) presented himself to Complainant as “Tony Gevani,” which is a false name. Complainant testified that she discovered this when Rafi came to the jobsite and one of the workers referred to him as “Mike.” She told the worker that his name was Tony and the worker replied: “No. He is the owner. He is Mike.”8 Exhibit C-6. Id. Exhibits C-7, C-8, and C-9. Exhibits C-10 and C-11. The credit card company did not reverse the charge upon Complainant’s complaint. This evidence overwhelmingly shows that Respondent was operating under a name other than the name on the license. However, A.R.S. § 32-1154(A)(15), which prohibits that conduct, was not cited in the Citation and Complaint for this matter. 8 2/1/13 Hearing Record at 0:24:42—0:26:30. 11. Complainant testified at hearing that she believed that she was getting the laminated flooring for $2.99 per square foot. When she later calculated the square footage and compared it to the contract price, she testified that it does not come out to
$2.99 per square foot. This tribunal finds her calculation to be unreliable because it is
not clear how much of the $7,195.00 price was for tile.
12. Finally, Complainant submitted Exhibits C-27 through C-34, which are found
to be unreliable internet hearsay about Respondent’s character and are given no
weight.
CONCLUSIONS OF LAW
1. The burden of proof at an administrative hearing is generally upon a
complainant.9 Further, the standard of proof at hearing is by preponderance of the
evidence.10 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.11 Complainant has met that burden with regard to one of the allegations. 2. The Citation and Complaint alleges violations of A.R.S. § 32-1154(A)(9) (requiring completion of a contract for the price stated in the contract), A.R.S. § 32- 1154(A)(16) (prohibiting false, misleading, or deceptive advertising whereby a member of the public may be misled and injured), and A.R.S. § 32-1154(A)(17) (prohibiting operating outside the scope of a license). 3. The evidence does NOT show a violation of A.R.S. § 32-1154(A)(9). A.R.S. § 32-1154(A)(9) prohibits “Failure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.” Here, the project has been completed and the contract price to which Complainant agreed by signing the contract was $7,816.82. She has not paid more than that amount. Therefore, there is no violation.12 Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). Complainant’s argument that the contract price was $2.99 per square foot because she accepted the price stated in the advertisement is contrary to basic contract law. An advertisement is not an offer; rather, it is an invitation to make an offer. Restatement (Second) of Contracts § 26 cmt. b (1981) (“Advertisements of goods by display, sign, handbill, newspaper, radio or television are not ordinarily 4. The evidence does NOT show a violation of A.R.S. § 32-1154(A)(16). A.R.S. § 32-1154(A)(16) prohibits “False, misleading or deceptive advertising whereby any member of the public may be misled and injured.” Complainant makes two arguments
in an attempt to show a violation of that provision: 1) that the advertisement was
misleading because a name other than Respondent’s was not on it; and 2) that the
$2.99 per square foot price was false. Taking the second argument first, the premise of
the argument has not been shown. Complainant needed to provide evidence that
Respondent did not sell laminate wood flooring to anyone for $2.99 per square foot.
Complainant has not shown that proposition. Moreover, as to the first argument,
Complainant has not shown a violation of A.R.S. § 32-1154(A)(16) due to the wrong
name on the advertisement. While the Administrative Law Judge agrees that the wrong
name on the flyer could be misleading, no potential injury to the public has been shown
because the flyer does exhibit a valid ROC license number by which Complainant and
the public could find Respondent’s name, license status, and license history.
Therefore, Complainant has not shown a violation of A.R.S. § 32-1154(A)(16).
5. A.R.S. § 32-1154(A)(17) prohibits “Knowingly contracting beyond the scope
of the license or licenses of the licensee..” The evidence clearly shows that Respondent installed countertops in addition to flooring. Installation of countertops is beyond the scope of Respondent’s license. 6. In summary, the evidence shows a violation of only A.R.S. § 32-1154(A)(17). 7. Administrative notice is taken of Respondent’s prior license record as reflected on the ROC’s public website on April 10, 2013. That prior record shows that Respondent has held the license since November 2002 and has been disciplined several times. Respondent’s license was suspended on April 5, 2005. That suspension was lifted on May 19, 2005. Respondent’s license was suspended again on October 31, 2005. That suspension was lifted on November 22, 2005. Finally,
intended or understood as offers to sell.”). Thus, Complainant’s reliance on the flyer to set the terms of the agreement between the parties, rather than the written contract signed by both parties, is misplaced. Complainant may have a contract claim that is appropriate for civil court, but there is no violation of A.R.S. § 32-1154(A)(9) because she was charged no more than the amount she agreed to in the written contract. Respondent’s license was placed on disciplinary probation from September 24, 2010 to January 22, 2011. This is not a good record. 8. The appropriate sanction in this matter is revocation. Respondent did work
outside the scope of its license, has served four months of probation, and has had its
license suspended twice. Also, Respondent is dishonest in its dealings with the both
the public and the government, as evidenced by: a) Michael Rafi using a false name to
Complainant and signing contract documents with that same false name (“Tony
Gevani”); and b) giving false information as to his status as Qualifying Party to the
Administrative Law Judge at the February 1, 2013, hearing date. For these reasons,
the Administrative Law Judge finds that Respondent is a danger to the people of the
State of Arizona.
RECOMMENDED ORDER
IT IS RECOMMENDED that License No. K-8.179638-D, held by Enterprise
Floors, LLC, be revoked. 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 12, 2013. /s/ Eric A. Bryant Administrative Law Judge
Transmitted electronically to: William A. Mundell, Director Registrar of Contractors