ALJDEC decisions subject to certification as final

2012A-4014-ROC · Registrar of Contractors · 2013-02-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 4, 2013, at 8:00 a.m. APPEARANCES: Complainant Lin Hammond appeared on her own behalf; Respondent Slide Lok Modular Storage Systems Inc. appeared through Brian Scott Strayer, an officer. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. According to the public website of the Arizona Registrar of Contractors (“the Registrar”), on or about June 10, 2007, License No. C34R.234309-R for residential surface preparation and waterproofing was issued to Slide Lok Modular Storage Systems Inc. (“Respondent”). 2. On or about January 5, 2008, Respondent contracted to apply a decorative coating over the floor of Complainant’s garage located at 15810 East Chicory Drive, Fountain Hills, Arizona, for a total contract price of $1,297.22.[1] The coating consisted of three layers: (1) A Polyaspartic base coat; (2) A second wet coat that consisted of polyvinyl acrylic color chips; and (3) After the second polyvinyl acrylic coat dried and was scraped smooth, a clear coat. When Respondent originally performed the work in January 2008, it was unable to apply the decorative coating to a small area on the right side of Complainant’s garage because the area was covered by cabinets. 3. The manufacturer of the decorative coating provides a limited lifetime warranty against abnormal yellowing, fading or color change of the clear sealer due to the effects of UV sunlight or overhead lighting and a 15-year warranty against the coating failing to bond to the concrete, peeling, flaking, chipping, or excess wear or the excessive loss of gloss of the clear coat.[2] The manufacturer does not provide an express warranty against the appearance of tire marks or imprints on garage floors to which the decorative coating has been applied. 4. At some point, Complainant removed the cabinets from her garage, leaving a bare spot. On or about February 12, 2011, Respondent contracted to install the first two layers of the decorative coating over the bare spot and to apply clear coat over the entire garage floor, for a contract price of $300.00.[3] The contract specifically stated that Respondent did not guarantee that the color or the patch would match the rest of the garage floor. 5. According to the Registrar’s public website, on or about July 1, 2011, Respondent’s License No. C34R.234309-R was suspended for non-renewal.

6. On or about January 4, 2012, Complainant filed a complaint with the Registrar against Respondent regarding its installation of the decorative coating, alleging that the coating had faded, that the coating had peeled off in areas, and that the repair that Respondent performed in 2011 was inadequate. The Registrar designated Complainant’s first complaint against Respondent as Case No. 2012-61. 7. The Registrar assigned Case No. 2012-61 to its inspector, Randy Cason, for investigation. Inspector Cason performed a jobsite inspection and on February 7, 2012, issued a Corrective Work Order (“CWO”) in Case No. 2012-61 that required Respondent to correct areas where it had failed to adequately scrape and make smooth the polyvinyl acrylic color chips on the patched area. Because Respondent’s license was administratively suspended for non-renewal, Inspector Cason’s February 7, 2012 CWO informed Respondent that it could not perform itself or subcontract to others the required corrective work. 8. The February 7, 2012 CWO in Case No. 2012-61 also contained the following findings: (1) The Registrar lacked jurisdiction to resolve Complainant’s complaint about the decorative coating that Respondent had installed in January 2008, because more than two years had passed since Respondent installed the coating; (2) Although the color of the patch did not match the remainder of the garage floor perfectly, the match was within the Registrar’s standards; and (3) The clear coat was not peeling and was within the Registrar’s standards. 9. According to the Registrar’s public website, on or about July 1, 2012, Respondent’s License No. C34R.234309-R expired. 10. The Registrar referred Complainant’s complaint against Respondent in Case No. 2012-61 to the Office of Administrative Hearings (“the OAH”), an independent state agency, for an evidentiary hearing. A hearing was held in Case No. 2012-61 before Administrative Law Judge (“ALJ”) M. Douglas on July 30, 2012. 11. Inspector Cason, Complainant, and Respondent’s officer, Brian Scott Strayer, testified at the July 30, 2012 hearing in Case No. 2012-61. Inspector Cason testified consistently with his February 7, 2012 CWO. 12. Approximately two weeks after the hearing in Case No. 2012-61, on or about August 15, 2012, Complainant filed the instant Complaint against Respondent for its allegedly poor workmanship in performing its February 12, 2011 contract. According to the Complaint, “[t]he product used on my garage floor has failed again. The product has peeled off of my floor. . . .” The Registrar designated Complainant’s second Complaint against Respondent as Case No. 2012-4014. 13. On or about September 19, 2012, Inspector Cason performed a jobsite inspection in Case No. 2012-4014. 14. On or about September 18, 2012, the Registrar issued an Order substantially adopting ALJ Douglas’s recommended decision in Case No. 2012-61, finding that Complainant established that Respondent violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108,[4] and A.R.S. § 32- 1154(A)(23)[5] by failing to make adequately smooth certain areas of the repair or to apply the finish coat properly over the repair, as well as finding administrative violations that did not involve workmanship.[6] As a result of Respondent’s violations of A.R.S. §§ 32-1154(A)(3) and 32-1154(A)(23), and in light of Respondent’s expired license, the Registrar’s September 18, 2012 Order in Case No. 2012-61 revoked Respondent’s License No. C34R.234309-R unless it performed certain corrective actions, including causing a properly licensed contractor of Complainant’s choice to fully comply with the terms of the February 7, 2012 CWO. 15. On or about September 24, 2012, Inspector Cason issued a directive in Case No. 2012-4014 that informed the parties that a citation would not be issued against Respondent for the following reasons: Complaint – Clear coat product used on my garage floor has failed again. Product has peeled off my floor.

The Complainant showed this Inspector, 4 areas on the right side of the garage floor that the Complainant had stated the clear coat finish had peeled away. Inspected all 4 areas in question; the surface felt smooth, did not feel any areas that felt rough as if the clear coat finish was missing. It appears that there is finish material on these areas, cannot determine how much material is there or if any had peeled away as stated by the Complainant.

The September 24, 2012 directive informed Complainant that she could request in writing further review of her Complaint in Case No. 2012-4014 and that if she had additional information to support her Complaint, she should submit it with her request for review. 16. On or about October 5, 2012, Complainant requested further review of her Complaint in Case No. 2012-4014. Complainant submitted photographs of tire imprints on her garage floor with her request for review. 17. On or about November 16, 2012, the Registrar issued a Citation and Complaint against Respondent in Case No. 2012-4014, charging a possible violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.

18. Respondent filed a timely written answer to the Citation and Complaint in Case No. 2012-4014, denying any statutory violation and affirmatively alleging that the Registrar lacked jurisdiction over the work that Respondent performed in 2008 and that the Registrar’s September 18, 2012 Order in Case No. 2012-61 barred Complainant’s Complaint in Case No. 2012-4014 under the legal principle of res judicata or collateral estoppel. 19. The Registrar referred Case No. 2012-4014 to the OAH for an evidentiary hearing. A hearing was held on February 4, 2013. Inspector Cason testified. Complainant submitted eight exhibits and testified on her own behalf. Respondent submitted eight exhibits and presented the testimony of two witnesses: (1) Mr. Strayer; and (2) Ricardo Ramirez, who since 1987, has installed decorative coatings on thousands of floors for various employers, although he is not listed on any contractor’s license. 20. On or about February 15, 2013, the Registrar issued an Order in Case No. 2012-61 that determined that Respondent had complied with all the requirements of the September 18, 2012 Order, with the exception of causing a properly licensed contractor of Complainant’s choice to fully comply with the terms of the February 7, 2012 CWO. The Registrar’s February 15, 2013 Order also determined that the contractor that Complainant had chosen to perform the repairs had refused and, instead, had submitted a bid to completely resurface Complainant’s garage floor, which was far beyond the scope of the February 7, 2012 CWO or the September 18, 2012 Order. Therefore, as an appropriate and equitable remedy, the Registrar’s February 15, 2013 Order required Respondent to pay Complainant restitution in the amount of $300.00 to avoid having its License No. C34R.234309-R revoked. Hearing Evidence in Case No. 2012-4014 21. Complainant testified that she went on-line to look up the Registrar’s workmanship standards for licensed contractors and found that exterior paint should not peel or deteriorate. Complainant testified that the dictionary definition of “deteriorate” was “[t]o diminish or impair in quality. To grow worse; degenerate. To weaken or disintegrate; decay.”[7] Complainant argued that the decorative coating that Respondent applied on her garage floor had weakened from the weight of vehicles and that as a result, the vehicles’ tires left imprints. 22. Mr. Strayer testified that the manufacturer did not warranty against tire marks appearing in a garage. Mr. Strayer testified that tire marks on a garage floor are not unexpected and that such a warranty would be foolish, like a kitchen painter providing a warranty against handprints. 23. Inspector Cason testified consistently with the September 24, 2012 directive. Inspector Cason testified that at the September 19, 2012 jobsite inspection, Complainant showed him tire tread marks in various areas of the floor. Inspector Cason testified that because Respondent had applied the color coat in the areas where Complainant showed him the tire marks more than two years before she filed the Complaint in Case No. 2012-4014, the Registrar lacked jurisdiction over those alleged deficiencies in the color coat. 24. Inspector Cason testified that he performed a prehearing jobsite inspection on January 31, 2013. Inspector Cason testified that he again inspected the clear coat in the garage and found it to be smooth and that in his opinion, the clear coat on Complainant’s garage floor was within the Registrar’s standards for epoxy floor finishes. 25. Inspector Cason testified that the only part of the garage floor that did not comply with the Registrar’s standards was a small area that Respondent had patched, which had a “clump” of material, as found in the Registrar’s September 18, 2012 Order in Case No. 2012-61. 26. Inspector Cason testified that at the January 31, 2013 prehearing jobsite inspection in Case No. 2012-4014, Complainant showed him a strip that was approximately 8” wide just outside the exterior garage door where it appeared the clear coat was gone and the decorative coating felt rough to the touch. Inspector Cason testified that the Complaint in Case No. 2012-4014 did not include the 8” strip on the driveway on the exterior of the garage, that he could not determine whether Respondent was responsible for the strip because it had been exposed to weather, and that the strip was beyond the Registrar’s two- year jurisdictional limit. 27. Inspector Cason testified that the rough 8” strip on the driveway on the exterior of the garage that he saw at his January 31, 2013 prehearing jobsite inspection had not been present at his September 19, 2012 inspection in Case No. 2012-4014. 28. Mr. Ramirez and Mr. Strayer testified that the rough 8” strip on the driveway outside the garage door looked as if someone had used a floor sander to remove the clear coat. Mr. Ramirez testified that the uniform width of the strip across the driveway indicated that the clear coat had not delaminated due to weather or exposure to the sun’s UV rays because there were areas of shade on the driveway. Mr. Ramirez testified that he had seen floors that had been worn by tires, but that the damaged area was too uniform to have been caused by tires. Mr. Ramirez testified that because sanding a finished floor is the first step in performing repairs, he has seen many floors that have been sanded and that all such floors looked like the 8” strip on the exterior of Complainant’s garage. 29. Respondent submitted photographs of the decorative coatings on the area outside Complainant’s garage door and on a similar floor that Mr. Ramirez had sanded. The decorative coating on the floor outside Complainant’s garage door looked like the similar floor that Mr. Ramirez had sanded.[8] / / / / CONCLUSIONS OF LAW A.R.S. § 32-1155(A) requires the Registrar to investigate a written complaint about any act by a licensed contractor that was committed within two years prior to the date that the complaint was filed. For complaints involving workmanship, the two-year limitations period commences when the contractor last worked on the project.[9] The timely filing of a complaint is a jurisdictional prerequisite.[10] Respondent applied the base and color coats to the small area from which the cabinet had been removed and recoated the entire garage floor on or about February 12, 2011. Complainant filed the Complaint in Case No. 2012- 4014 on August 15, 2012. Therefore, the Registrar has jurisdiction to determine whether Respondent’s patch on the small area and application of the clear coat to the garage floor was unprofessional or not workmanlike, in violation of the charged statute, A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. Respondent applied the color coats to the remainder of the garage floor and all three coats to the area outside the garage door on or about January 5, 2008, more than two years before Complainant filed her Complaint in Case No. 2012-4014. Therefore, the Registrar lacks jurisdiction to resolve Complainant’s complaints about the color the garage floor outside the small patched area, including the tire marks if they result from deficiencies in the color coat that Respondent applied in 2008, and the 8” rough strip outside the garage door. The Registrar also lacks jurisdiction to enforce contractual warranties that exceed the two-year limit set forth in A.R.S. § 32-1155(A). Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[11] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[12] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[13]

“‘Under the doctrine of res judicata, a judgment on the merits in a prior suit involving the same parties or their privies bars a second suit based on the same cause of action.’”[14] Complainant may not complain about the same deficiency in a successive complaint filed with the Registrar, even if the complaint is timely, in the hope that she will obtain a different result. Because Complainant raised and the Registrar resolved her complaint about the allegedly peeling and fading clear coat on her garage floor in Case No. 2012-61, it is barred by the doctrine of res judicata in her Complaint in Case No. 2012-4041. Even if Complainant’s complaint about the tire imprints was timely and not barred by the doctrine of res judicata, Complainant did not establish that tire marks evidence a workmanship deficiency in any of the three layers of the decorative floor coating or that the clear coat was deficient in any other respect. Even if Complainant’s Complaint about the rough area on the decorative coating outside the garage door was timely, Complainant did not establish that the roughness was due to Respondent’s poor workmanship. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order in this matter, Complainant Lin Hammond’s Complaint in Case No. 2012-4014 against Respondent Slide Lok Modular Storage System Inc.’s License No. C34R.234309-R shall be dismissed. 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, February 21, 2013.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See Respondent’s Exhibit D (Complainant’s complaint filed with the Registrar in Case No. 2012-61 with attachments) at 4.

[2] See Respondent’s Exhibit D at 5. [3] See Respondent’s Exhibit D at 3. [4] 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.” [5] 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.” [6] The Registrar found that Respondent violated A.R.S. § 32-1154(A)(13) by failing to include its license number preceded by the acronym “ROC” on the documents it used in its business, in violation of A.R.S. § 32-1124(B), and by failing to include in its February 12, 2011 contract with Complainant all the terms required by A.R.S. § 32-1158(B). [7] Complainant’s Exhibit 2. [8] Compare Complainant’s Exhibits 6, 7, and 8 and Respondent’s Exhibits B and C with Respondent’s Exhibits E, F, G, and H. [9] See Attorney General Opinion I79-088 (March 28, 1979) (citing Lyon v. Great American Ins. Co., 4 Ariz. App. 596, 599, 422 P.2d 724, 727 (App. 1967)). [10] See Harrelson v. Industrial Commission of Arizona, 144 Ariz. 369, 371, 697 P.2d 1119, 1121 (App. 1985) (untimely filed administrative claim deprived agency of jurisdiction to consider merits of claim); Attorney General Opinion I79-088 (Registrar must act on and issue citation in complaints that meet “jurisdictional requirements” of A.R.S. § 32-1155(A)). [11] 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). [12] See A.A.C. R2-19-119(B)(2). [13] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [14] Hawkins v. State of Arizona, Department of Economic Security, 183 Ariz. 100, 103, 900 P.2d 1236, 1239 (App. 1995) (quoting Gilbert v. Board of Medical Examiners, 155 Ariz. 169, 174, 745 P.2d 617, 622 (App. 1987).

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