ALJDEC decisions subject to certification as final

2012A-4033-ROC · Registrar of Contractors · 2014-09-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 6, 2013, August 26, 2013, November 13, 2013, June 26, 2014, June 27, 2014, August 5, 2014, August 6, 2014, August 7, 2014, August 19, 2014, and August 20, 2014. The record was kept open until August 25, 2014, for the filing of written closing statements. APPEARANCES: Gary, Steve, and Denise Sladek were represented by their attorney, James P. Armstrong, Esq. Beitman Roofing, L.L.C. had been represented by its attorney, Michael Thal, Esq. until June 26, 2014, when it was represented by its general manager, Brian Beitman. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ FINDINGS OF FACT 1. On August 20, 2012, the Registrar of Contractors (“Registrar”) received a completed Complaint Form (“Complaint”) submitted by Gary Sladek, on behalf of himself, Steve Sladek, and Denise Sladek (“Complainants”) against Beitman Roofing, L.L.C. (“Respondent”) for work performed for Complainants by Respondent at Complainants’ commercial apartment units located at 6740 W. Montebello Avenue, Glendale, Arizona. The Registrar designated the Complaint Form as Complaint No. 2012-4033. 2. At the time of the filing of the Complaint, Complainants were the owners of Building Nos. 2, 3, 4, and 5. At the time of the hearing, Gary Sladek no longer had an ownership interest in any of those properties. 3. Respondent is the holder of License No. K-42.237480-D issued by the Registrar. 4. Complainants’ Complaint stated that the parties’ contract price was $69,934.00 and that Complainants had paid Respondent the sum of $57,861.00, with Complainants owing Respondent an outstanding balance of $8,714.00. 5. Complainants’ properties had sustained hail damage. The buildings had flat roofs on which water ponded. Complainants originally hired Roofing Professionals, L.L.C. (“Roofing Professionals”), a licensed roofing contractor, to install foam over the existing modified roofing. Complainants and Roofing Professionals entered into a contract based upon Complainants’ insurance claim. After Gary Sladek filed a Complaint against Roofing Professionals with the Registrar, it repaid Gary Sladek the full contract price paid. 6. Gary Sladek then hired Respondent to repair Complainants’ roofs. Gary Sladek and Respondent entered into two contracts: one for Buildings 2 and 3 and one for Buildings 4 and 5. 7. Respondent changed the pitch of the roofs by installing an over- framing system over the existing roofs and then appling a torch-on roof to each building. 8. The Complaint Form listed the following Complaint Items: #1. [B]uildings 2, 3, 4, and 5 repair front wall [where] holes are and reinstall roofing material so it attaches to wall #2 Buildings 2, 3, 4 and 5 reset all [air conditioners] 4x4 base across rippers because they are bending into the roof #3 [Buildings] 2, 3, 4 and 5 install webbing around mastic #4 Buildings 2, 3, 4, and 5 install proper brace (roof jacks) on all electrical feeds to air [conditioners] #5 Buildings 4 and 5 secure the back slants of the modified roof so they are secure and not excessively spongy #6 Buildings 2 and 3 remove roof and install roof to industry standards to address severe spong[i]ness and ugliness #7 Clean all [air conditioners] to remove elastomeric paint See attached private roofing inspection report on buildings for more detail See attached summary for a chronological list of events that have taken place from 10/05/11 [until] the present #8 - Reimburse out of pocket expenses

9. Gary Sladek signed the following certification in the Complaint Form under the declaration, “I declare, under penalty of perjury, that all information provided herein is true of my own knowledge. I further certify that all documents attached to this complaint are true and accurate copies of the original.” (Emphasis in the original). 10. Gary Sladek later amended the Complaint to include the following: “8. Buildings 4 & 5: remove and replace roof in accordance with Code and industry standard.”[1] 11. By letter dated October 2, 2012, from Gary Sladek to the Registrar, Complainants supplemented their Complaint Items as follows: We are adding the following corrective action additional items in this supplement:

9. Buildings 2, 3, 4 & 5: repair and/or seal all penetrations 10. Buildings 2, 3, 4 & 5: install missing granules as needed 11. Buildings 2, 3, 4 & 5: recoat surfaces with primer as needed 12. Buildings 2, 3, 4 & 5: repair buckled kicker; install missing kickers 13. Buildings 2, 3, 4 & 5: reattach roofing material and secure fasteners in accordance with industry standard 14. Buildings 2, 3, 4 & 5: remove and replace application of bare mastic 15. Buildings 2, 3, 4 & 5: install roof jack or pitch pan as needed 16. Buildings 2, 3, 4 & 5: address support structure under the air conditioners to address proper pitch, puddling water, and sponginess, to comply with Code, industry standard, workmanship, and manufacturer specifications, as appropriate 17. Buildings 2, 3, 4 & 5: repair all nails that are popping up into roofing materials 18. Buildings 2, 3, 4 & 5: properly support plywood (plywood often meets between rippers without support) to comply with Code, industry standard, workmanship, and manufacturer specifications, as appropriate 19. Buildings 2, 3, 4 & 5: properly support structure around all vents and pipes to comply with Code, industry standard, workmanship and manufacturer specifications, as appropriate 20. Buildings 2, 3, 4 & 5: properly secure structure of roof to repair existing warping, and prevent further warping to comply with Code, industry standard, workmanship and manufacturer specifications, as appropriate 21. Buildings 2, 3, 4 & 5: properly install roof structure to repair soft spots due to unknown causes

We are adding the additional non-corrective work items below, and seek a remedy for them as well:

22. Buildings 2, 3, 4 & 5: failure to do work for agreed upon price ($27,000) 23. Buildings 2, 3, 4 & 5: failure to provide material specifications upon request 24. Buildings 2, 3, 4 & 5: reimburse owner for reasonable costs of rework/repairs incurred due to contactor’s faulty work or lack of work 25. Buildings 2, 3, 4 & 5: failure to comply with A.R.S. § 32-1158, specifically: a. failure to include date on contract per A.R.S. § 32-1158(B)(3); b. failure to include estimated work date A.R.S. § 32-1158(B)(4); c. failure to include total dollar amount of contract inclusive of taxes A.R.S. § 32- 1158(B)(6); d. failure to state dollar amount of deposit A.R.S. § 32-1158(B)(7); e. failure to sign agreement A.R.S. § 32- 1158(B)(9); and f. failure to include statement regarding Registrar of Contractors, the complaint process, and ROC contact information A.R.S. § 32- 1158(B)(9). 26. Buildings 2, 3, 4 & 5: failure to pull a permit as the existing roof was changed from a flat roof to pitched roof, resulting in a structural change

As an alternative remedy to rework, we request the following:

27. Buildings 2, 3, 4 & 5: return of all monies paid so the roofing can be removed and replaced by alternative contractor.

(Emphasis in the original). 12. Complaint No. 2012-4033 was assigned to Mark Alyea, an ROC Investigator, for investigation. As a result of his jobsite inspection of Complainants’ properties, Investigator Alyea issued a Corrective Work Order dated October 31, 2012, that required the following remedial action by Respondent no later than 15 calendar days from the date of the Corrective Work Order: Contractor to correct by appropriate means the following:

This corrective work order will include all the four buildings, 2,3,4,and 5 at 6740 W. Montebello Ave. Phoenix, Az. 85303.

1.Correct the front parapet walls where the roofing material is not attached correctly on the top.

2.Reset all the H.V.A.C. bases. Base wood should be installed against the rippers that were installed.

3.Reinstall [granules] at all foot prints, and where imprints of five gallon buckets were set [down] on the roof, and any exposed roofing materials that are missing roof [granules].

No action required of the contractor for the following. 1.At the inspection I found that the roofs are not spongy. 2.It is not necessary for the contractor to clean off the H.V.A.C. units. He installed the paint in good customer service and was not compensated for this. 3.No permits were required for the four buildings, per the City of Glendale.

13. Upon further investigation, Investigator Alyea issued an Amended Corrective Work Order dated November 28, 2012, that provided for the following remedial work by Respondent no later than 20 calendar days from the date of the Amended Corrective Work Order: “4.Per City of Glendale, a permit was required to install a ripper system at the roofs of the four buildings.”

14. Pursuant to a letter dated January 2, 2013, from Complainants’ attorney, James Patrick Armstrong, Esq., to Investigator Alyea, Complainants requested that the following additional items be added to their Complaint: 28. Failure and refusal of Respondent to provide Complainant[s] the following information first requested on November 15, 2012:

1. What Respondent did as far as repairs and destructive testing on or about October 30, 2012 by providing written detail, per roof, and by location.

. . . .

29. Failure and refusal of Respondent to provide Complainant[s] the following information requested on November 20, 2012:

1. Any drawings of any roof or roofs as provided by Respondent to Respondent’s draftsman (Mr. Walth) or his agent, representative or registrant acting on behalf of Respondent;

2. Any drawings, specifications or diagrams prepared by Respondent’s draftsman (Mr. Walth) or his agent, representative or registrant acting on behalf of Respondent; and

3. Advance notice as to when Respondent and/or its draftsman (Mr. Walth) and/or a registrant will submit drawings to the City of Glendale, as the owner and/or owner’s representative asked to accompany Respondent to the permit office at the City of Glendale when the drawings are submitted.

. . . .

30. Failure and refusal of Respondent to provide the following information first requested on December 12, 2012:

1. A complete copy of what Respondent submitted to the City of Glendale.

. . . .

31. Failure and refusal of Respondent to provide the following information first requested on December 18, 2012:

1. A copy of the City of Glendale’s redline of Respondent’s submission to the City.

(Emphasis in the original).

15. By letter dated February 8, 2013, Complainants’ attorney informed Investigator Alyea that Complainants further amended their Complaint to include Complaint Item 32, which pertained to alleged water leaks at two of the buildings during the week of January 8, 2013. 16. On March 21, 2013, the Registrar issued a Citation and Complaint in Case No. 2012-4033 charging Respondent with violating the provisions of A.R.S. § 32-1154(A)(3), specifically A.A.C. R4-9-108, and A.R.S. § 32-1154(A)(23). 17. On May 3, 2013, the Registrar issued a Notice of Hearing in Case No. 2012-4033 notifying the parties that a hearing would be conducted before the Office of Administrative Hearings, an independent agency, “upon the charges made in the Citation and Complaint.” 18. Because Complainants did not move to amend the charged Citation and Complaint, any issues except workmanship and compliance with the Registrar’s corrective work orders are outside the scope of this hearing. See A.R.S. § 41-1092.05(D). 19. Gary Sladek was the primary Complainant who dealt with Respondent on the roofing projects. Denise Sladek, his sister, dealt with the financial aspects of the projects. 20. Respondent’s member and qualifying party is Jason Beitman, who testified that he had little participation on the subject roofing projects. Jason Beitman delegated Respondent’s scope of work to Brian Beitman, his father and general manager. 21. Gary Sladek and Brian Beitman negotiated the terms of two contracts for two buildings each.[2] 22. The evidence of record established that Respondent completed the two roofing contracts and that Complainants were satisfied with Respondent’s workmanship. After Complainants received payments for that work from their insurance carrier, Gary Sladek began to express concerns about workmanship to Respondent. 23. After the completion of the roofing project, the relationship between Gary Sladek and the Beitmans became vitriolic. 24. At the hearing, the following witnesses testified: Justine Cornelius, the Building Safety Manager at the City of Glendale; Investigator Alyea; Charles Sinclair, a roofer with S & R Roofing; Philip Coppola, the holder of a KB-2 contracting license; Brian Beitman; Gary Sladek; Jason Beitman; Randy Cason, an Investigator with the Registrar; Mark Walth, a draftsman; Chris Sosnowski, a registered structural engineer; Stephen Dudley, a Building and Safety official at the City of Glendale; Adam Venetis, a former plan reviewer at the City of Glendale; Charles Miller, a roofer who is not a licensed contractor; Don Haight from Roofing Professionals; Jessica Mitchell, who filled out the insurance claims for Respondent’s work to Complainants’ insurer; Marcie Berman, a previous customer of Respondent; Alex Mendelson, a previous customer of Respondent; Greg Nichols, a roofer who worked for Respondent on Complainants’ roofing projects; Kenneth Mooney, a roofer who worked on subject roofing projects; Craig Brown of Brown Roofing, a licensed roofing contractor; Steve Daley, a roofer who worked on the subject roofing projects; and Guy Phillips of Budget Mechanical, L.L.C., a licensed contractor. Complaint and Amended Complaint Items 1 to 32 25. Complainants failed to present credible evidence that Complaint Items to 5 do not comply with workmanship standards. 26. Complainants failed to present credible evidence that Complaint Item 6 does not comply with workmanship standards. On the contrary, there is credible evidence that the roofs are not spongy. 27. Complainants failed to present credible evidence that Complaint Item 7 does not comply with workmanship standards. On the contrary, there is credible evidence that Respondent is not responsible for removing paint from the air conditioners. 28. Complainants failed to present credible evidence that Respondent is responsible for reimbursing Complainants’ out-of-pocket expenses as alleged in Complaint Item 8.[3] Complainants failed to present any authority for this relief in this disciplinary proceeding. At the hearing, there was evidence that the parties are presently in civil litigation for monetary issues involving these projects. Therefore, Complaint Item 8 should more properly be addressed in the parties’ civil lawsuit. 29. As to the amendment labeled “8” in Gary Sladek’s letter dated October 2, 2012, Complainants failed to present credible evidence that Respondent should be responsible for removing and replacing the roofs for Buildings 4 and 5. 30. Complainants failed to present credible evidence that Amended Complaint Item 9 does not comply with workmanship standards. On the contrary, there is credible evidence that Respondent sealed all penetrations to comply with workmanship standards. 31. The evidence of record supports a finding that as to Amended Complaint Item 10, Respondent should be required to comply with the Amended Corrective Work Order to reinstall granules. 32. Complainants failed to present credible evidence that Complaint Items to 15 do not meet workmanship standards. 33. The evidence of record supports a finding that Respondent should be required to perform remedial work identified in Amended Complaint Item to address deficiencies in the support structures, as provided for in the Registrar’s Amended Corrective Work Order. 34. Complainants failed to present credible evidence that Amended Complaint Items 17 to 21 violated workmanship standards. 35. Amended Complaint Item 22 involves a monetary dispute. 36. Amended Complaint Item 23 alleges that Respondent failed to provide Complainants with material specifications when requested to do so. However, Complainants failed to present any credible statutory, regulatory, and/or contractual authority for requiring Respondent to comply with such a request. 37. Amended Complaint Item 24 seeks compensatory damages from Respondent. This issue should be addressed in the parties’ pending monetary civil litigation. 38. Amended Complaint Item 25 alleges that Respondent failed to comply with statutorily required minimum elements of a contract. However, the Registrar’s Citation and Complaint did not charge Respondent with violating the provisions of A.R.S. §§ 32-1154(A)(13) or 32-1158. Therefore, this issue is outside the scope of this disciplinary proceeding. 39. As to Amended Complaint Item 26, Respondent has obtained the required permit. However, the City of Glendale requires a special inspection of Respondent’s over-framing underneath the roofing. That has not been scheduled by Respondent. 40. Amended Complaint Item 27 seeks monetary damages from Respondent. This issue should be addressed in the parties’ pending monetary civil litigation. 41. Amended Complaint Item 28 alleges that Respondent refused to provide Complainants with information requested on November 15, 2012. However, Complainants failed to present any credible statutory, regulatory, and/or contractual authority requiring Respondent to provide such information. 42. Amended Complaint Item 29 alleges that Respondent refused to provide Complainants with information requested on November 20, 2012. However, Complainants failed to present any credible statutory, regulatory, and/or contractual authority requiring Respondent to provide such information. 43. Amended Complaint Item 30 alleges that Respondent refused to provide Complainants with information requested on November 15, 2012. However, Complainants failed to present any credible statutory, regulatory, and/or contractual authority requiring Respondent to provide such information. 44. Amended Complaint Item 31 alleges that Respondent refused to provide Complainants with information requested on December 18, 2012. However, Complainants failed to present any credible statutory, regulatory, and/or contractual authority requiring Respondent to provide such information. 45. As to Amended Complaint Item 32, Complainants failed to present credible evidence that Respondent’s workmanship caused water leaks at two of the buildings during the week of January 8, 2013. With the exception of one protruding nail that was repaired by Respondent, the weight of credible evidence established that water leaks that occurred at Complainants’ buildings after Respondent completed its work had been caused by deficiencies in the HVAC ductwork that allowed water penetration into the interior of the buildings, rather than penetrations through the roofs. Respondent’s Workmanship Issues 46. The evidence of record established that Respondent constructed over- framing on each roof to provide a pitch for the off-loading of water from the roofs. Respondent then applied a rubber torch-on roof to each building. 47. The evidence of record further established that once the City of Glendale received full and accurate information as to the scope of Respondent’s work, the City required a building permit for the over- framing but not for the roof work. By that time, Respondent had completed the roof project. 48. The City of Glendale issued the Building Permit Nos. 75245 (Building 2), 75246 (Building 3), 75247 (Building 4), and 75248 (Building 5) on March 5, 2013. 49. On June 25, 2014, Investigator Randy Cason, who was assigned this matter after Investigator Alyea left the Registrar, performed a jobsite inspection to assess Respondent’s compliance with the Amended Corrective Work Order. Inspector Cason noted that Respondent had partially complied with the requirement that Respondent pull a permit, but noted that full compliance with that portion of the written directive required the completion of the special inspection by the City of Glendale to view Respondent’s over-framing. Investigator Cason could not inspect the over-framing because it was covered by the roofing. Investigator Cason noted that the remaining items in the written directive needed to be addressed by Respondent. The Amended Corrective Work Order 50. Although Complainants and the Registrar gave an extension for compliance with the Amended Corrective Work Order so that Respondent could obtain the required building permit for the over-framing before performing the remedial work, Respondent has not fully complied with that written directive. Respondent obtained the permits but Respondent has not scheduled the special inspection required by the City of Glendale. The remedial work has not been completed. 51. The weight of credible evidence established that Respondent failed to meet workmanship standards as set forth in the Registrar’s Amended Corrective Work Order. Roofing Product Issue 52. The parties’ contracts did not specify the brand of rubber roofing system to be installed. 53. Complainants failed to present credible evidence that Respondent did not install the rubber roofing system pursuant to manufacturer’s specification. 54. The parties’ contracts did not specify any type or length of a warranty covering Respondent’s workmanship. There was credible evidence that Respondent’s warranty was two years under A.R.S. § 32- 1155(A). Restitution Issue 55. Despite Gary Sladek’s certification in the Complaint that Complainants still owed Respondent an outstanding balance of $8,714.00, at the hearing he testified that Respondent had been overpaid and that Complainants had subsequently been damaged as a result of Respondent’s deficient workmanship. Complainants now seek restitution in the amount of $175,800.00, which they claim constitutes the total cost to remediate Respondent’s workmanship. 56. At the hearing, Brian Beitman testified that Complainants failed to pay the contract price in full for the two contracts. 57. The evidence of record established that the parties’ have a monetary dispute over the two subject projects that is presently being litigated in the Superior Court. Respondent’s License Status 58. Respondent’s License No. 237480 was revoked on April 4, 2014 by the Registrar. As such, Respondent may not perform or hire another properly licensed contractor to perform the required remedial work required by the Amended Corrective Work Order, including any activity concerning the permits and special inspection. Denial of Access Issue 59. The evidence of record established that both parties bear responsibility for unreasonable delays in accessing the subject property for Respondent’s completion of the Registrar’s written directive. City of Glendale Building Permit and Third Party Special Inspection 60. The Amended Corrective Work Order required Respondent to obtain a building permit for the over-framing work performed on the roofs. Respondent obtained the Building Permits on March 5, 2013. 61. The City of Glendale required a Third Party Special Inspector (“TPSI”) to perform a Special Inspection because the roof projects had been completed and covered with roofing without proper inspection of the over-framing by the City. The TPSI must be a certified registered engineer in the State of Arizona and in good standing with the Board of Technical Registration. Respondent was responsible for selecting the TPSI and scheduling the Special Inspection. 62. By email dated July 30, 2013, Respondent’s then counsel advised Complainants’ counsel that the TPSI selected by Respondent was Dave Jarol. 63. As of the date of the conclusion of the hearing, the Special Inspection had not been conducted. CONCLUSIONS OF LAW 1. Pursuant to A.R.S. § 32-1154(C), the revocation of Respondent’s contracting license does not deprive the Registrar of jurisdiction to impose disciplinary action upon that license for proven violations by Respondent of the charged statutes. 2. Pursuant to A.A.C. R2-19-119(B), Complainants have the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. See A.A.C. R2-19-119(A). 3. The Registrar’s Citation and Complaint did not charge Respondent with failing to complete a project for the price stated in the contract pursuant to A.R.S. § 32-1154(A)(9). Therefore, Complainants’ Amended Complaint Item 22 is beyond the scope of Citation and Complaint. This monetary dispute should be addressed in the parties’ pending monetary civil litigation. 4. Although A.R.S. § 32-1156.01 provides after a hearing, “an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee,”[4] based upon the evidence of record, the Administrative Law Judge concludes that a recommendation of restitution in this matter would be inappropriate. The evidence of record supports a conclusion that Respondent violated the provisions of A.R.S. § 32-1154(A)(3), specifically A.A.C. R4-9-108, by failing to perform the roofing projects in a workmanlike manner. Specifically, Respondent failed to comply with the City of Glendale building code requirement to obtain a building permit for the over-framing work performed on Complainants’ roofs and failed to meet workmanship standards as identified by the Registrar in the Amended Corrective Work Order.[5] 5. The evidence of record supports a conclusion that Respondent violated the provisions of A.R.S. § 32-1154(A)(23) by failing to comply with the Registrar’s Amended Corrective Work Order. Complainants and the Registrar extended the compliance period in the written directive to allow Respondent time to obtain the required Building Permits. The evidence of record established that both parties unreasonably interfered with access to Complainants’ rooftops. However, Respondent still has not had the Special Inspection completed after almost seventeen months from the date of the issuance of the Building Permits. Respondent should be assessed a civil penalty pursuant to A.R.S. § 32-1154(D). 6. Pursuant to A.R.S. § 32-1154(B) and (E), the Registrar may impose discipline on Respondent’s contracting license for the above statutory and regulatory violations. Since Respondent’s contracting license has been revoked, Respondent may not perform or cause to be performed the required remedial work set forth in the Amended Corrective Work Order. Therefore, revocation of Respondent’s contracting license in Case No. 2012-4033 is supported by the evidence of record. RECOMMENDED ORDER In view of the foregoing, it is recommended that Respondent’s License No. K-42.237480-D be revoked on the effective date of the Order entered in Case No. 2012-4033. It is further recommended, in addition to the above-provided license revocation, that Respondent pay the sum of $500.00 by certified check or money order to the Registrar by way of a civil penalty pursuant to A.R.S. § 32-1154(D). The failure by Respondent to pay the entire amount of civil penalty on or before 30 days following the effective date of the Order entered in Case No. 2012-4033 shall result in the automatic revocation of Respondent’s contractor’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. § 1101(A)(6), unless payment of any outstanding prior civil penalty is paid.

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 shall be forty (40) days from the date of the certification.

Done this day, September 15, 2014.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See Letter dated October 2, 2012, from Gary Sladek to the Registrar. Gary Sladek identified two Complaint Item 8 references in that letter and the Complaint. [2] At the hearing, Complainants examined Brian Beitman about the required statutory minimum elements of a contracting contract. However, the Registrar’s Citation and Complaint did not charge Respondent with violating the provisions of A.R.S. § 32-1158. [3] Although A.R.S. § 32-1156/01 allows the Registrar to award restitution under some circumstances, Complainants did not establish such remedy is appropriate. [4] Cf. Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 400, 406, 690 P2d 119, 125 (App. 1994) (Registrar may require contractor to return the price of solar heater where homeowner paid full price and, after several repair attempts, contractor could not make heater produce sufficient heat to make home habitable). [5] The Citation and Complaint did not charge Respondent with violating the provisions of A.R.S. § 32-1154(A)(2).

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