ALJDEC decisions subject to certification as final

2012A-4389-ROC · Registrar of Contractors · 2013-09-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 5, 2013, at 8:15 a.m. APPEARANCES: Caleb L Serrano and Catalina R Serrano (hereinafter “Complainants”) appeared through their attorney, Frederick M. Aspey, Esq., Aspey, Watkins, and Diesel, PLLC. Rayburn and Sons Inc. (hereinafter “Rayburn”) appeared through its Qualifying Party, Brian Lane Rayburn. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT Rayburn is the holder of License No. B.199018-R issued by the Registrar of Contractors. This is a residential matter where Complainants entered into a construction contract with Rayburn for the construction work on Complainants’ residence, including but not limited to replacing damaged wood, recoating the deck, redirecting water from the deck, and preventing future leaks in Complainants’ residence, for the total sum of $14,500.00. Complainants were dissatisfied with Rayburn’s workmanship and demanded that Rayburn properly correct its poor workmanship and complete the construction project. When Rayburn failed to comply with their demands, Complainants filed a formal Complaint against Rayburn with the Registrar of Contractors. Pursuant to the filing of the formal Complaint, an assigned Registrar Inspector, Rick J. Emry (hereinafter “Inspector Emry”), conducted an onsite inspection. Inspector Emry issued a written Corrective Work Order on October 2, 2012, directing Rayburn to perform designated corrective work on Complainants’ residence. The Corrective Work Order provided, in pertinent part, as follows: License #199018 issued to Rayburn and Sons Inc was suspended for Lack of Bond on 9-11-2012 and cannot do or sub-contract the following corrective work until the suspension is lifted

#1 - 2 Drainage pipes in basement are not sealed at the joints and cont to leak

Upon flooding the deck with water I observed that [the] northern most drain immediately began to leak a constant drip of water at the 90 degree elbow directly below the drain connection. Respondent shall correct by appropriate means using a properly licensed contractor.

#2 - Insulation has not been replaced or reinstalled on basement ceiling.

Several joist bays did not have insulation in them. Respondent shall correct by appropriate means using a properly licensed contractor.

#3 – Deck coating is 2 different colors … 1 lighter than the other. Note: Texture is dissimilar and groove detail is missing near the installed back door step Amended during Inspection.

The applied textured deck coating was blotchy throughout with varying shades of pink. The areas adjacent to all three drains as well as the area next to the step had a filled in appearance to the texture. The area near the step in particular was void of the 1” wide border edge that should have [run] parallel to the step matching the surrounding area. Respondent shall correct by appropriate means using a properly licensed contractor.

Testimony of Inspector Emry Inspector Emry testified that the drainage pipes in Complainants’ basement were not properly sealed at the joints and leaked. Inspector Emry stated that he conducted a water test at Complainants’ residence and observed the leakage in the basement. Inspector Emry testified that he observed several joist bays where insulation had been removed and not replaced. Inspector Emry stated that he observed several pieces of insulation lying on the floor. Inspector Emry testified that the color and texture of the deck coating at Complainants’ residence was inconsistent and varied. Inspector Emry opined that Rayburn’s construction work on Complainants’ decking failed to comply with applicable workmanship and industry standards. Inspector Emry testified that Rayburn had subcontracted much of the construction work at Complainants’ residence to an unlicensed contractor identified as James Sealy.[1] Inspector Emry stated that on one occasion, Rayburn’s Qualifying Party, Brian Lane Rayburn, stated that Rayburn performed no actual construction work at Complainants’ residence. Inspector Emry testified that Rayburn refused to perform any corrective action at Complainants’ residence. Inspector Emry stated that Rayburn’s written contract with Complainants did not contain Rayburn’s contractor’s license number, did not provide an estimated date of completion, and did not inform Complainants that they had the right to file a written complaint with the Registrar of Contractors for an alleged violation of A.R.S. § 32-1154(A).[2] Inspector Emry testified that he performed a pre-hearing inspection at Complainants’ residence on September 4, 2013, and verified that no corrective work had been performed at Complainants’ residence. Inspector Emry stated that Rayburn had failed to comply with the terms of the Corrective Work Order. Inspector Emry’s testimony is found to be credible. Testimony of Joel Serrano Joel Serrano (hereinafter “Mr. Serrano”) testified that he is Complainants’ son. Mr. Serrano stated that he has power of attorney for Complainants because both of the Complainants are elderly and hard-of-hearing. Mr. Serrano testified that the construction work performed by Rayburn on Complainants’ decking was very poor and required correction. Mr. Serrano testified that Complainants paid Rayburn the entire $14,500.00 that was due under the parties’ construction agreement. Mr. Serrano stated that Rayburn’s subcontractor, James Sealy, removed an additional $3,700.00 in cash from Complainants’ residence without their permission. Mr. Serrano testified that he asked James Sealy to return the $3,700.00, but that James Sealy refused to return the money. Mr. Serrano testified that James Sealy was not currently a licensed contractor but was a licensed contractor when he was working at Complainants’ residence. Mr. Serrano stated that Rayburn refused to perform corrective work on Complainants’ residence. Mr. Serrano reviewed the photographs of Complainants’ decking and testified that the photographs accurately depicted the conditions of the decking and basement at Complainants’ residence.[3] Mr. Serrano stated that there are cracks, leaks and rotten wood in Complainants’ decking. Mr. Serrano testified that the textured coating applied to the decking was blotchy and appeared to be different colors. Mr. Serrano’s testimony is found be credible. Testimony of Brian Lane Rayburn Brian Lane Rayburn (hereinafter “Mr. Rayburn”) testified that Rayburn is no longer functioning as a contractor and that he had put Rayburn’s contractor’s license “to sleep.” Mr. Rayburn stated that he gave half of the down payment to James Sealy so that James Sealy could buy materials. Mr. Rayburn testified that he “guessed” that Rayburn was guilty of the violations of A.R.S. § 32-1154(A) charged in the Citation and Complaint. Mr. Rayburn testified that he thought James Sealy was a licensed contractor when he subcontracted portions of the construction work on Complainants’ decking to James Sealy. Mr. Rayburn stated that he had “not been running from this matter.” Mr. Rayburn testified that he was under the assumption that James Sealy would resolve the problem because the “ball was in his court.” Mr. Rayburn testified that he subcontracted work to James Sealy because he had been recommended by another licensed contractor. Mr. Rayburn acknowledged that he did not check with the Registrar of Contractors to determine if James Sealy was a licensed contractor. Mr. Rayburn denied that Rayburn had been fully paid for its work on Complainants’ decking. Mr. Rayburn asserted that James Sealy still owed Rayburn $500.00 for the work that Rayburn completed on Complainants’ decking. Mr. Rayburn testified that he knew nothing about the additional $3,700.00 that James Sealy allegedly took from Complainants’ residence. Mr. Rayburn testified that he intends to obtain another contractor’s license from the Registrar of Contractors. Mr. Rayburn stated that he was willing to pay to have another licensed contractor perform corrective work on Complainants’ decking. Mr. Rayburn testified that all he wanted to do was to take care of the problem. Administrative notice is taken of Respondent’s prior license record as reflected on the Registrar of Contractors’ public website on September 5, 2013. Such prior license record reflects that License No. B.199018-R of Rayburn was under suspension. License No. B.199018-R of Rayburn was suspended for non-renewal on October 1, 2012, and suspended for lack of bond on September 10, 2012. License No. B.199018-R of Rayburn had previously been suspended for non-renewal from October 1, 2010, through October 13, 2010. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119. 2. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 3. The drainage pipes in Complainants’ basement are not sealed and continue to leak. Insulation has been removed from Complainants’ basement ceiling and not replaced. The deck coating applied by Rayburn has inconsistent texture and color. Rayburn retained an unlicensed individual to perform construction work on Complainants’ residence. This Tribunal concludes that Rayburn violated the charged provision of A.R.S. § 32-1154(A)(3),[4] namely A.A.C. R4-9-108.[5] 4. Rayburn’s written contract with Complainants did not contain Rayburn’s contractor’s license number, did not provide an estimated date of completion, and did not inform Complainants that they had the right to file a written complaint with the Registrar of Contractors for an alleged violation of A.R.S. § 32-1154(A). This Tribunal concludes that Rayburn violated the charged provisions of A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32-1124(B),[6] and A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32- 1158(B)(1), (4), and (9).[7] 5. Rayburn failed to obtain a bond and renew its contractor’s license. Rayburn failed either to perform corrective work at Complainants’ residence or to retain a licensed contractor to perform corrective work at Complainants’ residence. This Tribunal concludes that Rayburn violated the charged provision of A.R.S. § 32-1154(A)(23).[8] RECOMMENDed order In view of the foregoing, it is recommended that that License No. B.199018-R of Rayburn shall be revoked on the effective date of this Order. It is further recommended, in addition to the above-provided penalties, if any, that Rayburn pay the sum of $500.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. § 32-1154(D). The failure by Rayburn to pay the entire amount of the aforesaid civil penalty on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Rayburn’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Rayburn, as defined in A.R.S. § 32-1101(A)(5), unless payment of any outstanding prior civil penalty is tendered. In the event of certification of this 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 the certification

Done this day, September 6, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] Administrative notice is taken of a search on the Registrar of Contractors’ public website on September 5, 2013. This Tribunal could find no evidence that James Sealy had ever been a licensed contractor in the State of Arizona. [2] See Exhibit C-1 (11/29/11 Construction Agreement). [3] See Exhibit Nos. C-5, C-6, C-7, and C-8. [4] A.R.S. § 32-1154(A)(3) includes among the grounds for disciplinary action against a contractor’s license, violation of any rule adopted by the registrar. [5] A.A.C. R4-9-108 provides, in pertinent part, as follows: A. A contractor shall perform all work in a professional and workmanlike manner. B. A contractor shall perform all work in accordance with any applicable building codes and professional industry standards. C. All work performed by a contractor in a county, city, or town that has not adopted building codes or where any adopted building codes do not contain specific provisions applicable to that aspect of construction work shall be performed in accordance with professional industry standards.

[6] 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) provides, in pertinent part, as follows:

Licenses issued under this chapter and any renewals shall be signed by the registrar or the registrar's designated representative and by the licensee. The license shall be nontransferable, and satisfactory evidence of possession shall be exhibited by the licensee upon demand. The license number appearing on any licenses held by the licensee shall be preceded by the acronym "ROC" and shall be posted in a conspicuous place on premises where any work is being performed, shall be placed on all written bids submitted by the licensee and shall be placed on all broadcast, published, internet or billboard advertising, letterheads and other documents used by the licensee to correspond with the licensee's customers or potential customers in the conduct of business regulated by this chapter. A violation of this subsection relating to posting and placement of license numbers shall be, at the discretion of the registrar, grounds for disciplinary action pursuant to section 32-1154, subsection A, paragraph 13, but not grounds for preventing the award of a contract, voiding an awarded contract, or any other claim or defense against the licensee. For the purposes of this subsection, advertising does not include a trade association directory listing that is distributed solely to the members of the association and not to the general public.

[7] A.R.S. § 32-1158 provides, in pertinent part, as follows: B. From and after December 31, 2007, 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 shall contain in writing at least the following information: 1. The name of the contractor and the contractor's business address and license number. 4. The estimated date of completion of all work to be performed 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 at least ten point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative. This paragraph does not apply to a person who is subject to and complies with section 12-1365. C. At the time of signing a contract the owner shall be provided a legible copy of all documents signed and a written and signed receipt for and in the true amount of any cash paid to the contractor by the owner.

[8] A.R.S. § 32-1154(A)(23) includes among the grounds for disciplinary action against a contractor’s license, failure 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. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held.

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