ALJDEC decisions subject to certification as final

2012A-4622-ROC · Registrar of Contractors · 2013-05-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 16, 2013, at 8:00 a.m. APPEARANCES: P.A.W.S. Veterinary Center (hereinafter “Complainant”) appeared through its owner and authorized representative, Dr. Randy D. Aronson, VMD. Flooring Systems of Arizona Inc., (hereinafter “Flooring Systems”) appeared through its attorney, Patric Durazzo, Esq., Durazzo, Eckel & Hawkins P.L.C. 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 Flooring Systems is the holder of License No. K-8.264688-D issued by the Registrar of Contractors. Complainant is a veterinary hospital. This is a commercial matter where Flooring Systems installed a new floor coating system (hereinafter “floor coating”) to coat, seal, and color Complainant’s concrete floor. Complainant was dissatisfied with Flooring Systems’ workmanship and filed a formal Complaint against Flooring Systems with the Registrar of Contractors. Pursuant to the filing of the formal Complaint, an assigned Registrar Inspector, Richard Clark Allen (hereinafter “Inspector Allen”), conducted an onsite inspection. Inspector Allen issued a written Corrective Work Order on October 15, 2012, directing Flooring Systems to perform designated corrective work on Complainant’s concrete floor. The Corrective Work Order repeated the items set forth in the Complaint and provided, in relative part, as follows: 1. Faulty Material and Applications Used/Flooring Unable To Be Repaired or Maintained:

This Agency expects the contractor to stand behind the workmanship and materials for the first two years of ownership (with the exception of owner maintenance items). Therefore, this agency lacks jurisdiction regarding the original installation. This agency does have jurisdiction regarding the work last performed in April, 2012. The jobsite inspection found toenail scratches, chair wheel roll marks and shoe scuffs. The inspection did not find a highly irregular finish. The jobsite inspection found a very poorly written agreement/proposal with both parties strongly disagreeing with one another as to the “intentions” of the agreement. The complainant’s representative, Lisa Cawood, claimed that the entire floor was to be epoxy. The respondent, Victor Corella Jr., claimed that the entire floor was to be acrylic and the spots under the office chairs [were] to be epoxy. I am unable to verify. There would be fewer noticeable toenail scratches with an epoxy finish. There is a disclaimer in both proposals regarding the “office rolling chairs.” The shoe scuffs wiped off with minimum effort. No action required.

2. Incomplete and Unsatisfactory Workmanship with Recent “Remodel.”

The jobsite inspection found that the kennel floor was not refinished. Corella claimed that it was not part of the agreement. Neither proposal excludes the kennel. Contractor is to correct/refinish the kennel floor by appropriate means. During the jobsite inspection, there was a discussion as to whether or not one room south of the kennel got refinished. Corella agreed to refinish the room in question.

3. Horrible Customer Service/Failure to Return calls, Failure to Maintain Record of Products Used:

This agency lacks jurisdiction regarding the customer service. The jobsite inspection found some sort of sheen variation on the vinyl shoe base. It may be wax, but I cannot verify. If it is from the floor, the contractor should correct. The jobsite inspection found hair in the floor finish. Corella agreed to correct. During the jobsite inspection, both parties agreed that there were multiple test areas. These areas appeared to be consistent throughout and acceptable. During the jobsite inspection, a milky discoloration in the floor finish was pointed out. The parties agreed that the discoloration was caused by unintentional drops and spills of alcohol as well as intentional markings with alcohol. Cawood claimed that the alcohol did not discolor the floor when it had the epoxy finish. (See item #1 that I cannot verify the intent of the poorly written agreement about the epoxy or acrylic finish.)

4. Detrimental to Our Livelihood:

This agency lacks jurisdiction.

Inspector Allen testified that he conducted a prehearing inspection on April 15, 2013. Inspector Allen stated that he observed that no corrective work had been performed. Inspector Allen testified that the condition of the floor has continued to deteriorate under the rolling chairs. Inspector Allen testified than an acrylic floor coating is cheaper and less durable than an epoxy floor coating. Inspector Allen stated that the amounts on Flooring Systems’ July 14, 2011 Proposal were the sum of $5,613.49 for the application of an acrylic floor coating and the sum of $13,715.99 for the application of an epoxy floor coating. Inspector Allen testified that both parties agreed that Flooring Systems tested several different types of acrylic floor coatings on Complainant’s floor. Inspector Allen stated that the numerous acrylic floor coatings were tested by placing alcohol on the test strips to determine if the acrylic coating turned white. Inspector Allen testified that the purpose of the testing was to find an acrylic floor coating that would “hold up.” Inspector Allen testified that Complainant asserted that Flooring Systems agreed to apply an epoxy floor coating over Complainant’s entire floor for the sum of $4,100.00 because Flooring Systems intended to utilize Complainant’s veterinary hospital as an example of its work for advertising purposes. Inspector Allen testified that Flooring Systems’ July 14, 2011 Proposal[1] and its January 12, 2012 Proposal[2] did not display Flooring Systems’ license number with the acronym “ROC.” Inspector Allen opined that the two proposals did not contain the minimum elements of a contract required by applicable statute. Inspector Allen reviewed a copy of Flooring Systems’ current contract form[3] and stated that the new form appeared to comply with applicable statutory requirements. Inspector Allen’s testimony is found to be credible. Dr. Randy D. Aronson (hereinafter “Dr. Aronson”) testified that it was his understanding that an epoxy floor coating was to be applied to Complainant’s floor rather than an acrylic floor coating. Dr. Aronson acknowledged that the amount of Flooring Systems’ proposal for the application of an epoxy floor coating was $13,715.99. Dr. Aronson testified that he did not realize that Flooring Systems had applied an acrylic floor coating until he saw the invoice for $4,100.00 for the completed application of the acrylic floor coating. Dr. Aronson testified that Flooring Systems’ application of the floor coating at Complainant’s veterinary hospital was unacceptable. Dr. Aronson stated that Flooring Systems failed to apply the acrylic floor coating to the kennel floor and that he observed a leaf and dog hairs embedded in the new acrylic floor coating. Dr. Aronson testified that Complainant refused to pay Flooring Systems for its work because of the unsatisfactory application of the new floor coating. Dr. Aronson acknowledged that Complainant did not notify Flooring Systems of Complainant’s dissatisfaction with the new floor coating within fourteen days of the application of the new floor coating. Dr. Aronson testified that Complainant never denied access of any kind to Flooring Systems. Dr. Aronson stated that he did not know the basis for Flooring Systems’ allegation of a denial of access. Dr. Aronson acknowledged that Flooring Systems tested various floor coatings at various spots throughout Complainant’s concrete floor. Dr. Aronson testified that the parties were trying to find a floor coating that did not spot when alcohol was dropped on it. Dr. Aronson stated that he thought Flooring Systems was attempting to find an acrylic floor coating that would function like an epoxy floor coating. Complainant’s hospital administrator, Lisa Cawood (hereinafter “Ms. Cawood”), testified that she assumed that the new floor coating would be an epoxy floor coating because the previous floor coating had been an epoxy floor coating. Ms. Cawood stated that there were no discussions regarding the application of an acrylic floor coating and that the application of an epoxy floor coating was the only floor coating that she discussed with Flooring Systems. Ms. Cawood acknowledged that Flooring Systems performed numerous tests of various floor coatings on Complainant’s floor. Ms. Cawood testified that the purpose of the testing was to find a floor coating that would not turn white when alcohol was dropped on it. Ms. Cawood stated that an acrylic floor coating was never discussed. Ms. Cawood testified that she always insisted that the floor coating be an epoxy floor coating. Ms. Cawood acknowledged that Flooring Systems requested access to the veterinary hospital to perform the corrective work that was necessary to comply with the terms of the Corrective Work Order.[4] Ms. Cawood testified that she refused to allow Flooring Systems access to the veterinary hospital unless Flooring Systems agreed to coat the entire floor with an epoxy floor coating. Ms. Cawood stated that she did not want an acrylic floor coating applied to the floor because she knew it would not work.

Ms. Cawood’s actions in refusing to allow Flooring Systems access to Complainant’s veterinary hospital unless Flooring Systems agreed to re-coat the entire floor with an epoxy floor coating are found to constitute an unreasonable denial of access. Flooring Systems’ qualifying party, Victor Corella (hereinafter “Mr. Corella”), testified that Flooring Systems’ original proposal for the application of an acrylic floor coating on Complainant’s floor was for the sum of $5,613.49. Mr. Corella stated that the proposal included the application of an epoxy floor coating over the entire floor for the sum of $13,715.99. Mr. Corella testified that Complainant rejected Flooring Systems’ proposal to apply an epoxy floor coating over the entire floor due to cost. Mr. Corella testified that, after Flooring Systems submitted it proposal to Complainant Flooring Systems received pressure from one of its regular customers to “work something out” with Complainant. Mr. Corella testified that Flooring Systems then revised its proposal to apply an acrylic floor coating to most of the floor and to apply epoxy coating and stain to damaged spots under the roller chairs for the total sum of $4,100.00. Mr. Corella stated that Complainant accepted the revised proposal. Mr. Corella testified that Flooring Systems performed numerous test applications at Complainant’s veterinary hospital to find an acrylic floor coating that would not turn white when alcohol was spilled on it. Mr. Corella stated that Flooring Systems finally found the acrylic floor coating that Flooring Systems actually applied to Complainant’s floor. Mr. Corella testified that he specifically discussed with Ms. Cawood that Flooring Systems proposed to stain and apply an epoxy coating on areas of the floor that had been damaged by roller chairs and to apply an acrylic floor coating to the “entire floor” for the $4,100.00 sum set forth in the revised proposal. Mr. Corella stated Flooring Systems never offered to apply an epoxy floor coating over the entire floor for the sum of $4,100.00. Mr. Corella testified that the cost of materials needed to apply an epoxy floor coating on Complainant’s entire floor would exceed $11,000.00. Mr. Corella acknowledged that there was a leaf and dog hairs embedded in the new acrylic floor coating. Mr. Corella testified that he agreed that Flooring Systems should remove the leaf and dog hairs and then correct the acrylic floor coating. Mr. Corella denied that Flooring Systems included the application of an acrylic floor coating on the floor of the kennel as part of its revised proposal to Complainant. Mr. Corella stated that Flooring Systems was willing to apply the acrylic floor coating to the kennel floor to comply with the terms of the Corrective Work Order. Mr. Corella testified that Flooring Systems contacted Complainant, orally and in writing, in an attempt to gain access to the veterinary hospital and comply with terms of the Corrective Work Order. Mr. Corella stated that Flooring Systems was unable to comply with the terms of the Corrective Work Order because Complainant refused to allow Flooring Systems access to the veterinary hospital unless Flooring Systems agreed to apply an epoxy floor coating to the entire floor. Mr. Corella testified that Flooring Systems’ January 12, 2012 proposal does not specify that epoxy is to be applied over all floors. Flooring Systems’ January 12, 2012 proposal provided, in relevant part, as follows: Light strip, spot color where necessary, Epoxy in those areas and apply wax sealer over all floors. All for the sum of $4,100.00.[5]

Administrative notice is taken of Flooring Systems’ prior license record as reflected on the Registrar of Contractors’ public website on April 29, 2013. Such prior license record reflects that License No. K-8.264688-D of Flooring Systems is current. 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 acrylic floor coating applied by Flooring Systems contains animal hairs and at least one leaf embedded in it. The acrylic floor covering is not complete because it was not applied to the floor in Complainant’s kennel. This Tribunal concludes that Flooring Systems violated the charged provisions of A.R.S. § 32-1154(A)(2)[6] and A.R.S. § 32-1154(A)(3), namely, A.A.C. R4-9-108.[7] 4. Flooring Systems failed to list its contractor’s license number preceded by the acronym “ROC” in its written proposals provided to the Complainant. This Tribunal concludes that Flooring Systems violated the charged provision of A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32-1124(B).[8] 5. Flooring Systems’ written proposals furnished to Complainant, that became Flooring Systems’ contract with Complainant upon its acceptance, did not provide that Complainant had the right to file a written complaint with the Registrar for an alleged violation of A.R.S. § 32-1154(A) and did not provide an adequate description of the work to be performed. This Tribunal concludes that Flooring Systems violated the charged provision of A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32-1158.[9] 6. Complainant’s hospital administrator acknowledged that Complainant received a written request from Flooring Systems for access to the veterinary hospital so that Flooring Systems could perform corrective work hospital to comply with the Corrective Work Order. Complainant’s hospital administrator acknowledged that she denied Flooring Systems access to the veterinary hospital unless Flooring Systems agreed to apply an epoxy floor coating over the entire floor of the veterinary hospital. Flooring Systems was unable to comply with the terms of the Corrective Work Order due to Complainant’s unreasonable denial of access. Because construction work is not a perfect art, generally contractors must be allowed to correct their work before their licenses are disciplined as a result of poor workmanship. This Tribunal concludes that Complainant failed to meet its burden of proving that Flooring Systems violated the charged provision of A.R.S. § 32- 1154(A)(23).[10] RECOMMENDed order In view of the foregoing, it is recommended that commencing on the effective date of the final Order, License No. K-8.264688-D of Flooring Systems shall be suspended until the Registrar of Contractors receives and accepts written proof of the following: • Flooring Systems has fully complied with the terms of the written Corrective Work Order issued in this matter, including applying an acrylic floor coating on the kennel floor, or • Flooring Systems was denied reasonable access to Complainant’s veterinary hospital to perform the corrective action necessary to comply with the terms of the written Corrective Work Order; and • Flooring Systems has brought all of its written contracts and communications to within full compliance with the provisions of A.R.S. § 32-1124(B); and • Flooring Systems has brought its form contracts to within full compliance with the provisions of A.R.S. § 32-1158. It is further recommended that if on or before the effective date of this Order, Flooring Systems has provided acceptable written proof that it has fully accomplished the above-described corrective action, or was denied reasonable access to Complainant’s veterinary hospital to do so, and that it has brought all of its written communications and forms to within full compliance with the provisions of A.R.S. § 32-1124(B) and all of its contracts within full compliance with the provisions of A.R.S. § 32-1158, then the above-provided License suspension shall not take place and this matter shall be closed. 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, May 1, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit R-1 (7/14/11 Proposal). [2] See Exhibit R-2 (1/12/12 Proposal). [3] See Exhibit R-11(Blank contract form). [4] See Exhibit R -7 (Written requests for access). [5] See Exhibit R-2 (1/12/12 Proposal). [6] A.R.S. § 32-1154(A)(2) includes among the grounds for disciplinary action against a contractor’s license, departure from or disregard of plans or specifications or any building codes of the 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. [7] 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.

[8] 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.

[9] A.R.S. § 32-1158(B) provides, in pertinent part, as follows: 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. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction 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. [10] 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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