ALJDEC decisions subject to certification as final

2012A-5871-ROC · Registrar of Contractors · 2013-10-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 9, 2013, at 8:00 a.m. APPEARANCES: Terry Smith and Shannon Smith (hereinafter “Complainants,” “Mr. Smith,” or “Ms. Smith”) were represented by their attorney, James B. Rolle III, Esq., the Law Offices of James B. Rolle. Monreal’s Construction LLC (hereinafter “Monreal”) was represented by its member and qualifying party, Thomas Monreal. 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 Monreal is the holder of License No. C-9.215881-R issued by the Registrar of Contractors. Complainants entered into written a written agreement with Monreal for the construction of a block wall with rebar (“wire”) and a concrete driveway at Complainants’ residence for the total sum of $3,000.00.[1] During the course of construction, Complainants expressed their dissatisfaction with Monreal’s workmanship to Monreal. Monreal then stopped work at Complainants’ residence and abandoned the construction project, leaving Complainants with an unfinished construction project. When Monreal refused to return and complete the construction project, Complainants filed a formal Complaint against Monreal with the Registrar of Contractors. Pursuant to the filing of the formal Complaint, an assigned Registrar Inspector, Jeff Fleetham (hereinafter “Inspector Fleetham”), conducted an onsite inspection. Inspector Fleetham issued a written Corrective Work Order on January 3, 2013, directing Monreal to perform designated corrective work on Complainants’ residence. The Corrective Work Order provided, in pertinent part, as follows:

1- Open trench left on east side of property 30” long, no barricades, a safety hazard. • No plan, specification, or properly executed change order provided at time of inspection. • Respondent shall complete project per original contract agreement, properly executed change orders, local building codes, and manufacturer's installation instructions.

2- Block fence not finished. • Per jobsite agreement, the Respondent will correct by appropriate means. • Respondent shall complete project per original contract agreement, properly executed change orders, local building codes, and manufacturer's installation instructions.

3- Dumped muddy water on winter lawn, destroying grass. • Inspector has no firsthand knowledge. • No action required by the Respondent.

4- Block work not completed per code - with wire installation in block. • Unable to determine at time of inspection as areas identified are complete no visual available. • However, per jobsite agreement the Respondent will add wire where missing. • Respondent shall complete project per original contract agreement, properly executed change orders, local building codes, and manufacturer's installation instructions.

5- Used buckets and baskets around our property plastic shelving used like scaffolding. Dumped stuff everywhere from buckets. • Inspector has no firsthand knowledge. • No action required by the Respondent.

6- Got mud/mortar on ’55 Chevy in garage. • No deficiency demonstrated or observed at time of inspection. • No action required by the Respondent.

7- Job abandonment. Dumped building material in trash receptacles. • Per jobsite agreement, the Respondent will correct by appropriate means. • Respondent shall correct by appropriate means.

8- Called Tom for lying. • Inspector has no firsthand knowledge. • No action required by the Respondent.

9- Was to change contract for modifications, did not & refused to sign when we did, leaving. • Complainant modified contract copy that they included in complaint and the Respondent declined to sign. • No action required by the Respondent.

10- 11/30 concerns expressed he was supposed to come back on 12/1 no show 12/3 he did not like our concerns. • This statement – Inspector has no firsthand knowledge. • No action required by the Respondent.

Testimony of Registrar Inspector Randy Cason Registrar Inspector Randy Cason (hereinafter “Inspector Cason”) testified that Inspector Fleetham is no longer with the Registrar of Contractors. Inspector Cason stated that he conducted a pre-hearing inspection at Complainants’ residence on October 4, 2013, at 10:00 a.m. Inspector Cason testified that Complainants had filled in the open trench and removed building debris from their yard. Inspector Cason stated that Monreal had performed no corrective work in response to the Corrective Work Order. Inspector Cason testified that he agreed with the terms of the Corrective Work Order. Inspector Cason stated that the construction work performed by Monreal was incomplete and failed to comply with applicable industry standards. Inspector Cason testified that the construction work performed by Monreal would have to be corrected and completed by a properly licensed contractor. Inspector Cason testified that the written contract provided by Monreal did not comply with the provisions of A.R.S. § 32-1158. Inspector Cason reviewed photographs of the masonry block wall work at Complainants’ residence and agreed that the photographs were an accurate depiction of the masonry block wall construction work at Complainants’ residence.[2] Inspector Cason testified that he could not observe any rebar or wire in the masonry block wall. Inspector Cason stated that no construction permit had been obtained for the construction of the block wall. Inspector Cason testified that the scope of Monreal’s License No. C- 9.215881-R allows for the installation and repair of concrete, concrete products, and accessories common in the industry. Inspector Cason stated that construction of masonry bock wall fences is covered under the scope of a Class C-14 fencing license. Inspector Cason testified that the construction of masonry block walls was beyond the scope of Monreal’s License No. C-9.215881-R. Inspector Cason stated that Monreal should have known that the construction of masonry block wall fences was beyond the scope of Monreal’s License No. C-9.215881-R. Inspector Cason’s testimony is found to be credible. Testimony of Terry Smith Mr. Smith testified that the parties had a written construction agreement and a secondary oral construction agreement. Mr. Smith stated that Monreal agreed to construct a masonry block wall fence with metal rebar for Complainants and to install a concrete driveway in the parties’ written construction agreement. Mr. Smith testified that Monreal entered into a separate oral agreement with Complainants to perform additional masonry block wall fence work in the front of Complainants’ residence for the sum of $900.00. Mr. Smith testified that Monreal’s construction work was sloppy. Mr. Smith stated that when he complained about Monreal’s sloppy construction work, Monreal abandoned Complainants’ construction project and refused to return. Mr. Smith testified that Monreal left an open trench and assorted construction debris in Complainants’ yard. Mr. Smith stated that Monreal destroyed Complainants’ winter lawn. Mr. Smith stated that Complainants filled in the open trench and removed the construction debris because these conditions created safety hazards. Mr. Smith testified that he was present when Inspector Fleetham informed Monreal that it was performing construction work beyond the scope of Monreal’s License No. C-9.215881-R. Mr. Smith stated that Monreal failed to install any rebar or wire in the masonry block wall fence that Monreal constructed at Complainants’ residence. Mr. Smith testified that he contacted Monreal after the Corrective Work Order was issued and requested that the directed corrective work be performed at their residence. Mr. Smith stated that Complainants had tried “over and over” to get Monreal to return to Complainants’ residence and properly complete the construction project. Mr. Smith’s testimony is found to be credible. Testimony of Thomas Monreal Mr. Monreal acknowledged that the construction of masonry block wall fences is beyond the scope of Monreal’s License No. C-9.215881-R. Mr. Monreal acknowledged that on or about April 18, 2013, the Registrar of Contractors informed him in writing that the performance of masonry block fence work was beyond the scope of Monreal’s License No. C-9.215881-R. Mr. Monreal acknowledged that Monreal’s employees left a “little bit of mess” in Complainants’ yard. Mr. Monreal testified that Monreal stopped work and left the construction project because of a dispute with Ms. Smith over a footing that Ms. Smith believed to be crooked. Mr. Monreal acknowledged that Monreal had not performed any corrective action at Complainants’ residence. Mr. Monreal testified that Monreal had offered to return Complainants’ money to them and that Monreal attempted to fill in the open trench in Complainants’ yard. Mr. Monreal testified that Monreal did install wire in the portions of the masonry block wall that Monreal constructed at Complainants’ residence. Mr. Monreal stated that he informed Complainants that Monreal was not able to obtain the correct sized masonry blocks and that Monreal would install slightly larger masonry blocks instead. Mr. Monreal testified that Complainants agreed to the use of the larger masonry blocks. Administrative notice is taken of Monreal’s prior license record as reflected on the Registrar of Contractors’ public website on October 18, 2013. Such prior license record reflects that License No. C-9.215881-R of Monreal was canceled on June 24, 2012. License No. C-9.215881-R of Monreal had previously been suspended for lack of bond from November 24, 2011, through December 6, 2011. 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. Monreal abandoned the construction project and left an open trench on Complainants’ property. The open trench presented a health and safety danger to Complainants. Monreal’s construction work on the block wall fence at Complainants’ residence was not performed in a workmanlike manner, failed to comply with applicable code requirements, and was abandoned in an unfinished and dangerous condition. This Tribunal concludes that Monreal violated the charged provision of A.R.S. § 32- 1154(A)(3),[3] namely, A.A.C. R4-9-108.[4] 4. The written contract provided by Monreal failed to provide an estimated date of completion for all work to be performed under the contract, failed to contain the dollar amount of any progress payment and the stage of construction at which the contractor would be entitled to collect progress payments during the course of construction under the contract, failed inform Complainants that they had the right to file a written complaint with the Registrar for an alleged violation of A.R.S. § 32- 1154(A), failed to contain the Registrar’s phone number and website address, and failed to state that complaints must be made within the application time period set forth in A.R.S. § 32-1155. This Tribunal concludes that Monreal violated the charged provisions of A.R.S. § 32- 1154(A)(13),[5] namely, A.R.S. § 32-1158(B)(4), (8), and (9).[6] 5. On or about November 31, 2012, Monreal knowingly entered into a contract with Complainants to perform block wall fencing work that was beyond the scope of Monreal’s License No. C-9.215881-R. This Tribunal concludes that Monreal violated the charged provision of A.R.S. § 32-1154(A)(17).[7] 6. Monreal failed to respond to the Corrective Work Order issued in this matter. The only corrective work performed at Complainants’ residence was performed by Complainants. This Tribunal concludes that Monreal violated the charged provision of A.R.S. § 32-1154(A)(23).[8] 7. Pursuant to A.R.S. § 32-1154(C), cancellation of a license does not deprive the Registrar or this tribunal of jurisdiction and does not render the Registrar powerless to revoke the license in this matter.[9] This Tribunal concludes that the appropriate sanction in this matter is to require Monreal, at Monreal’s sole expense, to cause the corrective work described above in the Corrective Work Order to be performed by a properly licensed contractor. If Monreal does not do so in a timely manner, License No. C-9.215881-R of Monreal should be revoked. RECOMMENDED ORDER IT IS RECOMMENDED that on the effective date of the final Order in this matter, License No. C-9.215881-R of Monreal shall be revoked unless the Registrar receives, and accepts, written proof that Monreal has caused the corrective work noted in the Corrective Work Order above to be performed by a properly licensed contractor at Monreal’s sole expense. It is further recommended that if on or before the effective date of the Registrar’s Order, Monreal provides such written proof, the license revocation shall not take place. It is further recommended that on the effective date of the final Order, the Registrar shall revoke License No. C-9.215881-R of Monreal unless it has provided to the Registrar, and the Registrar has accepted, evidence establishing that it has amended its form contracts to comply with A.R.S. § 32-1158(B). It is further recommended that if on or before the effective date of the final Order, Monreal provides written proof that is acceptable to the Registrar that it has amended its form contracts to fully comply with A.R.S. § 32-1158(B), the Registrar should not revoke License No. C-9.215881- R of Monreal, but, instead, shall close this matter. It is further recommended, in addition to the above-provided penalties, if any, that Monreal 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 Monreal 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 Monreal’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Monreal, 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, October 23, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit No. C-1 (11/31/12 Contract). [2] See Exhibit Nos. C-5 (Photographs). [3] A.R.S. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, violation of any rule adopted by the registrar. [4] 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.

[5] 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.”

[6] 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: 4. The estimated date of completion of all work to be performed under the contract. 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. 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.

[7] A.R.S. § 32-1154(A)(17) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, knowingly contracting beyond the scope of the license or licenses of the licensee. [8] A.R.S. § 32-1154(A)(23) includes among the grounds for suspension, revocation, or other 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. [9] A.R.S. § 32-1154(C) provides as follows:

The expiration, cancellation, suspension or revocation of a license by operation of law or by decision and order of the registrar or a court of law or the voluntary surrender of a license by a licensee shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such licensee, or to render a decision suspending or revoking such a license, or denying the renewal or right of renewal of such license.

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