ALJDEC decisions subject to certification as final

2012A-599-ROC · Registrar of Contractors · 2013-01-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 13, 2012, at 8:00 a.m. APPEARANCES: Complainant Dr. Nima Ghadimi was represented by Eric D. Gere, Esq., and Shanna N. Orlich, Esq., Jennings Strouss & Salmon PLC; Respondent 1 2 3 Flooring Inc. appeared through Kamran Afshari, its qualifying party. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On or about May 30, 2011, the Arizona Registrar of Contractors (“the Registrar”) issued License No. K-8.273326-D for floor covering to 1 2 3 Flooring Inc. (“Respondent”). Kamran Afshari (“Mr. Kamran”) is the only person listed on Respondent’s license. 2. Mr. Kamran and his brother, Hassan Afshari (“Mr. Hassan”), are listed on the Arizona Corporation Commission’s records as Respondent’s directors.[1] 3. On or about March 18, 2008, the Registrar issued License No. K-8.243111-D to 1 2 3 Flooring LLC. Mr. Kamran is listed as the qualifying party and a member and Mr. Hassan is listed as a member. License No. K-8.243111- D was cancelled on May 30, 2011. 4. On or about February 1, 2012, the attorney representing Dr. Nima Ghadimi (“Complainant”), Eric D. Gere, Esq. of Jennings, Strouss & Salmon, PLC, filed a Complaint with the Registrar that alleged that Respondent was responsible for a “[h]ome remodeling project including flooring, electrical, painting, drywall, tiling, blinds, baseboards, etc.” at Complainant’s home at 12802 East Golddust in Scottsdale, Arizona. The Complaint alleged that the date of the contract was May 1, 2011, that the contract was verbal, that Respondent had last performed work on the project on August 10, 2011, and that Respondent had been paid in full, although no specific contract amount was stated. 5. Various documents were attached to the Complaint, including the following: 1. Copies of approximately 40 pages of invoices on Respondent’s letterhead dated between July 28, 2011, and November 17, 2011. The invoice dated July 28, 2011, showed Respondent’s name as “1 2 3 FLOORING INC AND REMODLING [sic].” The invoices described the work performed as including plumbing, electrical, drywall, painting, carpentry, and framing, as well as flooring, but did not include Respondent’s license number preceded by the acronym “ROC.” 2. A copy of a drawing showing various styles of baseboards with one circled and the notation, “What I need 340 lf.” 3. Copies of letters between Complainant and/or the parties’ attorneys regarding monies that Complainant owed or did not owe for Mr. Hassan’s or Respondent’s work. Kent A. Lang, Esq. of Lang Baker & Klain, PLC sent a demand letter on Respondent’s behalf dated November 22, 2011, to Complainant that stated in relevant part as follows: [Mr. Hassan] is an owner and director of [Respondent]. His name is reflected in the records of the Arizona Corporation Commission. [Mr. Kamran] installed flooring in your home in the normal course of [Respondent’s] business, and [Respondent] has not received payment from you for the flooring materials and the work required to remove old flooring, prepare the foundation, and install new flooring in your home. . . . .

[Respondent] has reviewed its previous invoices to eliminate the work that may have been separately agreed to between you and [Mr. Hassan] as friends, and for which you separately paid [Mr. Hassan]. A new Invoice No. 1015 for unpaid flooring materials and labor in the amount of $57,263.98 is enclosed. This invoice is payable immediately.

4. On December 21, 2011, Complainant’s attorney, Mr. Gere, responded to Mr. Lang’s letter on Complainant’s behalf, in relevant part as follows: The facts upon which your demand letters are based are materially incorrect. First and foremost, [Complainant] did not enter into an agreement with [Respondent] to perform work on his residence. Rather, [Complainant’s] relationship was with [Mr. Hassan] in his individual capacity. Prior to the subject project, [Mr. Hassan] performed two projects for [Complainant] in 2009 and 2010. The first project involved miscellaneous tiling and painting projects, as well as a complete re-roofing of the residence. The second project involved a repair of water damage to the residence’s wine cellar and staircase.

5. Copies of 24 of Complainant’s personal checks made payable to Mr. Hassan that appeared to have been dated between August 9, 2010, and September 28, 2011, in the total amount of $106,463.32. 6. The Registrar’s assigned inspector, Phil Coscia, performed a jobsite inspection. On April 20, 2012, Inspector Coscia issued a Corrective Work Order (“CWO”) that required Respondent to take corrective action on 25 of Complainant’s 27 specific Complaint items within 15 calendar days. The CWO included the following prefatory remarks: ROC License No: 273326, issued to [Respondent] on May 30, 2011, is a class K-8 Floor Covering license. The scope of work covered under the license includes installation, replacement, and repair of floor covering materials and related accessories including preparation of the surface to be covered. In view of this, respondent may perform only the corrective work covered under their K-8 license.

The respondent must hire a properly licensed General Residential Contractor or General Remodeling and Repair Contractor to complete the remainder of the corrective work. The contractor is responsible for obtaining all necessary permits from the local building department to ensure all necessary inspections are performed by a local building official.

Note *: In regards to any complaints that dispute costs for labor and materials, the ROC does [not] regulate what contractors charge for their work. The inspector lacks the authority to resolve disputed money amounts. Disputes such as these would be better addressed and resolved in an appropriate venue that has competent jurisdiction over the matter.

A copy of the CWO is attached to this Administrative Law Judge Decision. Only Item Nos. 1, 2 (part), 3, and 4 on the CWO concerned work that was within the scope of Respondent’s K-8 License. 7. The Registrar subsequently issued a Citation and Complaint against Respondent charging possible violations of A.R.S. § 32-1154(A)(2), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108 and A.A.C. R4-9-109, A.R.S. § 32-1154(A)(9), A.R.S. § 32-1154(A)(13), namely A.R.S. § 32- 1124(B) and A.R.S. § 32-1158, A.R.S. § 32- 1154(A)(14), A.R.S. § 32-1154(A)(15), A.R.S. § 32-1154(A)(17), and A.R.S. § 32-1154(A)(23). 8. Mr. Kamran filed a timely written answer to the Citation and Complaint on Respondent’s behalf, denying any statutory violations. The written answer denied that Respondent ever contracted with Complainant and affirmatively alleged that the general contractor for Complainant’s project was Julian Fine Cabinetry and Design (“Julian”),[2] that Mr. Hassan supplied Complainant with labor that was cheaper than what Julian offered, that Respondent’s only involvement was repairing the hardwood flooring, and that Respondent only issued the invoices because Complainant said that, otherwise, he would not pay Mr. Hassan or Respondent for their work. The written answer further alleged that Respondent did not attempt to comply with the CWO because after Respondent filed a lawsuit against Complainant to collect the monies due to Mr. Hassan and Respondent for their work, Complainant threatened to blow up Mr. Hassan and his family and Mr. Hassan obtained an order of protection against Complainant.[3] 9. Mr. Kamran attached to Respondent’s written answer a printout of an e-mail from Complainant dated November 17, 2011, stating that he had never entered into a contract with Respondent and that he had a gentlemen’s agreement with Mr. Hassan for work at his property. 10. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 11. A hearing was held on December 13, 2012. Because Inspector Coscia was on leave from state service, the Registrar’s inspector, Jim Dimond, performed a prehearing inspection and testified about the Registrar’s workmanship standards and procedures. Complainant submitted six exhibits and testified on his own behalf. Respondent submitted one exhibit and presented the testimony of two witnesses: (1) Mr. Kamran; and (2) Mr. Hassan. Hearing Evidence Workmanship 12. Inspector Dimond testified that at Inspector Coscia’s jobsite inspection, Mr. Kamran stayed at the street in front of Complainant’s house because there was at least one protective order in place against Complainant. Inspector Dimond testified that when the contractor cannot legally enter the property where he performed work, the inspector asks the contractor to wait outside the property and that after the inspection, the inspector will talk to the contractor to obtain his side. 13. Inspector Dimond testified that he performed a prehearing jobsite inspection on December 12, 2012, and that Complainant and Complainant’s attorney, Mr. Gere, attended the inspection. Inspector Dimond testified that he advised Mr. Kamran not to attend the prehearing jobsite inspection due to the protective order. 14. CWO Item No. 1 required Respondent to correct tile lippage that exceeded 1/32”, to install missing grout at glass tile borders and to clean up the grout on the tile surface in the breakfast nook area, and to buff and polish the floor following Respondent’s completion of repairs to the kitchen floor. Inspector Dimond testified that none of the repairs had been performed. 15. CWO Item No. 2 required Respondent to clean construction debris and drywall dust off electronic equipment, to repair frayed carpet that was not stretched completely to the wall, and to complete carpet installation in the home theater. Because Inspector Coscia could not determine whether Respondent had irreparably damaged the theater screen, the CWO did not require it to take any action with respect to the screen. 16. Inspector Dimond testified that the missing carpet had been corrected by another party but that none of the other repairs that CWO Item No. 2 required had been performed. 17. Complainant testified that he went out of town on business while Respondent was working in the home theater and that when he returned, he saw dust all over the home theater and that Mr. Hassan had folded the screen, ruining it. Complainant testified that he paid $1,700.00 to another contractor to complete installation of the carpet. 18. CWO Item No. 3 required Respondent to repair and to complete installation and finishing of the hardwood floors. Inspector Dimond testified that the hardwood floors had not been repaired. Inspector Coscia’s CWO noted he could not determine whether dust from Respondent’s work led to the failure of the air conditioning unit. 19. Complainant testified that during the summer that Respondent was working on his house, he returned from out of town and found that Respondent had left extensive dust and construction debris in his house with the air conditioner running full blast. Complainant testified that he spent $35,000.00 to replace the air conditioner. 20. CWO Item No. 4 required Respondent to correct the missing paint above the baseboards, to fill the gaps at the bottom of the baseboards where they met the floor, and to correct areas of missing stain color and finish on the lower part of the baseboards. Inspector Dimond testified that Inspector Coscia’s notes of his jobsite inspection stated that Complainant had accepted the type of baseboard that was installed. 21. Complainant testified that Respondent damaged the baseboards when it attempted to refinish the hardwood floors and that it agreed to replace the baseboards. Complainant testified that the handwriting on the drawing that was attached to the Complaint was his. Complainant testified that Respondent replaced the baseboards with the same kind of baseboards that it had damaged and that he did not authorize the replacement. Complainant testified that Respondent told him that if he did not love the baseboards, he did not have to pay for them. 22. CWO Item No. 5 did not require any correction of the blinds because they were not installed and Inspector Coscia could not confirm whether or not they were operable. Inspector Dimond testified that the blinds were not in the house at the prehearing jobsite inspection and that Complainant told him that they were in the garage. 23. CWO Item No. 6 involved certain electrical work, including the trim finish rings on the recessed canister lights (“can lights”) in the pool table area in the lower level, the accent lighting above the kitchen cabinets, the kitchen wiring, the warming tray under the microwave in the kitchen, and the electric floor receptacle that was missing a cover plate, and required the electrical work to be repaired or inspected by a properly licensed electrical subcontractor to ensure that the work complied with code requirements. Inspector Dimond testified that Inspector Coscia’s notes of the initial jobsite inspection stated that the Lutron system, which allows switches to be controlled remotely, was not functioning. Inspector Dimond testified that the Lutron system and the warming tray still were not working at the prehearing inspection. Inspector Dimond testified that he did not confirm the missing cover plate. Inspector Dimond testified that a contractor needed a C-11 or K-11 license to perform residential electrical work. 24. Complainant testified that Mr. Kamran said that he was qualified to perform electrical work in his previous life and in Arizona. 25. CWO Item No. 7 required installation of grout in the kitchen backsplash to prevent water from collecting behind the tile and damaging the wall. Inspector Coscia’s notes indicated that Mr. Kamran stated that Complainant did not want grout and the lack of a written contract prevented Inspector Coscia from determining whether the parties’ contract required application of clear silicone or grout between the tiles on the backsplash. 26. CWO Item No. 8 required installation of grout in the glass tiles on the wine bar and referred to CWO Item No. 7 on the issue of whether the parties’ contract required clear silicone or grout. 27. CWO Item No. 9 noted that the fireplace in the corner of the living room was unfinished, without trim to close the gap between the tile and the drywall on the side walls. Inspector Dimond testified that trim had been installed, but that it did not sit properly against the tile. 28. Item No. 10 of the Complaint alleged that Respondent had failed to return certain enumerated personal property that it had removed from Complainant’s residence. The CWO stated that Mr. Kamran said that Respondent would only return Complainant’s personal property if Complainant paid Respondent what he owed. 29. Complainant testified that Respondent stored some of his personal property in his garage and that Mr. Hassan said that Respondent would store other property in a rented storage space, but that Complainant later learned that his personal property was being stored at Mr. Kamran’s or Mr. Hassan’s home. 30. Mr. Kamran testified that Complainant has a huge garage with a lot of storage space and that Complainant instructed him to take furniture and other personal possessions that Complainant did not want. Mr. Kamran testified that he would love to return Complainant’s unwanted possessions, but that Complainant owed Mr. Hassan and Respondent money. 31. Item No. 11 of the Complaint alleged that Respondent had replaced the entire roof in 2009-2010, that the work was poor, and that the roof was leaking. The CWO required correction of the roof. Inspector Dimond testified that the roofing material appeared to be the kind used on roof walk decks, not roofs above livable spaces. Inspector Dimond testified that a portion of the roof on the southwest corner of the house had been corrected appropriately by another contractor. Inspector Dimond testified that he had seen evidence of water damage in various areas of the interior of the residence that had not been repaired. 32. Item No. 12 of the Complaint alleged that Respondent had failed to complete the construction project for the agreed-upon price and that Respondent attempted to charge Complainant excessive amounts for work that was either defective, incomplete, or not part of the parties’ agreement. The CWO required Respondent to resolve this item of the Complaint by appropriate means. 33. Item No. 13 of the Complaint alleged that Respondent had entered into a contract for work that exceeded the scope of its license. The CWO informed Respondent that it had contracted to perform work that far exceeded the scope of its K-08 flooring license and that the Registrar had notified Respondent that exceeding the scope of its license could be grounds to revoke or suspend the license. 34. Item No. 14 of the Complaint alleged that Respondent engaged in false or misleading advertising by informing Complainant that it was legally able to perform work that was beyond the scope of its K-08 flooring license. The CWO on Item No. 14 referred to CWO Item No. 13. Inspector Dimond testified that he had not seen any advertising and that Complainant’s attorney informed him at the prehearing jobsite inspection that CWO Item No. 14 was moot. 35. Item No. 15 of the Complaint alleged that Respondent had removed and replaced the wine rack in the wine cellar and that Respondent’s poor work had damaged the wine rack. The CWO required that the wine rack be corrected by appropriate means. Inspector Dimond testified that the wine rack that was mounted above an opening in the wall on the lower level of the house was flimsy and that he did not think the rack could hold more than one bottle of wine without collapsing. 36. Item No. 16 of the Complaint alleged that because Respondent failed to properly correct water damage in the basement powder room, remediation of mold or water issues was necessary. The CWO did not require any corrective action because the repairs were covered over and Inspector Coscia could not confirm the presence of mold. Inspector Dimond testified that he was not shown anything that would require correction. 37. Item No. 17 of the Complaint alleged defective and incomplete glass tile in the upstairs powder room and sitting area of the kitchen. The CWO required correction of the defects and completion of the tile work. Inspector Dimond testified that 1” or ¾” glass tiles were installed in the bathroom off the kitchen on the main wall where a mirror was hung and that the tiles were clearly not level. 38. Item No. 18 of the Complaint alleged that Respondent’s installation of drywall in the kitchen was poor. The CWO required appropriate action to correct the finish at the base of the wall surrounding the circular eating area. Inspector Dimond testified that he agreed that the area of the drywall above the base was poorly done. 39. Item No. 19 of the Complaint alleged that the tile work on the stairs leading to the basement was poorly done. The CWO required correction “per the terms of the contract and/or any properly executed change orders.” Inspector Dimond testified that there was missing tile on the bottom tread of the stairs and broken tiles on the stairs. 40. Item No. 20 of the Complaint alleged that the closet door was not properly installed. The CWO required correction “per the terms of the contract and/or any properly executed change orders.” Inspector Dimond testified that there was a double door at the fish tank in the living room and that Inspector Coscia’s notes stated that the door was bare wood, without any finish. Inspector Dimond testified that the door at that location was exposed to higher humidity than in other areas of the house. 41. Item No. 21 of the Complaint alleged that Respondent had broken the instant hot water feature during installation. The CWO required correction “per the terms of the contract and/or any properly executed change orders.” Inspector Dimond testified that Complainant pointed out a tankless water heater beneath the sink on which the hoses had been cut that was not fully installed. The invoices that Complainant attached to his Complaint did not mention a tankless water heater. 42. Item No. 22 of the Complaint alleged that Respondent had damaged a door and its hardware during installation. The CWO required that Respondent perform repairs to correct the poor installation of the door and hardware. Inspector Dimond testified that the finish on a patio exit door showed damage. 43. Item No. 23 of the Complaint alleged that Respondent had in its possession missing parts of ceiling fans, can lights, and kitchen hardware that belonged to Complaint that were needed to complete installation of these items. The CWO noted that Mr. Kamran denied that he had any missing parts. The CWO further noted that Inspector Coscia might not be able to confirm which party had the missing parts but that if Respondent was paid for the work or required to correct or complete work that required the missing parts, it should take necessary action to complete the work in the contract. Inspector Dimond testified that he did not note any missing kitchen window hardware, but noted missing can lights and fans without blades in the lower level. 44. Item No. 24 of the Complaint concerned plumbing in the kitchen that was not installed in a workmanlike manner. The CWO required that Respondent ensure that both drawers to the dishwasher had sufficient drain lines into the waste piping. Inspector Dimond testified that a C-37 or K-37 plumbing license was required to perform residential plumbing work. Inspector Dimond testified that the drain lines from the dishwasher had not been corrected and that there was a loose spigot on the reverse osmosis water filtration system. 45. Item No. 25 of the Complaint concerned poor workmanship in painting. The CWO stated that Respondent should make remedial repairs as needed to correct areas of poor painting. Inspector Dimond testified that there were areas that required painting touchup all over the house. 46. Item No. 26 of the Complaint concerned Respondent’s failure to install drywall in the aquarium closet. The CWO required correction of the condition. Inspector Dimond testified that the drywall above the aquarium and in the storage/ kitchen area was taped and mudded, but not finished. Inspector Dimond testified that the drywall needed to be finished due to the high humidity in this area of the house. 47. Item No. 27 of the Complaint concerned damage to furniture allegedly caused by Respondent’s failure to use appropriate precautions to protect the furniture during construction. The CWO required Respondent to “correct by the appropriate means.” Inspector Dimond testified that there were still areas in the house that had construction dust, including the equipment area in the home theater. The Lawsuit 48. Complainant testified that he filed a civil lawsuit against Respondent, Mr. Kamran, and Mr. Hassan for the damages caused by the remodeling project. Complainant’s civil complaint was not submitted into evidence. 49. Respondent, Mr. Kamran, and Mr. Hassan were represented in Maricopa County Superior Court of Arizona Case No. CV2012-003477 by Judd S. Nemiro, Esq., a different attorney than had represented them in their initial negotiations with Complainant regarding nonpayment. Complainant submitted Respondent, Mr. Kamran, and Mr. Hassan’s Initial Rule 26.1 Disclosure Statement and Response to Uniform and Non- Uniform Interrogatories, Requests for Admission, and Requests for Production.[4] 50. Complainant testified that Respondent, Mr. Kamran, and Mr. Hassan filed a counterclaim in Case No. CV2012-003477, seeking payment of amounts that Complainant allegedly owed for work on his house. Mr. Nemiro on behalf of Respondent, Mr. Kamran, and Mr. Hassa took the position in Case No. CV2012-003477 that Respondent had performed all the work at Complainant’s house. 51. Mr. Kamran testified that he took the position in the civil lawsuit in Case No. CV2012-003477 that Respondent had performed the work because Mr. Nemiro told him that his brother, Mr. Hassan, would not get paid unless Respondent took responsibility for his work. Other Evidence 52. Complainant is a medical doctor who practices as an internist. 53. Complainant testified that he solicited contractors to perform tile work on one of his bathroom’s walls on the internet and that Mr. Kamran responded. Complainant testified that Mr. Kamran and Mr. Hassan worked together and that both were present at the jobsite most of the time that Respondent was performing work. 54. Complainant testified that he decided to remodel his kitchen and obtained bids from a cabinet supplier and subcontractors to install the cabinets. Complainant testified that Mr. Hassan told him that Respondent’s work was slow and that Respondent could beat the other subcontractors’ bids. Complainant testified that after he provided the bids to Mr. Hassan, Mr. Kamran told him that Respondent could remodel the kitchen for one-third of the other contractors’ price. Complainant testified that based on Mr. Kamran’s representation, he hired Respondent to remodel the kitchen. 55. Complainant testified that he subsequently made numerous oral contracts with Respondent for substantial other work at his home. Complainant testified that neither Mr. Kamran nor Mr. Hassan ever said that Respondent was not licensed to perform the other work. 56. Mr. Kamran testified that Complainant and Mr. Hassan were good friends, that Mr. Hassan had keys to Complainant’s house, and that Complainant called Mr. Hassan when he needed personal favors. Mr. Kamran testified that he only became involved in Complainant’s project to help his brother. 57. Mr. Kamran testified that Complainant acted as his own general contractor and that Mr. Hassan helped Complainant supervise various subcontractors and suppliers. 58. Complainant testified that he made his checks payable to Mr. Hassan because he was instructed to write the checks like that. 59. Complainant testified that initially, the entire job was only supposed to cost about $40,000.00 and to be finished in two to three weeks and that after six months, the cost of the job exceeded $100.000.00 and the job still was incomplete. 60. Mr. Hassan testified that he worked with Complainant’s general contractor to keep costs down on the remodeling project. Mr. Hassan denied that Respondent contracted to perform work that was beyond the scope of its license. Mr. Hassan testified that Respondent prepared the invoices that Complainant attached to his Complaint to help Mr. Hassan because Complainant had asked for invoices on a licensed contractor’s forms. Mr. Hassan testified that after Complainant threatened to kill him, he obtained a protective order. 61. Mr. Kamran testified that Complainant hired Mr. Hassan to help him with most of the work described on the CWO. Mr. Kamran testified that Complainant said numerous times that he wished that Mr. Kamran was working on the project rather than Mr. Hassan. Mr. Kamran testified that he is a simple man who grew up in a village and that Respondent’s business is his lifeblood. Mr. Kamran testified that he only put Mr. Hassan’s work on Respondent’s paperwork to help his brother. 62. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website. Such prior License record reflects that on January 2, 2013, Respondent’s License No. K-8.273326-D was current and that one complaint was pending against the License. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[5] Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[6] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[7] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[8] Both parties made contradictory and inconsistent statements following Complainant’s filing of the administrative Complaint in this matter and following Complainant’s filing of the civil action in Case No. CV2012- 003477.[9] “A judicial admission, or ‘confessory pleading,’ is an express waiver filed in court prior to trial which is presumed to be true and cannot be disproven.”[10] Although an attorney’s statements on behalf of his client in a court action generally are not hearsay under Ariz. R. Evid. 801(d)(2) and are admissible, statements made in disclosure statements are not considered to be conclusive judicial admissions[11] and statements made in response to an opponent’s discovery in a judicial action are not considered to be judicial admissions in an administrative proceeding.[12] Therefore, Complainant did not establish that Mr. Nemiro’s statements on Respondent’s behalf in disclosure and in response to Complainant’s discovery in Case No. CV2012-003477 are judicial admissions that conclusively establish Respondent’s responsibility for the specific items in the Complaint that Complainant filed with the Registrar in this matter. Complainant did not establish that that the substantial work that Mr. Hassan performed on the project was performed under Respondent’s license. Although Mr. Kamran acknowledged that Respondent performed flooring work, Complainant did not establish the scope Respondent’s contract or that the parties ever agreed upon the amount that Complainant would pay Respondent for its work. Therefore, Complainant did not establish that Respondent violated A.R.S. § 32-1154(A)(9) by failing to complete the contract work for the amount stated on the contract or any modification of the contract.[13] The parties may resolve their monetary disputes in the pending civil action in Case No. CV2012-003477. Respondent’s invoices did not show its license number preceded by the acronym “ROC.” Respondent’s contract to repair the floors was in an amount that exceeded $1,000.00, but was not in writing and did not include numerous required terms, including Respondent’s license number, an estimated completion date, the amount of the contract and progress payments, and notice of Complainant’s right to make a complaint to the Registrar for a violation of A.R.S. § 32-1154(A). Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(13),[14] namely A.R.S. §§ 32-1124(B)[15] and 32-1158.[16] Respondent’s July 28, 2011 invoice showed the name, “1 2 3 Flooring Inc. and Remodling [sic],” rather than the name listed on Respondent’s license. Therefore, Complainant established that Respondent violated A.R.S. §§ 32- 1154(A)(15)[17] and 32-1154(A)(3),[18] namely, A.A.C. R4-9-109(A).[19] Complainant did not establish that he contracted with Respondent rather than Mr. Hassan, that Mr. Hassan was working under Respondent’s license when he contracted with Complainant for plumbing, electrical, drywall, painting, carpentry, and framing work, or that Respondent contracted with Complainant to perform any work for which a permit was required. Therefore, Complainant did not establish that Respondent violated A.R.S. §§ 32-1154(A)(2)[20] or 32-1154(A)(17).[21] Complainant established that the Respondent performed unprofessional and not workmanlike work in the following respects: (1) Respondent left the kitchen floor with excess lippage and missing and untidy grout and failed to buff and polish the kitchen floor (CWO Item No. 1); (2) Respondent failed to complete installation and finishing of the hardwood floor (CWO Item No. 3); and (3) Respondent left missing paint above the baseboards, failed to fill the gaps at the bottom of the baseboards where they meet the floor, and left missing stain color and finish on the lower part of the baseboards (CWO Item No. 4). Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(3), namely, A.A.C. R4-9-108 in these respects.[22] Complainant established that Respondent is responsible for the installation of carpet in the home theater (CWO Item No. 2). Because this items has been corrected by another contractor and Complainant did not establish that the carpet in the home theater required correction before the administrative hearing, he has not established a right to restitution in any amount under A.R.S. § 32-1156.01.[23] Respondent established that Complainant threatened the lives of Mr. Hassan and his family, that Mr. Hassan obtained a protective order, and that neither Mr. Hassan nor Mr. Kamran was allowed at Complainant’s house to perform repairs. Because Complainant did not provide reasonable access to Respondent to allow it to perform corrective work, Complainant did not establish that Respondent violated A.R.S. § 32-1154(A)(23).[24] Because Mr. Hassan rather than Mr. Kamran obtained the protective order, Complainant should be allowed one more opportunity to provide reasonable access to allow Mr. Kamran on Respondent’s behalf, but not Mr. Hassan, to perform appropriate corrective actions on the floors and baseboards at Complainant’s house. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order, Respondent 1 2 3 Flooring Inc.’s License No. K- 8.273326-D be suspended until Respondent has remedied its violations of A.R.S. § 32-1154(A)(13), namely A.R.S. §§ 32-1124(B) and 32-1158(B), A.R.S. § 32-1154(A)(15), and A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108 and A.A.C. R4-9-109(A). It is further recommended that the Registrar not suspend Respondent’s license and, instead, close Complainant Dr. Nima Ghadimi’s Complaint in Case No. 2012-599 if on or before the effective date of the Registrar’s Order, Respondent provides written proof that is satisfactory to the Registrar of all four of the following, including subparts: 1) The floors of Complainant’s house have been corrected in a professional and workmanlike manner to comply with A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108, including the following: (a) Respondent has corrected the excess lippage and missing and untidy grout on the kitchen floor and has buffed and polished the floor (CWO Item No. 1); (b) Respondent completed installation of and repaired where necessary the hardwood floor (CWO Item No. 3); and (c) Respondent corrected the missing paint above the baseboards, filled in the gaps at the bottom of the baseboards where they meet the floor, and applied missing stain color and finish on the lower part of the baseboards (CWO Item No. 4); 2) Respondent has revised its website, estimate form, contract form, invoice form, proposal form, business cards, letterhead, advertising, invoices, and any other documents used in its contracting business to include its license number preceded by the acronym ROC, as required by A.R.S. § 32-1124(B); 3) Respondent has revised its website, estimate form, contract form, invoice form, proposal form, business cards, letterhead, advertising, invoices, and any other documents used in its contracting business to show the name on its license, as required by A.R.S. §§ 32-1154(A)(15) and 32-1154(A)(3), namely, A.A.C. R4-9- 109(A); and 4) Respondent has modified its business practices to memorialize all contracts in an amount of $1,000.00 or more with property owners in a written contract that includes all the terms required by A.R.S. § 32-1158(B). It is further recommended that in addition to any license suspension that may result from this matter, Respondent’s Class K-8 license be placed on disciplinary probation for a period of 365 days, commencing on the effective date of the Registrar’s Order or on the date on which Respondent files and the Registrar accepts Respondent’s notice of compliance, whichever is later. 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, January 2, 2013.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See Complainant’s Exhibit 4. [2] The Registrar’s public website does not contain any licenses for Julian. [3] Respondent attached to its written answer a translation of a message that Complainant allegedly left for Mr. Hassan with a statement from a certified translator that she was competent to translate from Persian/ Farsi to English. [4] See Complainant’s Exhibit 5. [5] See A.R.S. §§ 32-1151 to 32-1169. [6] 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). [7] See A.A.C. R2-19-119(B)(2). [8] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [9] Because A.R.S. § 32-1153 requires proof of a contractor’s license as a prerequisite to a civil action, Respondent’s attorney, Mr. Nemiro, apparently took the position in the civil action that all work for which payment was claimed was performed under Respondent’s license and Complainant’s attorney, Mr. Gere, took the position that Mr. Hassan as an individual performed all the work. When attorney Mr. Lang represented Respondent in the preliminary negotiations for payment, he took the position that Respondent only performed the work that was within the scope of its K-8 license. In contrast, in the hearing on the administrative complaint, Mr. Gere on Complainant’s behalf took the position that Respondent performed all the work and Mr. Kamran on Respondent’s behalf took the same position that Mr. Lang had taken earlier. [10] Ryan v. San Francisco Peaks Trucking Co., Inc., 228 Ariz. 42, 47 n.6, 262 P.3d 863, 868 (App. 2011) (citing Clark Equip. Co. v. Arizona Prop. & Cas. Ins. Guar. Fund, 189 Ariz. 433, 439-40, 943 P.2d 793, 799-801 (App. 1997)). [11] See id. [12] See, e.g., Kohler v. Hindaman, Inc., 80 F.3d 1181, 1185 (7th Cir. 1996). This case is cited as persuasive authority because the Administrative Law Judge was unable to find any Arizona authority on point. [13] A.R.S. § 32-1154(A)(9) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.” [14] 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.” [15] A.R.S. § 32-1124(B) requires that licensed contractors include their license number “preceded by the acronym ‘ROC’“ on “all written bids submitted by the licensee and . . . on all advertising, loan forms, lending institution forms, letterheads and other documents used by the licensee in the conduct of business regulated by this chapter.” [16] A.R.S. § 32-1158(B) provides that 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 after December 31, 2007, must be in writing and include the following minimum terms: 1. The name of the contractor and the contractor’s business address and the 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 ten point bold type. . . . [17] A.R.S. § 32-1154(A)(15) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]cting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth upon the license.” [18] 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.” [19] A.A.C. R4-9-109(A) requires that “[a] licensee shall do business under the name on the license issued and ensure that the same name is used on the license bond.” [20] A.R.S. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications or any building codes of any 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.” [21] A.R.S. § 32-1154(A)(17) includes among the grounds for suspension, revocation, and other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.” [22] 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.” [23] Cf. Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990) (Court of Appeals upheld the Registrar’s power to order a contractor to return to a property owner the cost of a solar heater where, although the contractor had made several attempts to repair the heater, he could not make it provide a habitable degree of heat).

[24] 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.”

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