ALJDEC decisions subject to certification as final

2012A-698-ROC · Registrar of Contractors · 2012-08-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 26, 2012, at 8:00 a.m. APPEARANCES: Gary Schumacher and Melissa Schumacher (hereinafter referred to as “Complainants” collectively and “Mr. Schumacher” and “Ms. Schumacher” individually) appeared through Ms. Schumacher. Casas Bonitas Development LLC (hereinafter “Casas Bonitas”) appeared through its authorized representative, Michael Joseph Ross. 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 1. Casas Bonitas is the holder of License No. B.214567-R issued by the Registrar of Contractors. 2. Complainants contracted with Casas Bonitas to remodel their kitchen. 3. During the course of construction Complainants became increasingly dissatisfied with Casas Bonitas’ workmanship and with Casas Bonitas’ failure to correct ongoing construction work to their satisfaction despite their repeated requests that it do so. 4. When Respondent failed to comply with Complainants’ repeated requests, Complainants filed a formal Complaint against Casas Bonitas with the Registrar of Contractors. 5. Pursuant to the filing of the formal Complaint, an assigned Agency Inspector, Frank Grochocki (hereinafter “Inspector Grochocki”), conducted an onsite inspection. Inspector Grochocki issued a written Corrective Work Order on March 2, 2012, directing Casas Bonitas to perform designated corrective work on Complainants’ residence no later than fifteen days from March 2, 2012. 6. The Corrective Work Order repeated Complainants’ complaint items and directed Casas Bonitas to perform certain corrective action as follows: *Note: Jobsite found work was done at this project needing a building permit. Contractor to obtain building permit from local building authority and obtain and pass all inspections required by this authority. 1) Complaint of: “All cabinets damaged[,”] jobsite found damaged cabinets throughout project; split cabinets, drawers, face frames, door and drawer fronts, excess holes and screws throughout project, nails protruding inside of cabinets, contractor to correct all damaged cabinets by appropriate means, repair or replace as necessary. 2) Complaint of: “Repair cracked granite[,”] jobsite found corrected prior to jobsite, no action required. 3) Complaint of: “Inspect skylight[,”] jobsite found structure work done to install skylight, contractor to obtain local building permit for all structure work at project and pass all required inspections. 4) Complaint of: “Unlicensed plumber[,”] jobsite found unlicensed plumber had done plumbing, contractor to hire licensed plumber to uncover and check all work done by unlicensed plumber, correct and complete project, obtaining inspections from local building authority. 5) Complaint of: “Modified pantry size[,”] unable to determine from jobsite, not in plans, no action required. 6) Complaint of: “Replace unworkable doors with 80 degree hinges[,”] at jobsite contractor agreed to replace hinges at wall cabinets, contractor to correct as agreed. 7) Complaint of: “Improper hardware screws to attach cabinets[,”] jobsite found different screws throughout project, contractor to install uniform cabinet screws through out project. 8) Complaint of: “Unlicensed electrician[,”] jobsite found unlicensed electrician had done electrical, contractor to hire licensed electrician to uncover and check all work done by unlicensed electrician, correct and complete project, obtaining inspections from local building authority. ` 9) Complaint of: “Project to be completed by Christmas[,”] jobsite found not in contract, contractor to give estimated date of completion as required by [A.R.S. §] 32-1158 minimum elements of a contract. 10) Complaint of: “Demanded 2nd draw[,”] unable to determine from jobsite, no action required. 11) Complaint of: “Need inspection[,”] contractor to pass all required inspections of local building authority. 12) Complaint of: “Furred out wall bowed[,”] jobsite found furred out wall bowed, out of level, contractor to correct by appropriate means.

7. Inspector Grochocki conducted a pre-hearing inspection on July 24, 2012. Inspector Grochocki checked each of the items set forth in the Corrective Work Order and observed that Respondent had failed to comply with the terms of the Corrective Work Order. Inspector Grochocki stated that he received a letter from Casas Bonitas alleging a denial of access.[1] 8. Ms. Schumacher testified that Casas Bonitas started the construction project in January 10, 2012, despite having promised Complainants that the construction project would be completed before Christmas, 2011.[2] 9. Ms. Schumacher testified that she personally obtained a building permit and “had plans drawn up.”[3] 10. Ms. Schumacher presented a DVD and numerous photographs showing the condition of the cabinets installed by Casas Bonitas, the non-permitted structural work performed by Casas Bonitas, the unlicensed electrical work performed by Casas Bonitas, and the unlicensed plumbing work performed by Casas Bonitas.[4] 11. Ms. Schumacher asserted that Casas Bonitas failed to comply with plans and specifications and failed to perform its construction work in a professional and workmanlike manner. Ms. Schumacher stated that the parties’ written construction agreement requires that all construction work is to be completed by licensed contractors.[5] 12. Ms. Schumacher testified that she tried to work with Casas Bonitas and come up with a new kitchen design to get the cabinets that had been provided and installed by Casas Bonitas to fit in her kitchen but that it was impossible to make the cabinets fit her kitchen area.[6] 13. Ms. Schumacher testified that Complainants allowed Casas Bonitas access to their residence to inspect the cabinets after the formal Complaint was filed and before the Corrective Work Order was issued.[7] 14. Ms. Schumacher acknowledged that Casas Bonitas sent Complainants an email asking for access to Complainants’ residence after the Corrective Work Order was issued. Ms. Schumacher testified that Casas Bonitas was given access and Casas Bonitas performed corrective work on Complainants’ sink and granite. During the onsite inspection Casas Bonitas’ representative inspected and took written notes of all damaged cabinets but performed no corrective action on the cabinets.[8] 15. Keith Quijada (hereinafter “Mr. Quijada”) was present when his mother, Ms. Schumacher, first discussed the kitchen remodel with Casas Bonitas. Mr. Quijada stated that Ms. Schumacher disclosed to Casas Bonitas her physical disability and the requirement that the new cabinets be at the proper height and of sufficient size for all of her small kitchen appliances to fit on the countertops.[9] 16. Mr. Quijada testified that he observed that Casas Bonitas experienced numerous delays at the jobsite due to lack of tools, lack of materials and lack of direction.[10] 17. Nick Yslas (hereinafter “Mr. Yslas”) testified that he worked for Casas Bonitas for about eight months and performed work at the Schumacher residence. Mr. Yslas stated Casas Bonitas failed to utilize licensed electricians and licensed plumbers for the construction work performed at the Schumacher residence. Mr. Yslas stated that he and other employees of Casas Bonitas were hired on the basis of their experience and were informed that they would be working under the contractor’s license of Casas Bonitas.[11] 18. Mr. Yslas testified that he observed Casas Bonitas’ employees performing non-permitted structural work and unlicensed electrical work at Complainants’ residence.[12] 19. Mr. Schumacher testified that Complainants decided to remodel their kitchen so that they could have eighteen inches of height between the countertops and the upper cabinets and to have a “nice looking” kitchen. Mr. Schumacher testified that he is a maintenance man and that he loaned several of his personal tools to Casas Bonitas’ workers so that work could proceed. Mr. Schumacher testified that he observed that the new kitchen cabinets were damaged as they were being unloaded from Casas Bonitas’ trailer.[13] 20. Mr. Schumacher testified that he had a “screaming match” with Casas Bonitas’ representative, Alex Ross, during which Alex Ross insisted that Casas Bonitas did not have to have a construction permit and that Casas Bonitas was not required to utilize licensed electricians and licensed plumbers for Complainants’ construction project. Mr. Schumacher testified that Alex Ross spoke to Complainants in a threatening and disrespectful manner. Mr. Schumacher testified that the individual that Casas Bonitas sent to their house to perform the corrective electrical work on Complainants’ residence was denied access because the individual was not a licensed electrician and was not employed by the licensed electrical contractor that he claimed to represent.[14] Mr. Schumacher’s testimony is found to be credible. Therefore, Complainants’ denial of access to Casas Bonitas was justified and reasonable under the circumstances. 21. Michael Schlabach (hereinafter “Mr. Schlabach”) testified that he was employed as a superintendent by Casas Bonitas for Complainants’ construction project. Mr. Schlabach acknowledged that he performed electrical work at Complainants’ residence and that he is not a licensed electrician.[15] 22. Mr. Schlabach testified that Ms. Schumacher denied Michael Ross and him access to Complainants’ residence one day when Michael Ross and Mr. Schlabach approached Complainants’ residence “about eight in the morning.” Mr. Schlabach stated that he did not remember the date of the visit and that he does not know if Casas Bonitas provided Complainants with prior notification of Casas Bonitas’ attempt to gain access to Complainants’ residence.[16] 23. Alex Ross testified that Complainants selected forty-two inch upper cabinets to provide extra storage capacity despite the fact that forty- two inch cabinets would provide less than eighteen inches of space between the countertops and the bottom of the upper cabinets.[17] 24. Debbie Alvarez (herein after “Ms. Alvarez”) testified that she is responsible for communication with all of Casas Bonitas’ customers including Complainants. Ms. Alvarez testified that Casas Bonitas issued several emails to Complainants in an attempt to gain access to Complainants’ residence to comply with the terms of the Corrective Work Order and that access was always denied.[18] 25. Michael Ross (hereinafter “Mr. Ross’) testified Complainants selected forty-two inch cabinets. Mr. Ross acknowledged that some of the cabinets were damaged by Casas Bonitas’ employees during the installation process.[19] 26. Mr. Ross testified that Casas Bonitas has attempted to have licensed individuals gain access to Complainants’ residence so the licensed individuals could examine and evaluate the complained-of construction work. Mr. Ross agreed that the construction project is incomplete and he agreed with the terms of the Corrective Work Order. Mr. Ross stated that Casas Bonitas wants to fully comply with the terms of the Corrective Work Order but has been unable to gain access to Complainants’ residence.[20] 27. Mr. Ross testified that Casas Bonitas issued several emails in an attempt to gain access to Complainants’ residence. Mr. Ross stated that Casas Bonitas specifically requested access to Complainants’ residence on February 13, 2012. [21] 28. Mr. Ross testified that Casas Bonitas was denied access to Complainants’ residence despite its repeated emails.[22] 29. Mr. Ross stated that he regards a March 27, 2012 email from Complainants as a denial of access.[23] 30. The March 27, 2012 email from Complainants provides, in pertinent part, as follows: With all due respect don’t you see that finishing all the cabinet work is just part of the issue. Everyone knows you had unlicensed workers working on our kitchen. We are aware removing all cabinets, appliances, counter[tops] and skylight will need to be done to resolve these matters.

I do not “wish to change the cabinets[.”] [I]ts what should have [been] done originally, if our kitchen was measured correctly this would not be an issue today. Finishing the cabinet work in our agreement at this time would just be putting up more cabinets between solving the unlicensed work behind and underneath the cabinets.

It has been brought to our attention that plumbing and gas work done in all the cabinets below, are suppose[d] to inside the wall your company furred out. With that in mind our furred out wall that is “bowed” is going to have to be removed and redone.

Do you really feel that finishing the cabinets in our agreement will resolve these major concerns? Everything is going to have to be removed and possibly damaged more in the process, why put up cabinets that will not fit the dimensions of the original layout as promised?[24]

31. Mr. Ross acknowledged that Casas Bonitas did not, at the time the plumbing work was performed on Complainants’ residence, believe that a licensed plumber was required for the amount of plumbing work performed on Complainants’ residence.[25] 32. Mr. Ross testified Casas Bonitas thought that the individual who performed electrical work on Complainants’ residence was in the process of becoming a licensed electrician.[26] 33. Mr. Ross acknowledged that Casas Bonitas did not obtain a building permit before performing structural construction work on Complainants’ residence because Complainants did not want to pay for cost of the required permits.[27] 34. Administrative notice is taken of Casas Bonitas’ prior license record as reflected on the Registrar of Contractors’ public website on August 6, 2012. Such prior license record reflects that License No. B.214567-R is current and that one prior complaint has resulted in discipline being imposed against Casas Bonitas’ License No. B.214567-R after an administrative hearing or default because of a violation(s) of state contracting laws. 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. Casas Bonitas performed structural construction work on Complainants’ residence without ensuring that a required building permit had been obtained from the local building authority. Casas Bonitas performed unlicensed electrical and unlicensed plumbing work on Complainants’ residence. Casas Bonitas failed to request inspections from the local building authority. Casas Bonitas failed to construct Complainants’ new kitchen in accordance with applicable plans and specifications. This Tribunal concludes that Casas Bonitas violated the charged provision of A.R.S. § 32-1154(A)(2).[28] 4. Casas Bonitas’ construction work in Complainants’ residence includes the installation of damaged cabinets, split cabinets, damaged drawers, damaged door fronts, damaged drawer fronts, excess holes, excess screws, nails protruding inside of cabinets, unworkable doors, and an out-of- level bowed wall. This Tribunal concludes that Casas Bonitas violated the charged provisions of A.R.S. § 32-1154(A)(3),[29] namely, A.A.C. R4-9- 108.[30] 5. Casas Bonitas performed unlicensed plumbing and unlicensed electrical work on Complainants’ residence. This Tribunal concludes that Casas Bonitas violated the charged provision of A.R.S. § 32-1154(A)(10).[31] 6. Casas Bonitas failed to provide Complainants with an estimated date of completion in its written contract. This Tribunal concludes that Casas Bonitas violated the charged provision of A.R.S. § 32-1154(A)(13)[32], namely, A.R.S. § 32-1158.[33] 7. Casas Bonitas failed to take appropriate corrective action to comply with the terms of the Corrective Work Order issued in this matter. This Tribunal concludes that Casas Bonitas violated the charged provision of A.R.S. § 32-1154(A)(23).[34] 8. Under all of the salient facts and circumstances presented herein, Casas Bonitas should not be allowed to wreak any further havoc on the lives of these homeowners. Thus, any condition placed into this Order for the purpose of allowing Casas Bonitas to accomplish corrective work as a means to reduce or eliminate otherwise appropriate disciplinary penalties should include the requirement that Casas Bonitas cause properly licensed contractors of Complainants’ choice, at Casa Bonitas’ sole expense, to fully comply with the terms of the Corrective Work Order. RECOMMENDed order In view of the foregoing, it is recommended that, commencing on the effective date of the Registrar of Contractors’ Order that License No. B.214567-R of Casas Bonitas shall be revoked unless the Registrar of Contractors receives and accepts written proof that Casas Bonitas has caused licensed contractors of Complainants’ choice, at Casas Bonitas’ sole expense, to fully comply with the terms of the Corrective Work Order issued in this matter and provides written proof, acceptable to the Registrar of Contractors, that Casas Bonitas has brought its written agreements into full compliance with the provisions of A.R.S. § 32-1158. It is further recommended that if Casas Bonitas causes properly licensed contractors, of Complainants’ choice and at Casas Bonitas’ sole expense, to fully comply with the terms of the Corrective Work Order issued in this matter and submits acceptable proof to the Registrar of Contractors that Casas Bonitas’ written agreements have been brought into full compliance with the provisions of A.R.S. § 32-1158, on or before the effective date of this Order, then the above provided License revocation shall not take place and instead License No. B.214567-R of Casas Bonitas shall be placed on disciplinary probation for a period of sixty days. It is further recommended, in addition to the above-provided penalties, if any, that Casas Bonitas 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 Casas Bonitas 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 Casas Bonitas’ contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Casas Bonitas, 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, August 7, 2012.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] 7/26/12 Hearing Record (hereinafter “H.R.”) at 24:47-28:54. [2] H.R. at 31:00-32:00. [3] See Exhibit No. C-T (Building Inspection Notice/Attachments). [4] See Exhibit Nos. C-1a, C-1b, and C-Q3. [5] See Exhibit C-A (Contract). [6] H.R. at 1:52:35-1:53:12. [7] H.R. at 2:05:22-2:05:53. [8] H.R. at 2:06:00-2:06:49. [9] H.R. at 2:12:50-2:13:35. [10] H.R. at 2:16:50-2:1716. [11] H.R. at 2:19:39-2:21:19. [12] H.R. at 2:24:21-2:26:25. [13] H.R. at 2:33:50-2:37:50. [14] H.R. at 2:40:25-2:43:25. [15] H.R. at 2:49:50-2:53:36. [16] H.R. at 3:05:20-3:06:06. [17] H.R. at 3:09:40-3:11:37. [18] H.R. at 3:36:30-3:36:50. [19] H.R. at 3:48:40-3:49:25. [20] H.R. at 3:48:40-3:51:08. [21] See Exhibit No. R-10 (February 13, 2012 email). [22] See Exhibit No. R-22 (March 15, 2012 email). [23] H.R. at 3:58:00-3:58:30. [24] See Exhibit No. R-25 (March 27, 2012 email). [25] H.R. at 4:00:48-4:01:15. [26] H.R. at 4:01:16-4:01:43. [27] H.R. at 4:02:00-4:03:33. [28] 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. [29] Violation of any rule adopted by the registrar. [30] 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. [31] Aiding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one's license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter. [32] Failure in any material respect to comply with this chapter. [33] A. From and after December 31, 1992 until December 31, 2007, any contract in an amount of more than one thousand dollars and less than one hundred fifty 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. 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. 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. 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. D. The requirements of this section shall not constitute prerequisites to the formation or enforcement of a contract. Failure to comply with the requirements of this section shall not constitute a defense by either party to an action for compensation, damages, breach, enforcement or other cause of action based on the contract.

[34] 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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