ALJDEC decisions subject to certification as final

2013A-3980-ROC · Registrar of Contractors · 2013-12-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 2, 2013, at 8:00 a.m. APPEARANCES: The Registrar of Contractors was represented by Assistant Attorney General, Michael Raine, Esq. All City Drywall LLC (hereinafter “All City”) was represented by its qualifying party/member, Heidi Ebel. 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. All City is the holder of License No. C-10.228406-R issued by the Registrar of Contractors.[1] On or about February 1, 2013, All City entered into a written contract with Susan Cohn (hereinafter “Ms. Cohn”) to remodel Ms. Cohn’s residence for the sum of $20,000.00. The construction work included, but was not limited to, removing an existing exterior wall, constructing a new exterior wall, installing a new sliding glass door, installing a new fireplace, removing and replacing baseboards and door trims, extending the laundry room, relocating the washer and dryer, installing a new closet in the garage, and squaring off the patio. All City and Ms. Cohn then orally amended their written construction agreement for All City to perform additional construction work, including but not limited to widening the front office door, moving electrical lines in the office, moving the office sliding door to the kitchen, repositioning a ceiling light in the kitchen, repairing stucco in the kitchen, and repairing and resealing flagstone in the patio area for an additional cost of $1,000.00. Ms Cohn was dissatisfied with All City’s workmanship and requested that All City properly correct its workmanship on her residence. On or about March 1, 2013, All City ceased work on the construction project and refused to return to Ms. Cohn’s residence to complete the construction project. Ms. Cohn then filed a formal Complaint against All City with the Registrar of Contractors. Pursuant to the filing of the formal Complaint, an assigned Registrar Inspector, Randy Cason (hereinafter “Inspector Cason”), conducted an onsite inspection. Inspector Cason issued a written Corrective Work Order on April 16, 2013, directing All City to obtain all required permits and to subcontract all phases of the remodeling project in the Corrective Work Order, other than drywall work, to properly licensed contractors. The Corrective Work Order provided, in pertinent part, as follows: During the inspection, this Inspector found that the Respondent had not completed the project per the contract specifications and/or verbal agreements made between both parties; and that the work that had been completed by the Respondent does not meet the ROC Workmanship Standards and that no building permit had been obtain[ed] for this remodeling project prior to the work commencing.

On the following Corrective Work Order; the Respondent is required to obtain all building permits from the Proper Building Authorities prior to any complaint items being corrected and/or completed pertaining to this Remodeling project.

The Respondent is also outside the scope of their C-10 (Drywall) license for this remodeling project (requires a B-3; General Remodeling license) and is required to sub-contract all phases of the remodeling project and this Corrective Work Order other than Drywall witch the Respondent is licensed for; to properly licensed Sub-Contractors in good standing with the ROC Licensing Department.

The following is a list submitted by the Complainant that the Respondent will have to correct/complete along with the Contract Specifications by appropriate means[.] They are as follows; Complaint #1 – Closets made in garage are uneven and too small to accommodate clothing. Complaint #2 – Plumbing in laundry room leaks. Complaint #3 – Rainsoft water softener outside back door disconnected and not working. Complaint #4 – Door in garage not trimmed out and no stoop. Complaint #5 – Drywall in garage and closets not taped or finished/no doors. Complaint #6 – Laundry room drywall not taped or finished and flagstone floor not done. Complaint #7 – Door in kitchen not trimmed out or finished. Complaint #8 – Window in kitchen not trimmed out or finished drywall incomplete. Complaint #9 – Flagstone floor in living room not finished. Complaint #10 – Fireplace floor in living room not finished with stone and slate and TV not mounted. Complaint #11 – Patio doors in living room leak are not finished or trimmed out/no lock. Complaint #12 – Drywall throughout house is incomplete not taped or finished or painted. Complaint #13 – Flagstone floor in office not finished and laundry room. Complaint #14 – Rough opening for office not finished or trimmed out or painted. Complaint #15 – Flagstone on patio not finished. Complaint #16 – Baseboards throughout house not installed, stained or completed. Complaint #17 – Flagstone floor throughout not cleaned and resealed. Complaint #18 – Electrical in kitchen not done light moved and backsplash lights not installed. Complaint #19 – Fireplace unit in living room not provided. Complaint #20 – Stucco on rear wall of house improperly installed not blended properly. Complaint #21 – Sink in laundry room not installed. Complaint #22 – Garbage left on property.

All City failed to comply with the terms of the Corrective Work Order and on October 8, 2013, the Registrar of Contractors issued a Citation and Complaint charging All City with possible violations of A.R.S. § 32- 1154(A)(2),[2] A.R.S. § 32-1154(A)(3),[3] namely, A.A.C. R4-9-108,[4] A.R.S. § 32-1154(A)(13),[5] namely, A.R.S. § 32-1158(B),[6] A.R.S. § 32- 1154(A)(17),[7] and A.R.S. § 32-1154(A)(23).[8] Testimony of Registrar Inspector Randy Cason Inspector Cason testified that he found the construction project to be incomplete when he performed his onsite inspection on April 1, 2013. Inspector Cason stated that he examined each item of the Complaint. Inspector Cason testified that he issued a Corrective Work Order on April 16, 2013. Inspector Cason testified that the construction work performed by All City did not meet applicable workmanship standards. Inspector Cason stated that a construction permit was required for the construction project. Inspector Cason testified that All City was responsible to ensure that a required building permit had been obtained from the local building authority before All City started construction work on Ms. Cohn’s residence. Inspector Cason testified that All City contracted to perform and performed construction work that is beyond the scope of All City’s License No. C- 10.228406-R. Inspector Cason stated that All City’s representative stated that Javier Rodriguez (hereinafter “Mr. Rodriguez’) was the general contractor for the construction project. Inspector Cason stated that he contacted Mr. Rodriguez and that Mr. Rodriguez denied any involvement in the construction project. Inspector Cason testified that construction permits were required for the performance electrical work, plumbing work, and the fireplace installation at Ms. Cohn’s residence. Inspector Cason stated that All City failed to ensure that any construction permits had been obtained before All City began work on the construction project. Inspector Cason testified that he informed All City that it would have obtain a building permit and to hire properly licensed contractors to perform the construction work necessary to comply with the terms of the Corrective Work Order. Inspector Cason stated that All City failed to comply with the terms of the Corrective Work Order. Inspector Cason testified that the contract provided by All City failed to comply with the applicable provisions of A.R.S. § 32-1158(B).[9] Inspector Cason stated that the contract did not provide written notice that the homeowner had a right to file a complaint with the Registrar of Contractors and did not provide an estimated start date and estimated completion date. Inspector Cason’s testimony is found to be credible Testimony of Adam Stafford, Esq. Adam Stafford, Esq. (hereinafter “Mr. Stafford”) testified that he is the Assistant Chief for the Registrar of Contractors’ Legal Department. Mr. Stafford stated that he had personally reviewed the file for this matter. Mr. Stafford testified that All City’s C-10 license does not include electrical, plumbing, glazing or general contracting work. Mr. Stafford stated that All City’s C-10 license was only for drywall work including the installation of lightweight non-bearing wall partitions and ceiling grid support systems for drywall. Mr. Stafford testified that the parties’ contract that All City prepared does not contain the minimum elements of a contract as required by applicable statute. Mr. Stafford stated that the contract did not provide written notice that the homeowner had a right to file a complaint with the Registrar of Contractors, did not contain the Registrar's telephone number and website address, and did not state that complaints must be made within the applicable time period as set forth in A.R.S. § 32-1155(A). Mr. Stafford testified that All City knowingly contracted beyond the scope of its License No. C-10.228406-R. Mr. Stafford stated that even if no construction work had actually been performed, All City’s written proposal contained work that was beyond the scope of All City’s C-10 License and constituted a violation of A.R.S. § 32-1154(A)(17). Mr. Stafford’s testimony is found to be credible. Testimony of Jerold Fleischman Jerold Fleischman (hereinafter “Mr. Fleischman”) testified that he and his wife, Ms. Cohn, are the owners of the residence located at 16811 E. Hawk, Fountain Hills, Arizona. Mr. Fleischman stated that he contracted with All City for the construction project. Mr. Fleischman denied that there was a general contractor for the construction project. Mr. Fleischman testified that All City informed him that no permits would be necessary for the construction project. Mr. Fleischman stated that All City agreed to perform electrical, plumbing, glazing, and structural work as part of the construction project. Mr. Fleischman testified that All City agreed to construct a fireplace as part of the construction contract. Mr. Fleischman testified that All City’s construction work was very poor. Mr. Fleischman stated that the plumbing work performed by All City was leaking and that there was exposed electrical wiring in his residence. Mr. Fleischman testified that the construction work performed by All City was so poor as to be valueless. Mr. Fleischman testified that All City abandoned the construction project after “yelling at [Ms. Cohn].” Mr. Fleischman stated that All City’s employee swore at his wife and “stormed out” of the residence. Mr. Fleischman stated that All City made no effort to comply with the Corrective Work Order. Mr. Fleischman denied that he or his wife had ever threatened or denied access to All City. Mr. Fleischman acknowledged that David Mau called him on the telephone. Mr. Fleishman testified that David Mau sounded as though he was intoxicated and that Mr. Mau’s speech could not be understood. Mr. Fleischman stated that All City informed him that it did not have the money to pay its employees and asked that Mr. Fleishman and Ms. Cohn pay All City’s employees directly. Mr. Fleischman’s testimony is found to be credible. Testimony of Susan Cohn Ms. Cohn testified that she agreed with her husband’s testimony. Ms. Cohn stated that she had never threatened any of All City’s employees. Ms. Cohn testified that she had never denied access to All City. Ms. Cohn stated that All City did not respond to the Corrective Work Order. Ms. Cohn testified that she discussed the scope of work involved in the construction project with All City before entering into a contract with All City. Ms. Cohn testified that All City performed all of the construction work at her residence. Ms. Cohn stated that All City informed her that it did not have the money to pay its employees and asked that Mr. Fleishman and Ms. Cohn pay All City’s employees directly. Ms. Cohn testified that she asked David Mau if All City was going to return to the construction project. Ms. Cohn stated that Mr. Mau said “F___ No!” Ms. Cohn’s testimony is found to be credible. Testimony of David Mau David Mau (hereinafter “Mr. Mau”) testified that he is employed by All City. Mr. Mau stated that Mr. Javier Rodriquez was present for the first meeting with Mr. Fleischman and Ms. Cohn. Mr. Mau testified that Javier Rodriguez was the general contractor for the construction project.[10] Mr. Mau testified that he informed Mr. Fleischman and Ms. Cohn that someone would call them about any construction permits that might be required for the construction project. Mr. Mau stated that Mr. Fleischman said that his furniture was in transit from Colorado and that he did not want to wait for a permit. Mr. Mau testified that problems at the construction site started when Ms. Cohn kept asking for changes in the construction project. Mr. Mau stated that Ms. Cohn added “a bunch of lights” and wanted to move a window to the kitchen area. Mr. Mau testified that the changes caused the cost of construction to go up. Mr. Mau testified that the people that Mr. Fleischman paid directly were Mr. Fleischman’s employees, not All City’s employees. Mr. Mau stated that he was not allowed into the residence after Inspector Cason’s onsite inspection. Mr. Mau testified that he contacted Mr. Fleischman on the telephone and asked for access to the residence. Mr. Mau stated that Mr. Fleischman refused to allow All City to enter the residence and demanded money. Mr. Mau testified that he had “about three telephone conversations” with Mr. Fleischman attempting to gain access to the residence. Mr. Mau testified that Rene Lopez (hereinafter “Mr. Lopez”) performed the electrical and plumbing work at the construction project. Mr. Mau stated Mr. Lopez was not licensed to perform electrical or plumbing work. Mr. Mau acknowledged that he contacted Mr. Lopez and arranged for Mr. Lopez to perform electrical and plumbing work at the construction project. Mr. Mau testified that All City was going to hire a licensed electrician and plumber to correct construction work that All City performed in the Fleischman/Cohn residence if Mr. Fleischman and Ms. Cohn had allowed All City access to their residence. Mr. Mau asserted that Javier Rodriguez was the general contractor for the project. Testimony of Heidi Ebel Heidi Ebel (hereinafter “Ms. Ebel”) testified that she is the qualifying party for All City. Ms. Ebel stated that she was not involved in any of the meetings at the beginning of the construction project. Ms. Ebel testified that she personally contacted Mr. Fleischman and Ms. Cohn on April 26, 2013, and attempted to gain access to their residence. Ms. Ebel stated that Mr. Fleischman and Ms. Cohn denied All City access to their residence. Ms. Ebel testified that All City had “years and years of experience and thousands of satisfied customers.” Ms. Ebel stated that All City performed lots of extra work at the construction site. Ms. Ebel testified that Ms. Cohn stated that she “never, ever, ever wanted to hear from [Ms. Ebel] again.” Ms. Ebel testified that All City could not comply with the Corrective Work Order if it could not get access to the residence. Ms. Ebel acknowledged that All City violated the charged provisions of A.R.S. § 32- 1154(A)(2). Ms. Ebel stated that no permit was obtained and work was performed. Ms. Ebel testified that she did not believe that All City violated the charged provision of A.R.S. § 32-1154(A)(3), namely, A.A.C. R4-9-108. Ms. Ebel stated that she did not believe that Mr. Mau would perform drywall work that failed to comply with applicable workmanship standards. Ms. Ebel acknowledged that the contract prepared by All City did not contain the minimum elements of a contract in violation of the charged provision of A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32-1158(B). Ms. Ebel denied that All City had performed work beyond the scope of its license. Ms. Ebel testified that New Energy Design was the general contractor for the construction project.[11] Ms. Ebel testified that she knew that Javier Rodriguez was a licensed contractor because she checked his contractor’s license prior to the hearing. Ms. Ebel testified that All City did not violate the charged provision of A.R.S. § 32-1254(A)(23). Ms. Ebel stated that she did not believe that All City made any requests for access in writing. Ms. Ebel testified that she did contact Ms. Cohn on the telephone. Ms. Ebel stated that she believed that All City’s drywall work was damaged after All City left the construction project. Administrative notice is taken of All City’s prior license record as reflected on the Registrar of Contractors’ public website on December 16, 2013. Such prior license record reflects that License No. C-10.228406-R of All City is current. License No. C-10.228406-R of All City was suspended for lack of bond from December 16, 2012, through January 7, 2013. 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. All City departed from or disregarded building codes by failing to ensure that a required construction permit was obtained prior to commencing work on the construction project. This Tribunal concludes that All City violated the charged provision of A.R.S. § 32-1154(A)(2). 4. The electrical, plumbing and drywall work performed by All City failed to comply with applicable workmanship and industry standards. This Tribunal concludes that All City violated the charged provision of A.R.S. § 32-1154(A)(3), namely, A.A.C. R4-9-108. 5. The proposal prepared by All City and utilized as the contract did not provide written notice that the homeowner had a right to file a complaint with the Registrar of Contractors and did not contain the Registrar's telephone number and website address and did not state that complaints must be made within the applicable time period as set forth in A.R.S. § 32- 1155(A). This Tribunal concludes that All City violated the charged provision of A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32-1158(B). 6. All City knowingly contracted to perform electrical, plumbing, glazing, and structural work that is beyond the scope of All City’s License No. C- 10.228406-R. This Tribunal concludes that All City violated the charged provision of A.R.S. § 32-1154(A)(17). 7. All City failed to obtain a building permit from the local building authority and failed to retain properly licensed contractors in good standing with the Registrar of Contractors to perform corrective work on the homeowners’ residence to comply with the terms of the Corrective Work Order. All City failed to perform any of the directed corrective work on the drywall in the homeowners’ residence. There was no credible evidence of any denial of access. This Tribunal concludes that All City violated the charged provision of A.R.S. § 32-1154(A)(23). RECOMMENDed order In view of the foregoing, it is recommended that commencing on the effective date of the final Order, License No. C-10.228406-R of All City shall be revoked unless the Registrar of Contractors receives and accepts written proof that All City has fully complied with the terms of the written Corrective Work Order by retaining properly licensed contractors, at All City’s sole expense, to properly correct and complete all structural, electrical, plumbing and all other contractual work beyond the scope of All City’s drywall license and by performing drywall work that is within the scope of its C-10 license, and that all of All City’s contracts have been fully corrected to comply with the provisions of A.R.S. § 32-1158(B). It is further recommended that if All City properly causes the full accomplishment of the above described corrective actions, at All City’s sole expense, on or before the effective date of this Order, then the above-provided license revocation shall not take place and that, instead, License No. C-10.228406-R of All City shall be suspended for a period of thirty (30) days. It is further recommended, in addition to the above-provided penalties, if any, that All City 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 All City 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 All City’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with All City, 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, December 18, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] Pursuant to A.A.C. R4-9-103, a C-10 license allows a contractor to perform the “[i]nstallation, repair, taping, and texturing of gypsum wallboard, including lightweight non-bearing wall partitions and ceiling grid support systems for drywall.” [2] A.R.S. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other 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 that 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. [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(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.

[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] See Exhibit No. Exhibit No. 2. [10] This Tribunal conducted a search of the Registrar of Contractors’ public website on December 16, 2013, and was unable to locate a Javier Rodriguez with a general contractor’s license. [11] This Tribunal conducted a search of the Registrar of Contractors’ public website on December 16, 2013, and was unable to locate a contractor’s license under the name “New Energy Design.”

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826