ALJDEC decisions subject to certification as final

2013A-4816-ROC · Registrar of Contractors · 2014-03-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 24, 2014 APPEARANCES: Assistant Attorney General Seth Hargraves represented Complainant Registrar of Contractors. Bo Brosemann appeared on behalf of Respondent Blinds-N-Shutters Super Store, Inc. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ FINDINGS OF FACT Background and Procedure 1. On August 7, 2007, the Arizona Registrar of Contractors (“the Registrar”) issued License No. C65R.236229-R to Blinds-N-Shutters Super Store, Inc. (“Respondent”). Bo Brosemann was listed as Respondent’s Qualifying Party and Vice-President.[1] Respondent’s license is current and there is no disciplinary history reflected on the Registrar’s website. 2. On December 19, 2013, the Registrar on its own motion issued a Citation and Notice of Hearing against Respondent’s License No. C65R.236229-R based on Respondent’s performance of contracting work on a job for Vern Sherwood. Based on Respondent’s alleged misconduct on the job, the Citation charged three counts of 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.R.S. § 32-1154(A)(23). 3. Respondent filed a timely written answer to the Citation and Complaint, generally stating that it had attempted to comply with the Registrar’s directives and that it had offered a resolution to the Sherwoods, and that the Sherwoods were non-responsive to Respondent’s attempts to resolve the matter. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent agency, for an evidentiary hearing. 4. An evidentiary hearing was held on February 24, 2014. The Registrar submitted seven exhibits and presented the testimony of three witnesses: (1) Mr. Sherwood; (2) Adam Stafford, Esq., Assistant Chief of the Registrar’s Legal Department; and (3) Randy Cason, the Registrar’s Inspector/Investigator[2] who performed the jobsite inspection. Mr. Brosemann testified on behalf of Respondent. Hearing Evidence The Sherwood Complaint (Case No. 2012-5878) 5. On or about August 20, 2012, Respondent contracted with Mr. Sherwood to install custom shutters at Mr. Sherwood’s residence for the contract price of $15,700.00.[3] The Sherwoods paid $7,850.00 of the contract price to Respondent.[4] On December 6, 2013, Mr. Sherwood filed a complaint against Respondent with the Registrar alleging four specific deficiencies and generally alleging a departure from plans and specifications and poor work by Respondent in the installation of the shutters.[5] The Registrar designated the complaint as Case No. 2012-5878. 6. The Registrar assigned Case No. 2012-5878 to its Investigator, Randy Cason, for investigation. 7. Investigator Cason performed a jobsite inspection on January 8, 2013. Mr. and Mrs. Sherwood and Mr. Brosemann on behalf of Respondent attended the jobsite inspection. 8. On January 11, 2013, Investigator Cason issued a Corrective Work Order (“CWO”) in Case No. 2012-5878 that required Respondent to correct by appropriate means three of the four items on Mr. Sherwood’s complaint within fifteen days.[6] 9. Investigator Cason testified that the sample piece of shutter provided to him by the Sherwoods as the agreed upon color of the shutters did not match the color of the installed shutters. Investigator Cason testified that the shutters are a darker color than the sample and, as such, Respondent’s work was not performed per the contract specifications. Investigator Cason further testified that because the shutters were not the agreed upon color, Respondent’s work did not meet workmanship or professional standards. Therefore, Investigator Cason directed Respondent to correct this item of complaint by appropriate means. 10. In response to the CWO, Respondent sent a letter dated January 15, 2013, to both the Sherwoods and Investigator Cason.[7] The letter was an offer of resolution wherein Respondent offered a full refund of the contract price, the removal of the shutters, removal of nails and filling of holes, and painting of walls to return them to their original condition.[8] 11. On February 7, 2013, the Registrar received notice from the Sherwoods’ attorney that Respondent had not complied with the CWO.[9] Investigator Cason testified that notwithstanding Respondent’s offer of resolution, because the Sherwoods did not agree to the offer, Respondent was not in compliance with the CWO. 12. Mr. Sherwood testified that he refused Respondent’s offer of a full refund, removal of the shutters and repair of any damage due to remarks made by Mr. Brosemann’s brother and business partner. Mr. Sherwood testified that he questioned Respondent’s ability to properly remove the shutters and repair the walls and doors because he felt that it was a “vindictive proposition” and that he and his wife were not treated in a civil manner by Mr. Brosemann’s brother as he used a harsh tone and vulgarity in his communications with the Sherwoods. Mr. Sherwood acknowledged that the shutters were of a good quality, just the wrong color, and that he did not give Respondent an opportunity to make the Sherwoods whole due to the fact that they were leery of having Respondent back in their home and their fear of potential damage. 13. Mr. Sherwood testified that he would have settled for monetary compensation, but for the fact that Respondent sued the Sherwoods for the balance of the contract price, compelling the Sherwoods to retain counsel. The Sherwoods have only paid half of the contract price according to the filed Complaint and the evidence of record established that the job is 98% completed. 14. Mr. Brosemann testified that he does not deny that the shutters were made in the incorrect color; however, he feels that Respondent was not given an opportunity to resolve the deficiency notwithstanding Respondent’s reasonable attempts to do so. Respondent explained in its letter dated January 15, 2013, that Respondent no longer has a relationship with the manufacturer of the shutters and that therefore, the shutters cannot be remade in the correct color.[10] Further, the sample given to the Sherwoods was an incorrect color sample and, as such, the manufacturer could not re-manufacture them in that color.[11] 15. The Registrar asserted that it cannot force a homeowner to accept offers of corrective work and that the Sherwoods lost confidence in Respondent due to Respondent’s poor treatment of them. The Registrar requested a three day suspension of Respondent’s contracting license and the imposition of a $500.00 civil penalty. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[12] 2. The Registrar bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[13] Respondent bears the burden of proof to establish affirmative defenses and factors in mitigation of any penalty by the same evidentiary standard.[14] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[15] 3. The Registrar’s Notice of Hearing advised Respondent as follows: [I]n the event Respondent is found to have violated any of the statutory provisions charged in this case, then the assigned Administrative Law Judge, in accordance with a standing motion filed by the [Registrar] with [OAH], may properly consider the Respondent’s prior disciplinary record and current license status as a matter in mitigation or aggravation when formulating and submitting an appropriate recommended disposition of this matter.

4. The Registrar established that Respondent contracted to install custom shutters in Mr. Sherwood’s home and Respondent did not dispute that it installed the wrong color shutters, deviating from the agreed upon color, thereby violating A.R.S. § 32-1154(A)(2).[16] 5. Notwithstanding that there was no evidence to establish poor workmanship in the installation of the shutters, Respondent’s failure to install the correct color shutters was unprofessional. Therefore, the Registrar established that Respondent’s workmanship on Mr. Sherwood’s project did not comply with the Registrar’s standards, in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.[17] 6. The evidence demonstrated that a jobsite inspection by the appointed investigator for the Registrar was held, pursuant to which the Registrar issued a CWO to Respondent directing it to perform specified remedial work. The evidence of record established that Respondent cannot have the shutters re-manufactured in the shade chosen by the Sherwoods. The evidence of record further established that Respondent offered a reasonable and viable solution in an attempt to comply with the CWO. Notwithstanding such offer, the Sherwoods refused based on an unfounded fear that Respondent would not properly remove the shutters and repair the walls and doors. Therefore, the Administrative Law Judge concludes that Respondent was justified in not performing the corrective work, and did not violate A.R.S. § 32-1154(A)(23).[18]

7. Respondent’s license history is deemed good and is considered a factor in mitigation of the penalty for the statutory violations established in this matter. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective day of the final Order, Respondent Blinds-N-Shutters Super Store, Inc.’s License No. C65R.236229-R shall be suspended for two business days. 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 forty (40) days from the date of that certification.

Done this day, March 10, 2014.

/s/ Sondra J. Vanella Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 1. [2] At hearing, the Registrar referred to Mr. Cason as Investigator, although the Exhibits reference Mr. Cason as Inspector. The Administrative Law Judge will refer to Mr. Cason as Investigator throughout this Decision for consistency. [3] See the Registrar’s Exhibit 2. [4] Id. [5] Id. [6] See the Registrar’s Exhibit 4. [7] See the Registrar’s Exhibit 5. [8] Id. [9] See the Registrar’s Exhibit 6.

[10] See the Registrar’s Exhibit 5. [11] Id. [12] See A.R.S. § 32-1154(A). [13] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [14] See A.A.C. R2-19-119(B)(2). [15] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [16] 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 . . . 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.” [17] 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.” 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.” [18] 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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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826