ALJDEC decisions subject to certification as final

2013A-4842-ROC · Registrar of Contractors · 2014-04-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 27, 2014, at 8:00 a.m. APPEARANCES: The Registrar of Contractors (hereinafter “Registrar”) was represented by Assistant Attorney General, Seth T. Hargraves, Esq. Can Do Construction, LLC (hereinafter “Can Do” or “Respondent”) was represented by its qualifying party/member, Wayne Bruce Johnston. 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 Background Can Do is the holder of License No. B-3.235765-R issued by the Registrar. License No. B-3.235765-R is a residential contractor’s license for general remodeling and repair.[1] Can Do is also the holder of License No. L-61.234420-C issued by the Registrar. License No. L-61.234420-C is a commercial contractor’s license for general remodeling, additions, replacements, and repairs to existing structures. A single contract for remodeling, repair, or a combination of both, cannot exceed $50,000.00.[2] On or about April 11, 2013, the Registrar received a Complaint against Can Do from Phillip M. Korte (hereinafter “Mr. Korte”) alleging that Can Do had disregarded plans and specifications and failed to perform work in a professional and workmanlike manner.[3] On or about May 1, 2013, the Registrar conducted a jobsite inspection of the construction project at 3837 Yoruba Basin Trail, Tombstone, Arizona. The Registrar subsequently issued a Corrective Work Order, directing Can Do to remedy its deficient workmanship on the construction project.[4] The Corrective Work Order provided, in pertinent part, as follows: Contractor to correct the following:

1. Missing shear supports at the gable ends per sheet 10: Shear supports are missing.

2. Missing shear blocking between purlins at gable ends per sheet 6: Shear blocking is missing.

3. Missing support blocking at all building corners per sheet 13: Truss connections are not per plan.

4. Truss connections at post are not per plan sheet 13: Truss connections are not per plans.

5. Missing gable end bracing per plan sheet 4: Gable end bracing is missing.

6. Roof ridge vent termination should be 4” not 12” per sheet 6 and the roof leaks: Roof ridge vent is 4” plans call for 12”.

7. Building height is greater than plans indicate and a large gap is present at the wall roof termination: Gap is present at the wall roof termination.

8. Wall supports are 2”x4” members which the contractor over nailed splitting the ends at several locations and documented with photos: Girt 2”x4”s are over nailed at several locations on walls.

9. The gable end and wall supports at the northwest corner of the building are pulling away from the post and a 3” gap has been created: Supports are pulling away creating a gap.

10. The roll up door was not installed properly and [there] are large gaps at the sides and top and a weather tight condition is not provided: Door is not installed correctly and is not centered in opening.

Testimony of Registrar Investigator Mike Nieves Investigator Mike Nieves (hereinafter “Investigator Nieves”) stated that the Corrective Work Order was issued on May 2, 2013. Investigator Klein testified that the Registrar received correspondence from Mr. Korte on or about June 6, 2013, indicating that Can Do had failed to comply with the Corrective Work Order.[5] Investigator Nieves testified that he performed a prehearing inspection at 3837 Yoruba Basin Trail, Tombstone, Arizona on March 10, 2014. Investigator Nieves testified that he confirmed that the items set forth in the Corrective Work Order had not been corrected. Investigator Nieves opined that Can Do failed to comply with the terms of the Corrective Work Order. Investigator Nieves testified that Can Do failed to comply with applicable plans and specifications and that the construction work performed by Can Do failed to comply with applicable workmanship and industry standards. Investigator Nieves testified that the contract prepared by Can Do and utilized as the parties’ construction agreement did not contain the minimum elements of a contract required by A.R.S. § 32-1158.[6] Investigator Nieves stated that the contract prepared by Can Do and utilized as the parties’ construction agreement did not contain an estimated completion date, did not inform Mr. Korte that he had a right to file a complaint with the Registrar for alleged violations of A.R.S. § 32-1154(A), 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). Investigator Nieves testified that Can Do had contracted and performed construction work beyond the scope of Can Do’s License No. B-3.235765-R. Investigator Nieves stated that Can Do’s residential License No. B-3.235765- R had been revoked on July 19, 2013. Investigator Nieves testified that Can Do’s License No. B-3.235765-R was restricted to the remodeling and repair of an existing residential structure. Investigator Nieves stated that the construction project at issue involved the construction of a completely new building, which is beyond the scope of Can Do’s License No. License No. B-3.235765-R. Investigator Nieves testified that License No. B-3.186493-R was issued to the sole proprietorship, Wayne Bruce Johnston dba Can Do Construction. Investigator Nieves stated that License No. B-3.186493-R was revoked by the Registrar on February 3, 2011.[7] Investigator Nieves testified that Can Do was prohibited from performing residential construction work with Can Do’s L-61.234420-C commercial contractor’s license. Investigator Nieves testified that Can Do’s L- 61.234420-C commercial contractor’s license was restricted to the performance of remodeling or repair of an existing commercial building that did not exceed $50,000.00.[8] Investigator Nieves stated that a warning letter was issued to Can Do for knowingly contracting beyond the scope of Can Do’s contractor’s licenses.[9] Investigator Nieves’ testimony is found to be credible. Testimony of Phillip M. Korte Mr. Korte testified that he is the owner of the residence located at 3837 Yoruba Basin Trail, Tombstone, Arizona. Mr. Korte stated that he was dissatisfied with Can Do’s construction work on his new garage and patio and retained a certified inspection service to inspect the construction work. Mr. Korte testified that his complaint was based upon his dissatisfaction with the quality of Can Do’s construction work and the inspection service’s written report.[10] Mr. Korte testified that the only change from plans and specifications that he authorized for the construction project was for the use of metal “saddles” for the support posts. Mr. Korte stated that he authorized the use of metal saddles for the support posts for the new garage after it was discovered that the original plan for installing the support posts would not be practical because of bedrock. Mr. Korte testified that he authorized no other changes from approved plans and specifications. Mr. Korte’s testimony is found to be credible. Testimony of Wayne Bruce Johnston Wayne Bruce Johnston (hereinafter “Mr. Johnston”) testified that Can Do had contracted to put up a new pole barn garage for Mr. Korte at Mr. Korte’s residence at 3837 Yoruba Basin Trail, Tombstone, Arizona. Mr. Johnston stated that the new garage was intended for commercial purposes because Mr. Korte intended to use the new garage to store motorcycles from Mr. Korte’s motorcycle business. Mr. Johnston acknowledged that Can Do deviated from approved plans and specifications. Mr. Johnston stated that “basically we beefed up everything.” Mr. Johnston testified that Mr. Korte agreed to changes in lumber sizes utilized in the construction of the new garage. Mr. Johnston acknowledged that no engineering was obtained for the changes to the approved plans and specifications. Mr. Johnston testified that the first problem that Can Do encountered at the construction project was that Can Do hit solid bedrock while attempting to excavate for the installation of the support posts for the new garage. Mr. Johnston stated that Mr. Korte provided metal saddles for the installation of the support posts. Mr. Johnston testified that the new garage was provided to Can Do in a kit package. Mr. Johnston stated that the new garage kit package was incomplete and that all of the wood in the kit package was green lumber. Mr. Johnston testified that the supplier of the kit package became uncooperative because he had to return to the supplier so often to obtain replacements for missing or defective pieces in the new garage kit. Mr. Johnston acknowledged that License No. B-3.235765-R of Can Do was revoked by the Registrar on July 19, 2013. Mr. Johnston acknowledged his sole proprietorship’s License No. B-3.186493- R had been revoked by the Registrar on February 3, 2011. Administrative notice is taken of Can Do’s prior license record for License No. B-3.235765-R as reflected on the Registrar’s public website on April 2, 2014. Such prior license record reflects that License No. B-3.235765-R was revoked on July 19, 2013. License No. B-3.235765-R had been previously suspended for lack of bond from June 26, 2010, through September 1, 2010.

Administrative notice is taken of Can Do’s prior license record for License No. L-61.234420-C as reflected on the Registrar’s public website on April 2, 2014. Such prior license record reflects that was License No. L- 61.234420-C was suspended for lack of bond from June 26, 2010, through September 1, 2010. Administrative notice is taken of Wayne Bruce Johnston’s sole proprietorship’s License No. B-3.186493-R as reflected on the Registrar’s public website on April 3, 2014. Such prior license record reflects that License No. B-3.186493-R was revoked on February 3, 2011. License No. B- 3.186493-R was canceled on July 16, 2007, and on July 31, 2007. License No. B-3.186493-R had been previously been suspended for non-renewal on July 1, 2007, and suspended for lack of bond from June 1, 2005, through June 15, 2005. CONCLUSIONS OF LAW 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.[11] 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). Can Do installed the new garage at Mr. Korte’s residence with missing shear supports, missing support blocking, and an incorrectly sized roof vent, the garage is higher than specified in approved plans and specifications, and the truss connections do not comply with plans and specifications. Mr. Korte did not authorize the departures from plans and specifications. The local building authority did not approve the changes from the approved plans and specifications. Can Do departed from or disregarded approved plans and specifications without the homeowner’s authorization and without the local building authority’s approval. This Tribunal concludes that Can Do violated the charged provision of A.R.S. § 32-1154(A)(2).[12] Can Do installed the new garage at Mr. Korte’s residence with missing shear supports, missing support blocking, an incorrectly sized roof vent, and truss connections that did not comply with plans and specifications. The 2”x4” framing members that Can Do installed are splitting and the garage door was not installed correctly. The roof for the new garage leaks. This Tribunal concludes that Can Do violated the charged provision of A.R.S. § 32-1154(A)(3),[13] namely, A.A.C. R4-9-108.[14] The contract prepared by Can Do and utilized as the parties’ construction agreement did not inform Mr. Korte that he had a right to file a complaint with the Registrar for alleged violations of A.R.S. § 32-1154(A), 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 Can Do violated the charged provision of A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32- 1158(B).[15] Can Do’s License No. B-3.235765-R is restricted to the remodeling and repair of an existing residential structure. The construction of the new garage and patio at Mr. Korte’s residence involved the construction of a completely new building that is beyond the scope of Can Do’s License No. B- 3.235765-R. Can Do’s commercial L-61.234420-C contractor’s license is restricted to the performance of remodeling or repair of an existing commercial building not to exceed $50,000.00. The construction of the new garage and patio was beyond the scope of Can Do’s L-61.234420-C. This Tribunal concludes that Can Do violated the charged provision of A.R.S. § 32-1154(A)(17).[16] Can Do has a person, Wayne Bruce Johnston, named on its License No. L- 61.234420-C who is also named on Can Do’s License No. B-3.235765-R that was revoked. Wayne Bruce Johnston is also named on License No. B-3.186493-R that was revoked. This Tribunal concludes that Can Do violated the charged provision of A.R.S. § 32-1154(A)(21).[17] Investigator Nieves performed a prehearing inspection on March 10, 2014. Investigator Nieves determined that Can Do had failed to perform any of the corrective action set forth in the Corrective Work Order. Can Do failed to comply with the terms of the Corrective Work Order. Can Do did not establish that Mr. Korte refused reasonable access to Can Do. This Tribunal concludes that Can Do violated the charged provision of A.R.S. § 32-1154(A)(23).[18] RECOMMENDed order In view of the foregoing, it is recommended that License No. B- 3.235765-R and License No. B-3.235765-R of Can Do shall be revoked. It is further recommended, in addition to the above-provided penalties, if any, that Can Do 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 Cam Do 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 Can Do’s contractors’ licenses, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Can Do, 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, April 4, 2014.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Appendix # E (A.A.C. R4-9-103). [2] See Appendix # D (A.A.C. R4-9-102). [3] See Exhibit No. 4 (Complaint with attachments). [4] See Exhibit No. 7 (Corrective Work Order). [5] See Exhibit No. 8 (6/2/13 Letter from Phil Korte). [6] See Exhibit No. 4 (Complaint with 2/21/11 contract attached). [7] See Exhibit No. 12 (Print out of contractor information from the Registrar of Contractors’ public website). [8] See Appendix D, p.7 (A.A.C. R4-9-102). [9] See Exhibit No. 11 (7/26/13 Warning Letter). [10] See Exhibit No. 4 (Complaint with attached 2/9/13 written report from Brown & Associates Certified Inspection Service, Inc.). [11] A.A.C. R2-19-119 provides as follows: A. Standard of proof. Unless otherwise provided by law, the standard of proof is a preponderance of the evidence. B. Burden of proof. Unless otherwise provided by law: 1. The party asserting a claim, right, or entitlement has the burden of proof; 2. A party asserting an affirmative defense has the burden of establishing the affirmative defense; and 3. The proponent of a motion shall establish the grounds to support the motion.

[12] 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 [13] 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.” [14] 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.

[15] A.R.S. § 32-1158 provides, in pertinent part, as follows: B. From and after December 31, 2007, any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information: 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.

[16]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. [17] A.R.S. § 32-1154(A)(21) provides grounds for suspension or revocation of a contractor’s license as follows: The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:

Having a person named on the license who is or was named on any other license in this state or in another state that is under suspension or revocation for any act or omission that occurs while the person is or was named on the license unless the prior revocation was based solely on a violation of this paragraph.

[18] A.R.S. § 32-1154(A)(23) provides as follows:

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