ALJDEC decisions subject to certification as final

2013A-5896-ROC-rf · Registrar of Contractors · 2016-07-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 13, 2016 APPEARANCES: Complainants James A. and Linda L. Tarron appeared and represented themselves. Done Rite LLC dba Done Rite Maintenance (“Respondent”) appeared through its authorized representative, member and qualifying party, Edward Hernandez. The Arizona Registrar of Contractors was represented by Assistant Attorney General John Tellier. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ FINDINGS OF FACT Background and Procedure 1. The Arizona Registrar of Contractors (“the Registrar”) issued License No. 214284 to Respondent. 2. On December 23, 2013, the Registrar received a Complaint against Respondent from Complainants regarding Respondent’s remodeling of their home, including but not limited to problems with the patio, dining room, kitchen, entry closet, guest bathroom, floors and front entryway (“the workmanship complaint”). See Exhibit 1. All told, the Complaint contained 26 items. Id. 3. On April 1, 2014, after an inspection, Beau Cruz, an investigator with the Registrar issued a Directive containing nineteen items of substantiated poor workmanship by Respondent. See Exhibit 2. 4. On May 12, 2014, Cruz conducted a compliance inspection at Complainants’ home. The notes from that inspection reflect that while Respondent obtained a permit after the fact, it made no attempt to correct the numerous instances of poor workmanship or to complete the project according to the estimates provided by Respondent and accepted by Complainants. See Exhibit 3. 5. Instead, on May 28, 2014, Respondent purported to withdraw from various aspects of the project and indicated that it did not intend to complete them in accordance with the Directive. See Exhibit A. 6. As a result of the Complaint, on May 14, 2015, the Registrar issued a Citation against Respondent charging a possible violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.[1] See Exhibit 5. 7. Respondent timely answered the Citation and the matter proceeded to hearing before the undersigned. On December 24, 2015, the undersigned issued an Administrative Law Judge (“ALJ”) Decision finding in pertinent part that: Undisputed credible testimony established that when Respondent did work in Complainants’ home, it did so in a manner that created a litany of problems that included: (a) problems with the covered porch slab’s broom finish and propensity for puddling water; (b) issues with a bathroom in that the wrong window was installed, the shower door opened in the wrong direction and safe egress from the shower was impeded by the toilet; (c) a bedroom wall was not repaired; (d) the ceiling in the dining room sagged; (e) problems with the kitchen pantry lacking shelves and having a pocket door that both jumped off track and had a gap; (f) a wall in the dining room was bulging; (g) kitchen walls that had been tagged but not completed; and, (h) tile throughout the house, was uneven, crooked, improperly grouted or had lippage presenting a tripping hazard.

Complainants established Respondent’s work detailed above was not done in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.

The undersigned also recommended that Respondent’s license be suspended for days. 8. During the hearing on the workmanship complaint, Hernandez testified (at paragraph 7 of the Findings of Fact in the Administrative Decision contained in Exhibit 6) that he was not disputing that several items of work performed fell below the Registrar’s minimum workmanship standards. In particular, he acknowledged that the wrong shower door had been installed, that the tiles throughout Complainants’ residence and the pantry door had workmanship issues associated with them, and that the covered porch slab required repair. Any suggestion Hernandez made in the instant hearing that Respondent is not responsible for the repair and completion of these items is expressly found to be not credible. 9. On January 26, 2015, the Registrar issued a Final Decision and Order finding that Respondent had violated A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. See Exhibit 6. Pursuant to the Order, the Registrar suspended Respondent’s license for three days. See id. 10. On April 21, 2016, Complainants filed a claim with the Residential Contractors’ Recovery Fund (“the Fund”) to recover the cost of fixing and completing the remodeling of their house. The claim form indicated that the lowest bid that Complainants had received to correct these items was a $29,856.00. See Exhibit 7. 11. The Registrar issued a Notice of Claim for Administrative Payout, finding that Complainants’ actual damages were $22,245.28. Respondent requested a hearing, believing the payout was too high. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”) for an evidentiary hearing. 12. Hearing was held on July 13, 2016. Hearing Evidence 13. The Directive required work on or completion of several items throughout the house, including the items noted above, the leech line and the patio. 14. Douglas Ulmer, claims adjuster for the Fund, testified that he reviewed the Directive that had been issued in Complainants’ matter, the Final Decision and Order containing the ALJ Decision, estimates provided by Respondent and accepted by Complainants, copies of checks Complainants paid to Respondent, and bids submitted by Complainants in calculating Complainants’ actual damages. Ulmer determined that Complainants still owed Respondent $7,610.72 under the parties’ agreement, which amount should be deducted from any bid. 15. Of the three bids provided, Barbour indicated that he utilized the lowest bid of $29,856.00 from AFC Remodelers LLC after confirming that the bid conformed to the Directive and was not excessive in amount or scope. He noted that he reviewed Exhibit A, which reflected Respondent’s attempt to belatedly withdraw from aspects of the project after receiving the Directive as well as Respondent’s concerns that Complainants had not paid it the agreed upon amounts, but said that this information did not change his opinion that the AFC Remodelers LLC bid was an appropriate reflection of the amount needed to repair and complete the project. 16. Barbour said that the $22,245.28 administrative payout represented the difference between the bid amount of $29,856.00 and the $7,610.72 still owed on the parties’ original agreement as reflected in Respondent’s estimates. The deduction of the unpaid amount adequately addresses Respondent’s concerns over monies Complainants never paid Respondent. 17. Edward Hernandez, the owner of and qualifying party of Respondent, testified that that the bid used as the basis for the administrative payout was excessive because the parties’ had no written contract and Respondent had withdrawn from various aspects of the project that were included in the bid such as the patio. Respondent did not offer any evidence to support the notion that the work needed to repair or complete the project could be done more cheaply. Respondent merely denied responsibility for some aspects of the repair and completion work contained in the AFC Remodelers LLC bid. 18. Complainant Linda L. Tarron testified that she and her husband hired Respondent, a licensed contractor, and trusted that it knew what needed to be done. She added that Respondent did not know the things it should have and “messed everything up” forcing Complainants’ to remove the leech line installed by Respondent and live without appropriate flooring for three years, causing mice to come up through the floor. She said that all Complainants want is the project done right so it is safe for their grandchildren. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction. A.R.S. § 32-1132(A) provides that “[a]n award from the fund is limited to the actual damages suffered by the claimant as a direct result of the contractor's violation but shall not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines. . . .” Respondent bears the burden of proof to establish that the proposed payout from the Fund is incorrect by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[4] After review of all the evidence, the Tribunal concludes that the award provided by the Fund is an accurate reflection of Complainants’ actual damages. The award appears to properly remedy the workmanship violations for which Respondent was responsible and completes those aspects of the project Respondent left undone. In the absence of contemporaneous documentary evidence that the bid utilized was excessive, the Tribunal finds that the bid was, in fact, appropriate. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainants receive a payout from the Residential Contractors’ Recovery Fund in the amount of $22,245.28. 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, July 20, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] 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.” [2] See 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). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] Black’s Law Dictionary 1220 (8th ed. 1999).

-----------------------

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