ALJDEC decisions subject to certification as final

2014A-1278-ROC · Registrar of Contractors · 2014-06-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 16, 2014, at 8:00 a.m. APPEARANCES: Flooring 2 Day LLC (hereinafter “Flooring” or “Respondent”) was represented by its attorney, Bert L. Roos, Esq., Bert L. Roos, P.C. The Arizona Registrar of Contractors (hereinafter “Registrar” or “Complainant”) was represented by Assistant Attorney General, John Tellier, Esq. 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 Flooring is the holder of License No. C-8.220301-R issued by the Registrar. License C-8.220301-R is a residential contractor’s license for floor covering.[1] On or about September 27, 2013, the Registrar received a Complaint against Flooring from Scot Hanson (hereinafter “Mr. Hanson”) alleging poor work by Flooring in the performance of its February 10, 2012 contract to install tile in Mr. Hanson’s residence located at 1250 W. Geronimo Place, Chandler, Arizona for $11,000.00.[2] The Registrar then conducted a jobsite inspection of the construction project at 1250 W. Geronimo Place, Chandler, Arizona. The Registrar subsequently issued a Corrective Work Order on December 5, 2013, directing Flooring to remedy its deficient workmanship on the construction project. The Corrective Work Order provided, in pertinent part, as follows: 1) Regarding the unraveling of the carpet at the master bedroom door entrance: This inspector saw no evidence of carpet or installation failure. The independent inspection report also did not indicate fault of the contractor but from a substantial impact at that area.

No action is required by the contractor.

2) Per the information provided by the complainant, the pictures do NOT show the use of a membrane between the tile and the Hardie- backer board. Even if it did, this would only be a manufacturer’s recommendation and not adapted as a standard by this agency. The lack of a membrane use could be used as a possible cause of the floor tile failure, however, there was no evidence of failure exhibited at the jobsite inspection.

No action is required by the contractor.

3) The use of a caulk-like grout or movement material, between the tile and the baseboards along the walls is not a standard adapted by this agency. There was no evidence of any excessive or minor grout cracking along any of the walls.

No action is required by this contractor.

4) Regarding the use of the “Red Guard”: Manufacturer recommends that it be spread at a distance of the diagonal measurement of the tile being installed on each side of the crack. In this case that measurement would be 28+ inches on each side of the crack. This would not be possible in many areas. For example, if a crack was down the center of a 36” wide hallway the maximum amount of Red Guard could only be 18 inches on each side of the crack, thus NOT meeting this recommended usage. Once again this would only be a manufacturer’s recommendation and not adapted as a standard by this agency. The lack of Red Guard usage could be used as a possible cause of the floor tile failure. However, there was no evidence of floor tile failure.

No action is required by the contractor.

5) Regarding the grout not meeting the top of the tile at areas throughout: This agency does have a minimum standard indicating that the grout should come to the top surface of the floor tiles and that no vertical face of the tiles shall be exposed. This inspector did find areas throughout where the grout did not meet this standard.

Contractor is to correct by appropriate means.

Testimony Testimony of Registrar Investigator Theodore William Gerold Investigator Theodore William Gerold (hereinafter “Investigator Gerold”) testified he had been employed by the Registrar for over thirteen years. Investigator Gerold stated that he had over twenty-one years of construction experience prior to his employment with the Registrar. Investigator Gerold testified that the Registrar received correspondence from Mr. Hanson indicating that Flooring had failed to comply with the Corrective Work Order. Investigator Gerold testified that he performed the initial onsite inspection at Mr. Hanson’s residence and that he authored the Corrective Work Order issued in this matter. Mr. Gerold stated that he personally observed areas of the new tile floor where the grout did not come to the top surface of the floor tiles. Mr. Gerold testified that the grout is required to come up to the top of the slight beveled edge of the floor tile. Investigator Gerold testified that Flooring failed to comply with applicable workmanship and industry standards. Investigator Gerold stated that there was irregular grout throughout the new tile floor. Investigator Gerold testified that there were some areas of the floor where the grout did come up to the top edge of the floor tile. Investigator Gerold testified that the construction agreement prepared by Flooring and utilized as the parties’ construction contract did not contain the minimum elements of a contract required by A.R.S. § 32-1158. Investigator Gerold stated that the contract prepared by Flooring and utilized as the parties’ construction agreement did not contain an estimated completion date, did not inform Mr. Hanson 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 Gerold testified that Flooring repeatedly complained about lack of access to Mr. Hanson’s residence. Investigator Gerold stated that Mr. Hanson always responded by denying that he had never denied access to Flooring to perform corrective work at his residence. Investigator Gerold’s testimony is found to be credible. Testimony of Scot Hanson Mr. Hanson testified that he is the owner of the residence located at 1250 W. Geronimo Place, Chandler, Arizona. Mr. Hanson stated that contract was for $10,800.00. Mr. Hanson testified that the parties’ construction agreement was prepared by Flooring. Mr. Hanson stated that the construction agreement did not have a starting date or an end date. Mr. Hanson testified that initially there were issues with the quality of the tiles. Mr. Hanson stated that after a manufacturer’s tile expert inspected the new tile, it was removed and replaced with new tile. Mr. Hanson testified that he had specified that the entire tile installation be done with tiles from the same dye lot. Mr. Hanson testified that he was very dissatisfied with Flooring’s construction work on his new tile floor. Mr. Hanson stated that he had numerous conversations with Flooring about his dissatisfaction with the new tile floor. Mr. Hanson testified that he filed a complaint with the Registrar against Flooring based upon his dissatisfaction with the quality of Flooring’s construction work and based upon an independent inspection performed by a third party. Mr. Hanson testified that the assigned Registrar Investigator conducted an onsite inspection at his residence. Mr. Hanson stated that the Registrar then issued a written Corrective Work Order directing Flooring to perform corrective action on his new tile floor. Mr. Hanson testified that there was no response from Flooring within the fifteen-day time period provided in the Corrective Work Order. Mr. Hanson acknowledged that the tiles in his new floor have a slight beveled edge. Mr. Hanson testified that the grout in the new tile floor does not come up to the top of the slightly beveled edge of the individual floor tiles. Mr. Hanson testified that Flooring had two different grout inspectors look at the grout in his new tile floor. Mr. Hanson stated that both inspectors stayed “about five minutes and left.” Mr. Hanson testified that Flooring failed to perform any corrective work on the grout in his new tile floor. Mr. Hanson denied that he had ever refused access to Flooring to perform corrective work. Mr. Hanson denied that he had ever demanded that Flooring replace all of the grout in his new tile floor. Mr. Hanson acknowledged that the actual contract was supposed to be for $11,000.00 for carpeting and tile. Mr. Hanson testified that he obtained $10,800.00 in financing. Mr. Hanson stated that after he complained to his financing company, it recouped all of the money that it had paid for the tile flooring to Flooring. Mr. Hanson testified that the first complaint against Flooring that he filed with the Registrar was about three individual tiles. Mr. Hanson acknowledged that Flooring corrected the three tiles that were the basis for his first complaint against Flooring. Mr. Hanson testified that his second complaint against Flooring was the complaint at issue. Mr. Hanson stated that the second complaint included alleged deficiencies with the carpeting and the floor tile. Mr. Hanson acknowledged that the Registrar Investigator found nothing wrong with the installation of the new carpeting. Mr. Hanson acknowledged that he had filed a civil lawsuit against Flooring.

Mr. Hanson acknowledged that a civil judgment had been issued by the San Marcos Justice Court but that he had not received a written judgment from the civil court. Mr. Hanson testified that civil court judge had found that there were problems with the grout in the new tile floor and stated that Mr. Hanson was going to receive a monetary offset for the problems with grout against the amount that was owed to Flooring for the tile installation. Mr. Hanson stated that Flooring had been paid for the carpet installation. Mr. Hanson’s testimony is found to be credible. Testimony of Brian Patrick Collins Flooring’s Qualifying Party, Brian Patrick Collins (hereinafter “Mr. Collins”) testified that he had been in the flooring industry for thirty years.[3] Mr. Collins acknowledged that there were some deficiencies in the construction agreement prepared by Flooring and utilized by the parties as their construction agreement. Mr. Collins stated that the deficiencies in the contract had been fully corrected by Flooring and that Flooring had furnished the Registrar with a copy of the corrected form construction agreements. Mr. Collins testified that the floor tiles in Mr. Hanson’s new tile floor have a beveled edge. Mr. Collins acknowledged that there are spots in the new tile floor where the tile grout is low. Mr. Collins stated that the low spots in the grout should be corrected. Mr. Collins testified that the entire tile floor does not need to be re-grouted. Mr. Collins testified that Mr. Hanson had refused to grant Flooring access to Mr. Hanson’s residence unless Flooring agreed to re-grout the entire tile floor. Mr. Collins testified that he was present for the civil trial that occurred in the San Marcus Justice Court. Mr. Collins stated that the Judge’s final decision awarded Flooring a thousand dollars plus attorney’s fees. Mr. Collins testified that the civil court judge gave Mr. Hanson an offset of $2,800.00 for the irregular grout and for Mr. Hanson’s inconvenience. Testimony of Christine Herth Christine Herth (hereinafter “Ms. Herth”) testified that she is employed by Flooring. Ms. Herth stated that near the beginning of the construction project, she was notified by the tile installers that the tile was defective and that tile installers wanted new tile. Ms. Herth testified that she furnished the tile installers with another batch of new tile. Ms. Herth testified that she then began receiving telephone calls that the tile installers were short of tile. Ms. Herth stated that she then performed an onsite visit. Ms. Herth testified that she found several tiles had been broken by someone walking on them and observed additional tile work being performed, including a tiled fireplace that was not part of the contract. Ms. Herth stated that she removed the first installers from the project and replaced them with new tile installers. Ms. Herth testified that Flooring resolved the issues set forth in Mr. Hanson’s first complaint against Flooring with the Registrar of Contractors. Ms. Herth stated that the complaint at issue was originally based on an alleged carpet installation issue. Ms. Herth testified that the manufacturer examined the carpet and found that the alleged problems with the carpet were due to homeowner maintenance or abuse. Ms. Herth testified that Mr. Hanson then amended his complaint to include a complaint regarding the grout in the new tile floor. Ms. Hanson acknowledged that there were low grout areas in the new tile floor. Ms. Herth stated that Mr. Hanson wanted all of the grout removed and replaced. Ms. Herth testified that the grout in the entire tile floor did not require complete removal and replacement. Ms. Herth testified that Mr. Hanson refused to allow her a third independent inspection of the grout in the new tile floor. Ms. Herth acknowledged that she had been allowed to have selected contractors perform two previous inspections of the grout in the new tile floor. Ms. Herth testified that Flooring had corrected the problems with Flooring’s form contract. Ms. Herth stated that she had sent Investigator Gerold a copy of the Flooring new form contract. Ms. Herth testified that she was present for the trial in the San Marcus Justice Court. Ms. Herth stated that the San Marcus Justice Court awarded Flooring a judgment of $1,000.00 plus attorney’s fees and costs. Ms. Herth testified that the Justice Court gave Mr. Hanson an offset for the problems with the grout in the new tile floor. Ms. Herth testified that Flooring received the Corrective Work Order on December 9, 2013. Ms. Herth stated that Flooring’s first email to Mr. Hanson trying to gain access to Mr. Hanson’s residence was December 23, 2013. Ms. Herth testified that she called Mr. Hanson and left a voice message trying to gain access to his residence prior to December 23, 2013. Ms. Herth testified that Flooring needed two more independent inspections after Investigator Gerold’s inspection because Mr. Hanson wanted all of the grout replaced. Ms. Herth acknowledged that she was not present during the inspections and her belief that Mr. Hanson had required the removal and replacement of all floor grout was based on what others had told her. Ms. Herth testified that there was also a January 13, 2013 email from Brian Simonitsch for Sir Grout indicating that Mr. Hanson wanted all of the grout removed and replaced.[4] Testimony of Jose Gill, Esq. Jose Gill, Esq. (hereinafter “Mr. Gill”) testified that he is an attorney in the Registrar of Contractors legal department. Mr. Gill stated that he was familiar with Flooring’s complaint history with the Registrar of Contractors. Mr. Gill testified that he conducted a search Flooring’s complaint history and found that 13 complaints from consumers had been filed against Flooring. Mr. Gill stated that Flooring’s contractor’s License No. C-8.220301-R was suspended until compliance from January 25, 2013, through March 15, 2013, for a “no-pay” complaint. Mr. Gill’s testimony is found to be credible. 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.[5] 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). Investigator Gerold testified that the tile grout for the tile floor in Mr. Hanson’s residence should come to the top surface of the floor tiles and that no vertical face of the floor tile should be exposed. Investigator Gerold testified that he found areas of the grout throughout the new tile floor in Mr. Hanson’s residence that did not meet this standard and where areas of unlevel grout were present. This Tribunal concludes that Flooring violated the charged provision of A.R.S. § 32-1154(A)(3),[6] namely, A.A.C. R4-9-108.[7] The construction agreement prepared by Flooring and utilized as the parties’ construction agreement did not inform Mr. Hanson 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 set forth in A.R.S. § 32-1155(A). This Tribunal concludes that Flooring violated the charged provision of A.R.S. § 32- 1154(A)(13), namely, A.R.S. § 32-1158(B).[8] Flooring failed to complete the corrective action set forth in the Corrective Work Order. Flooring failed to comply with the terms of the Corrective Work Order. Flooring did not establish that Mr. Hanson refused reasonable access to Flooring. This Tribunal concludes that Flooring violated the charged provision of A.R.S. § 32-1154(A)(23).[9] RECOMMENDed order In view of the foregoing, it is recommended that on the effective date of the final Order in this matter, Flooring’s License No. C-8.220301-R shall be suspended for a period of fifteen (15) days. It is further recommend that the any lifting of the fifteen-day license suspension shall be conditioned upon Flooring providing written proof, acceptable to the Registrar, that Flooring’s contracts are in full compliance with the provisions of A.R.S. § 32-1158(B). It is further recommended, in addition to the above-provided penalties, if any, that Flooring 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 Flooring 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 Flooring’s contractors’ licenses, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Flooring, 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, June 25, 2014.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit 2 (Application for Contractors License). [2] See Exhibit 3 (Complaint). [3] See Exhibit 2 (Application for Contractors License). [4] See Exhibit Defendant (January 13, 2014, email from Brian Simonitsch, Sir Grout and Tile Services, to Christine Herth. [5] 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.

[6] 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.” [7] 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.

[8] 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.

[9] 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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