ALJDEC decisions subject to certification as final

2014A-3425-ROC · Registrar of Contractors · 2015-02-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 2, 2015, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (hereinafter “Complainant” or “Registrar”) was represented by Assistant Attorney General, Seth T. Hargraves, Esq. Luis Antoni Irizarry dba Luma Construction and Remodeling (hereinafter “Respondent” or “Luma”) failed to appear. 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 Luma is the holder of License No. B-3.253698-R issued by the Registrar. License B-3.253698-R is a residential contractor’s license for general remodeling and repair.[1] On or about August 12, 2013, the Registrar received a Complaint against Luma from Diane M. Heller (hereinafter “Ms. Heller”) alleging poor work by Luma in the performance of its March 26, 2012 contract to install a new roof on Ms. Heller’s residence located at 1536 E. Mission Lane, Phoenix, Arizona, for $9,039.03.[2] On or about August 12, 2013, the Registrar also received a second Complaint against Luma from Ms. Heller alleging poor work by Luma in the performance of its July 30, 2012 oral agreement to correct a water leak under a bathroom floor in Ms. Heller’s residence for $1,371.00.[3] The Registrar then conducted a jobsite inspection of the construction projects at 1536 E. Mission Lane, Phoenix, Arizona. The Registrar subsequently issued a Corrective Work Order on September 11, 2013, directing Luma to remedy its deficient workmanship on the construction projects.[4] The Corrective Work Order provided, in pertinent part, as follows: Contractor to correct by appropriate means the following [:]

1. Seal the A/C duct work at the roof line and reseal the duct work to the A/C Unit.

2. The water leak behind the toilet in the hall bath.

3. Added at the inspection [:] [t]he left door to the kitchen sink base cabinet has fallen off the top hinge.

On September 11, 2013, the Registrar issued a warning letter to advise Luma that the Registrar had received a Complaint alleging that Luma was performing or had offered to perform plumbing work beyond the scope of Luma’s B-3.253698-R License. The warning letter advised Luma that knowingly contracting beyond the scope of its license was a violation of applicable statute.[5] On or about June 2, 2014, Luma filed a Cancellation Request requesting the voluntary cancellation of Luma’s B-3.253698-R License.[6] Luma’s B-3.253698-R License was canceled by the Registrar on June 2, 2014.[7]

Testimony Testimony of Diane M. Heller Ms. Heller testified that she is the owner of the residence located at 1536 E. Mission Lane, Phoenix, Arizona. Ms. Heller stated that her first construction contract with Luma was for $9,051.64 for the installation of a new roof over her entire residence. Ms. Heller testified that the parties’ written construction agreement was prepared by Luma. Ms. Heller testified that her second construction contract with Luma was in the amount of $1,371.00 for the correction of a leak under a bathroom floor. Ms. Heller stated that there was no written construction agreement for her second construction contract with Luma. Ms. Heller said the construction agreement for the repair of the leak in the bathroom was an oral agreement. Ms. Heller testified that she was very dissatisfied with Luma’s construction work on her roof and bathroom. Ms. Heller stated that she had numerous conversations with Luma about her dissatisfaction with Luma’s construction work on her residence. Ms. Heller said she gave Luma repeated opportunities to properly correct the deficient construction work that Luma had performed on her residence. Ms. Heller testified that her roof has still not been properly corrected and that further corrective action is required. Ms. Heller testified that Respondent attempted to comply with the terms of the Corrective Work Order by performing the plumbing work himself rather than through a licensed plumbing contractor. Ms. Heller testified that Luma failed to comply with the terms of the Corrective Work Order issued by the Registrar. Ms. Heller’s testimony is found to be credible. Testimony of Registrar Construction Investigator Theodore William Gerold Construction Investigator Theodore William Gerold (hereinafter “Investigator Gerold”) testified he was a construction investigator for the Registrar. Investigator Gerold stated that he did not perform the initial onsite inspection at Mr. Hanson’s residence and that he did not author the Corrective Work Order issued in this matter. Investigator Gerold said that he reviewed the file after it was reassigned to him. Investigator Gerold testified that he scheduled an onsite compliance hearing at Ms. Heller’s residence to determine if Luma had complied with the terms of the Corrective Work Order. Mr. Gerold that that he conducted an onsite compliance inspection at Ms. Heller’s residence on June 6, 2014, and that he personally observed areas of the roof and bathroom that required further corrective action. Mr. Gerold reviewed color photographs of Luma’s construction work on the roof and bathroom in Ms. Heller’s residence he took during his onsite inspection. Investigator Gerold testified that Luma failed to comply with applicable workmanship and industry standards. Investigator Gerold stated that there was an unacceptable amount of roof tar on the roof and that the roof still leaked. Investigator Gerold testified that the plumbing work performed by Luma on the roof failed to comply with applicable workmanship and industry standards and that it was in violation of applicable code requirements. Investigator Gerold stated that Luma failed to comply with the terms of the Corrective Work Order issued by the Registrar. Investigator Gerold opined that Luma violated the charged provisions of A.R.S. § 32-1154(A)(22). Investigator Gerold testified that the construction agreement prepared by Luma and utilized as the parties’ construction contract for the installation of the new roof on Ms. Heller’s residence did not contain the minimum elements of a contract required by A.R.S. § 32-1158. Investigator Gerold stated that the contract prepared by Luma and utilized as the parties’ construction agreement did not inform Ms. Heller that she 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 Luma is not a licensed plumbing contractor and that Luma should not have been performing plumbing work at Ms. Heller’s residence. Investigator Gerold stated the plumbing work that Luma performed on the roof and in the bathroom at Ms. Heller’s residence failed to comply with applicable workmanship and industry standards. Investigator Gerold opined that Luma knowingly contracted beyond the scope of Luma’s B-3.253698-R License in violation of A.R.S. § 32-1154(A)(16). Investigator Gerold testified that Luma failed to utilize a written contract for the plumbing work in the bathroom that Luma performed at Ms. Heller’s residence. Investigator Gerold stated that since the contract for the plumbing work was over one thousand dollars, a written contract was required by A.R.S. § 32-1158(B). Investigator Gerold testified that Luma violated the charged provisions of A.R.S. § 32-1158(B). Investigator Gerold’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.[8] 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 he personally observed areas of the roof that had excessive roofing tar and that the roof on Ms. Heller’s residence still leaked. This Tribunal concludes that Luma violated the charged provision of A.R.S. § 32-1154(A)(3),[9] namely, A.A.C. R4-9-108.[10] The construction agreement prepared by Luma and utilized as the parties’ construction agreement for the installation of the new roof on Ms. Heller’s residence did not inform Ms. Heller that she 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 Luma violated the charged provision of A.R.S. § 32-1154(A)(12),[11] namely, A.R.S. § 32-1158(B).[12] Luma failed to utilize a written construction agreement for the plumbing work that it performed in Ms. Heller’s bathroom. The parties’ oral agreement for the plumbing work in Ms. Heller’s bathroom was for over $1,000.00. This Tribunal concludes that Luma violated the charged provision of A.R.S. § 32-1154(A)(12), namely, A.R.S. § 32-1158(B). A.A.C. R4-9-103 allows Luma’s B-3.253698-R License to perform the remodeling or repair of an existing structure or appurtenance except for electrical, plumbing, mechanical, boilers, swimming pools or spas, which must be subcontracted to an appropriately licensed subcontractor.[13] Luma’s B-3.253698-R License is not a plumbing license and does not allow Luma to perform plumbing work. On September 11, 2013, the Registrar issued a warning letter to Luma advising Luma that the Registrar had received a Complaint alleging that Luma was performing, or had offered to perform plumbing work that was beyond the scope of Luma’s B-3.253698-R License. The warning letter advised Luma that knowingly contracting beyond the scope of its license was a violation of applicable statute. Ms. Heller credibly testified that Respondent tried to comply with the terms of the Corrective Work Order by performing the plumbing work himself rather than through a licensed plumbing contractor. This Tribunal concludes that Luma violated the charged provisions of A.R.S. § 32-1154(A)(16).[14] Investigator Gerold credibly testified that there was an unacceptable amount of roof tar on the roof and that the roof still leaked. Investigator Gerold stated that the work performed by Luma on the roof failed to comply with applicable workmanship and industry standards and that it was in violation of applicable code requirements. Investigator Gerold said that Luma failed to comply with the terms of the Corrective Work Order issued by the Registrar. Investigator Gerold opined that Luma violated the charged provisions of A.R.S. § 32-1154(A)(22). Ms. Heller testified that Luma attempted to comply with the terms of the Corrective Work Order by performing unlicensed plumbing work in Ms. Heller’s bathroom. Luma failed to complete the corrective action set forth in the Corrective Work Order. This Tribunal concludes that Luma violated the charged provision of A.R.S. § 32-1154(A)(22).[15] RECOMMENDed order In view of the foregoing, it is recommended that on the effective date of the final Order in this matter, Luma’s License No. B-3.253698-R shall be revoked. It is further recommended, in addition to the above-provided penalties, if any, that Luma 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 Luma 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 Luma’s contractors’ licenses, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Luma, 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 five days from the date of the certification. Done this day, February 3, 2015.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit 1 (Application for Contractors License). [2] See Exhibit 2 (8/12/13 Complaint forms). [3] See Exhibit 2 (8/12/13 Complaint forms). [4] See Exhibit 3 (9/11/13 Corrective Work Order). [5] See Exhibit 4 (9/11/13 Letter). [6] See Exhibit 1 (Application for Contractors License and Cancellation Request). [7] See Exhibit 1 (Application for Contractors License and Cancellation Request and License Status). [8] 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.

[9] 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.” [10] 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.

[11] A.R.S. § 32-1154(A)(12) provides as follows:

A. 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: Failure in any material respect to comply with this chapter.

[12] 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.

[13] A.A.C. R4-9-108 provides, in relevant part, as follows:

B-3 GENERAL REMODELING AND REPAIR CONTRACTOR

Remodeling or repair of an existing residential structure or appurtenance except for electrical, plumbing, mechanical, boilers, swimming pools or spas which must be subcontracted to an appropriately licensed contractor. The scope of work allowed under the C-7 carpentry classification is included within this scope.

[14] A.R.S. § 32-1154(A)(16) provides as follows: A. 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: 16. Knowingly contracting beyond the scope of the license or licenses of the licensee.

[15] A.R.S. § 32-1154(A)(22) 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.

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

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