ALJDEC decisions subject to certification as final

2014A-4086-ROC · Registrar of Contractors · 2016-01-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 17, 2015, at 3:00 p.m.; the record was held open until December 28, 2015, to allow Respondent to submit the sign-off form that Complainant Bonnie Ives Wagner signed to accept Respondent’s repairs. APPEARANCES: Bonnie Ives Wagner (“Complainant”) appeared on her own behalf; R M R Construction Inc. (“Respondent”) appeared through Erik Michael Brown, its qualifying party and officer. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On or about February 20, 2007, the Arizona Registrar of Contractors (“the Registrar”) issued License No. B.226222-R for general residential contracting to Respondent. 2. On or about June 23, 2008, the Registrar issued License No. CR11.241084-D for dual electrical contracting to Respondent. 3. On or about October 8, 2014, Complainant filed a complaint with the Registrar, alleging that Respondent had performed various contracting work to remodel a house that Complainant owned at 9412 E. Placita Eunice, Tucson, Arizona 85715. Complainant stated that Respondent had started work on October 22, 2012, and that she had paid Respondent $92,541.00 pursuant to an oral contract and oral change orders. The initial complaint alleged that Respondent’s work was deficient in seven general areas of construction. 4. The Registrar assigned the complaint to its Investigator, Frank Grochocki (“Investigator Grochocki”). On February 2, 2015, Investigator Grochocki performed a jobsite inspection, which both parties attended. Investigator Grochocki’s February 2, 2015 jobsite inspection notes noted that four specific items of construction required correction and that the electrical, furnace, and framing work required a permit. 5. Inspector Grochocki’s February 2, 2015 jobsite inspection notes did not mention GFI electrical receptacles, but stated with respect to the electrical wiring: Unable to tell from inspection work done from this contractor, no permit was obtained. Respondent will need to apply for all required permits and pass required inspections for work done.

Inspector Grochocki did not render any opinion whether the furnace that Respondent installed complied with the parties’ agreement, in relevant part as follows: “Disagreement by parties over new and used units? Respondent stated contract had 2 proposals, 2 prices for new and used unit, contract shows two dollar amounts, not clear?” 6. On February 6, 2015, the Registrar received a written addendum to the Complaint from Complainant which alleged that Respondent’s work was deficient in an additional 29 specific areas.[1] Complainant did not complain that the electrical outlets lacked GFI receptacles. 7. On May 12, 2015, Investigator Grochocki performed a second jobsite inspection, which both parties attended. Investigator Grochocki’s May 12, 2015 jobsite inspection notes state as follows: I explained to the parties if I find the work completed by the respondent does not meet standards I could only direct him to correct the poor work. I also explained that I could not tell the respondent how to make corrections I can only tell the respondent to correct by appropriate means, both parties understood. During jobsite parties became agitated, combative, [and] verbally abusive to one another, [I] had to stop jobsite, explained if parties cannot act civilly, I will end the jobsite.

Inspector Grochocki’s May 12, 2015 jobsite inspection notes noted that seven additional items required correction, but that the Registrar lacked jurisdiction over Complainant’s demand for detailed invoices because her demand evidenced a “money issue.” 8. On May 13, 2015, Investigator Grochocki on behalf of the Registrar issued a Directive that required that Respondent perform on or before June 6, 2015, twelve specific repairs based on Investigator Grochocki’s February 2, 2015 and May 12, 2015 jobsite inspections, including that “[a]reas of attic insulation [have] no converage, uneven, not 12” per contract.” 9. On May 20, 2015, Respondent sent a cover sheet from the City of Tucson Planning & Development Services Department that stated that Respondent had obtained building permits for framing, building, electric, plumbing, and mechanical and that on the final inspection was required for the last four permits.[2] 10. On June 8, 2015, Mr. Brown on behalf of Respondent sent Investigator Grochocki a letter, stating that Complainant had signed off on all of Respondent’s repairs. Mr. Brown explained that he requested the sign-off “because of the frequent changes of mind” and that after Respondent completed repairs, other contractors hired by Complainant had started working on the house. Attached to Respondent’s letter was Complainant’s signatures dated June 4, 2015, beneath the following statements: I Bonnie Wagner am satisfied with repair and adjustment to my existing interior and exterior doors. I withdraw my complaint to have them changed out.

All quarter round trim . . . , tile lippage, overcut tile, and grout in door tracks . . . . These repairs have been made and are acceptable to me.[3]

11. On June 8, 2015, Mr. Brown on behalf of Respondent sent a second letter to Investigator Grochocki, stating that on that date, after Respondent completed painting repairs, it came to the jobsite and found other an unlicensed contractor at the jobsite performing more painting over Respondent’s work. The second June 8, 2015 letter also stated that Respondent’s workmen had gone up on the roof, which it had previously repaired, and saw that the roof had been cut from the top of the roof to the drip edge. Mr. Brown stated that he feared that Complainant was attempting to sabotage Respondent’s repairs. Mr. Brown attached to the second June 8, 2015 letter photographs of the unlicensed contractor’s car and the damage to the roof.[4] 12. Respondent failed to correct the deficiencies in the original and amended complaints to Complainant’s satisfaction and she requested a hearing. On July 17, 2015, the Registrar issued a Citation against Respondent’s license, charging cause to revoke, suspend, or otherwise discipline Respondent’s license under A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108. 13. Respondent filed a timely written answer to the Citation, stating that it appropriately corrected the workmanship issues in the paint at Complainant’s house and denying any statutory violations. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 14. An evidentiary hearing was held on December 17, 2015. Complainant submitted seventeen exhibits, testified on her own behalf, and presented the testimony of her friend, John Hanes (“Mr. Hanes”), who had been involved in the complaint from the beginning. Respondent presented the testimony of Mr. Brown. Investigator Grochocki also testified. Hearing Evidence 15. Investigator Grochocki testified that he did not perform a compliance or prehearing inspection because at the February 2, 2015 and May 12, 2015 jobsite inspections, both parties were so agitated and personally abusive that he feared for his personal safety. 16. Complainant owns two houses in the neighborhood, including the house at which Respondent performed the remodeling project (“the house”). Complainant does not currently live in the house, but has owned it since 1997. The house was built in 1952. 17. Complainant’s real estate agent referred her to Respondent because she needed a handyman. 18. Complainant testified that she did not realize the house needed so much work until Respondent started working on it. 19. Mr. Brown testified that much of the remodeling at the house was performed poorly by unlicensed contractors before Respondent started the remodeling project, including the construction of a garage addition that was pulling away from the house. 20. Complainant testified that the only projects for which she ever hired unlicensed contractors was to build the garage and later, to install shelves in the bathroom, because Respondent would not perform the work. 21. Complainant testified that although Respondent promised a new furnace, it installed a furnace that was eight years old and could have been purchased on the internet for $500.00. Complainant also testified that none of the electrical outlets that needed to be protected because they were within 6’ of a water source had GFI receptacles and that Respondent had installed interior doors on the exterior of the house. 22. Complainant testified that Investigator Grochocki refused to inspect any of Respondent’s work that was not included in its proposals. Complainant acknowledged that the permits had been obtained and that Respondent’s work had passed the City of Tucson’s final inspections, but testified that the City did not fully inspect the electrical system.[5] 23. Mr. Hanes testified that he is a Program Manager for the Department of Homeland Security and because he oversees multimillion dollar projects, is familiar with best practices and industry standards. Mr. Hanes testified that Respondent corrected some items of complaint but that there was still too little insulation in the attic, that was supposed to be 12” thick, but was only 8” thick in places. Complainant submitted photographs of the insulation in the attic, which showed inconsistent thickness and bare spots.[6] 24. Mr. Brown testified that from the time she filed the complaint, Complainant had limited Respondent’s access to the jobsite and was only interested in accessing the Residential Contractors’ Recovery Fund for a financial payout. Mr. Brown testified that Respondent had completed all repairs and that Complainant had signed off on all repairs. Although the record was help open for five business days to allow Respondent to submit the sign-off form, it failed to do so, with the exception of Complainant’s written acceptance of the doors that Respondent previously provided. 25. Mr. Brown testified that neighbors informed him that Complainant was continuing to hire handymen to work on the project and pointed out that on one of the few days that he was present after the May 13, 2015 Directive, he photographed the unlicensed contractors’ vehicle. 26. Administrative notice is taken of Respondent’s license history as shown on the Registrar’s public website on December 10, 2015. License Nos. B.226222-R and CR11.241084-D were both current and in good standing and Complainant’s complaint appears to be the only complaint pending against either license. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[7] 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[8] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[9] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[10] 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.”[11] 4. Complainant established by a preponderance of the evidence that Respondent’s workmanship potentially furnishes cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(3),[12] namely A.A.C. R4-9-108,[13] as identified on the May 13, 2015 Directive. In general, however, contractors must be allowed to attempt to correct deficient work before their licenses may be disciplined. See A.R.S. § 32-1154(A)(22).[14] 5. Complainant did not bear her burden to establish cause to discipline Respondent’s license for most of the deficiencies about which she testified at the hearing. Either she had accepted the work (doors, trim, and tile), failed to establish that Respondent contracted to perform the work (new vs. used furnace), or did not include the specific item of workmanship in the original or amended complaint (GFI receptacles). 6. Complainant did bear her burden to establish that the insulation in the attic of the house was not uniformly 12” thick and had bare spots and that Respondent has not corrected this deficiency. However, the insulation is the only remaining workmanship deficiency that Complainant established. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the order in this matter, as a result of Complainant Bonnie Ives Wagner’s complaint in Case No. 2014-4086, Respondent R M R Construction Inc.’s License Nos. B.226222-R and CR11.241084-D shall be suspended for one business day. 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 five days from the date of that certification. Done this day, January 11, 2016.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See Registrar’s electronic file at Insp Correspondence From Complainant5.pdf. [2] The Registrar’s electronic file at Insp Correspondence From Respondent.pdf. [3] The Registrar’s electronic file at Insp Correspondence From Complainant1.pdf. [4] See the Registrar’s electronic file at Insp Correspondence From Complainant2.pdf. [5] See Complainant’s Exhibits 6 and 16. [6] See Complainant’s Exhibit 7. [7] See A.R.S. § 32-1154(A). [8] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [9] See A.A.C. R2-19-119(B)(2). [10] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [11] Black’s Law Dictionary at page 1220 (8th ed. 1999). [12] 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.” [13] 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.” [14] A.R.S. § 32-1154(A)(22) 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