ALJDEC decisions subject to certification as final

2015A-1118-ROC · Registrar of Contractors · 2016-06-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 23, 2016, at 8:00 a.m. APPEARANCES: Del D. O’Rourke (“Complainant”) appeared telephonically on his own behalf; Armorpoxy Concrete Coatings LLC (“Respondent”) was represented by Evan L. Thompson, Esq., Thompson Krone, PLC. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On or about May 16, 2010, the Registrar of Contractors (“the Registrar”) issued License No. CR34.265113-D for dual painting and wall covering to Respondent. 2. On or about March 11, 2015, Complainant filed a complaint with the Registrar, alleging that a concrete coating that Respondent had applied at Complainant’s property at 6337 E. Flower Ridge Dr., Tucson, Arizona 85739 had failed after only three months. Complainant’s complaint indicated that he had only paid Respondent the full $5,967.25 contract price for the coating that had failed. Complainant also alleged that Respondent stated that the failure was not his fault, but that it would repair the coating for an additional payment of $4,800.00. 3. Complainant attached Respondent’s contract to the complaint. The contract did not include an estimated date of completion or inform Complainant that he had the right to file a written complaint with the Registrar for an alleged violation of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A), and did not include the Registrar’s telephone number or website address.[1] 4. The Registrar assigned the complaint to its Investigator, Mike Nieves (“Investigator Nieves”), for investigation. Investigator Nieves performed a jobsite inspection on April 13, 2015. Investigator Nieves’ jobsite inspection notes state that attendees at the inspection included Complainant and his wife, Respondent’s project superintendent, Chris Moore (“Mr. Moore”), and Orlando Sandoval (“Mr. Sandoval”), the Director of Sales and Technical Support for Xcel Surfaces, the manufacturer of the concrete coating.[2] Investigator Nieves reported that Mr. Moore stated that the original concrete coating that Respondent had removed and replaced was applied by an unlicensed contractor and that after Respondent finished the project, someone allowed water to remain on the surface, which caused the coating to fail. Investigator Nieves also reported that Mr. Sandoval stated that the Xcel Surfaces coating was properly applied and did not fail but that “water was the cause of the surface spotting and failing.”[3] 5. On April 27, 2015, Investigator Nieves on behalf of the Registrar sent a letter to the parties, informing them that after investigation, the Registrar had determined that although “[t]he driveway and sidewalk do show spotting and coating bubbling and failing, [d]ue to conflicting statements by all parties I could not determine if the spotting and the coating failing was caused by the workmanship of the respondent.”[4] Pursuant to A.R.S. § 32- 1155(A), therefore, Investigator Nieves determined not to issue a citation and to dismiss the complaint. 6. On or about December 23, 2015, the Registrar received Complainant’s letter, stating that he was 80 years old and that his wife was 72 years old and that they had taken out a loan to pay Respondent to recoat the driveway, but that it was an eyesore. Complainant stated that he just wanted Respondent to return his money so that he could hire another contractor to correct the coating.[5] 7. As a result, the Registrar reopened the complaint and because Investigator Nieves had retired, assigned it to Senior Investigator Stephen Lawton (“Senior Investigator Lawton”) for investigation. 8. On or about February 16, 2016, Senior Investigator Lawton performed a jobsite inspection. Investigator Lawton noted that “the clear coat . . . and coating [are] failing and that the Respondent had accepted the substrate without talking to the Complainant [] about possible moisture problems.”[6] 9. On or about March 28, 2016, Senior Investigator Lawton issued a Directive to Respondent to correct the concrete coating on Complainant’s driveway and sidewalk by appropriate means on or before 5:00 p.m. on April 15, 2016.[7] 10. After Respondent did not correct the concrete coating, Complainant requested a hearing. 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, A.R.S. § 32-1154(A)(12), namely, A.R.S. § 32-1158, and A.R.S. § 32-1154(A)(22). 11. Respondent filed a timely answer to the Citation, denying that there was any cause to discipline its license. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing and issued a notice of hearing. 12. Shortly before the hearing, Complainant filed a written request to appear telephonically because he was leaving for Colorado. In the request, Complainant stated that he had “contacted another contractor and will get my driveway scraped and re-coated when I return, at a cost of approx. $6,000.00.”[8] 13. An evidentiary hearing was held via video conference from the Registrar’s Tucson office on June 23, 2016. Complainant testified telephonically on his own behalf. Respondent submitted four exhibits. Senior Investigator Lawton also testified. Additional Hearing Evidence 14. Senior Investigator Lawton testified consistently with his jobsite inspection notes and the March 28, 2016 Directive. 15. Senior Investigator Lawton testified that Complainant had not allowed Respondent’s representative, Mr. Moore, to be present on his property at the April 21, 2016 jobsite inspection. Senior Investigator Lawton testified that Mr. Moore could see the inspection. 16. Senior Investigator Lawton acknowledged that he had not had an opportunity to speak to Mr. Sandoval. Senior Investigator Sandoval testified that even if the moisture in the slab was a latent defect, Respondent should have been alerted to the possibility of the defect by the failure of the coating that the original contractor had installed. Senior Investigator Lawton testified that Respondent should have performed a moisture test to see if the coating could appropriately be applied to the concrete surface. Senior Investigator Lawton testified that by failing to perform a moisture test, Respondent accepted the surface. 17. Complainant acknowledged that he had no intention of allowing Respondent back on the property to perform repairs. 18. Administrative notice is taken of Respondent’s prior record on the Registrar’s public website pursuant to A.A.C. R4-9-117. As of this date, the Registrar’s public website showed that on June 8, 2016, Respondent’s license was under a one-day finite suspension; between February 16, 2016, and March 28, 2016, and between December 10, 2015, and January 29, 2016, the license had been suspended for a Residential Contractors’ Recovery Fund payout credential; between May 9, 2015 and August 6, 2015, the license had been placed on probation; and between May 4, 2015, and May 8, 2015, the license was under a finite suspension. Respondent’s license had been administratively suspended for non-renewal between June 1, 2014, and June 16, 2014, and was again administratively suspended for non- renewal on June 1, 2016. As of this date, Respondent’s license remained administratively suspended. Respondent’s poor licensing history is considered as a factor in aggravation of the recommended penalty in this case. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[9] 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[10] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[11] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[12] 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.”[13] 4. The concrete coating was applied outdoors on the driveway and sidewalk, where it could be expected to be exposed to water. Because the previous coating had failed, Respondent was on notice that the surface could be inadequate to allow the coating to be applied. By applying the coating without performing any further investigation, Respondent accepted the surface. Therefore, Complainant established by a preponderance of the evidence cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A) (3),[14] namely A.A.C. R4-9-108,[15] because the concrete coating failed. 5. Although Respondent failed to perform corrective work to comply with the March 28, 2016 Directive, Complainant candidly acknowledged at the hearing that he refused to allow access for Respondent to perform any corrective work. Although Complainant’s initial refusal to allow access may have been justified by Respondent’s initial refusal to correct the coating unless Complainant paid more money, Complainant’s subsequent refusal to allow Respondent access to comply with the Registrar’s Directive constitutes a legal excuse for Respondent’s failure to comply with the Directive. Therefore, Complainant did not establish by a preponderance of the evidence cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(22).[16] 6. The record in this matter establishes cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(12),[17] specifically, A.R.S. § 32- 1158(B),[18] because Respondent’s contract did not include an estimated date of completion or inform Complainant that he had the right to file a written complaint with the Registrar for an alleged violation of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A), and did not include the Registrar’s telephone number or website address. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order in this matter, License No. CR34.265113-D of Respondent Armorpoxy Concrete Coatings LLC shall be suspended for fourteen calendar days. It is further recommended that Respondent’s license shall remain suspended until it provides written proof that it has brought its form contract into compliance with the requirements of A.R.S. § 32-1158. It is further recommended that if Respondent provides such written proof that its form contract complies with A.R.S. § 32-1158 that is acceptable to the Registrar within the fourteen-day disciplinary suspension, at the end of the fourteen-day period, the disciplinary suspension imposed on Respondent’s license as a result of Complainant Del D. O’Rourke’s complaint in Case No. 2015-1118 shall end. 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, June 28, 2016.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See the Registrar’s electronic record at Intake Complaint Submittal1.pdf at 4. [2] See Respondent’s Exhibit B. [3] Id. [4] Respondent’s Exhibit A. [5] See Respondent’s Exhibit E. [6] The Registrar’s electronic record at Rcc100 Jobsite Inspection Notes2.rtf. [7] See the Registrar’s electronic record at Rcc014 Corrective Work Order1.rtf. [8] Respondent’s Exhibit F. [9] See A.R.S. § 32-1154(A). [10] 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). [11] See A.A.C. R2-19-119(B)(2). [12] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [13] Black’s Law Dictionary at page 1220 (8th ed. 1999). [14] 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.” [15] 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.” [16] 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.” [17] A.R.S. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” [18] A.R.S. § 32-1158(B) provides that 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 after December 31, 2007 must be in writing and must include the following minimum terms: 1. The name of the contractor and the contractor’s business address and the 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 ten point bold type. . . .

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

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