ALJDEC decisions subject to certification as final

2015A-1147-ROC · Registrar of Contractors · 2016-09-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Pending before the Office of Administrative Hearings is Respondent K Hovnanian Building Company LLC’s Motion to Dismiss. Background Complainant Barbara Ann Schwartz entered into a contract with Respondent for the purchase of a new home in October 2012, located at 5533 West Desert Hollow Drive, Phoenix, Arizona. The home was completed in March 2013, and was covered by a two-year initial warranty. Complainant is married to Jeremy Helfgot. Mr. Helfgot was not a party to the contract for the home and is not named on the deed of the home. Complainant listed Mr. Helfgot as an individual “authorized to submit [warranty] requests, approve repairs, and respond to surveys.” After moving into the home, Complainant discovered various items that she believed fell under the warranty and requested Respondent to correct. Complainant would communicate these issues to Respondent with requests that appropriate repairs be made. At some point, Complainant realized that Respondent failed to install the upgraded dishwasher she had selected and paid for under the contract. Once Mr. Helfgot determined what dishwasher unit Complainant should have received, he was directed by Respondent to contact Respondent’s trade partner, Barlow Company Inc. (Barlow), to arrange delivery and installation of the new dishwasher. Barlow handles the delivery and installation of appliances for Respondent. Complainant’s Evidence Mr. Helfgot reported that Barlow told him a particular day the dishwasher would be delivered and installed, but would not provide him with a more specific window of time. Thus, Mr. Helfgot blocked off his entire day to ensure he would be available when the dishwasher arrived. Mr. Helfgot testified that he did not receive a call the evening before the scheduled delivery, so he called Barlow the morning of June 23, 2013, to determine when the dishwasher would be delivered. When he called Barlow, Mr. Helfgot was told that there was no delivery scheduled for June 23, 2013. According to Mr. Helfgot, he was very frustrated with the situation and was told he was being put on hold; he then waited until he “had a reasonable expectation of privacy” and yelled and expressed his frustration to Complainant. Mr. Helfgot stated that he gave Complainant the phone and when into another room where he continued to blow off steam.[1] Mr. Helfgot testified that following the telephone call, his blood sugar was extremely high and he believed he was in an “altered state of consciousness.” Mr. Helfgot stated that he believed he apologized for losing his cool. Respondent’s Evidence According to Deanna Golden, Customer Relations Manager for Barlow, Mr. Helfgot called Barlow four to five times on June 23, 2013. During each phone call, Mr. Helfgot was extremely rude, vulgar, and abusive to those he spoke with. Mr. Helfgot’s last call to Barlow was at approximately 1:25 p.m. During that call, Mr. Helfgot was so abusive that Ms. Golden put Mr. Helfgot on speaker and another employee recorded the call on her cellular phone. During the recording, Mr. Helfgot can be heard to say the following: I am going to worry about that. If it is not here by noon, I am going to go down there and cut her fucking head off with a pocket knife. This fucking cunt. How dare she accuse me of lying after all the shit we have been through? I want to fucking [inaudible] God, is she a worthless piece of human flesh.

Ms. Golden felt threatened personally, but was also concerned for the other employees. Other employees also expressed their concern to her regarding Mr. Helfgot’s escalating and threatening behavior. Ms. Golden placed the Barlow office on lockdown because Mr. Helfgot threatened to come to the office and harm someone, the only time in the nine years she worked at Barlow that a lockdown had been instituted. Ms. Golden instructed the Barlow employees that no one was to deliver anything to Complainant’s home, to perform any warranty work for Complainant, or to have any further contact with Mr. Helfgot. Ms. Golden notified Sean Lanzaratto with Respondent of the conversation and informed Mr. Lanzaratto that Barlow would not go to Complainant’s home for any reason. Mr. Lanzaratto then arranged for the dishwasher to be delivered and installed by a different subcontractor. Mr. Lanzaratto did not hear the audio recording of the telephone call until after the dishwasher had been delivered and installed. On or about June 26, 2013, after receipt of the audio recording, Joshua Forest, legal counsel for Respondent, sent a letter to Complainant and Mr. Helfgot providing as follows: The purpose of this letter is to inform you that it has become necessary for us to discontinue all communication with you, either telephonic or in person. The reason for this decision arises from Mr. Helfgot’s abuse of K. Hovnanian Homes’ associates and subcontractors. Indeed, it has come to my attention that Mr. Helfgot threatened physical harm to K. Hovnanian’s trade partner’s representative. We have been provided a voice recording where Mr. Helfgot clearly threatens one of our subcontractor’s female employees, stating he will “come down there and cut your fucking head off with a pocket knife.” He further repeatedly uses extremely vulgar and abusive language – frankly, some of the most vulgar language imaginable. This voicemail is extremely concerning to us, and would be – and will be – to any rational person who listened to it. This cannot be passed off as someone merely “losing his cool.” Mr. Helfgot’s behavior was completely unwarranted. We have a responsibility to our associates and trade partners to ensure a safe work environment. As such, we have no choice but to discontinue communication with you.

Mr. Forest stated that Respondent did not take the threats lightly and would not risk its Registrar license for trivial matters, but it was worth keeping Respondent’s people safe. Mr. Forest testified that this was the only time he had sent a letter like this to a customer during his time at Respondent. Mr. Forest cited recent incidents in Phoenix, Arizona in which an attorney was killed during arbitration and the father of his counterpart at Meritage Homes was killed by a disgruntled party in a divorce proceeding. Mr. Forest also stated that Mr. Helfgot never apologized to anyone regarding the incident. The Complaint On or about March 12, 2015, Complainant filed a complaint with the Registrar of Contractors. In the complaint, Complainant included a list of items that she believed violated the Registrar’s workmanship standards. The matter was assigned to Investigator Timothy Pennington. On March 13, 2015, Investigator Pennington sent a letter to Respondent that provided as follows: A formal complaint against you has been filed with the Registrar and is attached for your review. The Registrar requests that you assist in the agency’s investigation and evaluation of this complaint by submitting a written response to the Registrar within fifteen (15) days from the date of this letter. Your response should address the allegation(s) raised in the complaint and provide any documentation supporting your response.

On or about March 17, 2015, Investigator Pennington sent a separate letter to Complainant and Respondent that provided as follows: A jobsite inspection is scheduled for 03/30/2015 at 03:00pm at 5533 W Desert hollow drive Phx AZ. Requests to reschedule the inspection should be communicated to me at least three business days before the scheduled inspection. Both Complainant and Respondent are advised to be present for the inspection to provide information supporting any claims and defenses.

Prior to the jobsite inspection, Respondent notified Investigator Pennington that it would not be present because of safety concerns raised by Mr. Helfgot’s previous threats. Respondent forwarded the audio recording on the June 23, 2013 telephone call to Investigator Pennington. A jobsite inspection was conducted on March 30, 2015. Investigator Pennington arranged for another investigator to be present during the jobsite inspection based on the audio recording he received from Respondent. Following the jobsite inspection, Investigator Pennington drafted a Directive from the Registrar which provided as follows: After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). You are hereby directed to remedy the following violations by the appropriate means: 1. Front entry door: The outside wooden trim is not caulked at the stucco to keep out air, water and bugs, and the top trim top edge, one side trim edge and the bases of the side trim pieces are not painted or otherwise surfaced to protect from wood destroying organisms as required by current industry standards. The front entry door is not effectively scaled on all (6) sides as is currently required by the AZ Registrar of Contractors Minimum Workmanship Standards (top and bottom are unpainted 2. Stucco wires were visible protruding out from the stucco near the rear edge of the right side master bathroom window; one area of stucco at the edge of a left side receptacle is gapped at the receptacle. 3. The masonry yard fencing has one section of “H” block that is cracked at its base on the rear yard wall.

Correct by the appropriate means

The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action.

Investigator Pennington did not issue the Directive to Respondent because Respondent already notified Investigator Pennington that it would not come out to do any work at Complainant’s home. On or about July 31, 2015, the Registrar issued a Citation to Respondent alleging a possible violation or A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3). Respondent filed a Motion to Dismiss this matter in which Respondent argued that Complainant effectively denied Respondent access to the home based on Mr. Helfgot’s threats made to Barlow employees. Discussion Arizona law provides, in pertinent part, The registrar shall not issue a citation for failure to perform work in a professional and workmanlike manner or in accordance with any applicable building codes and professional industry standards if . . . . [t]he contractor is not provided an opportunity to inspect the work within fifteen days after receiving a written notice from the registrar.

A.R.S. § 32-1155(C) (emphasis added). As previously noted, Investigator Pennington first notified Respondent, in writing, of the complaint that had been filed against it on March 13, 2015. Thus, Respondent should have been provided an opportunity to inspect the work within 15 days of that written notification, or by March 28, 2015. As the jobsite inspection was not scheduled and held until March 30, 2015, Respondent was not provided an opportunity to inspect the work within 15 days after receiving a written notice from the Registrar. Because Respondent was not provided an opportunity to inspect the work within 15 days after receiving a written notice from the Registrar, the Registrar should not have issued the citation in this matter. While Respondent argued that it was effectively denied access to Complainant’s home based on Mr. Helfgot’s threats to the Barlow employees, it is not necessary to determine whether such threats constitute an effective denial of access given the specific facts presented in this matter. Conclusion In view of the foregoing, it is recommended that the complaint in this matter be dismissed. In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of these Orders will be 40 days from the date of the certification. Done this day, September 16, 2016.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] The audio recording of the conversation disproves Mr. Helfgot’s statement. It is apparent from the recording that Mr. Helfgot was holding or was close to the phone during the entire phone call while Complainant is in the background.

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