ALJDEC decisions subject to certification as final

2015A-2022-ROC · Registrar of Contractors · 2016-01-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 8, 2016 APPEARANCES: Nat Clarkson, Attorney for Complainant; Roselle Saba, Complainant; Michael Seabrook, Sales Manager and representative, appeared on behalf of Respondent. ADMINISTRATIVE LAW JUDGE: Harriet Turney _____________________________________________________________________ A hearing was convened to determine whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors (Registrar). Evidence and testimony was presented, and based on the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made: FINDINGS OF FACT 1. Complainant Roselle Saba is the owner/occupant of a residence located at 700 N Dobson Rd #55, Chandler, Arizona 85224. 2. Respondent Allstate Appliance Inc. holds Arizona Contractor License No. 063415. 3. On October 28, 2014, Complainant purchased new kitchen appliances from Respondent. She paid Respondent $1500 to install the appliances and make any modifications necessary to complete the installation. On May 7, 2015, Complainant filed a complaint with the Registrar alleging that Respondent performed work outside of its license, including carpentry and electrical installations, failure to represent ROC number on company documents, misrepresentation of license, use of unlicensed subcontractor, and damage to property. 4. The Registrar assigned Investigator Ted Gerold to investigate the complaint. 5. Investigator Gerold scheduled a jobsite inspection for June 18, 2015, which both the Complainant and Respondent attended. On June 29, 2015, he issued a written directive to Respondent to perform certain repairs on or before 5:00 p.m. on July 15, 2015. The directive provided in relevant part as follows: 1) This contractor is responsible for any and all proper modifications to any of the cabinetry in the kitchen which will involve any and all appliances that were part of the original contract. This includes the cabinet to the left of kitchen sink, the range hood cabinet, and around the refrigerator and anywhere else involving the original contract. 2) Replace damaged stiles, rails and interior of base cabinet to the left of the kitchen sink. 3) Reskin the cabinet wall where hole was cut in. 4) Remove old range an install new one per contract. 5) Finish cabinetry under range/oven. 6) There should be no gaps between stiles of cabinets above refrigerator. 7) The gaps between the stiles and the right and left sides of the refrigerator should be the same in width and spacing. 8) The depth of the cabinetry surrounding the refrigerators should be deep enough so that none of the sides of the refrigerators are exposed. 9) Refinish the flooring in front of the refrigerator to match the existing floor as close as possible. 10) Repair the scruff/gouge marks on the flooring in front of the refrigerator.

Any other workmanship violations alleged in the complaint not listed in the directive were unsubstantiated and required no correction action. 6. The directive also stated: You may not perform or hire contractors to perform work that is outside the scope of your license. If any workmanship violations listed above are designated as outside the scope of your license, then you may remedy those violations only by paying a properly licensed contractor hired by Complainant to correct your deficient workmanship or by reaching a financial settlement with Complainant.

7. On July 6, 2015, Investigator Gerold issued an amendment to the original written directive to remedy the following items by appropriate means: 1) This contractor is to secure any necessary permits from the local building authority and have all inspections passed regarding the electrical outlets behind the refrigerators and inside the kitchen sink base cabinet. If no permit is required than [sic] this contractor is to pay Complainant to have a properly licensed electrical contractor to ensure that the mentioned outlets are is [sic] in proper working order.

2) Item #4 on the original written directive should read: Remove old range hood and replace with new range hood per contract.

8. On July 30, 2015, Investigator Gerold advised Respondent that, based on his review of evidence, it appeared that Respondent may have operated outside the scope of its CR63 license,[1] by bidding on, contracting for, or performing work that would require a B-General Contractors license, which would be a violation of A.R.S. §32-1154(A)(16).[2] 9. Following the issuance of the directive, Respondent made no attempt to do any corrective work. 10. The Registrar issued a Citation against Respondent, charging possible violations of A.A.C. R4-9-108 (“Minimum Constructions Standards”), and thereby A.R.S. § 32-1154(A)(3); A.R.S. § 32- 1154(A)(16) (“Knowingly contracting beyond scope of license”); and A.R.S. § 32-1154(A)(22) (“Failure to take appropriate corrective action”). 11. Complainant testified that she purchased seven new kitchen appliances from Respondent. She also paid Respondent $1500 to install the appliances and make modifications necessary for their installation. She testified that an employee of Respondent came to her home in advance of delivery and installation to look at the areas in which the appliances would be installed and to take measurements. She and the employee had a discussion about power. As a result of this discussion, Complainant hired a licensed electrician to run a 220 line. Respondent was to perform all other electrical work. Respondent asked Complainant to hire a carpenter to shorten two cabinet doors. Complainant described the work done by employees of Respondent. The first employee, Andrew, was on-site for three days. He removed the existing oven and microwave, installed an electrical outlet on the island, and cut a hole on the wall where the 220 line would go. He made several overcuts. Two other employees came to finish the installation. They removed the existing ventilation hood and tried to install the new one but said it was impossible because it was too big. They put the old one back but it was no longer functional. They left because they did not know what to do. Thereafter, Respondent sent Chris Parent who was going to make repairs and finish the job. Parent reinstalled the electrical outlet on the island. He made cuts in existing cabinets and ripped out old cabinetry. Where he overcut, he put in a piece of filler wood. Parent told Complainant that the depth of the cabinets around the refrigerator had been miscalculated. Complainant submitted photographs taken during the installation process,[3] showing such things as a ragged hole, exposed electrical wires, overcuts, gaps and scuffed flooring. Except for the flooring, the condition of Complainant’s kitchen was the same on the day of the hearing as the day Parent stopped work in late December 2015. Respondent never contacted Complainant after the directive was issued. It never returned the microwave, warming unit or hood insert it had taken back or given Complainant a refund for those items. 12. Investigator Gerold testified regarding his jobsite inspection conducted on June 18, 2015. He noted that the electrical outlet inside the kitchen sink cabinet had been properly reinstalled by another contractor hired by Complainant and, thus, he found no violation. He observed cuts in cabinetry that damaged the cabinets, a hole cut in the side of a cabinet that would have to be reskinned, cuts in the cabinetry on three sides of the refrigerator that left gaps, and mismeasurements that rendered the depth of the opening of cabinetry surrounding the refrigerator too shallow to cover the refrigerator box side. He observed gouging and scuffing of the wood flooring in front of the refrigerator and replacement of damaged flooring in front of the refrigerator with an unmatching piece of wood that was visible when the refrigerator doors were closed. 13. Investigator Gerold conducted a prehearing inspection on January 7, 2016. At that time, he observed that the damaged flooring was gone, Complainant having had new flooring installed around the cabinetry. Everything else he noted in his Directive remained untouched. In Investigator Gerold’s opinion, Respondent’s license did not include cabinets, countertops or electrical and that, based on his inspection, Respondent had performed work outside the scope of its license. 14. Lance Holmes of An Extra Hand Building Services LLC testified regarding an estimate he prepared to perform work at Complainant’s residence to include: 1. Drawing plans and pulling permits for new electrical circuits needed to accommodate the kitchen appliances; 2. Electrical work to supply necessary circuits and power; 3. Building new and repairing cabinets; 4. New flooring; new granite island; patch back splash; drywall roofing and paint repairs; 8. Disassemble and rebuild island. The estimated cost for the listed work was $72,000. Holmes explained that in order to comply with code requirements, the freezer, refrigerator, wine cooler and microwave each required a dedicated electrical circuit. 15. Michael Seabrook, Respondent’s Sales Manager, admitted that Respondent had not completed the installation and that no work had been performed after the Directive issued. He said that the Directive had turned the job into remodel which is not something Respondent would do. He testified that Respondent never contracted as a General Contractor to remodel Complainant’s kitchen; rather, Respondent was paid to install the appliances which, in this case, required a retrofit. Other than some cosmetic work performed on some cabinets, Seabrook said that Respondent’s responsibility was essentially limited to plugging the appliances into the electrical outlets that were in the kitchen when the appliances were delivered. If the outlets were not the correct ones for the appliances, Complainant needed to have hired a licensed electrician, which he said Respondent told Complainant. Seabrook said typically there would be a signed pre-installation report but that he was unable to find one for this project. He commented that it was not Respondent’s responsibility to insure that Complainant’s home was up to code. Although he acknowledged that he was not on-site when any of the work was being performed and that Complainant was on-site, he denied that any of Respondent’s employees installed electrical outlets. Shown installation instructions on several of the appliances, Seabrook said they did not apply in a retrofit situation. Regarding any cabinetry work performed by Respondent, Seabrook said no license was required because the work was cosmetic not structural. Seabrook said that Parent was no longer employed by Respondent and that he did not know Parent’s dates of employment. 16. E-mail correspondence from Seabrook to H. Michael Wright, an attorney, corresponding with Seabrook on Complainant’s behalf on January 28, 2015,[4] states in part: I have spoken to Chris as well as pulled our install and delivery tickets. I respect and understand Mrs. Saba [sic] concern regarding Chris Parent as our head installer. Chris works for Allstate Appliance. Allstate Appliance does have an ROC license number for installation of appliances which would cover electrical for installation as well as any other related work to the installation of appliances.

17. Administrative notice is taken of Respondent’s license as reflected on the Registrar’s public website on January 19, 2016. Said license record reflects that Respondent’s License No. 063415 was first issued on August 14, 1985, was suspended for non-renewal from August 1, 2013 through August 19, 2013, and from August 1, 2015 through August 14, 2015, and is current. It has one open matter and has had no prior complaints resulting in discipline. CONCLUSIONS OF LAW 1. The matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. 2. Complainant bears the burden of proof to establish Respondent’s statutory violation(s) by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19- 119(B); see also Vazanno v. Superior Court, 74 Ariz. 369, 249 P.2d 837 (1952). “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). 3. Complainant established by a preponderance of the evidence that when Respondent performed work in her home, it did so in a manner that resulted in poorly cut stiles and rails in the kitchen base cabinet, as well as damage to the inside of this cabinet; damage to the old stove hood when reinstalled; an unfinished toe kick under the stove/oven; excessive and uneven gaps along the right side of the refrigerator; poorly cut and reconstructed cabinetry along top of the refrigerator; incorrect measurements of appliances; replacement of damaged flooring in front of the refrigerator with a piece of wood that did not match; and scuffing and gouging of the wood flooring in front of the refrigerator. Accordingly, Complainant established that Respondent’s work on the above items was not done in a professional and workmanlike manner in violation of A.A.C. R4-9- 108,[5] and thereby of A.R.S. § 32-1154(A)(3),[6] 4. Complainant established by a preponderance of the evidence that Respondent performed electrical work. She testified credibly that she observed employees of Respondent installing and reinstalling at least one electrical outlet and she submitted photographs documenting this work. Prior to the jobsite inspection, she hired another contractor to properly install the electrical outlet on the island. Seabrook denied that this work had been performed, but admitted he does not do installation and was not on-site. He acknowledged that Respondent’s CR63 license does not allow it to install or repair electrical lines, but stated in his January 28, 2015 e-mail to Complainant’s attorney at the time that Respondent’s license “would cover the electrical for installation as well as any other related work to the installation of appliances.” Complainant met her burden of establishing that Respondent violated A.R.S. § 32- 1154(A)(16).[7] 5. The undisputed credible evidence at hearing established that Respondent did not make any attempt to comply with the Directive from the Registrar. Respondent’s argument that the items in the Directive turned the job from a retrofit into a remodel is not evidence of valid justification for its failure to take any corrective action. The items listed for correction were the direct result of Respondent’s employees’ poor workmanship on tasks they undertook. Therefore, Complainant established that Respondent violated A.R.S. 32-1154(A)(22).[8] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Allstate Appliance Inc.’s License No. 063415 for a period of one day. It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(D). It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty. In the event of certification of the Administrative Law Judge Decision by the Director of the office of Administrative Hearings, the effective date of this order will be 40 days from the date of that certification. Done this day, January 21, 2016.

/s/ Harriet Turney Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] A.A.C. R4-9-103 CR63-Appliances states: “This classification allows the licensee to install and repair appliances. This classification does not allow the licensee to install or repair gas, electrical or plumbing lines.” [2] Exhibit 5.

[3] Exhibits 2 and 10. [4] Exhibit 14. [5] 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.” [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.R.S. § 32-1154(A)(16) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.” [8] A.R.S.§ 32-1154(A)(22) includes among the ground 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.” (Emphasis added).

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