ALJDEC decisions subject to certification as final

2015A-218-ROC · Registrar of Contractors · 2016-03-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 26, 2016 APPEARANCES: Kristine Heffner for Complainant; Frank Falbo for Respondent ADMINISTRATIVE LAW JUDGE: Thomas Shedden _____________________________________________________________________ FINDINGS OF FACT 1. On January 8, 2016, the Registrar of Contractors (“ROC”) issued a Notice of Hearing setting the above-captioned matter for hearing on February 26, 2016, at the Office of Administrative Hearings. 2. Respondent Falbo’s Ceramic Installations, LLC (“Falbo’s”) holds license number CR48.227008-D issued by ROC.[1] Charles Frank Falbo Jr. is Falbo’s’ qualifying party. 3. The Notice of Hearing shows that the hearing was set to consider the charges made in the Citation and Complaint.[2] 4. Through the Citation, ROC alleges that Falbo’s may have violated Ariz. Rev. Stat. sections 32-1154(A)(3) and (A)(22). The Citation shows that if the Administrative Law Judge finds that any of the alleged charges are valid, ROC may suspend or revoke Falbo’s’ license.[3] 5. Complainant Spontaneous Ventures, LLC entered an agreement with Falbo’s in which Falbo’s was to install tile at Belle’s Bar, located in Payson. 6. Falbo’s completed the work, but takes the position that Spontaneous Ventures, LLC allowed people to walk on the tile before it had properly cured. Spontaneous Ventures, LLC acknowledged that people had walked on the tile, but takes the position that this was in only limited areas and that it had “roped-off” most of the floor to prevent people from walking on it. 7. ROC investigator Jim Dimond’s investigation showed that other contractors at the project observed numerous people walking on the tile at all phases before the tile was set up.[4] 8. Spontaneous Ventures, LLC takes the position that Falbo’s had informed it that the tile would be cured within twenty-four hours, whereas Falbo’s takes the position that it had informed Complainant that seventy-two hours was the required curing time. 9. Mr. Falbo presented credible testimony that walking on tile before it is properly cured will cause the bond to break. 10. On January 16, 2015, Spontaneous Ventures, LLC filed a complaint with ROC alleging workmanship and other deficiencies on Falbo’s’ part. 11. In response to Spontaneous Ventures, LLC’s complaint, ROC Investigator Tom Sandoval conducted a job-site inspection on February 3, 2015. 12. ROC issued to Falbo’s a Directive dated February 19, 2015 (the “first Directive”) in which it order Falbo’s to make certain repairs. 13. The first Directive shows that there were about thirty-five “hollow” sounding tiles, which is not a violation of the workmanship standards, but Falbo’s agreed to replace those tiles. 14. Spontaneous Ventures, LLC was not satisfied with Mr. Sandoval’s inspection and did not allow Falbo’s access to make the repairs ROC ordered it to make. 15. At the hearing, Spontaneous Ventures, LLC presented the testimony of its employee Kevin Mootsy, who expressed his opinion that Mr. Sandoval was biased because he had spoken to Mr. Falbo about this matter. 16. In response to Spontaneous Ventures, LLC’s dissatisfaction with Mr. Sandoval’s inspection, ROC investigator Mr. Dimond and Assistant Chief of Investigations Steve Nelsen conducted a jobsite inspection on June 30, 2015. 17. At the second inspection, ROC again determined that the number of hollow sounding tiles was insufficient to be considered a workmanship deficiency, although it did determine that there were about ninety such tiles.[5] 18. On September 17, 2015, ROC issued a second Directive in which it ordered Falbo’s to make certain repairs. These repairs included replacing loose planks/tiles in three areas, replacing three missing tiles, and adding a missing baseboard. 19. Falbo’s was prepared to make the required repairs, but Spontaneous Ventures, LLC would not allow it access to do so. 20. At the hearing, Spontaneous Ventures, LLC’s member Kristine Heffner confirmed that it had denied Falbo’s access to make the required repairs. According to Ms. Heffner this was because Spontaneous Ventures, LLC it wanted this matter to go to hearing. Ms. Heffner testified as to her opinion that Spontaneous Ventures, LLC has not been treated fairly by ROC and that it was looking for an “honest evaluation” of the work at issue. 21. Spontaneous Ventures, LLC had entered into evidence an inspection report prepared by the Ceramic Tile Institute of America, Inc. that purports to show that Falbo’s’ work was deficient. This report can be given very little weight because it does not address the ROC workmanship standards and because author did not testify and so was not subject to cross examination. 22. Spontaneous Ventures, LLC argues that Falbo’s had agreed to “float” the floor, which Falbo’s disputes. Mr. Dimond testified that because there was nothing in writing regarding this disagreement and Spontaneous Ventures, LLC did not pay to have the floor floated, ROC did not address that allegation. 23. The evidence at hearing showed that Falbo’s has stood ready to make all repairs that ROC has ordered it to make, but Spontaneous Ventures, LLC has not allowed it access to do so. CONCLUSIONS OF LAW 1. Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119. 2. “At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2). 3. “At a hearing on an agency's imposition of fees or penalties or any agency compliance order, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(3). 4. A preponderance of the evidence is: The 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.

Black’s Law Dictionary 1373 (10th ed. 2014). 5. Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes."). 6. “Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B). 7. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 8. Ariz. Rev. Stat. section 32-1154(A) provides that: 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: ***** 3. Violation of any rule adopted by the registrar. ***** 22. 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.

9. Ariz. Admin. Code section R4-9-108(A) provides that “A contractor shall perform all work in a professional manner.” 10. A contractor cannot be found to have violated the workmanship standards if its work has been subject to neglect, modification or abnormal use. See Ariz. Rev. Stat. section 32-1155(C). 11. The preponderance of the evidence shows that Falbo’s work was subject to abnormal use because Spontaneous Ventures, LLC allowed people to walk on the tile before it had set up. Although the parties dispute how much of the tile was walked on, Mr. Dimond’s investigation shows that it was fairly widespread. Consequently, the preponderance of the evidence does not show that Falbo’s violated Ariz. Rev. Stat. section 32-1154(A)(3). 12. The preponderance of the evidence does not show that Falbo’s violated Ariz. Rev. Stat. section 32-1154(A)(22) by failing to comply with the two Directives because Spontaneous Ventures, LLC did not allow Falbo’s access to do the required work. 13. Because there are no proven violations of statute, this matter should be dismissed.[6] RECOMMENDED ORDER IT IS RECOMMENDED that the Citation in Case No. 2015-218 be dismissed.

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 is forty days after the date of that certification.

Done this day, March 14, 2016.

/s/ Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] ROC’s website shows Respondent’s license number as 227008. Consistent with existing policy, in this Decision the number set out in the Notice of Hearing is used. [2] The Notice of Hearing does not provide the date the Citation was issued or when the Complaint was issued or filed. There appears to be no dispute that the Citation was issued on December 9, 2015 or that the Complaint was filed on January 16, 2015. [3] The Citation shows that ROC could not determine whether any violations had actually occurred, which is why the matter was set for hearing. [4] Spontaneous Ventures, LLC had submitted into evidence a statement from one of these contractors that is not consistent with the information that he gave Mr. Dimond. [5] There is a measure of subjectivity in determining whether a tile is hollow sounding. [6] Given that Spontaneous Ventures, LLC has not allowed Falbo’s to do any corrective work, despite Falbo’s willingness to do so, it would be appropriate to dismiss this matter even if Falbo’s had committed a workmanship violation.

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