ALJDEC decisions subject to certification as final

2015A-317-ROC · Registrar of Contractors · 2015-06-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 15, 2015, at 8:00 a.m. APPEARANCES: The Arizona Registrar of Contractors (“the Registrar”) was represented by Seth T. Hargraves, Esq.; Pearson Contracting and Services LLC DBA: T & K Construction (“Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On or about June 10, 2011, the Registrar issued License No. KB- 1.272895-D for Residential and Commercial General Contracting to Respondent. Respondent’s current address of record with the Registrar is 5228 N. Idaho Rd., Apache Junction, Arizona 85119- 9611. Tony Pearson is listed on the license as a member and qualifying party.[1] 2. On or about May 7, 2015, RLI Insurance Company notified the Registrar that it had cancelled Respondent’s bond. As a result, on or about June 7, 2015, the Registrar suspended Respondent’s license.[2] 3. On or about April 24, 2015, the Registrar issued a Notice of Hearing upon the charges made in the Citation and Complaint that the Registrar had filed against Respondent on its own motion, notifying Respondent that an evidentiary hearing would be held on June 15, 2015, at 8:00 a.m. at the Office of Administrative Hearings (“the OAH”), an independent state agency.[3] The Registrar sent the Notice of Hearing to Respondent at its address of record. 4. The charges in the Registrar’s Citation and Complaint were based on a consumer complaint that Richard Leroy Hickman had filed against Respondent with the Registrar concerning Respondent’s failure to properly or to fully perform its contract to remodel Mr. Hickman’s residence, which the Registrar had designated Case No. 2014- 3919.[4] 5. An evidentiary hearing was held on June 15, 2015. The Registrar submitted seven exhibits and presented the testimony of three witnesses: (1) Mr. Hickman; (2) Theodore Gerold, the Registrar’s investigator who investigated Mr. Hickman’s complaint; and Darrah Dombrowski, a staff attorney employed by the Registrar. 6. Respondent did not request to appear telephonically at the hearing and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed sixteen minutes to allow Respondent additional travel time, Respondent did not appear, through an authorized employee, member, or attorney, and did not contact the OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend its license. Hearing Evidence Respondent’s Violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108[5] 7. On or about September 29, 2014, Mr. Hickman filed the complaint in Case No. 2014-3919 with the Registrar. Mr. Hickman’s original complaint and addendum included 19 specific items of workmanship.[6] On or about October 28, 2014, Investigator Gerold performed a jobsite inspection at Mr. Hickman’s residence. Mr. Hickman and his wife and Mr. Pearson, Respondent’s member and qualifying party, attended the jobsite inspection.[7] 8. Investigator Gerold took photographs of the workmanship deficiencies that he observed in Respondent’s performance of the remodeling project at Mr. Hickman’s residence to clarify the evidence.[8] Investigator Gerold testified that on October 28, 2014, he observed certain deficiencies in the work that Respondent had performed under its contract with Mr. Hickman at the jobsite. 9. On or about November 6, 2014, Investigator Gerold on behalf of the Registrar issued a Directive to Respondent to correct eighteen workmanship deficiencies that Inspector Gerold observed at the October 28, 2014 jobsite inspection on or before November 24, 2014. These deficiencies included Respondent’s failures to begin demolition or to perform any work in the laundry room, to complete the hall bathroom, to complete application of drywall texture to the new drywall on the kitchen ceiling, to properly line up tile grout lines or match grout color, especially in the master bedroom, to complete paint touchup on the baseboards and walls in the master bedroom, to install a transition strip in the master bedroom closet doorway, to install tile in the master bedroom so that was flat and without excess lippage in the, to cut floor tile properly at the master bath entry, to properly secure and seal around ceiling fixtures in the master bedroom, to properly install kerf corner bead on the right side of the bedroom doorway, to properly lay out the tile in the hallway, resulting in excessively small pieces at the doorways, to install floor tiles close enough to the door jamb kerf casings, to install shower wall tile so that it was flat, without excessive lippage, to install floor tile around the hearth in the family room without excessive gaps, to install the light switch next to the refrigerator right side up, to adjust the stove and to install the electrical outlet so that it would be flush when tile was installed next to it, to install proper electrical wire protection plates in the kitchen, and to secure and properly seal the kitchen light fixture.[9] Respondent’s Violation of A.R.S. § 32-1154(A)(12), namely A.R.S. § 32- 1158(B)[10] 10. Mr. Hickman attached to the complaint that he filed with the Registrar copies of Respondent’s August 16, 2014 estimate to perform twelve itemized components to remodel Mr. Hickman’s residence for a contract price of $6,850.00, payable by a 50% deposit before the start of work and the balance due upon completion, and an August 16, 2014 addendum to the estimate that included eight additional itemized components, for a total contract price of $7,550.00 with the same payment terms.[11] Mr. Hickman testified that Respondent sent these contract documents after it started the remodeling project. 11. Investigator Gerold pointed out that the contract documents that Respondent prepared did not include all the elements that A.R.S. § 32-1158(B) required, to wit, the documents did not include Respondent’s license number, the estimated completion date of the remodeling project, or notice to the homeowner of his right to file a complaint with the Registrar for Respondent’s possible violations of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32- 1155(A), along with the Registrar’s telephone number and website address. / / / / / / / / Respondent’s Violation of A.R.S. § 32-1154(A)(22)[12] 12. Investigator Gerold testified that Respondent’s only contact with the Registrar after the November 6, 2014 Directive was issued was on November 20, 2014, when Mr. Pearson sent an email requesting additional time to comply with the Directive. Investigator Gerold on behalf of the Registrar denied Mr. Pearson’s request because he sent the email only four days before the deadline on the Directive and at that time, Respondent had not even contacted Mr. or Mrs. Hickman to schedule corrective work.[13] 13. On November 25, 2014, Mr. Hickman informed Investigator Gerold that Respondent had not contacted Mr. Hickman since the November 6, 2014 Directive.[14] 14. Investigator Gerold testified that he performed a prehearing jobsite inspection at Mr. Hickman’s residence on December 8, 2014. Conditions at the jobsite were the same as they had been at the October 28, 2014 jobsite inspection; Respondent had not done anything to comply with the November 6, 2014 Directive.[15] 15. Investigator Gerold testified that he performed another prehearing inspection on June 11, 2015, for the hearing in this matter and that conditions at the jobsite were the same as at the initial October 28, 2014 jobsite inspection. CONCLUSIONS OF LAW 1. The Notice of Hearing that the Registrar mailed to Respondent at its address or record was reasonable, and it is deemed to have received the notice of the hearing.[16] 2. The administratively suspended status of Respondent’s license does not deprive the Registrar of its right to prosecute this complaint against Respondent or prevent the Registrar from determining the merits of the complaint.[17] 3. This matter lies within the Registrar’s jurisdiction.[18] 4. The Registrar bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[19] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[20] 5. The Registrar established that Respondent violated A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108, in the deficiencies in the work that Respondent had performed under its contract with Mr. Hickman that Investigator Gerold observed at the jobsite on October 28, 2014, and identified at the hearing. 6. The Registrar established that Respondent violated A.R.S. § 32- 1154(A)(12), namely A.R.S. § 32-1158(B), by not including on its contract with Mr. Hickman its license number, the estimated completion date of the remodeling project, or notice to the homeowner of his right to file a complaint with the Registrar for Respondent’s possible violations of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A), along with the Registrar’s telephone number and website address. 7. The Registrar established that Respondent failed to perform appropriate corrective work to comply with the deficiencies described on the November 6, 2014 Directive. Therefore, the Registrar established that Respondent violated A.R.S. § 32-1154(A)(22). RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the order in this matter, License No. KB-1.272895-D of Respondent Pearson Contracting and Services, LLC DBA T & K Construction shall be suspended for a period of five days. 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 Order, the Registrar shall 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 the Order will be five days from the date of that certification. Done this day, June 23, 2015.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See the Registrar’s Exhibit 1 at 1 and 9. [2] See id. at 4, 8, and 9. [3] The file of the Office of Administrative Hearings does not contain the Registrar’s Citation and Complaint. [4] See the Registrar’s Exhibit 2 at 1-2. [5] 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.” 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] See the Registrar’s Exhibit 2 at 1. [7] See the Registrar’s Exhibit 3 at 1. [8] See id. at 14-40. [9] See the Registrar’s Exhibit 4. [10] 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.” 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. . . . . 4. The estimated date of completion of all work to be performed 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. . . . [11] See the Registrar’s Exhibit 2 at 8-9. [12] 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.” [13] See the Registrar’s Exhibit 6. [14] See the Registrar’s Exhibit 5. [15] See the Registrar’s Exhibit 7. Respondent did not attend the December 8, 2014 inspection. [16] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [17] See A.R.S. § 32-1154(C). That statute provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . . .” [18] See A.R.S. § 32-1154(A). [19] 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). [20] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

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