ALJDEC decisions subject to certification as final

2015A-4837-ROC · Registrar of Contractors · 2016-05-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 16, 2016, at 10:00 a.m. APPEARANCES: Richard Butler (“Complainant”) appeared on his own behalf; Arsen Torosian LLC dba, Granite Kitchen Concepts (“Respondent”) appeared through its Qualifying Party/Member, Arsen Torosian (“Mr. Torosian”). ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On October 25, 2005, the Arizona Registrar of Contractors (“the Registrar”) issued License No. CR-5.212784-D for dual granite, marble, and travertine to Respondent. 2. On or about September 15, 2015, Complainant requested that the Registrar perform an inspection under the Building Confidence program of the white cast iron under-mounted sink that Respondent installed at Complainant’s house at 21425 N. Ridgeview Road in Paulden, Arizona as part of its contract to install quartz countertops. The Registrar’s Investigator Jim Dimond (“Investigator Dimond”) was assigned to conduct the Building Confidence inspection. Investigator Dimond concluded that the sink did not drain properly, resulting in staining at two corners, as a result of a manufacturing defect and that because Respondent provided the sink as part of its contract, it “would be responsible for resolving the issue with the manufacturer at no additional cost to the homeowner.” 3. Respondent did not resolve the issue with the white cast iron sink. On November 20, 2015, Complainant filed a complaint with the Registrar against Respondent, alleging that Respondent had installed quartz countertops and the white cast iron sink in Complainant’s kitchen, that Complainant had paid the full contract price of $6,562.94, and that the sink was starting to turn odd colors as a result of the improper drainage. 4. The complaint was assigned to Investigator Dimond for investigation. Investigator Dimond performed another jobsite inspection and on January 7, 2016, issued a Directive on behalf of the Registrar, directing Respondent to remedy by appropriate means the following workmanship deficiencies: The respondent contracted for an installed an under mount sink. That sink has been deemed defective as the corners fail to drain and the result has been staining that can’t be removed.

The deadline for Respondent to comply with the January 7, 2016 Directive was January 27, 2016, at 5:00 p.m. 5. Complainant eventually requested a hearing on the complaint. 6. On March 8, 2016, the Registrar issued a Citation against Respondent’s contractor’s license, charging cause to discipline the license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, and A.R.S. § 32-1154(A)(22). 7. On March 18, 2016, Mr. Torosian filed a timely written answer to the Citation on Respondent’s behalf, denying any cause to discipline its license and affirmatively alleging that it had contacted the manufacturer of the sink and had been informed that new sinks would be arriving the week of March 28, 2016, and that when the sink arrived, it would schedule repairs. Mr. Torosian explained that the manufacturer had sent out a new sink in December 2015, but that the new sink also did not drain properly. 8. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 9. A hearing was held on May 16, 2016, at which the parties appeared and testified via videoconference from the Registrar’s Flagstaff office. Investigator Dimond also testified. Hearing Evidence 10. The defective sink had not been replaced as of the date of the hearing. 11. Mr. Torosian testified that because Respondent does not stock the cast iron sink that it installed in Complainant’s kitchen, it purchased the sink through a plumbing fixtures supplier. 12. Investigator Dimond testified that he did not see any workmanship issues with Respondent’s installation of the quartz countertops and the under-mount cast iron sink. . 13. Complainant expressed a fear that because the only way the under- mount cast iron sink could be replaced was to raise the quartz countertops, he has been told that a significant risk exists that the corners of the countertops will break or sliver when the sink is replaced and that as a result, the entire countertop may have to be replaced. 14. Complainant testified that after Respondent installed the quartz countertops and under-mount cast iron sink, he hired a tile contractor to install tile backsplashes in the kitchen. Complainant testified that the tile contractor said that the backsplashes will also have to be replaced when the quartz countertops are lifted to replace the under-mounted cast iron sink. 15. Complainant testified that in addition, all of the plumbing underneath the sink will have to be removed and reattached when the sink is removed and replaced. Complainant testified that at this point, he and his wife would prefer that a different brand of sink be installed because the supplier informed Complainant that the entire shipment of sinks was defective. 16. Mr. Torosian testified that he obtained two more sinks from the supplier who provided the sink manufactured by CECO Commercial Enameling Co. (“CECO”). Both of the sinks evidenced the same manufacturing defect that prevented them from draining properly. CONCLUSIONS OF LAW 1. A licensed contractor’s potential violation of applicable statutes lies within the Registrar’s jurisdiction.[1] 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[2] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[3] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[4] 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.”[5] 4. Complainant did not establish that Respondent’s installation of the quartz countertops and the under-mount cast iron sink violated the Registrar’s and industry standards or was deficient in any respect. Therefore, Complainant did not establish cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(3),[6] namely A.A.C. R4-9-108.[7] 5. Complainant did not establish that Respondent actually knew or should have known that the sink was defective when it installed the sink or that Respondent specifically warranted that the sink would be free of manufacturing defects. The issue becomes whether Complainant should be able to enforce the manufacturer’s strict liability sounding in tort for a latent manufacturing detect against Respondent and possibly the Registrar’s Residential Contractors’ Recovery Fund[8] in an administrative action based on Respondent’s workmanlike installation of the sink. 6. In most jurisdictions, a contractor who merely installs a fixture obtained from a supplier is not liable in tort for manufacturing defects in the fixture.[9] Because Complainant presented no reason to make Respondent and potentially the Registrar’s Residential Contractors’ Recovery Fund liable in a licensing action for a product defect that is in no way Respondent’s fault,[10] Respondent was justified in failing to comply with the January 7, 2016 Directive. Therefore, Complainant did not establish cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(22).[11] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order in this matter, Complainant Richard Butler’s complaint in Case No. 2015-4837 against Respondent Arsen Torosian, LLC’s License No. CR-5.212784-D shall 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 will be five days from the date of that certification. Done this day, May 26, 2016.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See A.R.S. § 32-1154(A). [2] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [3] See A.A.C. R2-19-119(B)(2). [4] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [5] Black’s Law Dictionary at page 1220 (8th ed. 1999). [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.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.” [8] See A.R.S. § 32-1132(A). [9] See, e.g., Monte Vista Development Corp. v. Superior Court, 226 Cal. App. 3d 1681, 1687, 277 Cal. Rptr. 608, 611 (1991) (citing Restatement (Second) of Torts § 402A); Leininger v. Stearns-Roger Mfg. Co., 17 Utah 2d 37, 42, 404 P.2d 33, 36 (1965); cf. Smith v. Phillips, 110 N.Y.S.2d 12, 13 (N.Y. Misc. 1952) (“It is true that in the absence of an express warranty as to the quality of the materials, the contractor would not be liable for the quality” of the materials). [10] Because the defective sink became a fixture in Complainant’s house, he is in a better position than Respondent or the Residential Contractors’ Recovery Fund to make a claim sounding in tort against CECO for replacement of the defective under-mount cast iron sink and all collateral damage caused by its replacement. [11] 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.”

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