ALJDEC decisions subject to certification as final

2015A-5204-ROC · Registrar of Contractors · 2016-09-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 6, 2016, at 8:00 a.m. APPEARANCES: Linda Lee Gall (“Complainant”) was represented by Shane D. Butrock, Esq., Buntrock & Gardner Law, PLLC; C and E Services, Inc. dba, Arizona Environmental Group (“Respondent”) failed to appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT 1. On or about September 5, 2007, the Arizona Registrar of Contractors (“the Registrar”) issued License No. KB-2.236615-D for dual residential and small commercial contracting to Respondent. Respondent’s address of record is P.O. Box 72810, Phoenix, Arizona 85050-1031. 2. On or about December 21, 2015, Complainant filed a complaint with the Registrar stating that on October 28, 2015, Respondent had contracted to clean and seal the Saltillo tile at Complainant’s house at 6725 E. Cholla St., Scottsdale, Arizona 85254. Respondent did not complete the job and the tiles that Respondent attempted to clean and seal were damaged and discolored. 3. The Registrar assigned the complaint to its investigator, Steve Klein (“Investigator Klein”), for investigation. On February 25, 2016, Investigator Klein performed a jobsite inspection. His notes of his inspection stated that he observed color splatter type differences and marks that appeared to have made by a buffer. 4. Because Investigator Klein did not know what the floor looked like before Respondent attempted to clean it, he requested that Complainant provide photographs of the floor taken before Respondent performed any work. On March 2, 2016, after Complainant provided photographs of the floor’s prior condition, Inspector Klein issued a Directive to Respondent to perform certain repairs on or before 5:00 p.m. on March 18, 2016, in relevant part as follows: • Respondent shall complete project per original contract agreement, properly executed change orders, verbal agreements, and manufactuer[’]s installation instructions.

• Chemical hot spots including buffer and splatter type marks shall be corrected.

5. On April 12, 2016, Investigator Klein performed a compliance inspection. His notes reflect that neither of the repairs in the March 2, 2016 Directive had been completed. 6. Investigator Klein referred the complaint to the Registrar’s Legal Department. On April 14, 2016, the Registrar issued a Citation against Respondent’s license, charging cause to revoke, suspend, or otherwise discipline Respondent’s 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. Respondent filed a timely written answer to the Citation, alleging that it was working with Complainant to resolve issues. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. 8. On May 5, 2016, the Registrar issued a Notice of Hearing, setting an evidentiary hearing on June 27, 2016. The Registrar sent the Notice of Hearing to Respondent at its address of record. 9. On June 15, 2016, Complainant’s attorney moved to continue the hearing. On June 26, 2016, after Respondent did not file a response to the motion to continue, the Administrative Law Judge issued an order continuing the hearing to September 6, 2016. Staff at OAH sent the June 26, 2016 order to Respondent at its address of record. 10. A hearing was held on September 6, 2016, at the OAH. Complainant submitted four exhibits and presented the testimony of her husband, Lyle Gall (“Mr. Gall”). 11. Respondent did not request to appear telephonically at the continued hearing and did not request that the hearing again be continued. Although the hearing did not start until approximately minutes after the scheduled time and did not conclude for another approximately 60 minutes, Respondent did not appear through an authorized officer, employee, or attorney. Consequently, Respondent did not present any evidence to defend its license. 12. Complainant submitted Respondent’s bid to steam clean, strip, and seal 2107 square feet of Saltillo tile in Complainant’s house at a cost of $1.85/square foot.[1] According to the complaint, Respondent was paid $4,057.05 for this work. 13. Mr. Gall testified that he has measured or had others measure the tile areas in his house at least three times and that there is only 1,500 square foot of tile. 14. Mr. Gall testified that Respondent cleaned, stripped, and sealed approximately 987 square feet of tile. Complainant submitted into evidence photographs of the tile that Respondent cleaned, stripped, and sealed[2] and a photograph of other tile in the house that Respondent did not work on.[3] The tile that Respondent worked on has inconsistent, mottled color, while that tile that Respondent did not work on has a consistent color. 15. Mr. Gall testified that the only thing that Respondent has done to comply with the Directive was to send several individuals out to examine the floor and to perform test repairs on several tiles. Mr. Gall testified that Respondent has not repaired the floor. 16. Mr. Gall testified that he has spoken to 2 or 3 contractors who told him that Respondent had used a caustic substance to clean the floor, which had resulted in all prior coatings being emulsified. These contractors told him that the floor was ruined and would have to be replaced. 17. Mr. Gall testified that he contacted Mexican Tile Restoration Inc., License No. CR-5.139742-D for dual floor refinishing, who told him that the floor could be salvaged. 18. Complainant submitted Mexican Tile Restoration Inc.’s proposal dated January 12, 2016, in the amount of $5,904.00 to repair the floor.[4] 19. Administrative notice is taken of Respondent’s license history on the Registrar’s public website on September 1, 2016, pursuant to A.A.C. R4-9-117. Respondent’s license was current and in good standing and showed no prior disciplinary history. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[5] The Registrar’s Notice of Hearing and OAH’s order continuing the hearing at Complainant’s request that were both mailed to Respondent at its address of record were reasonable and Respondent is deemed to have received notice of the September 6, 2016 continued hearing.[6] Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[7] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[8] Complainant established that Respondent failed to comply with the Registrar’s or industry standards when it stripped, cleaned, and resealed the floor and that it failed to comply with the Registrar’s March 2, 2016 Directive. Complainant therefore established cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(3),[9] namely A.A.C. R4-9-108,[10] and A.R.S. § 32-1154(A)(22).[11] The legislature has not empowered either OAH or the Registrar to adjudicate or award money damages.[12] The Registrar may penalize a contractor’s license by ordering payment of restitution under some circumstances.[13] Restitution is appropriate in this case based on Respondent’s having undertaking work that it clearly was not qualified to perform, failure to make any meaningful effort to arrange to repair the damage that it caused, and failure to attend the duly noticed continued hearing. RECOMMENDED ORDER Based on the foregoing, it is recommended that, five business days after the effective date of the order in this matter, License No. KB- 2.236615-D of Respondent C and E Services, Inc. dba, Arizona Environmental Group shall be suspended until it provides written proof that is satisfactory to the Registrar that it has paid Complainant $5,904.00 by certified check. It is further recommended that if Respondent provides proof that is satisfactory to the Registrar that it has paid Complainant $5,904.00 by certified check, no license suspension take place and the Registrar shall close Case No. 2015-5204 as resolved/ settled/withdrawn. It is further recommended that the Registrar require Respondent to pay the sum of $250.00 as a civil penalty pursuant to A.R.S. § 32-1154(E).

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 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, September 6, 2016.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See Complainant’s Exhibit 3. [2] See Complainant’s Exhibit 1 (left side) and 2. [3] See Complainant’s Exhibit 1 (right side). [4] See Complainant’s Exhibit 4. [5] See A.R.S. § 32-1154(A). [6] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [7] 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). [8] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [9] 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.” [10] 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.” [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.” [12] See J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (Ct. App. 1984). [13] See A.R.S. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (Ct. App. 1990).

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