ALJDEC decisions subject to certification as final

2015A-5227-ROC · Registrar of Contractors · 2016-07-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 14, 2016 APPEARANCES: Charles Johnson, Esq., Counsel for the Complainants, Kara Geren, Brad Geren, Complainants; Yair Lavi, Respondent officer and Qualifying Party appearing without counsel of record; Stephen Lawton, ROC Investigator. ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson, Esq. _____________________________________________________________________ Hearing was convened to determine whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors (“ROC”). Evidence and testimony were presented, and based on the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT On May 17, 2016, the ROC issued a Notice of Hearing setting the above- captioned matter for hearing on July 14, 2016, at the Office of Administrative Hearings in Phoenix, Arizona. Respondent Lavi Remodeling and Construction, LLC, holds license number 211694 [b-3 | residential | llc] issued by ROC. The Notice of Hearing shows that hearing was set for July 14, 2016 at 10:00 AM, Arizona time, to consider the charges made in the Citation and Complaint. The complaint was filed December 24, 2015 asserting poor workmanship and abandonment. Following the filing of the complaint, the ROC assigned its Investigator, Stephen Lawton to inspect the jobsite. At the jobsite, Complainants’ residence at 24098 East Muriel Drive, Scottsdale, Arizona, was inspected by Mr. Lawton on February 24, 2016. The Complainant Bradley Robert Geren was present, for the inspection, but the Respondent failed to appear for the inspection. Confirming assertions in the complaint, Mr. Lawton determined: a) Deck coating was separated from the substrate; b) Concrete repair is separated from the existing concrete c) Side yard drains are above are above grade and does not allow rain water to flow into the drain itself. d) Caulking of cracks on the pool deck does not match the color of the pool deck. On April 11, 2016, a directive from the Registrar was issued wherein a corrective work order was made to the Respondent as follows: a) Deck coating separating from the substrate. Correct by Appropriate Means. b) Concrete repair of pool decking separating from existing deck. Correct by Appropriate Means. c) Side yard drain does not drain, drains are above grade. Correct by Appropriate Means d) Caulking does not match color of pool deck coating. Correct by Appropriate Means. 8. The Complainants, as part of the conditions and terms of the contract for purchase of their home at 24098 East Muriel Drive, Scottsdale, Arizona, required the Seller to provide repairs and updates to the home. The Seller contracted with the Respondent who performed work for the Seller. After closing on their home purchase, defects described in paragraph 6 herein above were discovered. 9. The Complainants conferred with Yair Lavi, the Respondent Qualifying Party, in order to determine whether the Respondent would warrant the work previously provided and whether the Respondent would undertake repairs to the job that Respondent performed. 10. At hearing in this matter, Mr. Lavi testified that he told the Complainants that “my work was warranted forever” and that “If anything needed repair, I will do it for you without charge.” 11. Respondent did not enter into a written agreement to provide repair work to the work he undertook for the Complainants’ Seller. Respondent undertook the work for the Complainants pursuant to Respondent’s oral promise to perform. 12. Respondent testified at hearing that the value of the repair work he provided for the Complainants exceeded One Thousand Dollars. The ROC issued a citation to the Respondent on April 28, 2016 charging Respondent with multiple violations of Arizona law as follows: a) A violation of Rule 4-9-108, titled “Minimum Construction Standards,” in the Arizona Administrative Code, and thereby of A.R.S. § 32-1154(A)(3). b) A violation of A.R.S. § 32-1154(A)(12)(“Failure in any material respect to comply with this chapter.”). c) 1158(B): A violation of A.R.S. § 32-1158(B)[1] d) A violation of A.R.S. § 32-1154(A)(22) (“Failure to take appropriate corrective action)[2] Respondent timely filed its answer to the Citation on May 13, 2016. The Answer was filed on the Respondent attorney’s letterhead – Shaye Mann, The Answer is not singed by the Qualifying Party, Mr. Lavi, but does contain a substitute electronic signature, to wit: /Shaye Mann. The Administrative Law Judge takes administrative notice of the public and published records of the Arizona Bar that Mr. Shaye Mann is a licensed Arizona attorney doing business as the Law Office of Shaye Mann, 1212 E Osborn Rd Ste 111, Phoenix, AZ 85014-5537. Mr. Mann neither appeared at his client’s July 14, 2016 hearing nor has he provided a notice of his withdrawal from this case. The Respondent, at hearing, stated he expected his attorney to be present at hearing and did not know why he was not present. However, Mr. Lavi indicated he had not spoken to or heard from his attorney for some time. On the record, the Administrative Law Judge inquired whether the Respondent wished to proceed in the absence of his attorney. The Respondent, through, Mr. Lavi, decided Respondent wished to proceed with the hearing without counsel. Mr. Yair Lavi, Respondent, and Mr. Brad Geren, one of the Complainants, testified that since the filing of the Complaint on December 24, 2015, the Respondent has not returned to the Complaints’ property to inspect Respondent’s work or to commence work on any of the repairs. Respondent has never returned to the Complainants’ property to comply with the ROC’s Corrective Work Order. Mr. Lavi testified that the reason he has not returned to the Complainants’ home and jobsite to comply with ROC’s Corrective Work Order was that Mr. Lavi had been experiencing “a lot of personal problems” in his life that prevented him from being able to do Complainants’ work. Mr. Lavi testified that he had contracts for “really big jobs, much larger, , ,” that the Complainant’s job that he was working on. On examination by the Administrative Law Judge, Mr. Lavi was not able or not willing to discuss specific examples of his “personal problems” that prevented him from complying with his duty to complete the ROC’s Corrective Work Order of April 11, 2016, No evidence of valid justification for ignoring the ROC corrective order of April 11, 2016, was offered. At hearing, the Respondent offered no exhibits. Complainants offered Exhibits C1 thorough and including Exhibit C9 which were admitted without objection and considered. Complainants presented testimony by Mr. Brad Geren regarding exhibits C6, C7 and C8 of estimates that were obtained by the Complainants to repair the work performed by the Respondent. Evidence presented shows that to enable the Complainants to a) bring the side yard drain in this case down to below grade so that the drain functions properly;\ b) plus the expense needed to be incurred to remove the existing pool deck, remove the demolition debris, form a new cantilever edge, pour 890 square feet of concrete deck and apply acrylic lace coating to the new deck will cost a total of $13,540.00. 23. Respondent testified that the repair expense was not justified because the decking cracks to not extend throughout the entire deck, that the deck does not need to be demolished and repoured, that the amount of concrete estimated to be needed is more than Resppondent believes is needed. Respondent estimates that about $2,500.00 is a fair and reasonable estimate of repair costs. 24. Respondent testified that since Mr. Lavi had not been to the Complainant’s home site for nearly 7 months, he has no basis to determine what work needs to be done to repair his own work. 25. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on July 14 2016. Such prior License record reflects that Respondent’s License No. was first issued October 13, 2005 and reports the following discipline: a. [FINITE SUSPENSION 05/09/2016 - 06/12/2016] b. [FINITE SUSPENSION 12/04/2015 - 01/02/2016] c. [SUSPEND UNTIL COMPLIANCE 04/22/2014 - 04/30/2014] d. SUSPENDED NON-RENEWAL 11/01/2013 - 05/12/2014] e. [SUSPENDED LACK OF BOND 06/18/2013 - 04/30/2014] f. SUSPENDED LACK OF BOND 09/20/2010 - 01/05/2011] g. [SUSPENDED NON-RENEWAL 11/01/2009 - 12/03/2009] h. SUSPENDED LACK OF BOND 05/11/2008 - 07/25/2008] i. [SUSPENDED NON-RENEWAL 11/01/2007 - 11/07/2007]

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. Ariz. Rev. Stat. section 32-1154(E) provides that ROC may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of Ariz. Rev. Stat. section 32-1154(A)(22). 11. The preponderance of the evidence shows that Lavi Remodeling and Construction, LLC, License No: 211694, violated Ariz. Rev. Stat. section 32- 1154(A)(3) by failing to perform its work in a professional manner in that: a. it did not construct the side yard drain below grade causing flooding when it rained because the drain was too high for the drain to function; b. it failed to apply Deck coating is such a way as to prevent it from separating from the substrate. c. Failed to repair deck Concrete of pool decking to prevent it from separating from existing deck. d. Attempted to repair deck cracks with caulking does not match color of pool deck coating. . 12. The preponderance of the evidence shows that Lavi Remodeling and Construction, LLC violated Ariz. Rev. Stat. section 32-1154(A)(22) by failing to comply with the April 11, 2016 ROC’s Directive without any justification whatsoever. It is apparent from the evidence that not only did the Respondent simply fail to comply with the ROC Directive, he ignored the well founded ROC directive and ignored the Complainants. 13. Inasmuch as the evidence is clear that the value of the work contracted in this case exceeds $1,000;.00, the Respondent violated A.R.S. § 32- 1158(B) by failing to provide contractor services without a written contract containing the specific language required by the subject statute. 14. Considering the nature of the workmanship violations, the conduct of the Respondent in completely ignoring the lawful ROC Directive by failing to inspect its jobsite or initiate any repair efforts whatsoever from filing of the Complaint on December 24, 2015 until the July 14, 2016 hearing in this case; and considering the Respondent undertook to perform contractor services without a written contract that contains the specific consumer protective language required by statute, the Lavi Remodeling and Construction, LLC’s license should be suspended. 15. Evidence supports that the Complainants will be required to expend $13,540.00 to repair the sub-standard workmanship provided by the Respondent. 16. The Respondent admits that he has no idea what condition the Complainants’ site is in and has no idea what repair will be needed since Respondent has not inspected or been on the site for nearly 7 months. 17. Respondent’s arguments that the repair will not require the decking to be demolished and then re-poured, that the amount of concrete required to restore the deck to a standardized condition; that the side yard drain needs no more repair than an application of a few river rocks and that repair should const not more than about $2,500.00 is not credible since the Respondent has no basis in fact to determine what repairs are needed or what the reasonable expense for the repairs should be. 18. Considering that Lavi Remodeling and Construction, LLC acknowledged that it did not comply with the Directive and that is stated no justifiable reason for that failure, the imposition of a $500.00 civil penalty is appropriate.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 211694 for a period of not less than twenty (20 ) days. Further it is recommended that the Respondent be ordered to pay the sum of $13,540.00 to the Complainants in restitution, Further it is recommended that the Registrar shall suspend Respondent’s License No. 211694 unless and until Respondent has provided proof satisfactory to the Registrar of Contractors that Respondent has paid Complainants $13,540.00 in restitution.. Further it is recommended that the Registrar require Respondent to pay the sum of $500.00 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 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. Done this day, July 28, 2016. /s/ Randolph D. Wolfson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] “From and after December 31, 2007, 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 shall contain in writing at least the following information: 1. The name of the contractor and the contractor's business address and license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction 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 at least ten point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative. [2] A.R.S. § 32-1154(A)(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

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