ALJDEC decisions subject to certification as final

2016A-1017-ROC · Registrar of Contractors · 2016-09-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 15, 2016, at 1:00 p.m. APPEARANCES: Gregory Allen Yant (“Complainant”) was represented by Tony S. Cullum, Esq.; Eternity Homes LLC (“Respondent”) was represented by Nicholas Dale Patton, Esq., Moore Law Firm PLLC. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. On or about March 16, 2003, the Arizona Registrar of Contractors (“the Registrar”) issued License No. KB-2.183637-D for dual residential and small commercial contracting to Respondent. 2. On or about March 28, 2016, Complainant filed a complaint with the Registrar against Respondent alleging 26 specifically enumerated deficiencies in the work that Respondent contracted to perform building Complainant’s residence at 3335 Hilltop Drive, Lakeside, Arizona 85929. The first alleged deficiency was “Exterior Stone – Rubble Stone laid improperly (like fieldstone) (Contractor admitted problem with stone).” 3. Complainant attached to his complaint a copy of his contract with Respondent, which included a page of Contract Cost Breakdowns that included various allowances for specific work, a page of Contract Specifications, and a signature page, which both parties signed on July 9, 2014. The contract did not include Respondent’s license number, the address of the project or Complainant’s address, the estimated date of completion, or the total dollar amount of the contract (which presumably was the total of all the cost breakdowns), did not apprise Complainant of his right to file a complaint against Respondent with the Registrar for a violation of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A), and did not provide the Registrar’s telephone number and website address. 4. Complainant also attached to his complaint a copy of Respondent’s Invoice No. 1030 dated December 11, 2015, which showed that Complainant had no outstanding balance on the contract. Invoice No. 1030 did not include Respondent’s license number preceded by the acronym “ROC.” 5. The Registrar assigned the complaint to its Investigator, Steve Philpott (“Investigator Philpott”), for investigation. Investigator Philpott performed a jobsite inspection on April 20, 2016. On May 4, 2016, Investigator Philpott on behalf of the Registrar issued a Directive to Respondent to perform certain repairs on or before 5:00 p.m. on May 20, 2016. The May 4, 2016 Directive required Respondent to correct the following work: 1. Complaint Item 1: Exterior Stone – Rubble Stone laid improperly (like fieldstone) (Contractor has admitted problem with stone)

2. Complaint Item 2: Exterior Stone – Corner stone not used in some areas, stone cut instead of chipped.

3. Complaint Item 3: Mortar/Grout – Holes Cracks, Uneven, Excessive grout lines (Some 3-4”)

4. Complaint Item 4: Mortar/grout – Spilled across brick, stone, windows, doors

5. Complaint Item 5: Mortar/grout- uneven color throughout inside and out on stone.

6. Complaint Item 7: Tile work- Master Bath floor cracked after repaired once by contractor

7. Complaint Item 9: Tile in Master covered with grout.

8. Complaint Item 14: Deck concrete surface is flaking off

9. Complaint Item 15: Drywall gap in kitchen about 1” at ceiling. “Repaired” with caulk by contractor. Stated he bought a undried beam

10. Complaint Item 17: Bathroom tiles uneven with flooring.

11. Page 2 Complaint Item 3: Stairwell – some caps are wrong – contractor stated he would fix (3 months ago)

6. Respondent did not resolve all the items of Complainant’s complaint. On June 7, 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, A.R.S. § 32-1154(A)(12), namely, A.R.S. §§ 32-1124(B) and 32-1158(B), and A.R.S. § 32- 1154(A)(22). 7. Respondent filed a timely written answer to the Citation, denying that it violated any of the Registrar’s statutes. 8. An evidentiary hearing was held on September 15, 2016, via videoconference from the Registrar’s office in Flagstaff. Complainant submitted eleven exhibits and testified on his own behalf. Respondent submitted one exhibit and presented the testimony of Christopher Zampedri (“Mr. Zampedri”), its qualifying party/member. Investigator Philpott also testified. Hearing Evidence 9. Investigator Philpott testified that he performed a compliance jobsite inspection on June 6, 2016. On that date, Respondent had corrected the floor and the excess grout in the master bathroom (Complaint Items 7 and 9, Items 6 and 7 on the May 4, 2016 Directive). 10. Investigator Philpott testified that he performed a prehearing jobsite inspection on September 13, 2016. On that date, Respondent had corrected the drywall gap in the kitchen (Complaint Item 15, Item 9 on the May 4, 2016 Directive). 11. Complainant testified that two weeks before the hearing, during a monsoon storm, water started coming into the house. 12. Investigator Philpott testified that at the September 3, 2016 prehearing inspection, he noticed moisture coming through the lower level floor (Complaint Item 18) and water back-flowing from the edge of the deck to the house, leaking into the lower level with rain (Complaint page 2 Item 1), neither of which he had not noticed at the original April 20, 2016 jobsite inspection or at the June 6, 2016 compliance inspection. The Administrative Law Judge upheld Respondent’s objection to Complainant’s request to add these items to the items that the Registrar could consider to impose discipline against Respondent’s license because they were not listed on the May 4, 2016 Directive or any addendum to the directive and Respondent had not had a reason or an opportunity to correct these items. Complainant may file a new complaint on these items.[1] 13. Inspector Philpott testified that the house had natural stone veneer on most of the exterior walls. Complainant had chosen stone that had been prepared by Cedar Creek Stone and had selected Belgian rubble for the pattern that Respondent would use when installing the stone. Inspector Philpott testified that Complainant had provided Cedar Creek Stone’s brochure for Investigator Philpott to understand Complainant’s dissatisfaction with the stone pattern.[2] 14. Investigator Philpott testified that Cedar Creek Stone has four different profile patterns, which were shown by 1½” x 2½” illustrations in the brochure. The rubble pattern is more of a horizontal pattern, in contrast to the fieldstone pattern, which was completely random. Investigator Philpott testified he stone that he saw on the large exterior walls at Complainant’s house looked more like a field pattern, rather than a rubble pattern. Investigator Philpott testified that the pattern of the stone was not as noticeable on the columns of the house. 15. Investigator Philpott acknowledged that he never specified which walls that Respondent needed to repair to comply with the May 4, 2016 Directive. 16. Mr. Zampedri and Complainant agreed that he told Respondent that he did not want stone that looked like the stone on a house in the Torreon subdivision. Mr. Zampedri testified that he saw the Cedar Creek Stone brochure when he went to his supplier, Arizona Stone, to order the stone, but that he did not again see the brochure until Complainant filed the complaint with the Registrar. 17. Mr. Zampedri testified that he has never installed natural stone, where every piece is different, only cultured stone, which has only 15-20 uniformly sized pieces. 18. Complainant testified that Mr. Zampedri was never at the jobsite and the workers who installed the stone did not speak English. 19. Mr. Zampedri testified that he does not speak Spanish and that he communicated with his workers in English. Mr. Zampedri testified that his employees installed the stone between May and July of 2015, and that although he was regularly present at the jobsite installing tile, Complainant never complained about the stone installation while it was being done. 20. Complainant submitted three photographs placed on a single sheet that showed three large exterior walls on the house.[3] The photograph on the right included the caption, “Correct.” Investigator Philpott testified that the photographs on the left and bottom seemed to show a field stone pattern and the photograph on the right seemed to show a block pattern. Investigator Philpott acknowledged that the small illustration in Cedar Creek Stone’s brochure set a nebulous standard for the pattern of the stone and acknowledged that the actual placement of the stone may vary somewhat from the illustration but still comply with the manufacturer’s and the Registrar’s standards. 21. Complainant also submitted photographs that showed uneven or excessive grout in the exterior stone.[4] Respondent did not argue that the grout between the stones complied with the Registrar’s or industry standards. 22. Investigator Philpott testified that Respondent agreed that some areas of the exterior stone needed to be replaced. Mr. Zampedri testified that initially, Respondent agreed to replace a couple areas that Complainant did not like and requested that Complainant get bids. Mr. Zampedri testified that the areas totaled about 300 square feet. 23. Mr. Zampedri testified that the initial bid that Complainant provided was for about $17,000.00, but that eventually Complainant provided a bid of $38,000.00 to $40,000.00 to repair the stone pattern on the exterior walls. 24. Complainant submitted a bid from Meredith Masonry, Inc. (“Meredith”) dated March 11, 2016, in the amount of $65,810.00 to replace all the exterior stonework on Complainant’s house.[5] Complainant testified that Meredith told him that all the exterior stone needed to be removed and reinstalled and that in the process, 25% of the stone pieces would be damaged or lost. 25. Mr. Zampedri testified that he spoke to Brandon Meredith (“Mr. Meredith”) of Meredith. Mr. Zampedri testified that Mr. Meredith stated that he did not see any major problems and that all the defects in the stone work were cosmetic. Mr. Meredith also stated that the only way that Meredith would undertake repairs would be to replace all the stone work. 26. Mr. Zampedri testified that after Complainant filed the complaint with the Registrar, he made repeated efforts to gain access to Complainant’s house for Respondent to perform repairs. Respondent submitted texts that demonstrated that between April 14, 2016, and May 10, 2016, after Mr. Zampedri requested access for repairs, Complainant or his wife would respond that they had other plans or that the parties needed to meet to discuss what would be done.[6] After Complainant and his wife finally agreed to allow Respondent access on Wednesday, May 11, 2016, they changed their minds.[7] Complainant and his wife finally allowed Respondent to begin repairs on Monday, May 16, 2016.[8] Respondent apparently was able to continue working on repairs from Tuesday, May 17, 2016, through Thursday, May 19, 2016.[9] 27. Investigator Philpott testified that he did not think that Respondent could repair the stonework by 5:00 p.m. on May 20, 2016, as required in the May 4, 2016 Directive. Investigator Philpott testified that if Respondent had been diligently attempting to repair the stonework, he would have extended the deadline. Investigator Philpott testified that Complaint Items 1 – 5, Items 1 – 5 on the May 4, 2016 Directive, all involved the exterior stone work. 28. Investigator Philpott testified that Mr. Zampedri called on May 9, 2016, to request clarification of the necessary repairs. Investigator Philpott testified that he did not remember what he told Mr. Zampedri. 29. Investigator Philpott testified that Respondent wanted to correct the bathroom tiles that were uneven with the adjacent flooring (Complaint Item 17, Item 10 on the Directive) with a transition strip. Investigator Philpott testified that a transition strip was commonly used between different kinds of flooring and would have complied with the Registrar’s standards, but that Complainant would not allow the repair. 30. Pursuant to A.A.C. R4-9-117, administrative notice is taken of Respondent’s license history on the Registrar’s public website. On this date, Respondent’s license is current and in good standing. Although Respondent’s license history shows four administrative suspensions for non-renewal or lack of bond, there has been no prior discipline. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[10] 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[11] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[12] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[13] 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.”[14] 4. Complainant established cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(3),[15] namely A.A.C. R4-9-108,[16] with respect to Complaint Items 1, 2, 3, 4, 5, 14, and Page 2 Complaint Item 2 (Items 1, 2, 3, 4, 5, 8, and 11 on the May 4, 2016 Directive). 5. Respondent established that Complainant refused to allow a reasonable repair of the bathroom tiles that were adjacent to a different kind of flooring (Complaint Item 17, Item 10 on the May 4, 2016 Directive). Therefore, Complainant is not entitled to any further relief on this item in this forum. 6. The aesthetics of the pattern of the stone is subjective and the differences between manufacturer’s illustrations of the four patterns, especially rubble and fieldstone, is nebulous, as Inspector Philpott acknowledged. Complainant acknowledged that the pattern of the stone on at least one large wall at his house was correct. Therefore, the only areas of the stone on the large exterior walls where Complainant established by a preponderance of the evidence that the pattern of the stone requires repair or replacement were the exterior walls shown on the photographs on the left and bottom in Complainant’s Exhibit C-10. 7. Respondent did not establish that Complainant refused to provide reasonable access for it to comply with the May 4, 2016 Directive. Although the parties do not trust each other and had poor communications, Complainant provided at least four days’ access, Respondent made no attempt to repair the stone whose pattern that Mr. Zampedri acknowledged was defective, and Inspector Philpott would have extended the time for compliance if he had seen Respondent make diligent efforts to repair the stone. Because Respondent acknowledged that it did not fully comply with the May 4, 2016 Directive, Complainant established cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(22).[17] 8. The record establishes that Respondent’s July 9, 2014 contract did not contain all the terms that A.R.S. § 32-1158(B) requires.[18] Therefore, cause exists to discipline Respondent’s license under A.R.S. § 32-1154(A)(12).[19] 9. The record establishes that Respondent’s June 9, 2014 contract and Invoice No. 1030 do not include Respondent’s license number, preceded by the acronym “ROC.”[20] Therefore, additional cause exists to discipline Respondent’s license under A.R.S. § 32-1154(A)(12). RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order in this matter, Respondent Eternity Homes LLC’s License No. KB-2.183637-D shall be suspended for five business days. It is further recommended that Respondent shall be required 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. It is further recommended that Respondent shall be required to provide written proof to the Registrar that it has modified its form contracts, invoices, business cards, and other documents used in its contracting business to comply with the requirements of A.R.S. §§ 32- 1124(B) and 32-1158(B). If Respondent fails to provide such written proof that is satisfactory to the Registrar on or before thirty calendar days after the effective date of the final order in this matter, Respondent’s license shall be suspended until it provides such proof. 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 28, 2016.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] According to the complaint, Respondent finished work on the residence on December 22, 2015, and Complainant and his family moved into the residence on December 23, 2015. [2] See the Registrar’s electronic record at Insp Correspondence From Complainant1.pdf at 2 and 3. [3] See Complainant’s Exhibit C-10. Complainant also submitted two more photographs of stone on smaller exterior walls at Complainant’s house. See Exhibit C-11. The stones appear to be less randomly placed than the stones in the photographs of the large exterior wall on the left and bottom of Exhibit C-10. [4] See Complainant’s Exhibits C-12, C-13, and C-14. [5] See Complainant’s Exhibit C-3. Meredith’s bid does not state the areas or square footage where the exterior stone will be removed and replaced. [6] See Respondent’s Exhibit R-1 at 1-15. [7] See id. at 15-16. [8] See id. at 16-17. [9] See id. at 17-18. [10] See A.R.S. § 32-1154(A). [11] 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). [12] See A.A.C. R2-19-119(B)(2). [13] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [14] Black’s Law Dictionary at page 1220 (8th ed. 1999). [15] 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.” [16] 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.” [17] 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.” [18] 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. 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 ten point bold type. . . . [19] 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.” [20] A.R.S. § 32-1124(B) requires that licensed contractors include their license number “preceded by the acronym ‘ROC’“ on “all written bids submitted by the licensee and . . . on all advertising, loan forms, lending institution forms, letterheads and other documents used by the licensee in the conduct of business regulated by this chapter.”

-----------------------

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