ALJDEC decisions subject to certification as final

2016A-2084-ROC · Registrar of Contractors · 2016-12-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Gabriel Sandoval,

COMPLAINANT,

-v-

T M Building Damage Restoration Inc.,

License No: 196164, 256230,

RESPONDENT.

No. 2016A-2084-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: Monday, November 21, 2016, at 8:30am

APPEARANCES: Gabriel Sandoval (“Complainant”); Veronica Sandoval (“Witness1” for Complainant); Tim Lacey (“Complainant Attorney”); Jay Powell (“Complainant Attorney2”); Miguel Alvarez (“Interpreter” for Complainant); J. Lynne Prikosovits (“Respondent1”); John Paul (“Respondent2”); Alex Parra (“Respondent3”); Evan Thompson (“Respondent Attorney”); and Jack Grimm (“Investigator Grimm” for Registrar of Contractors (“ROC” or “Registrar”).

ADMINISTRATIVE LAW JUDGE: Linda Marie Brown

_____________________________________________________________________

This matter was set by the Registrar of Contractors as a hearing to determine whether Respondent has violated Arizona Revised Statutes (“A.R.S.”) § 32-1154(A)(1) “Abandonment or Refusal to Perform”, Rule 4-9-108, “Minimum Construction Standards: in the Arizona Administrative Code (“A.A.C.”) and thereby of A.R.S. § 32-1154 (A)(3), and A.R.S.; § 32-1154(A)(22) “Failure to take appropriate corrective action without valid justification”.

FINDINGS OF FACT

The Arizona Registrar of Contractors (“Registrar” or “ROC”) issued License Nos. KB-1-196164-D and CR42-256230-D to Respondent, T M Building Restoration, Inc. Respondent’s address of record is 423 South Olsen Avenue, Suite A, Tucson, Arizona 85719-6342.

Complainant, Gabriel Sandoval, is a residential homeowner. On or about June 14, 2016, Complainant filed a complaint with the Registrar alleging “”abandonment” and “Poor Work” for work to be performed at the address of 9331 North June Bug Drive, Tucson, Arizona 85742. Complainant included a four (4) page list of items to include 32 bullet points beginning with ceiling renovation are in bad state, there are patches and water damages to trash from the workers were left in the house. The contract amount was listed as $65,381.42.

On June 20, 2016, the Registrar sent a letter to Complainant requesting additional information. Specifically, a copy of (1) Contract with Respondent and (2) proof of payments.

On June 20, 2016, Notice of the Complaint and a copy of the Complaint were sent to the Respondent at its address of record.

Respondent submitted written correspondence in answer to the Complaint on July 6, 2016, stating they would address any and all workmanship issues. In that letter, Respondent asserts a great deal of confusion on where the insurance proceeds were to be applied as it pertains to the scope of work to be performed.

A jobsite inspection was conducted on July 11, 2016. Gabriel Sandoval and John Paul were present. Of the 34 Complaint Items investigated, Investigator Grimm substantiated the following 23 Complaint Items in his Jobsite Inspection Notes:

Jobsite General Notes

Also present at inspection was Mrs. Sandoval and Alex a supervisor for TM Building. It appears the two parties had disagreements regarding money and how much upgrades should cost and the contractor just stopped working. John Paul stated at the inspection they are willing to finish the work. A lot of work needs to be corrected or finished.

Complaint Item 1: Ceiling renovations are in bad state, there are patches and water damage.

Investigator’s Observation: Many areas of the ceiling was repaired due to water damage. No water damage is showing however in many locations the drywall repair is poor and does not macth [sic] existing very well. Photos 2, 5, 8, 9 12. Texture or joints need to match better and be repainted. Workmanship Rule 4-9-108(A) Visible poor condition.

Complaint Item 2: Ceilings also show very poor finish.

Investigator’s Observation: Same as #1

Complaint Item 3: Interior wall show bunps [sic], hits and very poor finish with cracks shown throughout the house.

Investigator’s Observation: Walls throughout the house appear to not have been covered when the ceiling was retextured in the repaired areas. Roughness or splatter down the walls from the ceiling in many locations and just painted over with out being sanded. P-4, 13, 24, 25, 26. Workmanship Rule 4-9-108(A) Visible poor condition.

Complaint Item 4: The walls in the staircase also show poor finish, hits and very rough edges that can be rough and hurt to touch.

Investigator’s Observation: It appears the retextured areas either were not sanded prior to repaint or have overspray that was not sanded prior to paint. Workmanship Rule 4-9-108(A) Poor work.

Complaint Item 5: The paint job was a very poor job. For example the doors, door sills, hinges and other metal parts of the doos [sic] were all painted the same color as the walls. That is not how a painted house looks like.

Investigator’s Observation: Paint was observed on lights, outlets, hinges and other items. Photo 18, 19, 20, 21, 32. Workmanship Rule 4-9-108(A) Poor work.

Complaint Item 7: When the paint job was done they did not properly cover the windows, hinges and other things that should have been covered and now show paint splashes or completely painted over.

Investigator’s Observation: Addressed in #5 above

Complaint Item 9: Some of the light switches don’t work at all. For example the laundry room has two switches, one for the light and the other for the extractor, one of the switches does not work and the other turns on both the light and the extractor.

Investigator’s Observation: I was shown the one location were the switch did not work in the laundry room. P-27. It appears to be a wiring issue. Workmanship Rule 4-9-108(A) Malfunctioning switches.

Complaint Item 10: The bathrooms don’t have mirrors.

Investigator’s Observation: Mirror were to be removed and replaced. No mirrors in place. Workmanship Rule 4-9-108(A) Incomplete Work.

Complaint Item 11: All of the electrical outlets have paint on them.

Investigator’s Observation: Observed some electrical outlets and switches with drywall mud or paint on them. P-51. Workmanship Rule 4-9-108(A) poor work.

Complaint Item 12: The light switched also have paint on them and they are also the original, they aren’t new switches that should have been renovated.

Investigator’s Observation: Observed a few outlets and switches that need to be cleaned. Scope does to include any replacements. Workmanship Rule 4-9-108(A) Poor work.

Complaint Item 13: The lights that were added to the ceiling show holes in the ceiling as if the hole for the light fixture was cut to big. The job was simply not done right.

Investigator’s Observation: Observed one can light trim that did not cover hole. P-7. Workmanship Rule 4-9-108(A) Poor work.

Complaint Item 14: Some of the light fixtures seem damaged.

Investigator’s Observation: Observed some existing light fixture with overspray on them. Workmanship Rule: Poor work.

Complaint Item 16: The master bedroon bathroom renovations and vanity installation was not done.

Investigator’s Observation: It appears there was an agreed upon added scope of work on this project. Plans have been drawn for included extras at no extra cost over the insurance allowed price. Per the plans it states Remodel master bath. This work is incomplete and needs to be finished per agreement. P-43. Workmanship Rule 4-9-108(A) Incomplete work.

Complaint Item 17: Double wall and insulation was not added to the one of the rooms to serve as soundproof wall which was agreed upon.

Investigator’s Observation: Parties stated that the added wall between the master bedroom and the adjacent room was agreed upon between the homeowner and Alex the project manager. This wall is not in place and needs to be installed per agreement. Inable to verify if the sound insulation per the paln has been added to all walls as shown. Workmanship Rule 4-9-108(A) complete work per agreement.

Complaint Item 18: They did not finish the closet in the game room next to the master bedroom.

Investigator’s Observation: he closet that was added per plan is built, drywalled and painted. Walls are not built per plan and no doors have been installed. Workmanship Rule 4-9-108(A) Incomplete and Incorrecto work.

Complaint Item 19: None of the closet doors are finished.

Investigator’s Observation: Closet doors are not installed. P-29. Workmanship Rule 4-9-108(A) Incomplete Work.

Complaint Item 25: The exterior of the garage door and the main part of the house still shows signs of water damage.

Investigator’s Observation: Garage door is dirty. Scope included R and R of overhead door. It also states final cleaning. Garage door needs to be cleaned. Workmanship Rule 4-9-108(A) Incomplete Work.

Complaint Item 27: The mirrors were removed from the bathrooms and the installations were not done so they can be used to full function.

Investigator’s Observation: No mirrors are in place. P-14. Workmanship Rule: 4-9-108(a).

Complaint Item 30: None of the doors have door knobs.

Investigator’s Observation: A few doors have knobs and some do not. Scope states remove clean and replace. Workmanship Rule 4-9-108(A) Incomplete Work.

Complaint Item 31: The closets don't have doors.

Investigator’s Observation: The closets are missing doors, at least one does not have a clothes rod. P-40. Workmanship Rule 4-9-108(A) Incomplete Work.

Complaint Item 32: Trash from the workers were left at the house.

Investigator’s Observation: Observed many paint buckets left on property that need to be removed. P-55. Workmanship Rule 4-9-108(A) Poor work.

Complaint Item 33: Missing toe kick in kitchen.

Investigator’s Observation: Toe kick not in place. Workmanship Rule 4-9-108(A) Poor work.

Complaint Item 34: Incomplete window coverings.

Investigator’s Observation: Window coverings were not complete or repalced when respondent stopped working. The homeowner has installed a few coverings. This work was included in the insurance scope of work. Workmanship Rule 4-9-108(A) Incomplete Work.

5. The Registrar issued a Directive on July 20, 2016, that included 20 items of the 34 Complaint Items observerd during the Jobsite Inspection, to include Complete all clean up per insurance scope of work, and verify that all required inspections have been performed and supply final inspection report to Registrar of Contractors and homeowner. This will inlcude any structure work, Plumbing, Electric, and HVAC. Respondent was provided with a completion date of August 12, 2016 to remedy and provide written proof of satisfactory compliance with the Directive.

6. The Registrar issued a warning letter to Respondent (License No. KB-1-196164-D) on August 17, 2016, for missing at least one element under A.R.S. § 32-1158 minimum elements of contract.

7. On August 19, 2016, the Registrar issued a Citation against the Respondent listing three (3) alleged violations: Charge 1: A.R.S. § 32-1154(A)(1) Abandonment of a contract or refusal to perform; Charge 2: Charge 2: Rule 4-9-108 Minimum Construction Standards, thereby A.R.S. § 32-1154(A)(3); and Charge 3: A.R.S. § 32-1154(A)(22) failure to take appropriate corrective to comply without valid justification. The Citation shows that if the Administrative Law Judge determines the validity of any of the charges listed above, then Respondent’s license may be subject to suspension or revocation, or may be subject to other penalties provided by law.

8. Respondent submitted its Written Answer to the Citation and Complaint stamped received by Legal ROC on August 29, 2016, specifically denying all the allegations, and affirmatively alleging that the workmanship defects are without a basis of fact or law.

9. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. The Registrar issued a Notice of Hearing, setting the hearing on October 27, 2016, at 8:30 a.m. at the OAH in Tucson and Phoenix. The Registrar mailed a copy of the Notice of Hearing to Complainant at the address on its complaint and to Respondent at its address of record.

10. Attorneys for Complainant and Respondent requested to reschedule so they could narrow down the issues, and asked for a full day. A new hearing date was requested on October 27, 2016, and rescheduled for November 21, 2016, from 8:30am to 5:00pm. Respondent and Complainant were mailed the same day a Minute Entry Granting Continuance with the new hearing date.

Hearing Evidence

11. Complainant’s Attorney stated in the Opening that the family 2-story home encountered a fire (smoke damage) which required renovations. This occurred December 21, 2014, and it wasn’t until around April 2016 that his family returned to the home after the insurance would no longer pay for temporary housing and their funds ran out. He acknowledged delay because of miscommunication surrounding the upgrades to the HVAC. He stated that he provided $10,000.00 of his own funds to Respondent in addition to the funds Respondent received from his insurance, and that the architect plans set forth that to which he agreed.

12. Respondent’s Attorney stated in its Opening that there are three (3) charges set forth in the Citation, and that they will Charge 1 is with justification since there was no agreement that the extra work was included in the proposal and that Respondent required self-pay to complete. Under Charge 2, Respondent concedes there were workmanship issues but asserts they have always been ready and able to complete. And that Charge 3 is without merit since Complainant denied access to the property.

13. Investigator Grimm testified that he listed the Complaint Items in his Jobsite Inspection Notes as found in Complainant’s complaint. He further stated that issues of non-payment is a civil matter and not relevant to the issues surrounding work performed and noted as poor workmanship.

14. ROC Investigator stated that 20 out of 34 Complaint Items were listed in the Directive to Respondent for corrective action with a completion date of August 12, 2016. He telephoned Complainant on August 17 and the work was not fully remedied. Complainant expressed concerns that Respondent may be filing for Bankruptcy. He then placed a call to J. Lynne Prikosovits, and forwarded the matter to legal on August 18, 2016.

15. Complainant’s Attorney asked Inspector Grimm if the extras were listed in the architect plans, to which he replied, yes. He did see extra lights and bath included. 16. Respondent’s Attorney stated that John Paul would later testify that the work was complete to plan and within the scope of work.

17. Respondent testified that there was a discussion on what was included and what was not in respect to what would be covered under the insurance proceeds and that the Complainant agreed to use allowances for clothing and such to pay for upgrades.

18. Testimony was provided in respect to the flooring and the offset to the billing since the insurance covered laminate. However, this is not the proper forum to determine remedies outside of discipline issues as it pertains to the citation.

19. Documents were provided such as an Invoice Statement from Stephen C. Bohn, Architect, Inc. dated April 9, 2015, with a Project titled of, “Sandoval Fire Damage repair and remodel.” Project #1506. This invoice included billing for “review of existing home and meeting with John and owners, procuring plans of file from TO Marana, producing plans, specs and documents required for permitting on architectural, mechanical/plumbing and electrical plans, calcs, etc., meeting with John to review plans before completion, submitting plans to TO Marana for permit review.”

20. Respondent stated that they attempted to schedule the home inspection but that Complainant was not present and the Town would not move forward without the property owner present. They also testified that they have been denied access and that Complainant is seeking monetary remediation instead.

21. Respondent’s Attorney pointed to Exhibits 1-27 that were submitted on October 27, 2016. Several of the documents included photographs of duct work that reflected smoke damage, light canisters, unfinished bathroom, missing mirrors, communications between various persons surrounding invoice payments, and plans.

22, Exhibit R-7 was the written proposals no. 0115018 dated February 9, 2015, provided for the project totaling $69,236.09 setting forth under job description “Fire Damage Restoration. Clean and Restore Fire/Smoke Damage per the attached Adjustor’s Scope of Work and Supplement.” Hartford Insurance provided check no. [number redacted] in the amount of $53,623.92.

23. Respondent’s Attorney stated that Respondent was no longer given access to the property and Complainant stopped answering the phone.

24. Several email exchanges were read into the record by Complainant’s Attorney to demonstrate that Respondent agreed to perform work and that several of the unfinished items were inclusive of the entire project.

25. Testimony exchanged between Complainant and Respondent surrounding whether or not the extras were included in the proposals.

CONCLUSIONS OF LAW

1. This matter lies within the Registrar’s jurisdiction.

2. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.

3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

4. 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. A.A.C. § R2-19-119.

5, Statutes should be interpreted to provide a fair and sensible result..

6. “Statutes shall be liberally construed to affect their objects and to promote justice.”

7. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. As well as determine whether or not the Respondent should be subject to discipline. Any other remedies are best sought in a civil proceeding.

8. A.R.S. § 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:

(1) Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

(3) Violation of any rule adopted by the registrar.

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(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. A.A.C. § R49108(A) provides that “A contractor shall perform all work in a professional manner.”

10. Complainant has met its burden by a preponderance of the evidence that Respondent violated A.R.S. § 32-1154(A)(1). In review of the evidence and testimony, the Administrative Law Judge finds that items were left behind such as trash and a substantial amount of the unfinished or incomplete work that was not considered an extra and was included within the scope of the work for this project to be timely complete.

11. Complainant established that Respondent abandoned the contract or refused to perform after submitting a bid on work without legal excuse for the abandonment or refusal in violation of A.R.S. § 32-1154(A)(1).

12. The preponderance of the evidence does show that Respondent violated A.R.S. § 32-1154(A)(3) by failing to complete the work in a professional manner that it was contracted to do. Respondent conceded to workmanship issues in its Opening but attempted to justify it by asserting the parties agreed that Complainant would self-pay for upgrades that were not reimbursed through the insurance and failed to do so. The Administrative Law Judge finds that the Complainant’s Insurance carrier was provided a proposal at the outset of the project for $69,236.09, to which they provided a check in the amount of $53,623.92. This was included in Respondent’s Exhibit R7. And that Complainant paid an additional $10,000.00 as found in his supplemental documents. There also appears to be an credit to Complainant because they hired another contractor to install floor covering. Therefore, there appears to be no justification for failing to complete the work in a professional workmanship manner that aligns with industry standards. It is also unclear why several of the renovations started were not complete such as the bathroom and several of the issues with the doors which goes to the weight of abandonment or refusing to perform after submitting a bid.

13. Complainant meets its burden that a violation of A.R.S.; § 32-1154(A)(22) Failure to take appropriate corrective action without valid justification occurred. Respondent provided data and accounting as evidence as to why the project ended. However, the Administrative Law Judge finds that amount drafted in the Contract for the project and funds received does not justifiably excuse for the various poor workmanship issues set forth in the Directive of July 20, 2016, listing 20 out of the 34 Complaint Items substantiated from the jobsite inspection that needed corrective action. Complainant appeared to be more than patient allowing more than 12 months for the project to be complete and not returning to the family home nearly 17 months from the date of being dispossessed of their property due to the fire, and yet no corrective action was taken to their unfinished home reflective of poor workmanship issues as substantiated throughout by Investigator Grimm.

14. In review of the various documents provided, including Stephen C. Bohn, Architect, Inc.’s Invoice Statement for this project, and finding all parties appeared to have adequately reviewed same, and in review of the actual plans, it appears that Respondent had knowledge and agreed to perform the scope of the work as set forth in the plans, find no merit for legal excuse since the work should have been performed according to plan in order to meet or come close to the project completion date.

15. Considering that Complainant meet its burden on all three (3) charges, Respondent should be subject to discipline.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent T M Building Damage Restoration Inc’s License Nos. KB-1-196164-D and CR42-256230-D for a total of three (3) days.

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, December 13, 2016.

/s/ Linda Marie Brown

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors