ALJDEC decisions subject to certification as final

2016A-2401-ROC · Registrar of Contractors · 2017-02-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Allie Olson,

COMPLAINANT

-v-

Prodigy Enterprizes, LLC,

License No. 254372,

RESPONDENT.

No. 2016A-2401-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 13, 2017

APPEARANCES: Complainant Allie Olson appeared on her own behalf. David Howard, Owner and Qualifying Party, appeared on behalf of Respondent Prodigy Enterprizes, LLC.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Respondent Prodigy Enterprizes, LLC (Respondent) is the holder of License No. 254372 issued by the Arizona Registrar of Contractors (Registrar).

On or about March 11, 2016, Allie Olson (Complainant) entered into a contract with Respondent to build two buildings on her property. The contract totaled $23,851.00.

After the buildings were complete, Complainant noted several issues. After Respondent was done, Complainant noted several issues and filed a complaint with the Registrar.

On or July 7, 2016, the Registrar received a Complaint against Respondent from Complainant alleging Respondent was not properly licensed at the time of the contract and that there were numerous poor workmanship issues on the jobsite.

The Registrar assigned the complaint to Investigator Jim Dimond. After a jobsite inspection, Investigator Dimond issued a written directive to Respondent that provided as follows:

*** The respondent’s license number 254372 became suspended for lack of bon on 5/8/2015. The bond issue was never resolved and as a matter of law, the license became expired on 5/1/16.

This contract was signed on 3/11/16, while the respondent’s license was still suspended for lack of bond. The expiration of the license sets the requirements for compliance with this directive.

The two structures that are the subject of [this] complaint are new structures that have yet to be completed and the permits are still open.

During the contract, the respondent applied for license #306647, a CR-61 Carpentry, Remodeling and Repairs license. That license was issued on 8/1/16.

Due to the fact that this license’s scope only allows for work on existing structures, any corrective action to comply with this directive is limited to the parameters set forth in the italics, bold and underlined paragraphs below. Self-performed corrective action would be beyond the scope fo the CR-61 license.

Dear Respondent:

After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a Citation, discipline of your license and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. Failure to comply with this Directive may also be treated as an aggravating factor should the Registrar pursue discipline of your license[.] You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on September 25th, 2016.

You are hereby directed to remedy the following violations by the appropriate means:

Pursuant to Arizona Administrative Code Rule R4-9-108, in relevant part:

“R4-9-108. Minimum Construction Standards

B. A contractor shall perform all work in accordance with any

applicable building codes and professional industry standards”

It is this investigator’s finding that this rule applies even in situations that do not require inspections by the Authority Having Jurisdiction (AHJ) as is the case with this project.

Additionally, the International Residential Code (IRC) provides that:

SECTION R301

DESIGN CRITERIA

“R301.1 Application. Buildings and structures, and all parts thereof, shall be constructed to safely support all loads, including dead loads, live loads, roof loads, flood loads, snow loads, wind loads and seismic loads as prescribed by this code. The construction of buildings and structures in accordance with the provisions of this code shall result in a system that provides a complete load path that meets all requirements for the transfer of all loads from their point of origin through the load-resisting elements to the foundation. Buildings and structures constructed as prescribed by this code are deemed to comply with the requirements of this section.”

Due to the fact that there are no approved plans in place and no engineering provided, it is this investigators finding that numerous violations of the code exist namely in Chapters:

Chapter 5- Floors

Chapter 6- Wall Construction

Chapter 8- Roof-Ceiling Construction

Chapter 9- Roof Assemblies

As examples, the window opening framing and door opening framing are framed in a non-typical manner and lack proper headers and studs.

A large loft in contracted Building #1 is constructed in a manner that may not meet requirements as well as the truss assemblies in both structures.

The structures were also not constructed in compliance with the contract. As examples:

*walls were to be 12’ but are 11’ 7”

*windows were to open up and down but side opening windows exist

*flood vents are not installed

*Rake metal at the 2 car garage is not complete

As to workmanship items other than the code related and contractual items:

*Faulty nailing of exterior to the studs (shiners)

Additionally, this respondent presented a contract that does not comply with statutory requirements as delineated pursuant to ARS 32-1158.B as the respondents address is not present, the respondent’s ROC license number is not included ( note: the respondent was still licensed at this time, although suspended), the respondent uses a name that is not the name that is listed on the license and bond, does not contain an approximate completion date and does not contain the notice to the public of the right to file an ROC complaint.

These are violations of ARS 32-1154.A.(3)(namely AAC R4-9-108 and AAC R4-9-109),(12)(namely ARS 32-1124.B and 32-1158.B) and (14).

The respondent in this matter is to resolve the conditions in an appropriate manner pursuant to the two bold, italicized and underlined paragraphs below.

The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action.

You are advised that if your license is suspended for administrative reasons or is inactive, you may not perform any corrective work nor contract in any manner, which includes hiring other contractors to perform work, until the administrative suspension of your license(s) has been lifted or your license(s) has been reactivated.

If your license is suspended for administrative reasons or is revoked, expired, or cancelled, you may not contract in any manner and may remedy the workmanship violations listed above only by paying a properly licensed contractor hired by Complainant to remedy your deficient workmanship or by reaching a financial settlement with Complainant.

You may not perform or hire other contractors to perform work that is outside the scope of your license If any workmanship violations listed above are designated as outside the scope of your license then you may remedy those violations only by paying a properly licensed contractor hired by Complainant to correct your deficient workmanship or by reaching a financial settlement with Complainant.

Following the issuance of the written directive, Respondent offered to allow Complainant to keep the retention amount due under the contract totaling $4,151.00. Complainant did not believe the retention amount was sufficient to cover the repair work necessary on the project.

On September 8, 2016, the Registrar issued three warning letters to Respondent advising Respondent that it appeared to have violated A.R.S. § 32-1124(B), A.R.S. § 32-1154(A)(14), and A.R.S. § 32-1158(B). All three letters advised Respondent that “[a]t this time, the Registrar will not seek discipline against you for the failure to comply with” the statute noted in the letter, but that “the Registrar may seek discipline against you if it discovers future violations.”

On September 29, 2016, the Registrar issued a Citation against Respondent, charging possible violations of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3); A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1124(B); A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158(B); A.R.S. § 32-1154(A)(14); A.R.S. § 32-1154(A)(17); and A.R.S. § 32-1154(A)(22).

At hearing, Investigator Dimond testified that there were approximately 30 items on the list of workmanship issues. Investigator Dimond stated that Respondent’s license at the time of the contract only allowed it to perform work on existing structures. Investigator Dimond further noted that Respondent’s license was suspended on May 18, 2015, the contract was executed on March 11, 2016, and Respondent’s license expired on May 1, 2016; therefore, Respondent entered into the contract while its license was suspended. Investigator Dimond also testified that, while the project was not required to be permitted, the Registrar still requires that work meet the workmanship standards including the IRC. Investigator Dimond stated that no plans were produced and, in his opinion, it seemed like the plans were “drawn on plywood and built from that.”

Complainant testified as to the numerous issues remaining on the project. Complainant also presented the testimony of licensed contractor, Jack Miller, who testified as to the numerous issues in the project that required repair. Mr. Miller also provided an estimate for the repair work totaling $9,176.12. Complainant requested that she be awarded restitution under A.R.S. § 32-1156.01.

David Lee Howard, Owner and Qualifying Party, acknowledged that Respondent’s license was suspended at the time of the contract and that Respondent knowingly entered into contracts when the license was suspended. Mr. Howard testified that since he had been issues a new license, he was now permitted to perform the type of work required under the Directive and was willing to do that.

Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on February 2, 2017. Such prior License record reflects that Respondent’s License 254372 was issued on April 16, 2009, was suspended for non-renewal from May 1, 2013, to April 9, 2014; suspended for non-renewal from May 7, 2014, to May 12, 2014; suspended for non-renewal from May 1, 2015, to April 30, 2016; and expired on May 1, 2016.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960).

The evidence established that Respondent’s work was not in conformity with the Registrar’s standards. Therefore, Complainant established that Respondent did not complete the project in a workmanship manner in violation of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3).

The evidence established that Respondent contracted while its license was under suspension in violation of A.R.S. § 32-1154(A)(17).

The evidence established that while Respondent offered a settlement that would allow Complainant to keep the $4,151.00 owing on the contract, such a settlement did not satisfy Complainant or cure the damages she suffered. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).

A.R.S. § 32-1156.01 provides that “[a]fter a hearing pursuant to this article, an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee.”

The evidence presented established the cost to repair the structures totaled $9,176.12. Less the $4,151.00 still owing on the contract, Complainants total damages were $5,025.12.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall revoke Respondent’s License No. 254372.

It is further recommended that the Registrar require Respondent to pay to Complainant the sum of $5,025.12 as restitution pursuant to A.R.S. § 32-1156.01.

It is further recommended that if Respondent fails to pay the entire amount of the restitution 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 restitution.

It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(D).

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.

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 40 days from the date of that certification.

Done this day, February 2, 2017.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors