ALJDEC decisions subject to certification as final

2016A-4772-CHC-ROC · Registrar of Contractors · 2017-08-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Richard and Catherine McKim,

COMPLAINANT,

v.

P B K Construction LLC ,

License No: 203926

RESPONDENT.

No. 2016A-4772-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 31, 2017, June 9, 2017 and August 10, 2017

APPEARANCES: Complainants Richard and Catherine McKim appeared on behalf of themselves. Whitney Cunningham, Esq. appeared on behalf of Respondent

PBK Construction, LLC.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

On March 17, 2017, the Registrar of Contractors (Registrar”) issued a Notice of Hearing setting the above-captioned matter for hearing on May 8, 2017, at the Office of Administrative Hearings in Phoenix, Arizona.

On February 28, 2017, the Registrar issued a Citation alleging that PBK may have violated Ariz. Rev. Stat. section 32-1158(B) and Ariz. Rev. Stat. sections 32-1154(A)(2), (A)(9),(A)(12) and (A)(22). The Registrar also alleged that PBK Construction may have violated Rule 4-9-108 and thereby Ariz. Rev. Stat. section 32-1154(A)(3).

The Notice of Hearing shows that the hearing was set to consider the charges made in the Citation and Complaint.

The Citation shows that if the Administrative Law Judge finds that any of the alleged charges are valid, the Registrar may suspend or revoke PBK Construction’s license.

Respondent PBK Construction, LLC (PBK) holds license number 203926 issued by ROC.

PBK’s qualifying party is Wes Shelton.

On or about May 17, 2016, Complainant Catherine McKim entered into an agreement with PBK Construction in which PBK Construction was to install provide a La Cantina Bi-Fold Door and a sliding glass door Complainants’ home.

PBK did not provide Complainants with a contract that advised Complainants of their right to file a Complaint with the Registrar against

PBK for an alleged violation of Ariz. Rev. Stat. section 32-1154(A) within the time allowed by Ariz. Rev. Stat. section 32-1155(B), and did not provide the Registrar’s telephone number or website address.

In September of 2016, PBK Construction installed the Bi-Fold and Sliding Glass Doors in Complainants’ home.

On or about November 28, 216, the McKims filed a Complaint with the Registrar alleging workmanship and other deficiencies on PBK Construction’s part.

On or about January 5, 2017, Registrar Investigator Jim Dimond conducted a job-site inspection in response to the Complaint.

On or about January 26, 2017, Inspector Dimond issued a Directive to PBK. The January 26, 2017 Directive provides, in relevant part, as follows:

After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on February 8th, 2017. You are hereby directed to remedy the following violations by the appropriate means:

Item 1- Structural engineer’s header detail was ignored resulting in required re-engineering. That new detail resulted in an added cost of $450.

The respondent is to correct the condition in an appropriate manner.

Item 2- As a result of the new engineers detail, the necessary extra hardware creates a installation issue regarding the drywall.

The respondent is to correct the condition in an appropriate manner.

Item 3- The bi-fold door system is not installed in a manner specified by the manufacturer and may not be warrantable.

The respondent is to correct the condition in an appropriate manner.

Item 4- Sliding door to the south in the dining area has an internal scratch.

The respondent is to correct the condition in an appropriate manner.

Item 6- Pantry door has never been delivered, stained and installed.

The respondent is to correct the condition in an appropriate manner.

Item 8- Due to item #1, complainant has incurred an additional $107 charge to relocate electrical.

The respondent is to correct the condition in an appropriate manner.

Item 9- Need warranty from PBK Construction to be valid. Mark Kuckuck had our signed contract and $10,902.55 of our money.

Mark Kuckuck is an unlicensed entity and the respondent has aided & abetted Kuckuck in violation of ARS 32-1154.A.9.

The ROC has jurisdiction over the respondent’s installed work for a period of 2 years.

The respondent is to only contract with appropriately licensed contractors as a sub.

Item 10- I will not pay for incomplete work.

The doors are not complete as the sliders do not have an even reveal which will result in drywall installation issues. At the exterior, none of the doors are flashed and the stucco not completed. Interior of the doors is not complete.

The respondent is to complete the installation in an appropriate manner.

13. On February 7, 2017, PBK contacted Mrs. McKim in an attempt to make the repairs. On February 7, 2017, Mrs. McKim informed PBK that she only wanted to communicate with Mark Kuckuck. On February 8, 2017, PBK was provided access to Complainants’ home to make some repairs, but not all repairs.

14. On or about March 15, 2017, PBK filed an answer to the Registrar’s February 28, 2017 Citation in which it denied all allegations of wrongdoing contained in the Citation and Complaint.

15. The matter was referred to the Office of Administrative Hearings, (“OAH”) for an evidentiary hearing.

16. Hearings were held on May 31, 2017, June 9, 2017 and August 10, 2017.

17. At hearing, Investigator Dimond provided testimony regarding his

observations at the job site inspection and the Directive. Investigator Dimond testified that he concluded that PBK’s work did not meet minimum workmanship standards with regard to Complaint Item 3 because the doors were out of square. Investigator Dimond also testified regarding the prehearing inspection. Investigator Dimond testified that he conducted a prehearing inspection on May 30, 2017. Investigator Dimond stated that PBK had not corrected all of the items listed in the Directive. However, Mr. Dimond testified that the doors were brought into square and the reveals had been appropriately fixed. Investigator Dimond testified that PBK corrected the header over the sliding door to the North. Investigator Dimond testified that an offer to credit the additional costs listed in Complaint Items 1 and 8 would be an appropriate remedy.

18. Mrs. McKim testified that PBK did not follow the structural engineer’s header detail and this resulted in re-engineering. Mrs. McKim testified that the manufacturer does not require that magnets be installed on the doors installed in her home. Mrs. McKim testified that PBK failed to install flashing and that flashing is required by the International Residential Code. Mrs. McKim testified that she does not have a valid warranty from PBK. Mrs. McKim also testified that she does not have a warranty for the glass that has an internal scratch because the glass has been installed. Mrs. McKim testified that Mark Kukuck told her that he owned PBK and SDW at the time that she entered into the contract. Mrs. McKim testified that Mr. Kukuck led her to believe that he would be installing her doors. Mrs. McKim testified that Complainants never contracted with PBK to perform drywall. Mrs. McKim testified that she did not allow PBK to repair her doors by installing magnets because magnets were not required nor included with her doors according to the installation instructions.

19. Mrs. McKim testified that an employee at La Cantina doors informed her that her doors were out of square and the reveals were too large.

20. West Shelton testified that he owns PBK and sometimes, he is paid by the hour. Mr. Shelton also testified that sometimes, Sedona Windows and Doors (“SDW”) pays him by the hour for work he performs for PBK. Mr. Shelton testified that SDW is not an owner of PBK. Mr. Shelton testified that Mark Kuckuck is not an owner of PBK. Mr. Shelton testified that he does not allow SDW or Mark Kuckuck to use PBK’s license. Mr. Shelton testified that he has a contractual relationship with Sedona Windows. The August 1, 2015 contract provides, in relevant part as follows:

PBK shall provide installation services on behalf of

SWD to SWD’s clients, at their solve option, and

will accept reasonable compensation for such services

from SWD.

21. Mr. Shelton testified that the extra hardware was installed because Catherine McKim did not want the doors installed according to the structural engineer’s original constructions.

22. Mr. Shelton testified that it was not hired to do any drywall work. Mr. Shelton did not know the nominal value of the cost to repair the drywall. Mr. Shelton testified that there is little work required to repair the drywall caused by the extra hardware. Mr. Shelton testified that a drywall contractor would not charge an additional cost to repair the area of the drywall caused by the extra hardware.

23. Mr. Shelton testified that PBK offered to fix Complaint Item 3 by installing magnets in between the doors. However, Mr. Shelton testified that Mrs. McKim refused to allow PBK to install the magnets.

24. Mr. Shelton testified that he did not observe an internal scratch on the Sliding Glass Door when he installed it. Mr. Shelton testified that SWD, the company that sold the door to Ms. Kim, informed him that the door is covered by manufacturer’s warranty and that Complainants still owe over $10,000 for materials. Mr. Shelton testified that he would install the new door when the glass is available.

25. Mr. Shelton testified that the pantry door was not installed because Mrs. McKim did not want the door that was delivered to be installed. Mr. Shelton testified that it is willing to install the door when Mrs. McKim approves of the door.

26. PBK also presented the testimony of Mark Kukuck. Mr. Kukuck testified that he is the owner of SDW. Mr. Kukuck testified that the glass door with the internal scratch is still under warranty. Mr. Kuckuck testified that he would provide the McKim’s with a new glass door if they requested a new door.

27. Dan Oen testified that he is an Investigator for the Registrar. Mr. Oen testified that he was assigned a case regarding an allegation that Mark Kukuck was contracting without a license. Mr. Oen testified that he did not find any evidence that Mr. Shelton aid and abetted Mark Kukuck. Mr. Oen testified that the complaint against Mark Kuckuck was dismissed and the Registrar did not issue a Citation against him for aiding and abetting.

CONCLUSIONS OF LAW

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.

“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).

“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).

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).

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.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

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).

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:

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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.

Ariz. Admin. Code section R49108(A) provides that “A contractor shall perform all work in a professional manner.”

Ariz. Rev. Stat. section 32-1154(E) provides that the Registrar 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).

The preponderance of the evidence shows that grounds exist to discipline

Respondent’s license under Ariz. Rev. Stat. § 32-1158 because Respondent did not provide Complainants with a contract that advised them of their right to file a complaint with the Registrar against Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A) within the time allowed by Ariz. Rev. Stat. § 32-1155(B), and did not provide the Registrar’s telephone number or website address. Although Respondent should make sure that its contract forms comply with the Registrar’s statutes, Respondent’s violations were technical and did not cause Complainant to suffer any identifiable damages.

Under Ariz. Rev. Stat. section 32-1154(A)(22), a contractor shall not fail to take appropriate corrective action without valid justification within a reasonable period of time after receiving a written Directive from the Registrar.

The preponderance of the evidence shows that PBK offered to credit Complainants $450 for Complaint Item 1 and $107 for Complaint Item 8 within the time period for compliance under the Directive.

The preponderance of the evidence shows that PBK informed Complainants that it was available to assist the drywall contractor with repairs and that drywall was specifically excluded from the contract. Mrs. McKim testified that PBK was never required to perform drywall. Mrs. McKim testified that PBK is not licensed to perform drywall. There was no evidence provided at hearing that Mrs. McKim obtained a subcontractor to correct the drywall damaged by the extra hardware and presented an invoice to PBK. The preponderance of the evidence does not show that PBK violated Ariz. Rev. Stat. section 32-1154(A)(22) with regard to Complaint Item 2.

The preponderance of the evidence does not show that PBK failed to correct Complaint Item 3. The Registrar investigator testified he conducted a prehearing inspection and observed that the doors were brought within the square and the reveals were fixed.

The preponderance of the evidence does not show that the La Cantina Doors are not under warranty.

The preponderance of the evidence does not show that PBK violated Ariz. Rev. Stat. section 32-1154(A)(22) with regard to Complaint Items 4 and 6. PBK informed Complainants that it would install the new glass when it becomes available. There was no evidence presented at hearing that Complainants provided PBK with a new glass for installation. There was no evidence presented at hearing that Complainants provided PBK with a pantry door which Complainants accepted. PBK did not install the pantry door that was delivered to Complainants because Complainants did not approve of the door.

The preponderance of the evidence does not show that PBK aided and abetted Mark Kuckuck in violation of Ariz. Rev. Stat. section 32-1154 (A)(9). It is undisputed that PBK has received payment from SDW for work that PBK performs. PBK and SDK have a written contract describing such a relationship. However, such a relationship is not a violation of Ariz. Rev. Stat. section 32-1154 (A)(9). The PBK service proposals do not state that Mark Kuckuck was the owner of PBK Construction. There was no eyewitness testimony presented that SDW paid PBK to use PBK’s license.

This Tribunal concludes that the preponderance of the evidence of record is insufficient and fails to support a conclusion that Respondent violated the charged provisions of Ariz. Rev. Stat. sections 32-1154(A)(3), namely, A.A.C. R4-9-108, and Ariz. Rev. Stat. sections 32-1154(A)(2) and (A)(22).

Complainants established cause to discipline Respondent’s license under Ariz. Rev. Stat.. § 32-1158 because PBK did not provide Complainants with a contract did that advised Complainants that of their right to file a complaint with the Registrar against Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A) within the time allowed by Ariz. Rev. Stat.. § 32-1155(B), and did not provide the Registrar’s telephone number or website address. Although Respondent should make sure that its contract forms comply with the Registrar’s statutes, Respondent’s violations were technical and did not cause Complainant to suffer any identifiable damages.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that within thirty days of the effective date of the final order, Respondent shall provide to the Registrar copies of its form contract that has been revised to comply with the requirements of Ariz. Rev. Stat. § 32-1158(B). If Respondent fails to provide proof that it has so revised its form contracts, it is recommended that Respondent’s license be suspended for three 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 is forty days after the date of that certification.

Done this day, August 30, 2017.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors