ALJDEC decisions subject to certification as final

2016A-868-ROC · Registrar of Contractors · 2016-10-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Patrick James and Kay Quinn,

COMPLAINANTS,

v.

CKBR LLC dba, Complete Kitchen and Bath Remodeling,

License No: 266889, 297310

RESPONDENT.

No. 2016A-868-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: Friday, September 23, 2016, at 1:00 p.m.

APPEARANCES: Kay Quinn (“Complainant1); Patrick Quinn (“Complainant2”); Craig Granado (“Respondent1” for CKBR, LLC); Gayle Wiegard (“Respondent2” for CKBR, LLC); Shelby Lile (“Respondent’s Counsel” for CKBR, LLC); and Beau Cruz (“Investigator Cruz” for the Registrar of Contractors “ROC”).

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)(2) Departure from or disregard of plans or specifications; 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); A.R.S.; § 32-1154 (A)(12) Failure in any material respect to comply with this chapter; and A.R.S.; § 32-1154(A)(22) Failure to take appropriate corrective action without valid justification.

FINDINGS OF FACT

Background and Procedure

Patrick James and Kay Quinn (“Complainants”) contracted with Respondents under two separate contracts to perform remodels to kitchen, laundry room, office, master bathroom, small bathroom, and entertainment cabinet build at their residence.

On or about March 14, 2016, Complainants filed a complaint with the Registrar of Contractors against Respondent alleging (1) Over-run on first (kitchen) contract first signed 6/29/15. Scheduled competion [sic] 11/18/15 (per BuilderTrend schedule); (2) Over-run on second contract (baths) signed 10/1/15. Estimated completion (per contract) Dec. 10 – Dec. 24; (3) Significant slowdown on project 1 when 90% of monies had been received by 9/24/15. Work start date was 9/16/15; (4) Kitchen project is till on-going since work commenced on 9/16/15 just over 5 months ago; (5) Significant slowdown on project 2 when 90% of monies had been received by 12/12/15; (6) Bat project is still on-going since work commenced 10/13/15 just over 4 months ago; (7) A completion date not available for either project; contractor’s license suspended since 2/11/16; continues to work; (8) Encouraged to use BuilderTrend to monitor progress, but inaccurate and changed retrospectively; (9) With people in and out of house for this length of time quality of life suffers with serious health problems also; (10) Contributing to delays in large staff turnover and difficulty finding staff; minimal background checks; (11) A largely untested employee was in our home 2/22 – 2/25, leading to unprovoked verbal abusive attack on owners; (12) Contractor sent an abusive text to owners regarding this incident without consulting us for our side (2/26); (13) Delays in progress caused when an employee forbade contractor (owner) any form of communication with us ??; and (14) There were often time gaps when no workers were at our house, without explanation. A summary of complaints attached to the Complaint alleged (1) aspects of both contracts not followed; (2) Poor Workmanship; and (3) Violations of Title 32, Chapter 10.

Contract 1 was to remodel kitchen, office and laundry room and was executed on 06/29/2015 with an 8 to 10 week start/completion date. Contract 1 priced at $84,800.00, Complainant paid $78,320.00 as follows: 06/29/2015, Check No. 4774, $25,440.00; 09/16/2016, Check No. 4787, $25,440.00; and 09/24/2015, Check No. 4788, $25,440.00.

Contract 2 was to build an entertainment center and remodel master and small bath and was executed on 10/01/2015 with a 10 to 12 week start/completion date. Contract 2 priced at $48,619, Complainant paid $43,755.00 as follows: 10/01/2015, Check No. 4577, $14,585.00; 10/13/2015, Check No. 4581, $14,585.00; and 12/12/2015, Check No. 4587, $14,585.00.

Registrar of Contractors sent out three (3) letters dated April 18, 2016 to Respondent at the address of 4202 E. Elwood Street, Suite 20, Phoenix, AZ 85040-1955.

Notice of possible violation of A.R.S. § 32-1158(B) minimum elements of a contract;

Notice of possible violation of A.R.S. § 32-1158(B) Business Card does not include license number preceded by the acronym “ROC”; and

Notice of formal complaint being filed with notice of scheduled jobsite inspection for 05/09/2016 at 7:00am.

A jobsite inspection was rescheduled from 05/09/2016 to 06/01/2016. Investigator Cruz conducted the Jobsite Inspection and obtained photographs which were uploaded into Case View Documents File labeled “2016-868 Labeled JS Photos,. Investigator Cruz produced the following notes listed below as substantiated under a Governing Rule Workmanship Rule A.A.C. § R4-9-108:

Kitchen

Complaint Item 1: Door from kitchen to Arizona Room does not stand open when 45° to opening. Glazed entry door from Kitchen to the Arizona Room will swing fully open at 45°.

Investigator’s Observation: Glazed entry door to unit from the Arizona Room will not stay in neutral position.

Complaint Item 2: Poor finish on cabinet door

Investigator’s Observation: Marred finish on right stile of wall cabinet on north (N) wall on 2nd from right wall cabinet (P-3).

Laundry Room

Complaint Item 1: Poor finish on wall cabinet doors.

Investigator’s Observation: Rough (gritty) finish on the right (end) wall upper and lower cabinet doors on west (W) wall.

Complaint Item 3: A Formica shelf was specified in the contract to be installed above the washer and dryer in the pantry. Respondent installed quartz shelf made from off-cuts from complainants countertops, without written or signed change order.

Investigator’s Observation: Respondent installed quartz shelf in the laundry room above washer and dryer and, not a “Formica” shelf as per contract. (P-4)

Office

Complaint Item 1: Waiting on warped and poorly finished cabinet door to be replaced.

Investigator’s Observation: Missing upper cabinet door above right side of desk. (3rd door from the right of window on east (E) wall. (P-5)

Complaint Item 2: Warped cabinet door above left side of desk needs to be replaced.

Investigator’s Observation: Warped cabinet door above left side of desk. (2nd door from the left of next to west (W) wall). (P-6)

Master Bathroom

Complaint Item 4: Missing grout

Investigator’s Observation: Areas of missing grout noted on lower border tile in master bathroom shower on the east (E) wall. (P-7)

Complaint Item 5: Raised tiles and grout joints do not line up.

Investigator’s Observation: Section of lower border in master bathroom shower on the east (E) wall and, approximately two (2) feet from corner with north (N) wall is set unevenly with lippage present and grout joints do not line up same area. (P-7)

Complaint Item 6: Bathtubs backsplash border tile on not properly set.

Investigator’s Observation: Bathtubs border tile backsplash on south (S) wall is unevenly set with irregular grout lines also present. (P-8).

Complaint Item 7: Bathtubs backsplash border tile is not plumb.

Investigator’s Observation: Bathtubs border tile backsplash on south (S) wall is not plumb. (P-9) Checked wall and wall is plump.

Complaint Item 8: Tiled side splash below tub is not flush with tub.

Investigator’s Observation: North (N) side tiled side splash below tub is not flush in several areas.

Complaint Item 9: Border tile on shower pony wall is raised.

Investigator’s Observation: Border tile on east (E) side of shower pony wall is set unevenly with field tile with lippage present in several areas. (P-10)

On June 2, 2016, Investigator Cruz issued a Directive from the Registrar mirroring the workmanship deficiencies as substantiated from the Jobsite Inspection conducted on June 1, 2016, as noted above. The Respondent was directed to remedy with satisfactory written proof of compliance no later than June 16, 2016, at 5:00 p.m.

In addition to the various workmanship issues set forth in the Directive, Inspector Cruz further directed “Permit required for remodel. When permit is pulled by the owner or owner’s agent and inspected, if the local jurisdiction determines that there are corrective issues during the inspection the Respondent will have to Correct by Appropriate Means.”

A letter dated June 2, 2016, was sent by Inspector Cruz to the Apache Junction Building Official notifying of a reasonable belief that building permits were not obtained for the construction project located at 3700 S Ironwood Dr, Lot 139, Apache Junction, Arizona.

A Compliance Inspection was conducted by Investigator Cruz on June 20, 2016, and the following Items were listed as Contractor has not complied: Kitchen -- Complaint Item 1: Glazed entry door to unit from the Arizona Room will not stay in neutral position; Laundry Room – Complaint Item 3: Respondent is to install a “Formica” shelf per contract; Office – Complaint Item 1: Install missing upper cabinet door above right side of desk (3rd door from right of window on east (E) wall); Complaint Item 2: Replace warped cabinet door above left side of desk. (2nd door from the left of next to west (W) wall); Master Bathroom – Complaint Item 4: Areas of missing grout noted on lower border in master bathroom shower on the east (E) wall. Addendum: Missing tile noted; Complaint Item 5: Section of lower border in master bathroom shower on the east (E) wall and approximately two (2) feet from corner with north (N) wall is set unevenly with lippage present and, grout joints do not line up same area; Complaint Item 6: Bathtubs border tile backsplash on south (S) wall is unevenly set with irregular grout lines also present; Complaint Item 7: Bathtubs border tile backsplash on south (S) wall is not plumb; Complaint Item 8: North (N) side tiled side splash below tub is not flush in. Contractor attempted to correct although, efforts not successful. In attempts to correct, contractor also chipped tub in several ways. North (N) side tiled side splash below tub is not flush in several ways; and Complaint Item 9: Border tile on east (E) side of shower pony wall is set unevenly with field tile with lippage present in several areas.

Respondent having failed to meet the deadline to remedy the workmanship issues listed in the Directive, On June 22, 2016, the Registrar then issued a Citation against Respondent alleging possible violations as follows: Charge 1: A.R.S. § 32-1154(A)(2); Charge 2: A.A.C. § R4-9-108, and thereby A.R.S. § 32-1154(A)(3); Charge 3: A.R.S. 32-1154(A)(12) and 32-1158(B); and Charge 4: A.R.S. § 32-1154(22).

On July 6, 2016, Respondent’s Counsel submitted its Written Answer to Citation and Complaint with exhibits asserting the following: Charge 1: A.R.S. § 32-1154(A)(2) that the facts do not support the claim, no plans or specifications were provided, Respondent followed the video provided by Quinn to the extent possible, changes were made at Complainants request, not without his consent, and Complainants have not been prejudiced. Denies Charge 2: A.A.C. § R4-9-108, and thereby A.R.S. § 32-1154(A)(3). Respondent does not deny Charge 3: A.R.S. 32-1154(A)(12) and 32-1158(B), and provided as Exhibit 3 copies of revised contracts of added text for R-11 license number and B-3 license number, contact information for ROC or notice to property owner that they could file a complaint. Respondent provided repair status updates to the 11 remain items that were directed to be remedied in its response to Charge 4: A.R.S. § 32-1154(22).

The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. On July 11, 2016, the Registrar issued a Notice of Hearing, setting the hearing on September 23, 2016, at 1:00 p.m. at the OAH. 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.

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HEARING EVIDENCE.

Complainant1 testified that Respondent failed to provided acceptable workmanship, did not obtain permits, performed work while license was suspended, and that a refund is owed.

Respondent’s Counsel stated that a credit for more than cost was entered on the invoice, denied Charge 2 asserting the plans were given as a PBS video, Charge 3 was remedied in mid-August and because Complainant had knowledge, they were not prejudiced; and Charge 4 custom orders complied.

Investigator Cruz provided testimony that the Entertainment Center is not at issue since he found during the June 1, 2016, Jobsite Inspection, Respondent removed the center, agreed to deduct $10,000.00 from Complainant’s billing, and Complainant hired another contractor to build and install the currently installed system.

Investigator Cruz testified that a Prehearing Compliance Inspection was conducted on September 22, 2016, at the Complainants residence, and the findings are as follows: Kitchen -- Item 1 Glazed entry door to unit from the Arizona Room will not stay in neutral position, Inspector Cruz testified that he found that Respondent has complied; Laundry Room – Item 3 Respondent is to install a “Formica” shelf per contract installed as specified, but that revealed in joint shelf / bottom (gap) and two (2) strips not all the way down. No photo was provided, complied with plans; Investigator Cruz testified the Office -- Complaint Item 1 and 2: Install missing upper cabinet door above right side of desk (3rd door from right of window on east (E) wall), and Replace warped cabinet door above left side of desk. (2nd door from the left of next to west (W) wall) are now in compliance and that the doors were fixed and accepted by Complainant; Master Bathroom – Complaint Item 4: Still Missing one tile, no compliance; Complaint Item 5: not fully complied with section of lower border regarding unevenly with lippage present and, grout joints do not line up same area; Complaint Item 6: not fully complied with bathtubs border tile backsplash on south (S) wall is unevenly set with irregular grout lines also present; Complaint Item 7: not fully complied bathtubs border tile backsplash on south (S) wall is not plumb and still missing tile; Complaint Item 8: Investigator Cruz testified that lippage still exists; and Complaint Item 9: not compliant with border tile on east (E) side of shower pony wall is set unevenly with field tile with lippage present in several areas.

Respondent’s Counsel stated that the complained of missing tile is different than the one from the first Jobsite Inspection as that tile was fixed. That a permit inspection is necessary, none pulled yet and there is some resistance from Complainant to getting the inspection done. The laundry room door is fixed, full west wall is not warped, fully functional in all rooms, grout on East wall marked difference from first inspection, the pony wall must remove glass to repair and that there is some communication challenges to achieving compliance. Also a credit was issued for the entertainment center, and added that they followed specifications step-by-step.

Complainant testified they need to be home for Respondent to enter and they have not been cooperative but that they are frustrated as the work was to be complete November 18, 2015, and as of June 2, 2016, there continued to be post-delay.

Complainant submitted several documents into evidence designated as C10, C15, C16, C17, C1, C2, C18, C22, C19, and C25. Included in the exhibits was a copy of Respondent’s contract deficient of their right to rescind, and further testified they never received the $10,000.00 refund for the entertainment center that was nonfunctional and poor workmanship.

Complaint also entered as C15, a timekeeping log that they maintained after the Directive was issued on June 2, 2016, which tracked 06/07/16 Project Manager [Craig Granado] left Formica samples ~15 minutes; 06/08/16 Tiler (Dave) worked on tiles, 9 am – 1 pm = 4h; 06/10/16 Two workers (Jared and Dustin) arrived 9:30, left 3pm = 5.5 h x 2 = 11h; 06/14/16 Project manager took pictures for about 1 hour.

Complainants also expressed concern over the character of workman who were sent to the residence, and some hesitation on occasion to allowing the workman entry into their home.

Respondent’s Counsel entered into evidence documents labeled R1, R2, R3, R4, R5, R6, R7, R8, R9, R10, R11 and R12. Exhibit R1 Entertainment Cabinet Contract pages 1 through 4 included cabinet drawing width depth, height dimensions and no specified glaze color, and provided various termination rights and limited warranty for workmanship on its installation for two years from its completion date. The anticipated start and finish dates was listed as 8-10 weeks for a total amount due of $84,800.00. The Contract was executed on June 29, 2015.

Respondent2 testified that Complainants had input on any changes, that there was a meeting in May and upon its return, there were major changes in the plan, and that Complainant choose the stain.

On Cross-examination, Respondent replied to Complainant that it has been in the construction business for 30 years, and testified in regards to the entertainment center and the video they received from Complainants as “plans” to building the entertainment center and that they have never built an entertainment center similar to the one in the video. Further testimony was provided that discussion ensued advising it was not possible to build the entertainment center as specified due to the room and TV dimension, and any changes were discussed and accepted.

Respondent2 testified that any chipping occurred after repair, that grout was to specifications, missing tile was not aware, color change grout acrylic polish could fix, would conduct inspection, if permitted, the glass would cost $800 to 900 if glass breaks and would repair lippage if permitted to remove, and that the Complainant was credited $10,000.00 towards their billing.

Respondent1 testified that much of the work required custom orders. That they worked the grout repair in June 2016 and was not aware of missing tile or color grout. To repair grout, glass needs to be removed. That they were given access to install the 2 sets doors.

Respondent1 testified that any assertion that license was suspension was not disciplinary. Also that they resubmit the application with the city and that issuance is time sensitive and requires an inspection for completion.

In closing, Complainants asserted they are seeking sanctions and recovery of 10% forfeited since 18 months have passed and still workmanship issues still not resolved.

Respondent’s Counsel requested no sanctions be imposed and that any delay was a result of Complainants being out of town and changing plans and that Respondent has not been permitted to do bathtub work by removing glass. That $10,000.00 has issued to offset invoicing, and that the only remaining issues are the tile lippage, missing tile, and permit issue.

CONCLUSIONS OF LAW

This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§ 32-1104(A)(4), 32-1154(B) and 32-1156.

The Citation issued by the Registrar of Contractors in this matter alleged potential violations of Arizona Revised Statutes (“A.R.S.”) § 32-1154(A)(2) Departure from or disregard of plans or specifications; 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); A.R.S.; § 32-1154 (A)(12) Failure in any material respect to comply with this chapter; and A.R.S.; § 32-1154(A)(22) Failure to take appropriate corrective action without valid justification.

Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

A.R.S. § 32-1154(A)(2) provides grounds for suspension or revocation of a contractor’s license for departure from or disregard of plans, specifications or building codes “in any material respect that is prejudicial to another” without consent of the owner or his or her representative

Regarding Charge 1 of the Citation, Respondent’s failed to respond to address the specific issue in its Written Answer to Complaint and Citation as corresponding to the Directive and Jobsite Inspection. It was established that the Entertainment Center was not an issue on June 1, 2016, from Investigator Cruz’s Jobsite Inspection noting Respondent removed the initially constructed build and agreed to deduct $10,000.00 from the contract price and Complainant subsequently hired new Contractors to reconstruct. Nothing in the June 2, 2016 Directive referenced the Living Room Entertainment Center. The issue corresponding to the Citation is the quartz shelf that was installed in the laundry room that was not, as per contract. No material evidence was presented to the contrary as Respondents testified that Complainant selected stain and other changes were made but did not address the laundry room deviation of installing quartz instead of the contracted Formica.

For these reasons, the Administrative Law Judge finds that Respondent did violate A.R.S. § 32-1154(A)(2) by failing to obtain a written or signed change order to install a quartz shelf instead of the contracted Formica. Complainants established that Respondent deviated from the proposal, which served as part of the plans in this case. Respondent offered no evidence that it obtained a signed change order that would have had the effect of changing that agreement and, consequently, the agreed upon plans. The proposal specified that Formica would be used and Respondent did not dispute that it was not used. In light of Investigator Cruz’s testimony that the shelf is in compliance to specifications, he also testified that there now exists shelf and bottom cabinet gap and two (2) strips not all the way down. In this instance, Complainants established the deviation was material or that it was prejudicial to them. Therefore, Complainants have established a violation of A.R.S. § 32-1154(A)(2) regarding laundry room, Item 1 of the Directive from the Registrar.

Regarding Charge 3, Complainant established a violation of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3). Complainant meets its burden of proof that the Directives surrounding the items listed below surrounding the Master Bathroom have not been remedied. Based on credible testimony, it was established that the work by Respondent was not in compliance with the Registrar’s workmanship standards regarding the Master Bathroom, Complaint Items 4 through 9. While Respondent’s Counsel asserted that the remaining issue appears to be a missing tile, testimony obtained from Investigator Cruz noted the above listed items were not fully remedied to compliance as observed upon a Prehearing Inspection conducted on September 22, 2016, and further substantiates that the items listed in the June 2, 2016 Directive as not having been satisfactorily remedied by Respondent.

Respondents offered no material evidence to establish that the uneven lippage or deficiencies in the backsplash border, specifically border tile is not properly set and is plumb and tiled side splash below tub is not flush with tub have been satisfactorily remedied. Respondent’s Counsel entered into evidence Exhibits R6 (1-30) reflecting order details and material damage and delays from Bertch; however, the office warped and poorly finished doors are no longer at issue and have been accepted and are now in compliance, thus leaving the master bathroom items set forth in the Directive as non-compliant. Respondent testified that there is a communication breakdown between homeowner Complainant and entered as evidence a communication dated January 5, 2016, from Complainant to Respondents but again, this communication discusses the entertainment center which was not listed on the Directive to be remedied.

Respondents testified that the shower pony wall would require removal of the glass to remedy the lippage. Because no material evidence was presented regarding the Master Bathroom having been satisfactorily complied with in relation to the Directive, Complainant established that Respondent did not completely perform the work in a professional and workmanlike manner in violation of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3).

Regarding Charge 3, Respondent provided the Registrar copies of its revised form contract as attached to its Written Answer to Citation and Complaint as Exhibit 3, and provided same as Exhibit R9 (1-2) during the hearing. Therefore, no violations has been found as Respondent meets the requirements of A.R.S. §§ 32-1154(A)(12) and 32-1158(B).

A.R.S. § 32-1154(A)(22) provides grounds for suspension or revocation of a contractor’s license for failure to take appropriate corrective action on a Corrective Work Order without valid justification and within a reasonable period of time. Complainants established failure to take appropriate corrective action surrounding Charge 2, workmanship issues of the Master Bath Items 4-9. Therefore, it is established that Respondent violated A.R.S. § 32-1154(A)(22) Charge 2.

The Registrar of Contractors may consider the prior record of a contractor in any disciplinary proceeding. A.A.C. R4-9-117. Administrative notice is taken of the Registrar of Contractors website. As of the time of this recommendation, Respondent’s license was in good standing.

In this instance, Complainant has established that Respondent violated A.R.S. § 32-1154(A)(2) for Laundry Room, Item 3, and A.R.S. § 32-1154(A)(3) for Master Bath Items 4, 5, 6, 7, 8, and 9. No violation was established for Kitchen Items 1 and 2, Laundry Room Item 1, and Office Items 1 and 2.

The findings of the violation A.R.S. § 32-1154(A)(2) regarding Laundry Room Item 3 is based on Respondent’s failure to obtain an express written waiver to deviate from Formica to quartz. While the shelf have been changed out as noted in testimony obtained from the Prehearing Inspection, this does not excuse the fact that the Complainant had to pursue filing a Complaint and 15 months from the date of the Contract, obtained corrective action.

The findings of violations regarding the Master Bath, Respondent stated that correction may incur additional risk of expense of $800 to 900 if the glass broke to repair the lippage. Given the risk factor is a probable 1% loss over the cost of the entire value of the project, this provides no valid justification to not proceed to remedy. Therefore, Respondent has not established a valid justification for not correcting those items, and Respondent should be found in violation of A.R.S. § 32-1154(A)(22) regarding them.

Additionally, no inspection surrounding the Permit has been conducted to bring about satisfactory compliance with the Directive. Respondent testified that there have been scheduling issues with Complainant being out of town, but yet, all parties were present for the Prehearing Inspection and access has been afforded to allow for the Jobsite Inspection and thereafter to afford an opportunity to comply with the Directive. Therefore, no valid justification was present as evidence that would prevent the Directive action surrounding the Permit issue to not satisfactorily remedy.

All parties were present and Complainants established that they did not deny access to Respondents or any of the parties their rights to due process when Investigator Cruz conducted the Prehearing Inspection.

RECOMMENDED DECISION

Based on the foregoing considerations, the undersigned Administrative Law Judge hereby recommends that Respondent’s License Nos. 266889 and 297310 be suspended for two (2) days for violations of A.R.S. §§ 32-1154(A)(2), (3) and (22).

In the event of certification of this 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 the certification

Done this day, October 13, 2016.

/s/ Linda Marie Brown

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors