ALJDEC decisions subject to certification as final

2017A-1280-RFA-ROC · Registrar of Contractors · 2018-08-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Donna Jean Kitchens Marquez,

COMPLAINANT,

v.

Onsite Concrete Specialists LLC,

License No: 244659

RESPONDENT.

No. 2017A-1280-RFA-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 20, 2018.

APPEARANCES: Donna Kichen Marquez, Complainant, Jessica Ortiz,

Registrar Fund Claims Reviewer, Seth Hargraves, Esq., Attorney for the Registrar, Able Cordova, Respondent and Qualifying Party.

ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson

_____________________________________________________________________

FINDINGS OF FACT

On April 23, 2008, the Arizona Registrar of Contractors (the “Registrar”) issued Onsite Concrete Specialists LLC, License Number 244659, a Class R-9 Residential license for contracting to install and repair concrete, concrete products, and accessories common to the industry. (the “Respondent”).

The Workmanship Complaint (Case No. 2017A-1280-ROC)

On March 8, 2017, the Registrar received a Complaint against Respondent from Donna Jean Kitchens Marquez (“Complainant”). The Complaint alleged that Respondent contracted to pour a concrete patio slab alongside an existing smaller slab that is under cover at the rear of Complainant’s residence located at 14576 W Hope Drive in Surprise, Arizona and that the Respondent’s work has resulted in cement cracking and water ponding due to poor workmanship.

On September 20, 2017, a Job Site Inspection [hereinafter, “JSI”] was conducted by Registrar’s Investigators Laurie Swanson and Russell Reed. Donna and Juan Marquez were present at the JSI. Respondent did not attend. Investigator Reed’s Job Site Inspection notes related that

This complaint was re-opened due to an unlicnsed (sic) investigation that took place. During the investigation of complaint 2017-2020 it was determined that the monies paid by the complainant were deposited into a business account in which the respondant (sic) owns. Phone records also indicated that the text messages and phone calls made to and from the contractor belong to Able Cordova, the owner of Onsite concrete specialists.

Complaint Item 1: Cracks in excess of 3/32" in one slab, Cracks in several sections. Investigator’s Observation: The length of the crack is approximately 16' long and is wider than 1/16" in most areas of the crack. Governing Rule: Workmanship Rule: §32-1154.A.3

Complaint Item 2: 1/8" vertical displacement on new addition from existing to new which causes tripping hazard. Investigator’s Observation: Both the East and West side of the new pad is rising. There is a significant difference in the new concrete and existing concrete height. The new concrete is nearly 1/2" higher than the existing concrete. Governing Rule: Workmanship Rule: §32-1154.A.3

Complaint Item 3: Water does not drain off of whole patio. There is always ponding and standing water after rain. Investigator’s Observation: A small amount of water was applied to the specific section of concrete that the homeowner states retains water. When the water was applied it did not drain off the concrete, it runs back to the center of the pad. The water was greater than 1/16" deep. Governing Rule: Workmanship Rule: §32-1154.A.3

On September 20, 2017, Investigator Reed issued a Directive containing a Corrective Work Order [“CWO”] to the Respondent which stated:

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 October 9, 2017. (emphasis in original).

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

Compound crack in concrete slab is in excess of 3/32”.

New concrete is lifting and has a lip in excess of 1/8”.

Excessive pooling of water on one section of concrete.

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

Thereafter, on October 18, 2017, a Compliance Inspection was conducted by Investigator Reed who reported his finding as follows:

‘A compliance inspection (sic) was requested by the complainant and conducted at the above date and time. Donna and Juan Marquez and Investigator Russell Reed were present for the compliance inspection.

Compliance Findings: Three items were listed on the Directive from the Registrar:

1) Compound crack in concrete slab is in excess of 3/32". This crack is no longer visible however, the repair method used to cover the crack is poorly executed and the extension of the patio in its entirety is very poorly completed. It does not appear that the workmanship was completed in a professional, workman like manner. [emphasis added].

2) New concrete is lifting and has a lip in excess of 1/8". The lippage was ground down and a coating was applied to the surface of the concrete, however, the repair method used to cover the area is poorly executed and the extension of the patio in its entirety is very poorly completed. It does not appear that the workmanship was completed in a professional, workman like manner. [emphasis added].

3) Excessive pooling / ponding of water on one section of concrete.

Photos will show there are now two areas where water is ponding and not draining properly. The method used to correct this was poorly executed.

The repairs made to comply with the directive do not meet workmanship standards appear poorly executed. The coating was only applied to certain areas of the patio leaving the overall finish of the patio very inconsistent.

The Registrar issued a Citation against Respondent in Case Number 2017A-1280-ROC charging violations of A.R.S. § 32-1154(A)(3) [namely R4-9-108] and (22) The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing.

On December 19, 2017, hearing was conducted in Case No. 2017A-1280-ROC before Office of Administrative Hearings Administrative Law Judge (“ALJ”) Hon. Diane Mihalsky. The ALJ found the Respondent to have committed the violations as charged and recommended a seven day license suspension and a $500.00 Civil Penalty.

On January 16, 2018, the Registrar accepted ALJ Mihalsky’s recommendations and the Registrar’s order has, with the lapse of time, become final.

The Claim to the Residential Contractors’ Recovery Fund

On March 8, 2018, Donna Jean Kitchens Marquez, Complainant filed a Claim for payment [hereinafter, the “Claim] with the Residential Contractors Recovery Fund [hereinafter, the “Fund”] pursuant to A.R.S. § 32-1154(G) [hereinafter, the “Fund Statute”] After a review of the Claim and its supporting documents, the Fund determined that the Complainant was entitled to a Fund Payout Award in the amount of $6,888.75.

The Registrar’s Fund Claims Reviewer, Jessica Ortiz, testified at the hearing conducted August 20, 2018, that she analyzed Complainant’s claim to the Fund. Ms. Ortiz determined

That at all time relevant to the Claim, Claimant was the owner and occupant of the residence that is the subject matter of the Claim,

That the pursuant to the records of the Maricopa County Assessor’s records the subject realty is a Class 3 property satisfying the stated eligibility requirements of the Fund Statute,

That a previous Complaint filed by the Complainant against the Respondent herein was the subject of an Office of Administrative Hearings proceeding conducted December 19, 2017 in Case No. 2017A-1280-ROC before Office of Administrative Hearings Administrative Law Judge (“ALJ”) Hon. Diane Mihalsky. The ALJ found the Respondent to have violated A.R.S. § 32-1154(A)(3) [namely R4-9-108] and (22) as charged and recommended a seven day license suspension and a $500.00 Civil Penalty.

That the Complainant paid Respondent the entire amount charged by the Responded under its contract with Complainant in the amount of $3,800.00.

That no recovery on Respondent’s Bond was obtained.

That along with the Claimant’s Claim, she submitted three bids from licensed contractors to the Fund as proposals to provide the repairs directed by the Registrar’s CWO in Case No. 2017A-1280-ROC. The lowest of the three bids submitted was $6,888.75.

On June 13, 2018, the Registrar issued a Notice of Claim for Administrative Payout in the amount of $6,888.75.

The Registrar received a timely request by the Complainant for hearing.

The Registrar referred the matter to the OAH for an evidentiary hearing. A Recovery Fund Payout Hearing was held before the Office of Administrative Hearings on August 20, 2018.

Hearing Evidence

Mr. Able Cordova, Respondent and Qualifying Party noted in his Request for Hearing that he contested the results of the Finial Order in Case No. 2017A-1280-ROC and moved that the allegations and ruling be revisited. The Administrative Law Judge informed the parties that he would could not consider Respondent’s responsibility for actions in Complainant’s Claim to the Fund because the Registrar’s Decision and Order in Case Number 2017A-1280-ROC had already determined the issues. The Decision and Order in that matter is final by the passage of time and the issues presented and demined in that previous hearing, being the same issue between the same parties, are res judicata and will not be re-heard or re-argued in this proceeding. The Motion to revisit issues relevant to the matters heard, decided and made final in 2017A-1280-ROC was denied. Mr. Codova advised in his opening statement that the sole issue he presents was his contention that the payout was too large because the amount awarded was intended, per the lowest bidder’s proposal, to repair the entire concrete slab rather than repair only the areas where it was determined that sub-standard workmanship was found.

Claims Reviewer Ortiz testified that the ROC Inspector’s Job Site Notes and Directive opined that “the extension of the patio in its entirety is very poorly completed” Therefore, she testified in order to make Complainant whole, the entire patio (not just the poorly constructed areas) needed to be replaced. In other words, all of Respondent’s work needed to be demolished and the project started over. Thus, Ms. Ortiz accepted the low bided proposal to repair the entire patio area. Ms. Ortiz testified that she calculated the Fund Payout starting with the low bid of $6,888.75, added the total amount that Complainant actually paid to complete the job ($zero). She deducted the amount of Respondent’s contract that remained unpaid ($zero) and any bond recovery ($zero) resulting in a $6,888.75 payout. The Fund offered Exhibits 1 through and including Exhibit 15 into evidence in support of its payout determination.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish the amount that Complainant is entitled to recover from the Fund by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.

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

In Arizona, “‘[p]ublic policy dictates that there be an end to litigation; that those who have contested the issue shall be bound by the result of the contest; and that matters once tried shall be considered forever settled as between the parties.’” Therefore, the Registrar’s Decision and Order in Case No. 2017A-1280-ROC conclusively establishes that Respondent violated the charged statutes. The only issue to be resolved at the hearing on Complainant’s claim to the Fund is the amount of damages that Respondent’s statutory violations caused.

A.R.S. § 32-1132(A) provides the method of calculating the amount that a homeowner is entitled to recover from the Fund for a contractor’s statutory violations, in relevant part as follows:

An award from the [F]und is limited to the actual damages suffered by the claimant as a direct result of the contractor’s violation but shall not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines. Actual damages shall not be established by bids supplied by or the value of work performed by a person or entity that is not licensed pursuant to this chapter and that is required to be licensed pursuant to this chapter. If the claimant has paid a deposit or down payment and no actual work is performed or materials are delivered, the award of actual damages shall not exceed the exact dollar amount of the deposit or down payment . . . .

“A cardinal rule of statutory interpretation is to give full effect to each statutory word or phrase so that no part is rendered void, superfluous, contradictory or insignificant.”

The ROC Investigator’s determination from his personal Job Site Inspection and Directive demonstrated, by a preponderance of the evidence, that in order to repair the poor workmanship performed by this Complainant required the entire patio area to be demolished and rebuilt correctly.

By a preponderance of the evidence, that Fund’s Payout Order is fair, reasonable and issued according to the requirements and restrictions of the Fund Statutes and should be affirmed.

RECOMMENDED ORDER

In view of the foregoing,

IT IS RECOMMENDED that June 13, 2018, the Registrar a Notice of Claim for Administrative Payout in the amount of $6,888.75 be affirmed.

FURTHER IT IS RECOMMENDED that the Registrar order the Residential Contractors’ Recovery Fund to pay $6,888.75 to Complainant Donna Jean Kitchens Marquez.

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, September 4, 2018

/s/ Randolph D. Wolfson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors