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2017A-1853-CHC-ROC · Registrar of Contractors · 2017-10-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

William C Norman Jr, No. 2017A-1853-CHC-ROC COMPLAINANT, ADMINISTRATIVE LAW JUDGE v. DECISION

D C M Builders LLC, License No: 215117, 303557 RESPONDENT.

HEARING: August 25, 2017, and August 30, 2017 APPEARANCES: Complainant William C Norman Jr. appeared and was represented by Mark N. Goodman. Craig A. Boyd, Manager, appeared on behalf of Respondent D C M Builders LLC. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT 1. D C M Builders LLC (Respondent) is the holder of License Nos. 215117 and 303557 issued by the Arizona Registrar of Contractors (Registrar). 2. On or about April 13, 2016, William C Norman Jr. (Complainant) signed a fixed price contract with Respondent for the construction of a new home. The contract provided that “[t]he cost for the project as specified in the construction documents (PLANS) and construction details, shall be set at the sum of Two Hundred fifty eight thousand seven hundred twenty dollars $258,720 subject to additions and deductions pursuant to authorized change orders and allowances.” 3. Prior to Complainant signing the contract, Craig A. Boyd, Manager for Respondent, had email correspondence with Country Bank, which was providing the construction loan for the new home. On April 11, 2016, Bob Beyea, Vice President and Manager, emailed Mr. Boyd “please respond to this email and confirm that you will build this house for the contract amount with or without [Complainant’s] assistance.”1 On April

The evidence at hearing established that Complainant was an employee of Respondent at some point. Thus, it appears Complainant may have been expected to perform some work on the new home to reduce the cost to him, but no details were provided and no written contract was provided to that effect.

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826 12, 2016, Mr. Boyd responded, “I agree to build the house ‘per plan’ with [Complainant’s] limited help for the agreed contract price.” 4. On or about April 18, 2016, Respondent executed an Assignment of Construction Contracts (Assignment) identifying Complainant as the Borrower, Country Bank as the Lender, and Respondent as the Contractor. The Assignment provides, in pertinent part, that “Contractor further agrees that any alteration or amendment of the Construction Contract will not be effective unless and until approved in writing by Lender.” 5. During the construction of the project, Complainant made multiple purchases for the project out-of-pocket. Specifically, Complainant bought doors totaling $5,153.00, the woodstove totaling $4,916.00; granite slabs totaling $5,217.76, and installation of the granite for $4,636.33. These items were included in the construction cost breakdown spreadsheet created by Respondent and were to be paid by Respondent during the construction of the project. The estimated costs of the doors were $2,300.00, the woodstove was $2,800.00, and the kitchen countertops were $3,000.00. There was some disagreement as to whether some of the materials expanded or changed during the construction phase, but Respondent acknowledged that there were no change orders executed for those items. Further, it was noted that the woodstove Complainant purchased was the same woodstove that was included with the plans that were approved by the county prior to construction. 6. On or about March 22, 2017, Country Bank conducted a final inspection. At that time, Country Bank found that the bathroom sinks had been installed, but there were no countertops; that the vanities had been installed, but some drawer fronts were missing; and that there was no driveway. The inspection noted that “home needs countertops, touch-up painting, staining, concrete floor sealing, some cabinetry (drawer fronts)” and that “there are no kitchen countertops, sink not installed, needs final cleaning.” Because the home was not complete, Country Bank refused to pay the final draw of $25,000.00 requested by Respondent. 7. On or about March 23, 2017, Mr. Boyd texted Complainant regarding Country Bank’s refusal to pay the final draw of $25,000.00. Mr. Boyd also stated he would be at the site the following day to get everything from the site.

8. During the evening on or about March 23, 2017, Mr. Boyd arrived at the site, called Complainant, and left a voicemail. The voicemail was played during the hearing and introduced into evidence. In the voicemail, Mr. Boyd was profane and threatened Complainant to come outside to talk to him. Complainant contacted the sheriff’s office to report Mr. Boyd’s actions. Complainant testified that Mr. Boyd also knocked on the door of the trailer he was staying in and threatened him and his wife. 9. The sheriff’s office responded to the scene and attempted to arrest Mr. Boyd. Mr. Boyd was charged with and pled guilty to resisting arrest and disturbing the peace. An Injunction Against Harassment was issued against Mr. Boyd that he was to have no contact with Complainant or his wife at their home. 10. On or about April 6, 2017, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to the construction. 11. The Registrar assigned the complaint to Investigator Jim Dimond. When Investigator Dimond performed a jobsite inspection, Mr. Boyd was not allowed to attend because of the Injunction Against Harassment. Daniel Thein, Respondent’s Qualifying Party, could have attended could have attended, but did not. Respondent’s attorney attended the jobsite inspection. 12. Investigator Dimond testified that he was originally not going to issue a written directive because of the Injunction Against Harassment. However, upon reflection, he determined that Respondent was a general contractor that could subcontract any corrective work that needed to be done. Therefore, Investigator Dimond issued a written directive to Respondent that provided as follows:

*NOTE: Under the circumstances of this complaint, a subsequent review by the investigator and agency personnel has resulted in the issuance of this Written Directive from the Registrar. The respondent’s license scope allows for the ‘subbing’ out of the directed corrections as well as the opportunity for settlement in some other manner that can facilitate complaint resolution. Instead of immediately forwarding the complaint to the ROC legal department as originally relayed, the time period for compliance will be allowed to expire prior [to] continuing through the process if resolution is not achieved.

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 June 8th, 2017[.] You are hereby directed to remedy the following violations by the appropriate means: Item 1- Craig Allan Boyd, QP, has done unworkmanlike work on our house: a-Guest bedroom door jamb is cut b-Wood trim at front columns poorly done and not complete c-Master bathroom interior dormer space does not have finished drywall d-Corner tile in master shower is cracked at the soap shelf The respondent is to correct the condition in an appropriate manner

Item 5- Standing seam metal roof was not installed per manufacturer’s specifications and is not installed in a workmanlike manner. The respondent is correct the staining that is sporadic (not the rust), the foam that is installed and the flashing that is missing in an appropriate manner.

Item 6- Wood stain is not installed in a workmanlike manner. The trim was stained after it was installed. There is stain on the floors and walls. Additionally, the trim behind the water closet of the patio bathroom is not stained at all. Numerous door casings are not stained. One of the only 2 doors is not stained. At the exterior, the stain does not have adequate coverage and it appears that the stain was not adhering properly resulting in a ‘droplet’ like look. This was namely at exterior window opening trim. The respondent is to correct the condition in an appropriate manner.

Item 7- Bathroom plumbing was not installed in a workmanlike manner. The plumbing at the bathrooms is not installed and was previously hooked up with materials that are contrary to code. Additionally, the patio water closet supply line is not installed in a workmanlike manner. The respondent is to correct the condition in an appropriate manner. Item 8- Concrete apron was not installed in a workmanlike manner. At the south walk where the slabs meet, there is an obvious misalignment. The respondent is to correct the condition in an appropriate manner. Item 10- Covered patio concrete slab cracked across the full width within one week of pour. No control joints were used. While the concrete crack is still within ROC standards for concrete cracking, the slab’s lack of control joints within every 100 square feet is not. The respondent is to correct the condition in an appropriate manner. Item 13- Interior doors are not installed. The respondent is to correct the condition in an appropriate manner. Item 14- Kitchen/bathroom cabinets are not completed The respondent is to correct the condition in an appropriate manner.

The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action. 13. Following the issuance of the written directive, Respondent made no effort to comply with the written directive itself and did not hire any subcontractors to complete the corrective work. After the deadline in the directive expired, Investigator Dimond was notified no corrective work had been performed. 14. The Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(2); A.A.C. R4-9-108, and thereby of A.R.S. § 32- 1154(A)(3); A.R.S. § 32-1154(A)(8); and A.R.S. § 32-1154(A)(22). 15. Investigator Dimond testified that as to his observations of the project and noted certain items that were obviously not in compliance with workmanship standards. Investigator Dimond stated that a certificate of occupancy did not mean that the project met the Registrar’s standards. 16. Complainant testified that he never agreed to pay more than the fixed contract price and never signed any change orders. Complainant indicated that when he asked Respondent about change orders, Mr. Boyd said there would not be any.

Complainant stated that Mr. Boyd created the construction cost breakdown spreadsheet on his own and reassured Complainant that it did not really mean anything and just needed to come out with the right numbers to satisfy the lender. Complainant noted that the plans called for a concrete driveway to be poured. Complainant conceded that even if not a full driveway to the road, the plans clearly required a driveway pad more than the sidewalk Respondent built. 17. Mr. Boyd testified that Respondent built a driveway apron that satisfied that portion of the plans. Mr. Boyd denied that anything larger was required by the plans. Mr. Boyd also asserted that the certificate of occupancy issued by the county established that there were no workmanship issues remaining. Mr. Boyd also testified that that Respondent did not need to obtain any change orders because the contract provided that the cost was “subject to additions and deductions pursuant to authorized change orders and allowances.” Mr. Boyd interpreted that to mean that if an item went over the allowance set forth in the construction cost breakdown spreadsheet, he did not need written authorization to charge Complainant more for that item. Therefore, although Complainant specified the woodstove he wanted prior to the construction starting, Respondent listed the $4,916.00 woodstove for $2,800.00 on the construction cost breakdown spreadsheet. Respondent stated that he spent the $2,800.00 allotted to the woodstove to build the platform and the chimney for the woodstove, so Complainant properly paid for the woodstove out-of-pocket. Mr. Boyd testified that, in total, Complainant owed Respondent approximately $83,000.00, or approximately $58,000.00 more than the agreed upon contract price not included the out-of-pocket purchases Complainant made. 18. Administrative notice is taken of Respondent’s prior License record on October 10, 2017. Such prior License record reflects that Respondent’s License No. 215117 was first issued on January 4, 2006, and is current. Such prior License record also reflects that there were no other complaints against Respondent’s license. Such prior License record reflects that Respondent’s License No. 303557 was first issued on June 29, 2016, and is current. Such prior License record also reflects that there were no other complaints against Respondent’s license. CONCLUSIONS OF LAW

1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. 2. 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). 3. The evidence established that Respondent failed to construct a driveway in conformity with the plans. Therefore, Complainant established that Respondent deviated from or disregarded the plans in violation of A.R.S. § 32-1154(A)(2).2 4. 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 workmanlike manner in violation of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3).3 5. The evidence established that Respondent charged Complainant more than the agreed upon price of $258,720.00 without any executed change orders. Therefore, Complainant established that Respondent completed the construction project for the price stated in the contract in violation of A.R.S. § 32-1154(A)(8).4 6. The evidence established that Respondent did not attempt to compete the corrective work following the Directive being issued. Therefore, Complainant established

A.R.S. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.” 3 A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” A.R.S. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.” A.R.S. § 32-1154(A)(8) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.” 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).5 RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 215117 and 303557 for a period of ten days. 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(E). 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, October 10, 2017, 2017.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors

A.R.S. § 32-1154(A)(22) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure 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.”