ALJDEC decisions subject to certification as final

2017A-474-CHC-ROC · Registrar of Contractors · 2017-09-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Todd and Ingrun Wiekhorst,

COMPLAINANT,

-v-

Carlock Homes LLC,

License No. 299125

RESPONDENT.

No. 2017A-474-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 21, 2017

APPEARANCES: Eduardo Coronado, Esq. for Complainants; Jared Owens, Esq. for Respondents

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

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FINDINGS OF FACT

On May 25, 2017, the Registrar of Contractors (“ROC”) issued a Notice of Hearing setting the above-captioned matter for hearing on July 13, 2017 at the Office of Administrative Hearings. The matter was continued and the hearing was conducted on August 21, 2017.

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

Respondent Carlock Homes LLC holds license number 299125 issued by ROC. Wesley Carlock is Carlock Homes’ qualifying party.

Complainant(s) Todd and Ingrun Wiekhorst entered into a contract with Carlock Homes under which Carlock Homes agreed to construct a home at 2441 Black Beaver Circle in Pinetop Arizona.

Through the Citation, ROC alleges that Carlock Homes may have violated Ariz. Rev. Stat. sections 32-1154(A)(3) and (A)(22).

The Citation shows that if the Administrative Law Judge finds that any of the alleged charges are valid, ROC may suspend or revoke Carlock Homes’ license and it may impose other discipline against Carlock.

The County issued a certificate of occupancy, and on September 12, 2016, Ms. Wiekhorst executed a Certificate of Substantial Completion for the Wiekhorsts that effectively transferred possession of the home to the Wiekhorsts.

Although the Wiekhorsts made their final payment to Carlock Homes when the Certificate of Substantial Completion was executed (as they were required to do under the terms of their contract), the Wiekhorsts stopped payment on their check several days later. As of the hearing date, the Wiekhorsts had not repaid to Carlock Homes the amount owing at the time they executed the Certificate of Substantial Completion.

Ms. Wiekhorst testified to the effect that Carlock Homes had informed the Wiekhorsts that it would not perform any warranty or other work if they did not repay the amount owing. But in an email to the Wiekhorsts dated September 23, 2017, Carlock Homes provided the Wiekhorsts with information related subcontractor warranties and it identified punch-list items that it had corrected in the prior ten days. And in a letter to the Wiekhorsts dated October 6, 2016, Carlock Homes’ counsel informed them that Carlock was bound by the parties’ contract to make any required repairs (regardless of whether these had been identified when the punch-list was completed) and that they were also protected by ROC.

On January 26, 2017, the Wiekhorsts filed a complaint with ROC alleging workmanship and other deficiencies on Carlock Homes’ part.

In response to the Wiekhorsts’ complaint, ROC Investigator Chris Allison conducted a job-site inspection on February 22, 2017, and an inspection of the addendum items on March 20, 2017.

On March 21, 2017, ROC issued to Carlock Homes a Directive that required Carlock Homes to correct by appropriate means ten enumerated items: (1) standing water in the crawl space; (2) crawlspace finish grade does not meet the building code; (3) fireplace mantel in Great Room does not meet the clearances set out in installation instructions; (4) kitchen drawer damaged; (5) light switches and dimmer switches are not the same shade of white; (6) screen for master bedroom sliding door; (7) electrical panel box hard to open and close; (8) closet rods do not meet industry standard of forty to forty-four inches; (9) leaking at man door for garage; and (10) crack in CMU block (front left corner).

After the Directive was issued Mr. Allison determined that the fireplace mantel was installed according to the manufacturer’s directions (item 3); that the kitchen drawer was a manufacturer’s warranty issue, not a workmanship violation (item 4); and because the Wiekhorsts had requested the specific dimmer switches at issue, Carlock Homes was not responsible for any deficiencies in these (item 5).

The Directive required Carlock Homes to provide ROC with written proof that it had made the required corrections by no later than 5:00 p.m. April 10, 2017.

After the Directive was issued, Carlock Homes began to try to schedule subcontractors to make the repairs required by ROC.

Carlock Homes requested that the Wiekhorsts let it know when they would be present in Pinetop because work could not be scheduled unless the Wiekhorsts were present to allow access to the home. In response, the Wiekhorsts informed Carlock that they would not be there until April 15, 2017, which was after ROC’s deadline for Carlock to comply with the Directive.

In response to Mr. Carlock’s concerns about access to the home, through an email dated April 3, 2017, Mr. Allison informed the Wiekhorsts that they were required to provide access to their home during normal business hours during time ROC had allowed Carlock to make the repairs. Through that email, Mr. Allison informed the parties that he was extending the deadline for Carlock to complete the work to April 18, 2017.

Through a letter dated April 3rd that was delivered by email on April 4, 2017, Mr. Carlock informed Mr. Allison of Carlock’s progress in making the repairs and its trouble scheduling the appropriate trades based on the Wiekhorsts’ unavailability. Mr. Carlock explained that because the Wiekhorsts were not at the home, Carlock had been required to deny access to subcontractors who were scheduled to make the ROC-ordered repairs.

Carlock Homes’ April 3rd letter to Mr. Allison also shows that on April 3rd, it had been informed by Wiekhorsts that they might be in Pinetop beginning on April 10, 2017, but Carlock did not know how long the Wiekhorsts intended to stay in Pinetop. Mr. Carlock expressed doubt as to Carlock’s ability to meet the revised deadline of April 18, 2017. Mr. Carlock explained that Carlock was endeavoring to comply with ROC’s Directive, but access to the property was “essentially denied.”

On April 5, 2017, Carlock requested that the Wiekhorsts provide more information as to whether the Wiekhorsts would be in Pinetop for more than one day beginning on April 10th. Although the Wiekhorsts acknowledged receipt of the request on April 5th (through counsel) it was not until Friday April 7th that the Wiekhorsts confirmed that they would be present in Pinetop on Monday April 10th.

Through an email dated April 6, 2017, Mr. Carlock again informed Mr. Allison of Carlock’s difficulty in scheduling work based on the Wiekhorsts’ unavailability. Mr. Carlock also informed Mr. Allison that a subcontractor Carlock had engaged to remove the water from the crawlspace could no longer take the job because of the scheduling issues.

Although the Wiekhorsts informed Mr. Allison that they would be in Pinetop on April 10th and that they would be there until after the April 18th deadline if needed, the evidence of record shows that they were unwilling or unable to stay past that date.

On April 11, 2016, Mr. Carlock sent Mr. Allison a copy of an email from a second subcontractor that had inspected the crawlspace. The subcontractor informed Mr. Carlock that he would not take the job because he found the Wiekhorsts to be hostile and he was of the opinion that they were trying to pressure him into performing work beyond what Carlock Homes had authorized. The subcontractor, Russell Smith, executed an Affidavit about his experience that was entered into evidence.

The Wiekhorsts did not agree with Mr. Smith’s assessment of their interaction with him. But regardless of the Wiekhorsts’ perceptions of their interaction with Mr. Smith, Carlock Homes was required to locate another subcontractor to complete the corrective work because Mr. Smith’s company was unwilling to work at the Wiekhorsts.

On April 13, 2017, Mr. Carlock sent to Mr. Allison an email showing that a subcontractor would be inspecting the crawlspace on April 18, 2017, and that this was the third subcontractor Carlock had tried to get scheduled to do the work.

The third subcontractor turned down the work because he was concerned that he would be a third party caught in any dispute between the Wiekhorsts and Carlock Homes.

Mr. Allison acknowledged that during the time in which ROC allowed Carlock Homes to make any required repairs the building trades in the Pinetop area were very busy and that a three-week lead time for scheduling subcontractors would not be unreasonable.

In his April 13th email to Mr. Allison, Mr. Carlock specifically asked Mr. Allison to extend the deadline for compliance with the Directive.

Mr. Allison testified that he was unwilling to extend the April 18, 2017 deadline for compliance because he was of the opinion that Carlock had not made satisfactory progress and because he believed that this was a “he-said/she-said” situation that was appropriate for a judge to consider.

Mr. Allison could not say whether the Wiekhorsts had denied Carlock Homes access to make the corrections ROC ordered it to complete. Mr. Allison testified that he had informed Mr. Carlock that he could raise any allegations of denial of access at the hearing.

Mr. Allison testified to the effect that he was under the impression that the Wiekhorsts were available and the home was open for Carlock to complete the repairs the entire time from March 21 through April 18, 2017. But the Wiekhorsts were not at the home until April 10, 2017, whereas the Directive was issued on March 21st, meaning that the Wiekhorsts provided access for only eight of the twenty-eight days that Carlock Homes was given to complete the work ROC ordered to be corrected.

In addition, even after Mr. Allison informed the Wiekhorsts in his April 3rd email that they were required to be present at the home during business hours and he extended the compliance deadline, the Wiekhorsts did not provide access until April 10, 2017, which means Carlock had access for only eight of the fifteen days that ROC’s revised deadline allowed.

Ms. Wiekhorst testified to the effect that the Wiekhorsts had been available at the home at all times they were required to be so, but this was not true given that they did not arrive at the home until April 10, 2017.

At a compliance jobsite inspection conducted on April 19, 2017, Mr. Allison found that items 1, 2, 8, 9, and 10 had not been properly corrected. Carlock Homes was unable to attend the compliance jobsite inspection because Mr. Allison gave Carlock only about twelve hours’ notice of that inspection, which was scheduled to accommodate the Wiekhorsts’ need to leave Pinetop.

At the compliance jobsite inspection, Dr. Wiekhorst told Mr. Allison that Carlock Homes was “locked out” and Ms. Wiekhorst told him that she would not allow Carlock back. At the hearing, the Wiekhorsts took the position that they would allow Carlock back to complete any required repairs.

Carlock Homes was actively trying to schedule subcontractors to make the required corrections until the expiration of the April 18, 2017 deadline imposed by ROC.

Regarding the standing water in the crawl space (item 1), this corrective work was not completed because the Wiekhorsts did not provide Carlock adequate access to the home.

Regarding the finish grade in the crawl space (item 2), this item could not be properly corrected until after the crawlspace was properly dried out.

Regarding the fireplace mantel in the Great Room (item 3), Mr. Allison determined that the mantel met the clearances set out in the manufacturer’s installation instructions and that this was not a workmanship or other violation by Carlock Homes.

Regarding the kitchen drawer damage (item 4), Mr. Allison determined that this was a manufacturer’s warranty item and not a workmanship or other violation by Carlock Homes.

Regarding the light switches and dimmer switches (item 5), Mr. Allison determined that the Wiekhorsts had requested these dimmer switches and that this was not a workmanship or other violation by Carlock Homes.

Regarding the screen for master bedroom sliding door (item 6), Mr. Allison determined that this had been properly repaired.

Regarding the electrical panel box (item 7), Mr. Allison determined that this had been properly repaired.

Regarding the closet rods (item 8), these were not corrected because Carlock did not have adequate access to do the work. Mr. Carlock explained that there were several trades (e.g., drywall and paint) that needed to be scheduled and that the work would take several days because the drywall would need to cure before painting.

In addition, Ms. Wiekhorst acknowledged that she had participated in a design review at which time she gave a “general” approval to the arrangement that was installed in the closet. Mr. Carlock testified to the effect that at the design review the closet layout had been marked on the drywall and had been approved by the Wiekhorsts. Because the Wiekhorsts accepted the layout/design it has not been shown that this was a workmanship or other violation by Carlock Homes.

Regarding the leaking at the man door for the garage (item 9), repairs had been made, but these were only partially successful and more work was required.

Regarding the crack in CMU block (item 10), this item is not on the punch-list that was completed when the Wiekhorsts executed the Certificate of Substantial Compliance and Mr. Carlock testified to the effect that the location is such that it would be readily observable. In October 2016, before Mr. Allison’s initial jobsite inspection, the Wiekhorsts hired another contractor that used machinery to move material and compact soil around the stem wall. Consequently, there is insufficient evidence to show that Carlock Homes (and not this other contractor) was responsible for the cracking and it has not been shown that this was a workmanship or other violation by Carlock Homes.

Mr. Allison testified to the effect that the Wiekhorsts may have misunderstood ROC’s process in that they wanted to take an active role in how the required repairs were going to be made, whereas ROC leaves that up to the contractor.

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).

Substantial evidence is evidence that a reasonable mind would use to reach a conclusion. See Mealey v. Arndt, 206 Ariz. 218, 76 P.3d 892 (App. 2003).

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).

There was no substantial evidence adduced to show that Carlock Homes is unscrupulous, unqualified, or financially irresponsible.

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 ROC 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 items 1, 2, 6, 7, and 9 as set out in ROC’s Directive represent deviations from the general workmanship standard on Carlock Homes’ part. Consequently, the preponderance of the evidence shows that Carlock Homes violated Ariz. Rev. Stat. section 32-1154(A)(3).

After ROC issued its Directive, the Wiekhorsts provided access to Carlock Homes for only eight days, which is not a reasonable amount of time. Consequently, the preponderance of the evidence shows that Carlock Homes has not violated Ariz. Rev. Stat. section 32-1154(A)(22).

Because Carlock Homes has violated Ariz. Rev. Stat. section 32-1154(A)(3), ROC has authority to discipline its license. Considering however, that Carlock Homes made diligent efforts to rectify the workmanship issues despite the Wiekhorsts’ failure to provide adequate access, it is appropriate to dismiss this matter.

RECOMMENDED ORDER

IT IS ORDERED that on the Citation in case number 2017-474 is dismissed.

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, September 20, 2017

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors