ALJDEC decisions subject to certification as final

2017A-5102-CHC-ROC · Registrar of Contractors · 2018-03-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ralph Merwin, Sr. and Diana Merwin,

COMPLAINANTS,

Vito Frederick Austin dba,

Vito's Construction,

License No. KB-2.229267-D,

RESPONDENT.

No. 2017A-5102-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: February 27, 2018, at 8:30 a.m.

APPEARANCES: Diana Merwin appeared on behalf of herself and her husband, Ralph Merwin, Sr. (“Complainants”); Vito Frederick Austin dba Vito’s Construction (“Respondent”) appeared on his own behalf.

ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

On or about February 15, 2007, the Arizona Registrar of Contractors (“the Registrar”) issued License No. KB-2.229267-D for dual residential and small commercial contracting to Respondent.

On or about October 6, 2017, Complainants filed four separate completed complaint forms with the Registrar against Respondent alleging various items of poor workmanship or abandonment in Respondent’s performance of its contracts to perform work at Complainants’ property at 810 W. Main St., Quartzsite, Arizona 85346.

Complainants attached to their complaints copies of Respondent’s contracts for the work. Some of the contracts did not include Respondent’s license number, an estimated date of completion, or provide for a down-payment and progress payments, although Complainants’ notes on the contracts indicated the multiple payments were made. None of the contracts included information about filing a complaint with the Registrar for violations of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A).

The Registrar assigned the complaint to its Investigator, Cliff Corlett, for investigation. Investigator Corlett performed a jobsite inspection on October 24, 2017, which both parties attended. Investigator Corlett’s jobsite inspection notes include the following general notes about the inspection:

Complainant (C) and son Chancy were on site along with some other, non-participant persons.

This started to be a difficult inspection as Mr. Austin and the Complainant/and son would constantly interrupt and gathering information was difficult. After a short time Quartzsite police arrived (called by Complainant) Mr. Austin was asked to wait in his vehicle and I conducted my inspection/interview with the C of the two metal building slabs and the “incomplete” electrical work in the onsite residence.

When I was finished with C, I then spoke with R about the concrete and the electrical work.

Short synopsis is that the concrete work has numerous deficiencies however since the owner took/accepted the slabs and erected the buildings on them (as an unlicensed entity) A.R.S. § 32-1155-C, 2 applies.

It appears that the R made an agreement with the owner to allow him to use his license (for $150.00/day) to do the work on the metal building erection and the remodeling of the onsite residence.

On November 7, 2017, Investigator Corlett issued a directive to Respondent to repair certain items on Complainants’ complaints on or before 5:00 p.m. on November 25, 2017, in relevant part as follows:

Complaint Item 1: Contracted electrical work on "residence" and has not completed it.

Investigator’s Observation: Respondent (R) contracted to do the rough wiring and the top out trim (plugs and switches) in the onsite residence being refurbished. R has stated that if given access and when the walls are ready (painted) he would return and install the trim. The Complainant (C) stated that he was not concerned about the paint and would allow the R to return and complete elwctrical trim out.

RESPONDENT SHOULD PROPERLY RETURN AND COMPLETE ALL CONTRACTED ELECTRICAL WORK. ALL WORK TO BE PERFORMED BY PROPERLY LICENSED CONTRACTORS OR THEIR BONIFIED EMPLOYEES.

Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.

Complaint Item 2: 40 x 60 concrete foundation for metal building. Poor Workmanship:

a. Foundation is breaking away from the slab.

b. Floor has wide cracks as well.

Investigator’s Observation: There are several issues with this concrete foundation and slab.

***The C's photos and the R's statements indicate that the R poured all the footings one day one and half of the slab. The R then completed the pour of the second half the next day. This would be an impropper installation of a "monolithic" slab where the footing and slab are poured at the same time.

***The slab is "wavy" beyond the acceptable standards of the Workmanship Standards for Licensed Contractors (WSLC). The WSLC states that floors should not vary from flat more that 1/4-inch over a 10-foot area provided the varriation is gradual. Deviations, dips, or sags over short distances and easily visible to the eye may be considered unaceptable. The WSLC states that the contractor should make the necessary corrections.

***Cracks*** Cracking of "garage" slabs. The WSLC states that cracks in excess of 3/32-inches width or 1/8-inch verticle displacement or compound cracks in excess of 1/16-inch are unaceptable.

Both concrete slabs have numerous compound cracks and should be replaced.

### SEE NOTE BELOW###

Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.

Complaint Item 3: 30 x 40 concrete floor, Poor workmanship:

a. Excessive cracking.

b. Wavy floor.

c. Poor finish work.

Investigator’s Observation: There are several issues with this concrete slab.

*** Cracks*** Cracking of "garage" slabs. Cracks in excess of 3/32-inches width or 1/8-inch verticle displacement or compound cracks in excess of 1/16-inch and unaceptable.

Both concrete slabs have numerous compound cracks and should be replaced.

***Poor finish work*** The WSLC states that "improper, inadequate, unsightly finish work is unaceptable. The WSLC states that the contractor should make the necessary repairs.

###SEE NOTE BELOW###

Governing Rule: A.R.S. §32-1154-A. (3)(namely A.A.C. R4-9-108 Workmanship Standards for Licensed Contractors.

Complaint Item 4: Contract signed 11/10/16 for Vito's to run electric from box to each building. Work has never been completed. Owner never received copy of contract.

Investigator’s Observation: This investigator believes that this electrical work has been completed but I am not sure that it has been inspected and approved.

RESPONDENT SHOULD PROVIDE WRITTEN PROOF THAT THIS ELECTRICAL WORK HAS BEEN INSPECTED AND APPROVED.

*****A.R.S. § 21-1158-B (Minimum Elements of a Contract) requires that at the time of the signing of the contract that the owner be given a legible copy of all documents.

RESPONDENT SHOULD PROPERLY PROVIDE THE OWNER WITH A LEGIBLE COPY OF THE ELECTRICAL CONTRACT DESCRIBED ABOVE.

Governing Rule: A.R.S. §32-1154-A. (2). A.R.S. §32-1158-B. Minimum Elements of a Contract.

Complaint Item 5: Aiding and Abetting an unlicensed contractor(s)

Investigator’s Observation: The Complainant/owner of the property located at 810 W. Main St. Quartzsite, AZ. stated at the onsite inspection that the agreement with Vito Fredrick Austin DBA: Vito’s Construction was always for Vito’s to install the building slabs and then the owners would (themselves) erect/install the sectional metal buildings (Quonset style building).

The Complainant/owner stated that the agreement was for Mr. Austin to be compensated $150.00 per day “for every workable day after concrete is done for Rector shop”. This compensation was to be for the use of Mr. Austin’s license while the Complainant/owner did the metal building erection and completed the insulation and drywall inside the residence.

RESPONDENT APPEARS TO BE IN VIOLATION OF A.R.S. § 32-1154-A, (9). Aiding & Abetting.

Governing Rule: A.R.S. § 32-1154-A, (9). Aiding & Abetting.

###NOTE###

Pursuant to A.R.S. § 32-1155-C. “The Registrar shall not issue a citation for failure to perform work in a professional and workmanlike manner or in accordance with any applicable building codes and professional industry standards if either:

1. The contractor is not provided an opportunity to inspect the work within 15-days after receiving the notice from the Registrar.

2. The contractors work has been subject to neglect, modifications and or abnormal use.”

In this case where the property owner has taken these concrete slabs and erected metal buildings upon them himself, he has accepted these slabs as acceptable and the term “modification” applies.

**** The Registrar is barred by statute from issuing a citation against the Respondent in regards to all the concrete issues.*****

Please understand that nothing in this directive is intended to prevent you from seeking relief in another forum.

After Complainant informed Investigator Corlett that Respondent had not complied with the November 7, 2017 directive, the complaint was referred to the Registrar’s Legal Department. On December 5, 2017, the Registrar issued a Citation against Respondent’s contractor’s license, charging cause to revoke or suspend the license under A.R.S. § 32-1154(A)(1), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, A.R.S. § 32-1154(A)(9), A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158(B), and A.R.S. § 32-1154(A)(22).

Respondent filed a timely written answer to the Citation, stating that he never abandoned the job because Complainants had to go to Colorado and never contacted him about unfinished work on their return, he never knowingly performed work that did not comply with the Registrar’s workmanship standards, that he did not aid or abet an unlicensed contractor because he hired Nicholas Hawkins, a licensed electrical contractor, to perform the electrical work, that contract addendums provided many of the terms that A.R.S. § 32-1158(B) required, and that because Complainants had called the police twice for trespass when he attempted to inspect the work, including at Investigator Corlett’s jobsite inspection, he did not feel that he could perform any corrective work to comply with the directive.

An evidentiary hearing was held on February 27, 2018. Complainant Mrs. Merwin testified, presented the testimony of her son, Chancey Merwin, and daughter-in-law, LaDina Merwin, and submitted four exhibits. Respondent testified and submitted ten exhibits. Investigator Corlett also testified telephonically.

Hearing Evidence

The project involved two or three slabs that Respondent contracted to pour on Complainants’ property on which they would erect commercial steel buildings. A previously constructed small house also is located on the property.

Investigator Corlett testified consistently with his jobsite inspection notes and the April 5, 2017 directive. Investigator Corlett testified that Respondent had said at the jobsite inspection that he had performed all the work that the contracts required but that he would voluntarily complete the plug-in switches in the house. Investigator Corlett testified that he did not know whether Complainants had allowed reasonable access for Respondent to perform this work.

With respect to the alleged abandonment, Investigator Corlett testified that the scheduling of Respondent’s work on the project was complicated by the fact that Complainants were seasonal residents. In addition, the parties were embroiled in a payment dispute and the parties exhibited mutual hostility towards each other.

Complainants did not testify or offer any evidence to establish that Respondent had failed to complete any electrical or other work on the project that was required by any of the multiple contracts between the parties.

Complainants did not dispute Investigator Corlett’s jobsite inspection notes and hearing testimony that they had erected steel buildings on the slabs that Respondent had poured.

With respect to the charge that Respondent had aided and abetted an unlicensed contractor in violation of A.R.S. § 32-1154(A)(9), Investigator Corlett pointed to an addendum to the parties’ contract signed by Mrs. Merwin and Respondent dated May 4, 2016, that provided in relevant part as follows:

*$150 per day for every workable day worked on building(s) per contract.

*Before $150 per day begins, a schedule needs to be written up and agreed upon by both contractor and owner, for all days that will be worked.

Respondent testified that Complainants’ mostly commercial property had been vacant for many years and required substantial repairs to be useable. Complainants initially planned to perform the repairs themselves but La Paz County required them to have a licensed contractor perform the work to permit the work. The former owner of the property referred Complainants to him.

Respondent testified that Chancey Merwin, LaDina Merwin, and Complainants performed work on the project and that he issued the March 4, 2016 addendum to memorialize the parties’ agreement. Respondent testified that the agreement was that Complainants would be Respondent’s unpaid employees. Respondent testified that he provided W-4 forms to Complainants and that he was onsite every day for at least a few hours to supervise and inspect their work, even though he lives in Yarnell and was repairing his house after it was damaged in the Yarnell fire.

Respondent testified that he wanted to help Complainants. He was not aware of any problems until he learned that Complainants had gone behind his back to hire drywall and insulation subcontractors from whom he had obtained bids.

Respondent testified that the only compensation that he received under the March 4, 2016 addendum was that Complainants transferred title of a 2008 Yamaha ATV Rhino.

Pursuant to A.A.C. R4-9-117, administrative notice is taken of Respondent’s prior record with the Registrar as shown on the Registrar’s public website. On this date, Respondent’s license was current and in good standing. The website does not show that the Registrar has ever disciplined or administratively suspended Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainants bear the burden of proof to establish cause to suspend or revoke Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and 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.” A preponderance of the evidence is “[t]he 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.”

Complainants did not establish that Respondent failed to complete any electrical or other work required by any of the parties’ contracts or addendums. Therefore, Complainants did not establish cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(1).

A.R.S. § 32-1155(C)(2) provides as follows:

The registrar shall not issue a citation for failure to perform work in a professional and workmanlike manner or in accordance with any applicable building codes and professional industry standards if either:

. . . .

2. The contractor's work has been subject to neglect, modification or abnormal use.

Complainants did not dispute that after Respondent poured the slabs, they modified that slabs by erecting metal buildings on them. Even though there is evidence that the slabs did not meet the Registrar’s workmanship standards, A.R.S. § 32-1155(C)(2) bars the Registrar from issuing a citation or suspending or revoking Respondent’s license as discipline for his poor workmanship on the slabs. Therefore, Complainants did not establish cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.

“‘Knowingly’ imports only a knowledge that the facts exist which bring the act or omission within the provisions of the statute using such word. It does not require any knowledge of the unlawfulness of the act or omission.” “‘Knowingly’ means, with respect conduct or circumstance described by a statute defining an offense, that a person is aware or believes that his or her conduct is of that nature or that the circumstance exists. It does not require any knowledge of the unlawfulness of the act or omission.” It has long been the law in Arizona and elsewhere, however, that “’[n]otice of facts and circumstances which would put a man of ordinary prudence and intelligence on inquiry is . . . equivalent to knowledge of all the facts a reasonably diligent inquiry would disclose.’”

Respondent acknowledged that he allowed Complainants to use his license to work on the project to help them to comply La Paz County’s permitting requirements. Respondent argued that his license should not be suspended or revoked as a result of letting Complainants use his license because he supervised Complainants and gave them W-4 forms. Respondent did not present any evidence that he complied with statutes or rules governing social security, workers’ compensation, or unemployment insurance with respect to Complainants’ and their son’s and daughter-in-law’s purported employment, as required by the Registrar’s statutes. The sole reason for the March 4, 2016 addendum was to evade La Paz County’s permitting requirement that a licensed contractor perform and be responsible for the substantial repairs that Complainants’ property required. Therefore, Complainants established cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(9).

Respondent acknowledged that some of his contracts with Complainants did not include the nine elements required by A.R.S. § 32-1158(B). The statute does not allow a contractor to evade its requirements by entering into serial contracts with a property owner for different scopes of work. Therefore, Complainants established cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158(B).

Construction is not a perfect art and, generally, contractors must be afforded an opportunity to correct their workmanship before their licenses may be suspended or revoked. As noted above, Complainants did not establish that Respondent committed any workmanship violations by abandoning any of its contracts or violating the Registrar’s workmanship standards in his performance of any of the contracts. To the extent that the November 7, 2017 directive may have required Respondent to complete the electrical plug-in switches for the house, Respondent established that Complainants were likely to call the police a third time and report him for trespass if he attempted to perform this work, which furnishes legal justification for Respondent not to perform this work. Therefore, Complainants did not establish cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the final order in this matter, License No. KB-2.229267-D of Respondent Vito Frederick Austin dba Vito's Construction shall be suspended for a period of one (1) business day.

It is further recommended that within thirty (30) days off the effective date of the order, Respondent shall provide acceptable written proof to the Registrar that Respondent has modified his form contracts to include all of A.R.S. § 32-1158(B)’s nine required terms. If Respondent fails to provide such acceptable written proof, Respondent’s contractor’s license shall be suspended until he does so.

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 five days from the date of that certification.

Done this day, March 9, 2018.

/s/ Diane Mihalsky

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors