ALJDEC decisions subject to certification as final

2018A-04369-CHC-ROC · Registrar of Contractors · 2019-09-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 01, 2019 at 8:30 AM and August 26, 2019 at 9:00 AM. APPEARANCES: Nancy Lee Lisherness (“Complainant”) appeared on her own behalf. Barbara Dodds appeared on behalf of Wonders of Wood LLC (“Respondent”) with Steven Lawton, Jeffery Everett, Graeme Dodds, and Andrew Dodds as witnesses. Gene Zilliox observed. ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Arizona Registrar of Contractors (“Registrar”). FINDINGS OF FACT Background and Procedure 1. Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s license file as shown on the Registrar’s public website as of August 26, 2019. On April 17, 2014, the Registrar issued License No. 290964 for Specialty Dual CR-60 Finish Carpentry contracting to Respondent.[1] License No. 203571 is current and renewed through April 30, 2020. Graeme Mark Dodds is listed as the Qualifying Party/Member on the license.[2] Respondent’s address of record on the license is 6902 N 185th Ave., Waddell, AZ 85355-9622.[3] There is one open complaint against the license, which is presumed to be Complainant’s.[4] No other disciplinary action is listed on the license. 2. On July 03, 2018, Complainant and Respondent entered into a contract agreement whereby Respondent agreed to perform a residential cabinetry project for Complainant at her residence located at 6505 E. Chaparral Rd., Scottsdale, AZ 85253. Specifically, Respondent agreed to refinish two kitchen doors and all of Complainant’s kitchen cabinets for the sum total of $4,240.00.[5] 3. On July 11, 2018, Complainant issued a $2,020.00 down payment to Respondent with her Visa credit card.[6] 4. The project commenced on August 20, 2018. 5. On August 26, 2018, Complainant’s Visa credit card was charged for a final payment of $2,220.00 by Respondent.[7] 6. On September 17, 2018, the Registrar received a complaint from Complainant alleging poor workmanship and abandonment of contract.[8] 7. On October 19, 2018, the Registrar received a response to the complaint from Respondent, which included a liability waiver signed by Complainant and several photographs of the project.[9] 8. On or about October 08, 2018, the Registrar issued a Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by an investigator on October 22, 2018, at 12:30 p.m.[10] 9. On October 22, 2018, Registrar investigator Steven Lawton (“Investigator Lawton”) conducted a review of the contract executed between the parties. Investigator Lawton also inspected the work that had been done on the project to date and took thirty-one photographs.[11] When he was finished, Investigator Lawton drafted Jobsite Inspection Notes.[12] 10. On November 16, 2018, Investigator Lawton issued a Minimum Elements of a Contract Warning Letter to Respondent for a suspected violation of Ariz. Rev. Stat. § 32-1158 regarding Respondent’s contract with Complainant.[13] Respondent was further advised that failure to comply with Ariz. Rev. Stat. § 32-1158(A) was a violation of Ariz. Rev. Stat. § 32-1154(A)(12), which could result in discipline against Respondent’s license including suspension or revocation.[14] 11. On November 16, 2018, Investigator Lawton also issued a Directive from the Registrar to Respondent because he substantiated Complainant’s allegation that the work Respondent had done on their project failed to meet minimum workmanship standards.[15] Respondent was put on notice that it had until December 05, 2018, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1154(E).[16] 12. On March 11, 2019, the Registrar issued a Compliance Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by Investigator Lawton on March 27, 2019, at 10:30 a.m.[17] 13. On March 27, 2019, Investigator Lawton inspected the project and took fifteen photographs.[18] On April 04, 2019, Investigator Lawton drafted Compliance Inspection Notes.[19] 14. On April 04, 2019, Investigator Lawton referred the matter to the Registrar’s legal department with a Citation Recommendation for Ariz. Admin. Code R4-9-108, Ariz. Rev. Stat. §§ 32-1154(A)(3), 32- 1154(A)(12); 32-1158, and 32-1154(A)(22). 15. That same day the Registrar issued a Citation and Complaint to Respondent under Ariz. Rev. Stat. § 32-1155(A).[20] Respondent was given until April19, 2019, to respond with its Answer.[21] 16. On May 06, 2019, the Registrar referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on July 01, 2019. Per the Notice of Hearing the issue to be determined is whether the Registrar has cause to discipline Respondent’s license based on the following charges: Charge 1: A violation of Rule 4-9-108, titled “Minimum Construction Standards,” in the Arizona Administrative Code, and thereby of A.R.S. § 32-1154(A)(3). Charge 2: A violation of A.R.S. § 32-1154(A)(12) - A.R.S. § 32-1158 (“Failure in any material respect to comply with this chapter; Namely, A.R.S. § 32-1158.”) Charge 3: A violation of A.R.S. § 32-1154(A)(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.”). Hearing Evidence 17. Complainant appeared on her own behalf with Steven Lawton as a witness, and submitted five exhibits. Barbara Dodds appeared on behalf of Respondent with Jeffery Everett as a lay witness, Andrew Dodds and Graeme Dodds as expert witnesses, and submitted 11 exhibits. Gene Zilliox observed. 18. The July 03, 2018, contract between the parties stated, in pertinent part, that 56 cabinet pieces and 2 doors, front and back, were to be “touch[ed]-up” with “satin finish.” Complainant was to issue a $2,020.00 down payment to Respondent, and then two additional installments of $1,110.00 each. No further details were provided. 19. Prior to the start of the project Complainant contacted Respondent to cancel based on negative rumors she had heard about the company. Ultimately, after learning that Respondent would not return her nonrefundable deposit, Complainant rescinded her cancelation and agreed to move forward with the project. 20. On August 20, 2018, Respondent began work on Complainant’s kitchen door and cabinetry refinishing project. 21. When Respondent arrived to pick up Complainant’s drawer boxes and cabinet doors, Respondent found that Complainant had already removed the drawer boxes and stacked them on her kitchen floor. Respondent removed the cabinet doors and stacked them, along with Complainant’s drawer boxes, in the bed of a pickup truck for transport. Complainant was less than pleased with Respondent’s chosen method of handling her property. 22. Complainant confirmed to Respondent that she wanted a satin finish on her cabinetry, and declined to purchase new hinges when Respondent opined that some of the door hinges were in need of replacement. 23. Over the course of the project Complainant issued a number of demands to Respondent, including not permitting trades to wear shoes in her home; forbidding Respondent to use drop cloths and instead requiring furniture blankets to be used; refusing to let Respondent use spray finish on the doors and instead requiring Respondent to use a paint brush and roller; and requiring Respondent to use extra layers of plastic film to cover Complainant’s countertops and personal items. 24. Due to the number and delivery of Complainant’s demands, and Complainant’s dissatisfaction with Respondents responses, the parties’ professional relationship became contentious. 25. The level of contentious behavior Complainant demonstrated towards Respondent increased on a nearly daily basis. Things culminated when Complainant denigrated the education of a tradesman in comparison to her own, after the parties had a minor disagreement. Complainant escalated things further by threatening to write multiple negative reviews about Respondent online. 26. The parties’ professional relationship further deteriorated after a number of verbal agreements regarding project add-ons and spec modifications were made, changed, and then changed again without any formal Change Orders ever being issued.[22] 27. On August 29, 2018, once Respondent completed the project, Complainant signed and dated the following statement: “Graeme Dodds, Wonders of Wood, LLC was contracted to perform a touch up coating to my existing cabinetry. I acknowledge that such work was completed but that I have requested the performance of work outside the scope of the contracted services I have paid for. I understand that such work, the installation of 3 cabinet door handles is being performed as a courtesy and is not done in a manner intended to create any type of contractual obligation, warranty, etc. I understand as such, I assume the risk and liability for any potential damage from such work requested.”[23] [sic] 28. On March 27, 2019, Investigator Lawton conducted a post-Directive Compliance Inspection. Investigator Lawton reviewed work performed on the two complaint items that he had previously substantiated. 29. Ultimately, Investigator Lawton determined that Complaint Item 4 had been satisfactorily remediated.[24] Regarding Complaint Item 2, however, Investigator Lawton determined that the interior side of the exterior door had a poor finish. 30. By that time, no financial settlement or subcontracting agreement between the parties had been provided to the Registrar regarding the outstanding dispute of Complainant’s exterior door. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before the Office of Administrative Hearings pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq. 2. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.[25] 3. The Registrar may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.[26] 4. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[27] Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.[28] 5. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[29] 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.”[30] 6. Ariz. Admin. Code 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.” 7. Ariz. Rev. Stat. § 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.” 8. Ariz. Admin. Stat. § 32-1154(A)(12) provides that a holder of a license may not fail in any material respect to comply with the chapter. 9. Ariz. Rev. Stat. § 32-1154(A)(22) provides, in pertinent part, that “[a] holder of a license may not fail to take appropriate corrective action to comply with this chapter or 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. The Registrar has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.” 10. Ariz. Rev. Stat. § 32-1158(A) holds that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information: (1) The name of the contractor and the contractor's business address and license number; (2) The name and mailing address of the owner and the jobsite address or legal description; (3) The date the parties entered into the contract; (4) The estimated date of completion of all work to be performed under the contract; (5) A description of the work to be performed under the contract. (6) The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes; (7) The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner; (8) The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract; and (9) That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative. This paragraph does not apply to a person who is subject to and complies with section 12-1365. 11. Here, the material facts are not in dispute. 12. It is undisputed that Complainant contracted with Respondent for kitchen cabinetry and door refinishing, and that the contract in question did not contain all nine required elements as outlined in Ariz. Rev. Stat. §§ 32-1154(A)(12) and 32-1158(A). It is also undisputed that Complainant tendered the full contract price to Respondent. It is undisputed that one portion of the work Respondent completed on Complainant’s project fell below the Registrar’s minimum workmanship standards in violation of Ariz. Admin. Code R4-9-108 and Ariz. Rev. Stat. § 32-1154(A)(3). It is also undisputed that that the Registrar issued a Directive to Respondent on November 16, 2018, and required Respondent’s full compliance by December 05, 2018. The record reflects that Respondent did not fully comply. It is further undisputed that the Registrar performed a compliance inspection on March 27, 2019, whereby Investigator Lawson determined that Respondent fully remediated one of two complaint items, but did not fully remediate the other one, in violation of Ariz. Rev. Stat. § 32- 1154(A)(22). 13. Therefore, the only outstanding issue to be addressed is whether Respondent raised a sufficient justification or excuse at hearing for failing to completely finish Complainant’s project, per contract, by March 27, 2019. This is an affirmative defense that Respondent bears the burden to establish. At hearing, Respondent argued that it had fully remediated both complaint items outlined in the Registrar’s Directive, and further argued that Complainant’s dissatisfaction with its work was unfounded and par for the course of their contentious relationship. No evidence in mitigation was offered, however, to overcome or refute Investigator Lawton’s determination that Respondent had not fully repaired the outstanding issue(s) with the interior side of Complainant’s exterior door. Thus, Respondent did not sustain its burden. 14. Because Complainant established by a preponderance of the evidence that Respondent did not fully perform the scope of work included in their contract agreement, Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license under Ariz. Rev. Stat. § 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 Respondent Wonders of Wood LLC, ROC License No. 290964, shall be suspended for one (1) business day.[31] 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 09, 2019.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See https://roc.az.gov/contractor-search?Id=a0Yt000000ACMhVEAX. [2] Id. [3] Id. [4] Id. [5] See Registrar electronic file at page 135. [6] See Registrar electronic file at page 140. [7] See Registrar electronic file at page 139. [8] See Registrar electronic file at pages 124-125. [9] See Registrar electronic file at pages 141-158. [10] See Registrar electronic file at pages 29-31. [11] See Registrar electronic file at pages 57-87. [12] See Registrar electronic file at pages 26-28 [13] See Registrar electronic file at page 24. [14] Id. [15] See Registrar electronic file at pages 21-23. [16] Id. [17] See Registrar electronic file at pages 19-20. [18] See Registrar electronic file at pages 42-56. [19] See Registrar electronic file at pages 17-18. [20] See Registrar electronic file at pages 6-11. [21] Id. Respondent’s Answer is not a part of the Registrar’s electronic file, nor was it provided by either party as evidence. [22] Like the parties’ verbal agreements that Respondent would build four new drawer boxes for Respondent, and that Complainant agreed Respondent would not have to refinish the exterior side of Complainant’s exterior door. [23] See Respondent Exhibit 2. All errors in original. [24] See Registrar electronic file at pages 17-18. [25] See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). [26] See Ariz. Rev. Stat. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990). [27] Ariz. Rev. Stat. § 41-1092.07(G)(2); Ariz. Admin. Code R2-19- 119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [28] See Ariz. Admin. Code R2-19-119(B)(2). [29] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [30] Black’s Law Dictionary at page 1220 (8th ed. 1999). [31] No civil penalty shall be levied against Respondent pursuant to Ariz. Rev. Stat. § 32-1154(E).

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826