ALJDEC decisions subject to certification as final

2018A-04483-ROC · Registrar of Contractors · 2019-03-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 21, 2019, at 1:00 p.m. APPEARANCES: Annette M. Simmons (“Complainant”) appeared on her own behalf; Arizona Interiors and Millwork Inc. (“Respondent”) appeared through Jay Pendergast, its officer/qualifying party. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

FINDINGS OF FACT 1. According to the Registrar of Contractors’ (“the Registrar’s”) public website, on or about July 26, 1999, the Registrar issued License No. ROC 147413, Class CR-60 for Specialty Dual Finish Carpentry to Respondent. 2. On or about September 24, 2018, Complainant filed a complaint with the Registrar against Respondent, alleging that it had performed poor work in a substantial remodel of the kitchen and bathrooms of her house at 2322 S. Goldmine Mountain Dr., San Tan Valley, Arizona 85143. According to the complaint, Complainant had paid Respondent $17,229.68 of the $14,499.46 and $7,911.68 contract amounts. 3. Complainant attached to her complaint the Agreement/Contract that Respondent had prepared for the project. The Agreement/Contract was on Respondent’s letterhead with the name, “Arizona Interiors and Millwork, Inc.,” but did not include Respondent’s license number, an estimated date of completion, notice of the property owner’s right to file a written complaint with the Registrar for an alleged violation of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(B), or the Registrar’s telephone number and website address. 4. The Registrar assigned the complaint to its Investigator John Smith for investigation. On October 18, 2018, Investigator Smith performed a jobsite inspection, which both parties attended. On October 16, 2018, Investigator Smith on behalf of the Registrar issued a Directive that required Respondent to correct eight items of complaint on or before November 9, 2018, at 5:00 p.m., in relevant part as follows: Complaint ltem 1A: “Non-matching stain of all..., drawer fronts, cabinet doors, ...in kitchen, both bathrooms, and island." The respondent acknowledged he is planning on replacing all doors, drawer fronts, and island panels due to the incorrect stain color. The stain on the light rail molding is considered to be within industry standard. Complaint Item 2: "Smooth close draws [sic] and doors inconsistent and unacceptable in kit, baths, island.' The respondent is to ensure all cabinet doors and drawers operate properly. Complaint ltem 3: "Misalignment of cabinet doors in kitchen and bathrooms." Complaint Item 4: "Microwave unable to open all the way due to inadequate sizing of cabinet box." The respondent agreed to correct this by bringing the microwave forward one inch. Complaint Item 5: "Some hardware on doors & drawers not level in kitchen and bath." Complaint Item 11: "Multiple places where stain is missing." This was described to be visible unstained wood at miters and ends of trim pieces, and unfilled nail holes. Complaint Item 12: "Island cabinet box baseboard doesn't fit properly." This was described to be open and loose miters in the toe kick material around the kitchen island and kitchen base cabinets. Complaint Item 15: "The pull our shelves/drawers that are inside the kitchen island aren’t functioning properly. They are too hard to pull out."

5. On November 20, 2018, Investigator Smith performed a compliance jobsite inspection and determined that Respondent had not attempted to correct any of the items on the directive. Investigator Smith referred the complaint to the Registrar’s Legal Department. 6. On November 23, 2018, the Registrar issued a Citation that charged cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(2), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158, and A.R.S. § 32- 1154(A)(14).[1] 7. Respondent filed a timely written answer to the Citation, denying that any cause existed to suspend or revoke its license because it had apologized to Complainant and intended to complete repairs. Respondent alleged that it had ordered and paid for replacement doors, but that Complainant refused to allow the doors to be installed. 8. The Registrar referred Complainant’s complaint to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on February 21, 2019. Complainant testified and submitted four exhibits. Respondent’s officer/qualifying party Jay Pendergast testified. Investigator Smith also testified. 9. Investigator Smith testified consistently with his directive and compliance jobsite inspection notes. Investigator Smith testified that, shortly after he issued the directive on October 16, 2018, Mr. Pendergast stated that he was waiting for a progress payment to complete the job. Investigator Smith testified that he told Mr. Pendergast that, regardless of payment issues, Respondent needed to comply with the directive within the time allowed or risk having its license suspended or revoked. 10. Investigator Smith testified that on November 15, 2018, six days after the November 9, 2018 deadline on the October 16, 2018 directive, Mr. Pendergast contacted Investigator Smith to say that Respondent could not perform all the repairs that the directive required because had ordered but had not yet received the doors to complete the repairs. 11. Investigator Smith testified that he performed a prehearing jobsite inspection on February 20, 2017, and that no repairs had been attempted. 12. Complainant testified that if Respondent had made any effort, she would have allowed it additional time to perform repairs. However, Respondent had not contacted her at any time between the date that the directive was issued and the date of the hearing. 13. Mr. Pendergast testified that he did not think the repairs were urgent because they all concerned cosmetic issues. He did not recall whether he had contacted Complainant, but recalled contacting Investigator Smith near the deadline on the directive. Mr. Pendergast testified that the doors are in and that he needed only two weeks to finish the job. 14. Pursuant to A.A.C. R4-9-117, administrative notice is taken of Respondent’s prior disciplinary history as shown on the Registrar’s public website on this date. Respondent’s license was current and in good standing. The record does not show any prior discipline against the license. Respondent’s good record is considered as a factor in mitigation of the recommended penalty. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[2] 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s license by a preponderance of the evidence.[3] Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.[4] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] 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.”[6] 4. Complainant did not point out any departure by Respondent from plans, specifications, or code. Therefore, she failed to establish cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32- 1154(A)(2).[7] 5. The Registrar requires that if a contractor performs contracting work, it must perform the work to comply with the Registrar’s workmanship standards, as required by A.A.C. R4-9-108 and A.R.S. § 32-1154(A)(3). Although Complainant’s alleged failure to pay Respondent the full contract amount is not relevant to her workmanship complaint, if Complainant later makes a claim to the Registrar’s Residential Contractors’ Recovery Fund under A.R.S. § 32-1132(G) to recover the damages caused by Respondent’s poor workmanship, the Registrar will deduct any amount that Complainant owes under the contract from any damages that Complainant would otherwise be entitled to recover.[8] 6. A contractor does not have unlimited time to perform repairs on or to complete a project, especially if he fails to communicate his intentions to the property owner. Although a violation of A.R.S. § 32- 1154(A)(22)[9] was not charged in this matter, the deadline set forth on the Registrar’s directive is considered a reasonable time to comply with the directive; the burden then shifts to the contractor to contact the property owner and the Registrar’s Investigator assigned to the case before the directive’s deadline to obtain an extension if additional time is needed. Because Respondent failed to contact Complainant at any time and did not contact Investigator Smith until six days after the directive’s deadline, Complainant established cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(3),[10] namely, A.A.C. R4-9-108.[11] 7. The record in this matter establishes that Respondent’s Agreement/Contract with Complainant did not contain all the terms required by A.R.S. § 32-1158(A) because it did not include Respondent’s license number, an estimated date of completion, advice to the property owner of her right to file a complaint with the Registrar for an alleged violation of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(B), or the Registrar’s website address and telephone number. Cause therefore exists to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32- 1154(A)(12),[12] namely A.R.S. § 32-1158(A).[13] 8. Complainant did not point to any document that Respondent used in its business, including the Agreement/Contract, which did not show the name on its contractor’s license, Arizona Interiors and Millwork, Inc. Therefore, Complainant did not establish cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(14).[14] RECOMMENDED ORDER Based on the foregoing, it is ordered that on the effective date of the final order in this matter, as a result of Complainant Annette M. Simmons’ complaint in Case No. 2018-04483, Respondent Arizona Interiors and Millwork Inc.’s License No. ROC 147413 shall be suspended for three business days. It is further recommended that on or before thirty calendar days after the effective date of the order, Respondent shall provide satisfactory written proof to the Registrar that it has revised its proposal form and/or contract form to include all of the elements required by A.R.S. § 32-1158(A). If Respondent fails to timely provide such written proof, its license shall be suspended until it provides such proof. 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 6, 2019. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] Through an oversight, the Registrar did not cite a violation of A.R.S. § 32-1154(A)(22), which 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.” [2] See A.R.S. § 32-1154(A). [3] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] See A.A.C. R2-19-119(B)(2). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] Black’s Law Dictionary at page 1220 (8th ed. 1999). [7] A.R.S. § 32-1154(A)(2) includes among the grounds to suspend or revoke a contractor’s license, “[d]eparture from or disregard of plans or specifications or any building codes of any state or any political subdivision of the state in any material respect which 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.” [8] See Ramsey v. Arizona Registrar of Contractors, 241 Ariz. 102, 106, 384 P.3d 316, 320 (App. 2016) (“Actual damages” are the reasonable cost of repairing the contractor’s defective work and completing the project, minus any portion of the contract price still unpaid to the original contractor). [9] A.R.S. § 32-1154(A)(22) includes among the grounds to suspend or revoke 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.” [10] A.R.S. § 32-1154(A)(3) includes among the grounds to suspend or revoke a contractor’s license, “[v]iolation of any rule adopted by the registrar.”

[11] 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.” [12] A.R.S. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” [13] A.R.S. § 32-1158(A) provides 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 must be in writing and must include the following minimum terms: 1. The name of the contractor and the contractor’s business address and the 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. 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 ten point bold type. . . . [14] A.R.S. § 32-1154(A)(14) includes among the grounds to suspend or revoke a contractor’s license, “[a]cting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth upon the license.”

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