ALJDEC decisions subject to certification as final

2018A-04993-ROC · Registrar of Contractors · 2019-06-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 20, 2019 APPEARANCES: Complainant John Caligiuri appeared on his own behalf. Milton Carlson, Owner and Qualifying Party, appeared on behalf of Respondent Southwest Home Services Inc. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT Southwest Home Services Inc. (Respondent) is the holder of License No. 204614 issued by the Arizona Registrar of Contractors (Registrar). In the summer of 2017, Respondent contracted with Roger Berry to perform a roofing project at 15215 East Golden Eagle Boulevard, Fountain Hills, Arizona. The unsigned “proposal and invoice” purported to be the contract between Mr. Berry and Respondent included the following scope of work: Replace underlayment with Interwrap Titanium UDL 50 Existing area 40 squares – Replace damaged wood trim and ridge boards as needed. Entire roof area to be cleaned of debris and removal of original curled tarpaper or other damage Allow for new underlayment to sit flat with cap and overlap. Existing tile manufactured by ‘Monier’ Removal of debris included

Complainant John Caligiuri purchased the property at 15215 East Golden Eagle Boulevard, Fountain Hills, Arizona. After moving in, Complainant noticed leaking in the house with the first monsoon rains. Complainant contacted Respondent regarding the issues, but Respondent failed to respond to requests to inspect the roof and/or fix it. On or about October 22, 2019, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to the project.

The Registrar assigned the complaint to Investigator Steve Philpott. During the jobsite inspection, Investigator Philpott did not get on the roof, but did climb the ladder and inspect the roof from that position including taking photographs of the issues he observed. After the jobsite inspection, Investigator Philpott issued a written directive to Respondent that provided as follows: 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 December 28, 2018. You are hereby directed to remedy the following violations by the appropriate means:

Complaint Item 3: improperly sealed vents Investigator’s Observation: There is evidence of a current leak in the kitchen area. The roof vent shown in photo 14 of 16 is the approximate location of the leak in the home. Respondent shall identify the source of the leak and correct by appropriate means, including corollary damage.

Complaint Item 4: Exposed roof rig boards Investigator’s Observation: This complaint item is substantiated. According to the Tile Roofing Institute/WSRCA, Wrapping of nailed board is optional except with the use of mortar. It also specifies that this area at the ridge have “Weather blocking mortar or other approved materials” Respondent shall correct by appropriate means.

Complaint Item 5: Flashing in-correctly installed (nailed into roof), damaged,.-and missing Investigator’s Observation: This complaint item is substantiated. Weather blocking mortar or other approved materials is missing at the ridge. Bird stop is missing at eaves. Exposed underlayment is present. Additionally, There is evidence of a current leak in the kitchen area. The roof vent shown in photo 14 of 16 is the approximate location of the leak in the home. Respondent shall identify the source of the leak and correct by appropriate means, including corollary

Complaint Item 7: Roofing tiles not re-laid correctly ( off alignment) Investigator’s Observation: This complaint item is substantiated. The roofing tiles directly above the garage overhead door has an inconsistent reveal at the fascia. Respondent shall correct by appropriate means.

Complaint Item 10: Water leaks in dining room ceiling and wall Investigator’s Observation: There is evidence of a current leak in the kitchen area. The roof vent shown in photo 14 of 16 is the approximate location of the leak in the home. Respondent shall identify the source of the leak and correct by appropriate means, including corollary damage.

The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action.

All errors in original.

Following the issuance of the written directive, various issues prevented Respondent from accessing the jobsite and completing any repair work. Respondent was granted an extension to complete the work to February 12, 2019. After the deadline in expired, Investigator Philpott was notified no corrective work had been performed. The Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108; and A.R.S. § 32-1154(A)(22). Investigator Philpott testified that he did not get on the roof in accordance with the Registrar’s policies. Investigator Philpott stated that the Registrar’s standards did not include anything respecting bird stops or weather blockings. Investigator Philpott noted that A.A.C. R4-9- 108 requires contractors to comply with professional industry standards. Complainant testified that he purchased the home with a VA loan, which required a home inspection, but recommended that he obtain an independent roof inspection. Because he was stationed at Fort Bragg, North Carolina at the time he was purchasing the home, he requested that the owner obtain a roof inspection. Complainant was unaware that the individual who performed the roof inspection was actually Milton Carlson, Respondent’s Owner and Qualifying Party, who had been responsible for the installation of the roof. Complainant stated that he had not hired anyone else to perform any work on the roof since purchasing the home. Tim Broderick, Independent Consultant, also testified on behalf of Complainant. Mr. Broderick stated that he performed a roof inspection at the subject property at Complainant’s request to determine whether the roof was in compliance with industry standards. Based on his inspection, Mr. Broderick identified numerous issues with the roof. In so doing, Mr. Broderick relied on standards set forth and adopted by Tile Roofing Institute/Western States Roofing Contractors Association (TRI/WSRCA). Notably, Mr. Broderick found the roof did not have bird stops, which he called an “absolute requirement in Arizona” when installing “S tiles.” Mr. Broderick also stated that three courses of tiles from each side of the roof (top, bottom, and sides) should be nailed in place, but the roof did not have any nailed tiles. Mr. Broderick testified that there should be a three inch “head lap” for each course of tiles, but he observed many places that only had a two inch “head lap.” Mr. Broderick posited that the only way to correct the issues with the roof would be to replace the entire roof, which would cost an average of $18,000.00. Mr. Carlson testified that Respondent was not contracted by Mr. Berry to perform a top rate job on the roof, but only to replace the underlayment. Mr. Carlson stated that Respondent had been installing roofs for some time and knew how to do it properly, but that was not what Mr. Berry requested or contracted for. Mr. Carlson noted that Respondent installed a high quality underlayment to the roof and replaced the tiles as they had been. Mr. Carlson acknowledged that the tiles did not have a three inch “head lap” and asserted that had Respondent placed the tiles in that way, Respondent would have had to buy “500 more tiles” to finish the job properly. Mr. Carlson argued that the TRI/WSRCA specifications were not applicable to Arizona licensees and that the Registrar did not have standards addressing the alleged issues with the subject property. Mr. Carlson submitted an affidavit from Mr. Berry avowing that, in the summer of 2017, he contracted with Respondent “to replace the underlayment on the roof of [the subject property], and other roof-related tasks” but did not contract for the installation of weather blocking or bird stops. Mr. Berry also stated that he did not contract with Respondent or anyone else to replace the “frieze board” or “drip edge” on the property. Mr. Carlson asserted that the photos of the subject property show new frieze boards and drip edges that Respondent did not install, so another contractor had to have altered Respondent’s work prior to the investigator’s inspection. Mr. Carlson did not assert or provide evidence that Mr. Berry had signed a waiver or expressly agreed to have Respondent reinstall the roof in a manner inconsistent with industry standards. Administrative notice is taken of Respondent’s prior License record on June 10, 2019. Such prior License record reflects that Respondent’s License No. 204614 was first issued on February 18, 2005, and is active. Such prior License record also reflects that there were no other open or prior 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’s work was not in conformity with industry standards. While Mr. Carlson argued that Respondent’s contract was only for the replacement of the underlayment, that replacement required Respondent to completely remove the roof tiles and replace them after installation of the new underlayment. Thus, it was incumbent upon Respondent to replace the roof tiles in conformity with industry standards, including, but not limited to, a three inch “head lap,” bird stops, weather flashing, and proper nailing of the tiles. Respondent provided no evidence that Mr. Berry expressly agreed to a deviation from the industry standards. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.[1] 4. The evidence established that Respondent did not attempt to compete the corrective work following the Directive being issued. Therefore, Complainant established 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).[2] 5. A.R.S. § 32-1156.01 provides that “[a]fter a hearing pursuant to this article, an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee.” 6. Complainant established that the cost to repair Respondent’s work would be approximately $18,000.00 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. 204614 for a period of three days. It is further recommended that the Registrar require Respondent to pay to Complainant the sum of $18,000.00 as restitution pursuant to A.R.S. § 32- 1156.01. It is further recommended that if Respondent fails to pay the entire amount of the restitution 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 restitution. 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(D). 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, June 10, 2019.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] 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.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.” [2] 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.”

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