ALJDEC decisions subject to certification as final

2018A-05788-CHC-ROC · Registrar of Contractors · 2019-08-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 24, 2019, at 8:30 a.m. APPEARANCES: Bernadette Robinson (“Complainant”) appeared on her own behalf; Jim Higgins & Sons Construction LLC (“Respondent”) appeared through its qualifying party/member James Michael Higgins. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. According to the Arizona Registrar of Contractors’ (“the Registrar’s”) public website,[1] on or about February 18, 2009, the Registrar issued License No. ROC 252347 for Class B General Residential Contracting to Respondent. 2. On or about December 6, 2018, Complainant filed a complaint with the Registrar, alleging that Respondent had performed poor work on its repair of damages that resulted from a flood caused by a malfunctioning shutoff to the washing machine at her house at 2637 Old Black Canyon Hwy., Humboldt, Arizona 86329. According to the complaint, Complainant’s homeowner’s insurer, Foremost Insurance Company of Grand Rapids, Michigan (“Foremost”), had paid her $15,000.27 for the claim and Complainant had paid Respondent $10,000.00 for its work. 3. Complainant attached to her complaint a copy of Foremost’s approved scope of work with amounts for each line item. Foremost’s scope of work did not include Complainant’s name or the address of her home, Respondent’s name, address, or license number, an estimated date of completion, or the stage of construction at which payments would be due and did not apprise Complainant of her right to file a complaint with the Registrar for Respondent’s alleged violation of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(A) or provide the Registrar’s telephone number and website address. 4. The complaint was assigned to the Registrar’s Investigator Jim Dimond for investigation. Investigator Dimond sent a warning letter to Respondent because it did not appear that its contract with Complainant included all the elements required by A.R.S. § 32-1158.[2] 5. Investigator Dimond performed a jobsite inspection on January 18, 2019. On February 6, 2019, Investigator Dimond on behalf of the Registrar issued a directive that required Respondent to correct the ten items of the complaint for which Investigator Dimond had determined Respondent was responsible on or before February 23, 2019, at 5:00 p.m., in relevant part as follows: Complaint Item 3: Laundry room not textured and painted with wrong paint The respondent is to correct the condition in an appropriate manner.

Complaint Item 4: Kitchen cabinets- wood already splitting. Stain all over hinges. The respondent is to correct the trim at the left of the stove opening.

Complaint Item 7: Tile in master bath crooked, wall is wavy, holes in grout The respondent is to correct the tile surround in an appropriate manner.

Complaint Item 8: Toilet not secured down, crooked The respondent is to correct the condition in an appropriate manner.

Complaint Item 9: Trim in master bath not installed right, only replaced half The respondent is to correct the condition in an appropriate manner.

Complaint Item 10: Painted hinges and parts of door in master bath, linen closet door. The respondent is to correct the condition in an appropriate manner.

Complaint Item 11/12: Laundry room hinges painted and bought new for him to replace. He scraped paint off and paint around hinges. The respondent is to correct the condition in an appropriate manner.

Complaint Item 13/14: 11/21/18 @ 11 pm, water was flowing under house [because] they never tightened tub drain, now all insulation wet. The respondent is to correct the insulation [a] vapor barrier under the master tub in an appropriate manner.

Complaint Item 15/16: Kitchen window sill not painted properly, dishwasher leaks, tiles uneven kitchen window sill not painted properly. The respondent it to correct the texture and paint at the window sill in an appropriate manner. The respondent shall also inspect and confirm that the kitchen plumbing is properly connected and free of leaks.

Complaint Item 26: Unknown what was actually done under home to replace belly paper and insulation. The respondent is to correct the vapor barrier under the master bath and the kitchen in an appropriate manner. The insulation shall be inspected and compromised insulation shall be replaced.

The following item is an administrative violation of Arizona state contracting laws: Complaint Item 38: The respondent did not provide a written contract for this project and the project was in excess of $1000 in violation of ARS 32-1158. The respondent is to use proper written contracts on projects of $1000 or more in an appropriate manner. (See warning letter attached [)].[3]

6. After Complainant informed Investigator Dimond that Respondent had not complied with the directive, he forwarded the complaint to the Registrar’s Legal Department. On May 15, 2019, the Registrar issued a Citation against Respondent’s contractor’s license, charging cause to suspend or revoke the license under 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(A), and 32-1154(A)(22). 7. Respondent’s qualifying party/member, Jim Higgins, filed a timely written answer to the Citation on its behalf, denying any statutory violation. Mr. Higgins explained that during the time allowed for Respondent to comply with the directive, he arranged to meet with Complainant to perform repairs, but that a massive snowstorm in Humboldt forced the parties to reschedule the meeting to March 1, 2019. When Mr. Higgins met with Complainant on March 1, 2019, she informed him that she no longer wanted Respondent to perform any repairs. 8. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 9. A hearing was held on July 24, 2019. Complainant testified on her own behalf and presented the testimony of her daughter and son-in-law, Debra Snodgrass and William Snodgrass. Mr. Higgins testified on Respondent’s behalf, presented the testimony of his son and employee, Cody Higgins, and submitted one exhibit. Investigator Dimond also testified. Additional Hearing Evidence 10. Investigator Dimond testified that he performed a prehearing jobsite inspection on July 19, 2019. At that time, no additional work had been performed. 11. Mr. Higgins testified that Respondent was trying to complete the job in November 2019, just before Complainant filed the complaint, but that Mr. and Mrs. Snodgrass, who were living in the house, went to Mexico. Mr. Higgins testified that Mr. and Mrs. Snodgrass’ absence prevented Respondent from completing the project. 12. Ms. Snodgrass testified that she told a relative to give Respondent access to the house. 13. Complainant complained about Respondent having submitted a final bill to Foremost. Mr. Higgins explained that he submitted the bill at the insurance company’s adjuster’s request so that Foremost could pay Complainant for the rest of her loss and close the claim. 14. Respondent submitted a text that Mr. Higgins sent to Complainant on February 13, 2019, after the directive had been issued, requesting that she provide a date that would be convenient for Respondent to perform the repairs that the directive required. Complainant responded with a text, choosing February 21, 2019.[4] On February 21, 2019, Mr. Higgins texted that he would have to reschedule due to snow. Complainant responded that March 1, 2019 would be a good date.[5] 15. Mr. Higgins and his son, Cody, testified that they went to Complainant’s house and sat at the kitchen table to discuss repairs. It was a tense meeting. After Mr. Higgins said that he and Cody were there to perform repairs to comply with the directive, Complainant said that she not want Respondent to do any more work on the project. Although Mr. Higgins made efforts to reach a financial settlement with Complainant, his efforts were not fruitful. 16. Pursuant to A.A.C. R4-9-117, administrative notice is taken of Respondent’s prior disciplinary history on the Registrar’s public website. On this date, Respondent’s License No. ROC 252347 was current and in good standing. No prior discipline has been taken against the license and Complainant’s appears to be the only complaint pending against the license. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[6] 2. Complainant bears the burden of proof to establish cause to suspend or revoke Respondent’s license by a preponderance of the evidence.[7] Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.[8] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[9] 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.”[10] 4. Because Foremost’s scope of work does not include the jobsite address, Respondent’s address or license number, an estimated date of completion, or 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 evidence established grounds to suspend or revoke Respondent’s license under A.R.S. § 32-1154(A)(12),[11] specifically A.R.S. § 32-1158(A).[12] 5. Based on Investigator Dimond’s February 6, 2019 Directive and hearing testimony, Complainant established that Respondent’s construction of the ten items on the Directive potentially furnish grounds to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32- 1154(A)(3),[13] namely A.A.C. R4-9-108.[14] 6. 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. A property owner’s failure to provide reasonable access to allow a contractor to comply with a directive is an affirmative defense that the contractor bears the burden to establish. 7. Although Complainant agreed to provide access, a snowstorm prevented Respondent from performing repairs on the agreed upon date. Complainant implicitly agreed to extend the directive’s deadline, but she rescinded that agreement when Respondent came out to perform repairs. Although March 1, 2019, was technically beyond the directive’s February 23, 2019 deadline, under the circumstances, it would be unjust find cause to suspend or revoke Respondent’s license under A.R.S. § 32-1154(A)(22).[15] RECOMMENDED ORDER Based on the foregoing, IT IS ORDERED that on the effective date of the final order in this matter, which shall be at least forty (40) days from the date that the final order is issued, License No. ROC 252347 of Respondent Jim Higgins & Sons Construction LLC shall be suspended for a period of three (3) business days. IT IS FURTHER ORDERED that if, on or before the effective date of the final order, Respondent provides satisfactory written proof to the Registrar that it has corrected in a professional and workmanlike manner the ten items on the directive or that Complainant Bernadette Robinson has denied Respondent reasonable access to perform repairs, Respondent’s license shall not be suspended but, instead, the complaint in Case No. 2018- 05788 shall be dismissed. IT IS FURTHER ORDERED that on or before the effective date of the final order, Respondent shall provide acceptable written proof to the Registrar that Respondent has modified its form contracts to include all of A.R.S. § 32-1158(A)’s nine required terms, which form may incorporate the scope of work and contract amounts on the insurance company’s itemized list of approved repairs. If Respondent fails to provide such acceptable written proof on or before the effective date of the final order, Respondent’s contractor’s license shall be suspended until it provides proof that it has modified its form contracts to comply with A.R.S. § 32- 1158(A). 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 forty (40) days from the date of that certification. Done this day, August 12, 2019.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See A.A.C. R4-9-117 (“In any disciplinary proceeding conducted by the registrar, the licensee’s entire license file including the record of prior citations and decisions may be considered by the registrar in making a decision and order in the case.”). [2] See the Registrar’s electronic file at pdf pages 6-7. [3] The Registrar’s electronic file at pdf pages 8-10. [4] Because February 21, 2019 was only two days before the directive’s deadline on February 23, 2019, the record is not clear that Respondent would have had time to complete all the repairs on the directive by the deadline. If the Registrar accepts the Administrative Law Judge’s recommended order in this matter, Respondent should request and Complainant should allow reasonable access for the time necessary to complete all the repairs necessary to comply with the directive. [5] See Respondent’s Exhibit A at 11. [6] See A.R.S. § 32-1154(A). [7] 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). [8] See A.A.C. R2-19-119(B)(2). [9] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [10] Black’s Law Dictionary at page 1220 (8th ed. 1999). [11] 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.” [12] 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 after December 31, 2007 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. . . . [13] 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.” [14] 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.” [15] 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.” (Emphasis added.)

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