ALJDEC decisions subject to certification as final

2018A-05948-ROC · Registrar of Contractors · 2019-10-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 7, 2019 and October 2, 2019 APPEARANCES: John Dillingham, attorney, appeared behalf of Ann Marie Scott (“Complainant”). Ernest Bustamante, attorney, appeared on behalf of A and W Remodeling, LLC (“Respondent”). ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera _____________________________________________________________________ FINDINGS OF FACT 1. On October 2, 2005, the ROC issued License No. 211961 for Specialty Dual CR-61 Carpentry, Remodeling, and Repairs to A and W Remodeling, LLC (“Respondent”). Respondent’s address of record for the license is 42011 North 7th Street, Desert Hills, AZ 85086-5614. Kevin Lee Allen is listed on the license as Qualifying Party and Member. Richard James Ward is listed on the license as Member.[1] 2. Administrative Notice is taken of Respondent’s prior License record, for License No. 211961, as reflected on the ROC’s public website on October 2, 2019. Such prior License record reflects that Respondent’s license is currently active. The record also reflects that there are three open complaints against Respondent’s license, one of which is presumed to be related to this matter. There is one resolved/settled case reflected on the license. Respondent has an active $6,750.00 surety bond issued through Merchant’s Bonding Company effective June 1, 2017.[2] 3. On or about May 18, 2018, Ann Marie Scott (“Complainant”) entered into a verbal contract agreement whereby Respondent agreed to renovate her residential home located at 15222 North 44th Place, Phoenix, AZ 85032 for the sum total of $23,570.00. The project commenced on July 26, 2017, and stopped on December 4, 2018. Complainant paid Respondent a total $20,500.00 by the time Respondent stopped working. 4. On or about December 14, 2018, the ROC received a workmanship complaint from Complainant. On the complaint, Complainant indicated poor workmanship and abandonment as the basis for the complaint. 5. On or about December 21, 2018, the ROC issued a Jobsite Inspection Notification letter to the parties, providing proper notice to them, and advising that an onsite review would be conducted at the project site by an ROC investigator on January 18, 2019. 6. On January 18, 2019, ROC investigator Steve Klein (“Investigator Klein”) conducted a review of the estimates that were agreed upon between the parties. Investigator Klein also inspected the work that had been done on the project to date and took 10 photographs of the property. 7. On or about January 22, 2019, Investigator Klein issued a Directive from the Registrar to Respondent because he substantiated Complainant’s allegation that Respondent’s work failed to meet minimum ROC workmanship standards. Specifically, Respondent was ordered to remediate complaint items 1, 3-5, 7-17, 20-37, and 39 via appropriate means. Respondent was put on notice that it had until February 8, 2019, to notify the ROC of its compliance with the Directive or face discipline pursuant to Ariz. Ariz. Rev. Stat. § 32-1154(B) and 32- 1154(E). Respondent failed to timely comply. 8. On or about February 12, 2019, the ROC issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32- 1154(A)(22), and Ariz. Admin. Code R4-9-108. Respondent was given until February 27, 2019, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1154(B). 9. On or about February 27, 2019, Respondent filed an Answer to the Citation. In its Answer, Respondent stated that Respondent continued to work on Complainant’s property and that 80% to 90% was completed. Respondent further stated that it had a key to Complainant’s home because Complainant wanted more work done on the home because she was selling her home. In its Answer, Respondent indicated that Respondent and Complainant had “an amicable working relationship.” 10. On or about March 1, 2019, the ROC referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on August 7, 2019. 11. Per the Citation, the issue to be determined is whether the ROC has cause to discipline Respondent’s license based on the following charges: Charge 1: A violation of A.R.S. § 32-1154(A)(3)-R4-9-108. (“Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9- 108.”). Charge 2: 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.”).

12. On or about August 2, 2019, Investigator Klein conducted a prehearing inspection. He observed that items 1, 15, and 25 were completed but all other items listed on the Directive were not corrected. HEARING EVIDENCE 13. Investigator Klein testified that there were three complaints filed by Complainant. With respect to compliance with the Directive, Respondent completed 75% of work as listed on the Directive. Moreover, Respondent did not start work on the contract in the amount of $10,000.00. Thus, Respondent abandoned that project and performed poor workmanship on the other projects. 14. At hearing, Complainant testified that, at all times relevant, she was the owner of 15222 North 44th Place, Phoenix, AZ 85032. Complainant had a verbal agreement with Respondent for Respondent to perform a home remodel project. While there was no contract, Respondent created invoices to evidence the work to done and the prices. 15. In its invoice #1974, dated September 26, 2017, Respondent addressed the remodeling of the hall bath. Complainant paid $3,300.00 for that project. In its invoice #1994 dated September 11, 2017, Respondent addressed additional remodel of the hall bath, including fixing work that was done pursuant to invoice #1974. Complainant paid $1,500.00 for that project. In its invoice #1995, dated September 11, 2017, Respondent addressed the remodeling of the master bathroom. Complainant paid $6,000.000. In its invoice #2036, dated February 2, 2018, Respondent addressed the installation of tile for the entire floor and the installation of carpeting for the bedroom. Complainant paid Respondent $10,000.00 for that project. 16. Complainant paid Respondent the above amounts in good faith. Complainant was not satisfied with Respondent’s work from invoice #1974 due to crooked and uneven tiles, poorly done grout work, and mismatched paint. Complainant requested Respondent to fix these issues. Instead of fixing the issues, Respondent tore up the bathroom completely. Complainant did not want the bathroom torn up. Based on this work, Respondent created invoice #1994. 17. In addition to invoice #1974 and invoice #1994, Complainant requested Respondent to install tile. Respondent did not create a change order, but created invoice #2036. Respondent never started this project despite being paid $10,000.00. 18. While there may be have miscommunication between the parties with respect to the key, Complainant gave access to Respondent to complete all of the projects. 19. Richard Ward testified on behalf of Respondent. Mr. Ward agreed with Complainant to remodel Complainant’s bathrooms. When Complainant was unsatisfied with his work, Mr. Ward redid his work to make sure Complainant was happy. Complainant changed her mind throughout the project. Respondent incurred additional costs and expenses as a result of Complainant’s changes. 20. Invoice #2036 was Complainant’s request. Respondent was unable to begin this project because Respondent did not complete the master bathroom. 21. Mr. Ward’s mother, Kathy Mendiola, assisted Mr. Ward in handling the paperwork for this project as well as handling Complainant. When Complainant changed her mind, Ms. Mendiola created a change order. She later shredded it because Complainant did not sign it. Ms. Mendiola then drafted invoice #10071, which was signed by Complainant, to address the remaining issues. Complainant agreed that Respondent was to fix and complete the work, on invoice #10071, at no additional charge. Work addressed in invoice #10071 was also addressed in the Directive. 22. Mr. Ward acknowledged that he did not perform any work between the date the Directive was issued and the compliance deadline. Mr. Ward’s testimony regarding the Complainant’s key and access to her home was inconsistent. However, Respondent’s February 27, 2019 email to the ROC confirmed that Complainant gave her key to Mr. Ward. The last day Mr. Ward worked at Complainant’s home was on February 28, 2019. Thus, up until that time, Respondent was allowed to perform corrective work. However, Respondent failed to comply the requisite corrective work and was not in compliance with the Directive. Furthermore, Mr. Ward did not return Complainant’s money for the project he did not begin. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32- 1101 et seq. The copy of the Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable, and Respondent is deemed to have received notice of the hearing. See A.R.S. §§ 41-1092.04 and 41-1092.05(D). 2. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. 3. 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). 4. 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.” 5. 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.” 6. Ariz. Rev. Stat. § 32-1154(A)(22) holds, 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.” 7. Ariz. Rev. Stat. § 32-1154(E) holds, in pertinent parts, that the Registrar may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. It also holds that no future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.” 8. Complainant established, by a preponderance of the evidence, that work performed by Respondent, on invoice #1974, invoice #1994, and invoice #1995 were not done in a professional and workmanlike manner. In addition, work performed by Respondent on invoice #10071 was also not done in a professional and workmanlike manner. Thus, there are sufficient facts in the record to conclude that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(3), namely A.A.C R4-9-108, by a preponderance of the evidence 9. Furthermore, the Registrar issued its Directive to Respondent on January 22, 2019, and required Respondent’s full compliance by February 8, 2019. Respondent failed to comply. There are sufficient facts in the record to conclude that Respondent also violated Ariz. Rev. Stat. § 32-1154(A)(22), by a preponderance of the evidence. 10. Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter, as the Tribunal has no jurisdiction to award a refund of the underlying amount contracted between the parties. 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. 211961 for a period of three (3) days. 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(E). 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, October 22, 2019.

/s/ Antara Nath Rivera Administrative Law Judge Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See https://roc.az.gov/contractor-search?Id=a0Yt000000ACZSPEA5. [2] Id.

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