FINACT2018A-06061-ROC-ALJDecision-6527.pdf

2018A-06061-CHC-ROC · Registrar of Contractors · 2019-11-20

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Steven Packard, Case No. 2018-06061

COMPLAINANT, Docket No. 2018A-06061-CHC-ROC

v. FINAL ADMINISTRATIVE DECISION AND ORDER KYBA Building Group LLC, License No. ROC 298917, RESPONDENT.

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an

administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the Registrar

must provide written justification setting forth the reasons for the modification or rejection of each finding of

fact or conclusion of law.

REGISTRAR’S ACCEPTANCE

In this case, a hearing was held and the administrative law judge issued a written decision. See

Administrative Law Judge Decision, attached. The Registrar reviewed that decision and accepts it.

CONCLUSION AND ORDER

Because the Registrar has accepted the Administrative Law Judge Decision, that decision is the final

administrative decision and becomes effective on November 3, 2019.

IT IS FURTHER ORDERED that Respondent pay a civil penalty in the amount of $500.00 payable to

the Registrar on or before 30 days from the effective date of this Order. Payment may be hand-delivered to the

Registrar’s physical address or mailed to:

Registrar of Contractors P.O. Box 6748 Phoenix, Arizona 85505-6748 FINAL NOTE On page one, paragraph four, line 22, “Steven” should be replaced with “Stephen.”

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19 On page three, paragraph six, line 16, “Complainant filed a second complaint” should be replaced with “Complainant’s Attorney filed an addendum.” On page three, paragraph six, line 27, “February 25” should be replaced with “May 17.” On page seven, line 14, “on or before thirty days following the effective date” should be replaced with “30 days from the effective date of the final order.” On page seven, line 17 “(A)(5)” should be replaced with “(A)(7).” Dated September 24, 2019. By: /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund Arizona Registrar of Contractors Copy mailed via USPS First Class Mail September 24, 2019 to: Respondent KYBA Building Group LLC 727 E Portland St Apt 22 Phoenix, AZ 85006

Complainant Steven Packard 19614 W Soft Wind Dr Surprise, AZ 85387 Complainant’s Attorney Ernest S. Bustamante, Esq. Bustamante & Associates PLLC 76 E Mitchell Dr Phoenix, AZ 85012 Copy sent electronically this same date to: Office of Administrative Hearings Tammy L. Eigenheer, Administrative Law Judge Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar Complainant’s Attorney at email address of record with Registrar Case No. 2018-06061 / KR

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19 RECEIVED 9.18.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Steven Packard, No. 2018A-06061-CHC-ROC COMPLAINANT v. ADMINISTRATIVE LAW JUDGE KYBA Building Group LLC, DECISION ROC License: ROC 298917, RESPONDENT HEARING: August 12, 2019 APPEARANCES: Complainant Steven Packard appeared and was represented

by Ernest Bustamante. Respondent appeared through Oscar Galindo, Owner, and was

represented by Ian Quinn.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

1. KYBA Building Group LLC (Respondent) is the holder of License No.

298917 issued by the Arizona Registrar of Contractors (Registrar).

2. On or about August 22, 2016, Steven Packard (Complainant) signed a

contract with Respondent for the restoration of his home after a fire. The total contract price of the project was $256,918.13. 3. On or about December 21, 2018, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to the project. 4. The Registrar assigned the complaint to Investigator Steven Lawton. On or about January 18, 2019, Investigator Lawton conducted a jobsite inspection. At that time, Complainant raised additional items of concern that were not in the original complaint. Respondent would not agree to have the additional items addressed during the jobsite inspection and/or the resulting written directive, so Complainant was instructed to file a supplement to the complaint identifying the additional items of concern. 5. After the January 18, 2019 jobsite inspection, Investigator Lawton issued a written directive to Respondent (First Directive) that provided as follows:

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 9.18.2019 ROC LEGAL

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 February 25, 2019.

You are hereby directed to remedy the following violations by the appropriate means:

1. Complaint Item 1: Contractor was paid for work he did not complete. Investigator’s Observation: Was substantiated the work was not completed per contract. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9- 108 (A) (B) 2. Complaint Item 3: Master bathroom tub is installed, but not connected. Investigator’s Observation: It was substantiated that installation was not completed. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9- 108 3. Complaint Item 4: Master bath walls and tiles need to be finished. Investigator’s Observation: Is not completed at time of inspection. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9- 108 4. Complaint Item 5: Interior wall painted and finished. Investigator’s Observation: Was not completed at time of inspection in workmanship like manner. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9- 108 5. Complaint Item 6: Cracks in exterior stucco- needs painting Investigator’s Observation: It was observed that work needs and repairs. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9- 108 6. Complaint Item 10: Cleanup of outside of property. Investigator’s Observation: Substantiated that property was not cleaned up. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9- 108 7. Complaint Item 12: Thermostat is defective. Investigator’s Observation: HV/AC does not work correctly RECEIVED 9.18.2019 ROC LEGAL

Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9- 108 8. Complaint Item 17: Interior door for master bathroom won’t close properly Investigator’s Observation: Substantiated that door does not close properly. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9- 108 9. Complaint Item 18: Wrong caulk used on close shelves- sticky Investigator’s Observation: Substantiated that the caulk was poorly installed at joints. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9- 108 10. Complaint Item 19: Wrong size kitchen and laundry cabinets installed. Investigator’s Observation: Substantiated that the cabinets were wrong per drawings sent via email by the Respondent. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9- 108 The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action.

6. On or about February 27, 2019, Complainant filed a second complaint. On or about April 4, 2019, Investigator Lawton conducted a second jobsite inspection. On or about April 29, 2019, Investigator Lawton issued a second written directive from the Registrar (Second Directive). The Second Directive provided Respondent 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 February 25, 2019. You are hereby directed to remedy the following violations by the appropriate means: RECEIVED 9.18.2019 ROC LEGAL

1. Complaint Item 1: Vent hood above stove was not installed. Investigator’s Observation: It was observed that the exhaust hood was not installed at the time of inspection. Governing Rule: Workmanship Rule: ARS 32-1154 (A)(3); Namely R4-9- 108(A&B) 2. Complaint Item 2: Kyba did not pay AC subcontractor. Investigator’s Observation: Has not been completed per the first directive issued on 02/05/2019 Governing Rule: Workmanship Rule: ARS 32-1154 (A)(3); Namely R4-9- 108(A&B) 3. Complaint Item 3: Water pooling on roof. Investigator’s Observation: It was observed that there is pooling over the front entry roof. Governing Rule: Workmanship Rule: ARS 32-1154 (A)(3); Namely R4-9- 108(A&B) 4. Complaint Item 7: Paint overspray on solar panels. Investigator’s Observation: It was observed that there is over spray on solar panels. Governing Rule: Workmanship Rule: ARS 32-1154 (A)(3); Namely R4-9- 108(A&B) 5. Complaint Item 11: All drywall in house needs to be replaced. Investigator’s Observation: It was observed that there are many areas within the house needs correcting of texture and painting. Finish was to be Santa Fe and paint was to be an eggshell finish. Also, other areas had to be completed per first directive. Governing Rule: Workmanship Rule: ARS 32-1154 (A)(3); Namely R4-9- 108(A&B) 6. Complaint Item 13: Son’s bedroom-sliding closet door do not operate properly. Investigator’s Observation: It was observed that the door is not installed per manufacture specs. Governing Rule: Workmanship Rule: ARS 32-1154 (A)(3); Namely R4-9- 108(A&B) 7. Complaint Item 15: Cracks in ceiling. Investigator’s Observation: It was observed that there were some cracks at the ceiling. Governing Rule: Workmanship Rule: ARS 32-1154 (A)(3); Namely R4-9- 108(A&B)

7. Following the issuance of the written directives, Respondent performed

some of the corrective work. After the deadline in the directives expired, Investigator Lawton was notified the work had not been completed. RECEIVED 9.18.2019 ROC LEGAL

8. 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).

9. Investigator Lawton testified as to the Registrar’s involvement in this

matter, including the jobsite inspections and written directives.

10. Complainant testified that the contract in this matter was the result of a

fire at his home and the resulting insurance claim. The contract with Respondent was

finalized on or about August 22, 2016. The plans were approved on or about March

22, 2017, and the work was supposed to take six months to complete. Work on the

project did not start until May of 2017. After two years of being out of the home, the

insurance would no longer pay Complainant’s rent. Respondent paid Complainant’s

rent from November 2018 through March 2019 when Complainant returned to the

home. Complainant noted that the insurance claim included electrical work on solar

panels; however, Complainant was a licensed electrical contractor, so he performed

much of the electrical work on the project and separately hired a solar contractor to

perform that work. Complainant claimed that Respondent was paid for that work from

the insurance proceeds even though it did not perform any of the work. Complainant denied that he interfered with any of the corrective work being completed. Complainant admitted he asked for a white panel for the HVAC system, and the company indicated it would not be a problem. Complainant also stated that at least four subcontractors told him they had not been paid by Respondent. As to the First Directive, Complainant stated that Items 1, 3, 4, 6, 9, and 10 had not been completed. As to the Second Directive, Complainant stated that Items 1, 4, 5, 6, and 7 had not be completed. Complainant testified that he never denied Respondent access to the property to complete the repair work. Complainant stated that during the last days before the deadline, his son was in the home for a weekend visitation, so he offered to extend the deadline by a few days so Respondent would not be doing work on the home while Complainant’s son was there. 11. Oscar Galindo, Owner of Respondent, admitted that some of the items in the written directives were not completed, but alleged Respondent was not provided RECEIVED 9.18.2019 ROC LEGAL

with sufficient access to the property to complete the corrective work. Mr. Galindo also asserted that several contractors were turned away from the jobsite or left because Complainant was combative. Mr. Galindo testified that the bathtub had been installed,

but not connected. Mr. Galindo disagreed with Investigator Lawton and Complainant’s

interpretation of a Santa Fe finish for the drywall.

12. Administrative notice is taken of Respondent’s prior License record on

September 3, 2019. Such prior License record reflects that Respondent’s License No.

298917 was first issued on May 15, 2015, and was active. Such prior License record

also reflects that there were no other open complaints and three other resolved/settled

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 the Registrar’s 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. By Respondent’s own admission, all of the corrective work was not completed following the written directives being issued. Therefore, Complainant

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.” RECEIVED 9.18.2019 ROC LEGAL

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. While Respondent asserted it was denied access to the property to

complete the corrective work, Respondent failed to establish, by a preponderance of

the evidence, that Complainant denied Respondent access to comply with the written

directives.

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. 298917 for a period of

ten 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, September 18, 2019.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

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.” RECEIVED 9.18.2019 ROC LEGAL

Jeffrey Fleetham, Director Registrar of Contractors