ALJDEC decisions subject to certification as final

2018A-12-CHC-ROC · Registrar of Contractors · 2018-05-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Paul K Durand,

COMPLAINANT,

v.

Southwestern Home Design & Remodeling LLC,

License No: 304529

RESPONDENT.

No. 2018A-12-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 7, 2018

APPEARANCES: Paul Durand, Complainant, Mary Ann Durand, Complainant’s

Spouse and witness, John Smith, Registrar of Contractors Investigator.

ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson

_____________________________________________________________________

FINDINGS OF FACT

The Registrar of Contractors [hereinafter, the “Registrar”] referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing to determine the merits of a Complaint against Southwestern Home Design & Remodeling LLC, [hereinafter, the Southwestern”] filed with the Registrar on January 2, 2018 alleging poor and below standard workmanship along with considering the merits of the Citation issued in this case by the Registrar on March 2, 2018 charging numerous violations of Arizona law regarding the regulation of contractors.

Southwestern is the holder of a class CR61 Residential and Commercial License No. 304529 issued by the Arizona Registrar June 2, 2016. According to the Registrar’s records located at its public website, License number 304529 is currently active as of May 25, 2018.

On March, 22, 2018, the Registrar sent a Notice of Hearing [hereinafter the “NOH”] to Southwestern setting hearing at 8:30 AM on May 7, 2018. The Registrar mailed copies of the NOH to Southwestern at the physical mailing address on record with the Registrar and also transmitted the NOH to Southwestern’s email address of record with the Registrar. The NOH informed the parties that “[f]ailure to attend the scheduled hearing is likely to result in an adverse ruling against you.”

The NOH also informed Southwestern “...the assigned Administrative Law Judge may properly consider Southwestern’s prior disciplinary record and current license status as a matter in mitigation or aggravation when formulating and submitting an appropriate recommended disposition of this matter.”

Southwestern did not request to appear telephonically and did not request that the hearing be continued.

A hearing was conducted on May 7, 2018.

Although the start of the hearing was delayed 20 minutes, Southwestern did not appear through an authorized member, employee or attorney. Consequently, Respondent did not present any evidence to defend its license.

At the hearing, the Registrar’s Investigator, John Smith, testified that he conducted a Job Site Inspection [hereinafter the “JSI”] on January 14, 2018 in follow-up to the Complaint. He stated that he had mailed notice to Southwestern of the date, time and location of the JSI to the mailing address that is of record for Southwestern with the Registrar. A male identifying himself as Richard Hamilton was present at the JSI. Mr. Hamilton advised the Inspector that he was present for Southwestern. Inspector Smith testified that he requested a business card from Mr. Hamilton but that Mr. Hamilton had no business cards indicating his relationship or title for Southwestern. Mr. Hamilton, Investigator Smith stated, is not a member or Southwestern. The Complainant was also present at the JSI. Inasmuch as Mr. Hamilton appeared at the JSI, it is inferred that Southwestern received notice from Inspector Smith at the address the JSI notice was sent.

Inspector Smith testified that plumbing and electrical work for the Complainant was not done by a licensed contractor. That Richard Hamilton advised him that all of the work done on this project was by Jesus Chacon, an unlicensed contractor.

Inspector Smith testified that Southwestern has received two “Letters of Warning” for aiding and abetting unlicensed contractors from the Registrar since 2017; three “Letters of Warning” from the Registrar for contracting work beyond the scope of its license; three “Letters of Warning” from the Registrar for working without a required permit; and four “Letters of Warning” from the Registrar for its failure to utilize the language requirements of A.R.S. § 32-1158(A) in contracts Southwestern had undertaken.

The Complainant’s spouse, Mary Ann Durand, testified that her husband she first had contact with Southwestern at the Tucson Home show when they presented a coupon from a flyer of Southwestern’s to the Home Show booth for in order to obtain the coupon’s discounts on home design and remodeling.

On January 24, 2017, Jesus Chacon came to Mary Ann Durand’s residence. He claimed to be the crew chief for her remodeling project. Jesus Chacon brought cabinet door samples of various colors and quality for the Complainants to select for the project. She said that Jesus Chacon and his son, Diego Chacon, were the persons who did all of the work on their home for this project. She said at the JSI, she was present when John Hamilton told Inspector Smith that he was the Business Manager for Southwestern, but Mr. Hamilton had no business card reflecting his employer or his job title. The doors installed for the project were not the doors selected by the Complainant. The doors ordered were high grade wooden doors. The doors installed were of the wrong color, texture and were sub-standard. The product installed by Southwestern was a cork product, not wood as ordered.

After the CWO and Citation, in April, 2018, Mary Ann Durand and her husband saw Mr. John Hamilton again at the Vender Booth at the Tucson Home Show. He was not promoting Southwestern at that time, but instead was working at a booth with banners and signs for “We Fix Ugly Homes” She said they were using the exact same flyer and coupon as Southwestern had used when she first met with Southwestern at the Tucson Home show the year before.

Complainant, Paul Durand, testified that from day one, Jesus Chacon and his son, Diego Chacon, were the persons who performed the work that he had contracted for. He said that on March 29, 2018, he told Jesus Chacon that because of the poor work and incorrect materials that were installed, he was not going to pay him. Mr. Chacon left saying that he would do no more work. That was the last time Mr. Durand saw Mr. Chacon.

Following the JSI, the Registrar issued a Corrective Work Order [CWO] to Southwestern on February 01, 2018, which states in relevant parts as follows:

You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on February 20, 2018.

The Respondent is to obtain any and all required building permits from the Local Building Authorities prior to making any corrections to items 6 and 7 listed in this Directive. If the local jurisdiction finds corrective issues relating to the respondents work, the respondent will be required to correct those issues by appropriate means. The Respondent is required to submit a copy of the approved inspection results to the Registrar Investigator.

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

“New doors were cork, not wood as contracted.” As described by the complainant: the installed doors are not the doors specified in the contract; the contract specifies Shaker W/Bead K8 Espresso.

“Door bore scratches and paint smudges at installation.” This was described by the complainant to be a scratch, and area of rough texture, and a void/ding in the doors.

“Drawer pulls applied unevenly.” This was described to be a drawer pull installed uneven, and one 37” wide drawer front with only one pull in the center.

“Adhesive strips used to cover box frames & cabinet box joints were improperly applied. Adhesive strips have puckered, cracked, split, and are peeling off.

“Caulking placed to seal quartz counter and backsplash has disintegrated.”

“Plumbing performed without a license and improper trap installation.”

“Electrical work performed without a license” and without a permit.

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

In the CWO, Southwestern was given until 5:00 p.m. on February 20, 2018, to notify the Registrar of its compliance with the CWO. The Registrar having not received a notice of compliance from Southwestern, on February 23, 2018, a Compliance Inspection was conducted by Investigator Smith who issued notes of his findings as follows:

Compliance Jobsite General Notes: On February 15, 2018 (3 business days prior to the directive due date) the respondent sent an email to the complainant requesting access to remove the doors and drawer fronts from the kitchen. This email stated the work would take a minimum of 10 business days. On February 19, 2018 the respondent sent a worker to the complainant's house. The complainant stated the worker identified himself as Diego Chacon, the son of Jesus Chacon. No work was done on that day. Jesus Chacon is the unlicensed contractor the respondent used to perform all the work on this project.

Compliance Findings:

The directive has not been complied with. No corrective work has been done. The respondent has not submitted any information about obtaining a building permit. All work per directive is in the same condition as during the original jobsite inspection. The Respondent is to obtain any and all required building permits from the Local Building Authorities prior to making any corrections to items 6 and 7 listed in this Directive. If the local jurisdiction finds corrective issues relating to the respondents work, the respondent will be required to correct those issues by appropriate means. The Respondent is required to submit a copy of the approved inspection results to the ROC Investigator. This Item: not complied with. No information has been submitted about a permit being obtained.

Item 1 from Directive: “New doors were cork, not wood as contracted.” As described by the complainant: the installed doors are not the doors specified in the contract; the contract specifies Shaker W/Bead K8 Espresso. This Item: not complied with. The contract specifies "Cabinet Doors Shaker W/Bead K8 Espresso." The installed doors have no bead.

Item 2 from Directive: “Door bore scratches and paint smudges at installation.” This was described by the complainant to be a scratch, and area of rough texture, and a void/ding in the doors. This item: not complied with. All conditions described are present: The scratch, the area of rough texture, and the void, are all in the doors prior to paint/stain.

Item 3 from Directive: “Drawer pulls applied unevenly.” This was described to be a drawer pull installed uneven, and one 37” wide drawer front with only one pull in the center. This Item: not complied with. There is at least one drawer pull installed uneven / rotated. There is also a 37" wide drawer with only one pull in the center instead of two. The respondent acknowledged this drawer should have had two pulls at the request of the complainant.

Item 4 from Directive: “Adhesive strips used to cover box frames & cabinet box joints were improperly applied. Adhesive strips have puckered, cracked, split, and are peeling off. This Item: not complied with. There are numerous locations of the laminate material used for refacing delaminating and peeling off the cabinets.

Item 5 from Directive: “Caulking placed to seal quartz counter and backsplash has disintegrated.” This Item: not complied with. There are significant voids in the caulking between the countertops and the backsplash.

Item 6 from Directive: “Plumbing performed without a license and improper trap installation.” This Item: not complied with. The drain line from the disposer below the kitchen sink has two consecutive traps. This is not allowed by the IRC; International Residential Code.

Item 7 from Directive: “Electrical work performed without a license” and without a permit. This Item: not complied with. This project included cutting down the framing on the island so the bar top area of the counter top is the same level. This included relocating the electrical boxes in the island. The Marana Building Department confirmed any alteration of wiring inside the walls requires a building permit, and that no permit was obtained.

Note: Please review the complaint items listed above. If any of the items have not been corrected at the time of the compliance inspection this complaint will be forwarded to the Registrar’s legal department and a citation may be issued.

On March 2, 2018, the Registrar issued its Citation against Southwestern charging six (6) alleged violations:

A violation of A.R.S. § 32-1154(A)(2)

A violation of Rule 4-9-108, titled “Minimum Construction Standards,” in the Arizona Administrative Code, and thereby of A.R.S. § 32-1154(A)(3).

A violation of A.R.S. § 32-1154(A)(9) (“Aiding or abetting)

A violation of A.R.S. § 32-1154(A)(12)

A violation of A.R.S. § 32-1158(A)

A violation of A.R.S. § 32-1154(A)(16)

A violation of A.R.S. § 32-1154(A)(22) (“Failure to take appropriate corrective action).

Southwestern timely filed an Answer to the Complaint on March 16, 2018. The Answer was on Southwestern’s letterhead stationary and was signed by Richard Hamilton. The Answer admits the Complaint was received by Southwestern at its address of record. The Answer asserts affirmative defenses of work not within the scope of the contract and a refusal to admit access. There is no evidence of record presented regarding either of these affirmative defenses.

CONCLUSIONS OF LAW

The Registrar of Contractors has jurisdiction over the Complaint in case number 2018A-12-CHC-ROC under the authority of A.R.S. § 32-1101, et seq., a section that enables the Registrar to impose disciplinary sanctions against licensees for the violations noted at A.R.S. § 32-1154(A). Records of the Registrar demonstrate that Southwestern is a licensee.

Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

“At a hearing on an agency's imposition of fees or penalties or any agency compliance order, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(3).

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

Southwestern presented no evidence.

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

The copies of CWO and the NOH that the Registrar mailed to Southwestern at its address of record and at the address on its written Answer were reasonably calculated to, and, by a preponderance of the evidence did, provide Southwestern notice of the Hearing in this matter. Respondent is deemed to have received notice of the hearing. A.R.S. §41-1092.04 and §41-1092.05(D).

By its failure to appear, Southwestern has presented virtually no evidence to defend its license and therefore Southwestern has failed to meet its burden of proof.

Respondent did violate A.R.S. §32-1154(A)(2, departure from plans and specifications, in that Complainant was victimized by Southwestern’s “bait and switch” tactics in offering specific high quality cabinet doors but instead and without consent of the Complainant, installed substandard, inferior quality doors.

Ariz. Admin. Code section R49108(A) provides that “A contractor shall perform all work in a professional manner.” Respondent did repeatedly violate A.R.S. 32-1154(A)(3) on this project by violating the workmanship standards as specified in A.A.C. R4-9-108. These workmanship deficiencies were multiple and extensive.

Southwestern did violate A.R.S. § 32-1154(A)(9) in “Aiding or abetting Jesus Chacon, an unlicensed person, to evade A.R.S. § 32-1154 et seq. and did knowingly combine or conspire with Jesus Chacon, an unlicensed person, to allow Jesus Chacon to act as Southwestern’s agent, partner, associate or otherwise of Southwestern with intent to evade A.R.S. § 32-1154 et seq.

Southwestern, by a preponderance of the evidence, did engage in providing plumbing and electrical contractor services to the Complainant. Southwestern’s R-61 contractors license allows only scopes of work permitted by the commercial C-61 Carpentry, Remodeling and Repairs class license and the residential R-61 Carpentry, remodeling and Repairs class license. The provision of plumbing or provision of electrical contractor’s work is not covered under the R-61 license held by Southwestern. Southwestern did violate A.R.S. § 32-1154(A)(16) by engaging in contracting performing work beyond the scope of its license.

Each one of the violations that Southwestern has been found to have committed in this Conclusions of Law are a “failure in any material respect to comply” with A.R.S. § 32-1154. Southwestern did violate A.R.S. § 32-1154(A)(12).

The Agreement between the Complainant and Southwestern was in an amount more than one thousand dollars.

Southwestern did violate A.R.S. § 32-1158(A) in the following particulars:

The written Agreement did not contain the estimated date of completion of all work to be performed under the contract

The written Agreement did not contain the required statement “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 Agreement did not state that “complaints must be made within the applicable time period as set forth in section 32-1155, subsection A.”

Ariz. Rev. Stat. section 32-1154(A) provides that

The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: ....

3. Violation of any rule adopted by the Registrar....

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.

Southwestern did violate A.R.S 32-1154(A)(22) by failing to comply with the written directives of the Registrar of Contractors, i.e., the CWO, within a reasonable amount of time without valid justification.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

The preponderance of the evidence demonstrates that Southwestern is an unscrupulous, unqualified, or financially irresponsible contractor in that Southwestern did

Knowingly ignore each effort of the Registrar to address the concerns of the Complainant,

Aid, abet and utilize unlicensed contractors to perform its work;

Fail to seek required permits before initialing work;

Not obtain the required building permits for this project;

Fail to appear at the hearing in this case.

Engage in conduct amounting to a “bait and switch” scheme by promising the Complainants specifically chosen, high quality wood cabinet doors, but instead installed inferior quality cork doors while refusing to replace the substandard doors with the doors selected and paid for by the Complainants.

Persist in ignoring warnings issued by the Registrar by continuing to commit the violations determined by this decision despite repeated warnings by the Registrar.

The foregoing factors stated in paragraph 20 immediately appearing above, are aggravating circumstances.

Southwestern’s license should be, under the facts presented in this case, revoked.

RECOMMENDED ORDER

IT IS RECOMMENDED it be ordered that thirty days after the effective date of the final Order in this matter, Southwestern Home Design & Remodeling LLC, License Number 304529 is revoked.

Done this day, May 24, 2018.

/s/ Randolph D. Wolfson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors