FINACT2018A-1360-CHC-ROC.pdf

2018A-1360-CHC-ROC · Registrar of Contractors · 2018-10-17

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Maureen Deruyter, Case No. 2018-1360 COMPLAINANT, Docket No. 2018A-1360-ROC v. AZ Contracting Group LLC, FINAL ADMINISTRATIVE DECISION License No. ROC 303463, AND ORDER 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. 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 hereby accepts it. CONCLUSION Because the Registrar has accepted the administrative law judge’s decision, that decision is the final administrative decision in this case and becomes effective on November 20, 2018. 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

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Dated October 11, 2018.

Registrar of Contractors /s/ Nicole Sornsin Nicole Sornsin Assistant Director, Legal and Recovery Fund Copy mailed via USPS First Class mail October 10, 2018 to: Respondent AZ Contracting Group, LLC. 1753 E. Broadway Rd., Ste. 504 Tempe, AZ 85282 Complainant Maureen Deruyter 1017 Peonies Dr. De Pere, WI 54115 AND copy electronically mailed this same date to: Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar

Office of Administrative Hearings Randolph D. Wolfson, Administrative Law Judge Case No. 2018-1360/jo

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 9.24.2018 ROC LEGAL IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Maureen DeRuyter, No. 2018A-1360-CHC-ROC

COMPLAINANT, ADMINISTRATIVE LAW JUDGE v. DECISION

AZ Contracting Group LLC, License No: 303463

RESPONDENT.

HEARING: September 10, 2018 APPEARANCES: Maureen DeRuyter, Complainant; Michael Wales, Esq., Counsel for the Complainant; Pace Marby, Respondent Member; Danielle Graham, Esq., Counsel for the Respondent; Nicole Mecham, Respondent’s Controller; Michael McPeak, Respondent Project Manager; Steve Lawton, Sr. Investigator, Arizona Registrar of Contractors.

ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson _____________________________________________________________________ FINDINGS OF FACT 1. Respondent, AZ Contracting Group LLC. (hereinafter, “AZ Contracting”) is the holder of License No. 303463 issued by the Arizona Registrar of Contractors (ROC). 2. On or about August 12, 2017, Maureen DeRuyter (Complainant) entered into a contract with AZ Contracting to demolish and re-model Complainant’s residence located at 7656 East Northland Drive in Scottsdale, Arizona.1 3. On or about March 26, 2018, the Registrar received a Complaint against AZ

Contracting from Complainant alleging AZ Contracting performed poor work, abandoned

the project and failed to refund Complainant’s double payment.

See, Scope of Work contained in “Estimate #10139” dated August 12, 2017 attached to Complaint’s Complaint, Agency Record, “Intake Complaint Submittal1.pdf.”

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 9.24.2018 ROC LEGAL

4. The Registrar assigned the complaint to ROC Investigator Matt Gunstra.2 On or about May 2, 2018, Mr. Gunstra conducted a Jobsite Inspection [hereinafter, the “JSI”]. Mr. Gunstra’s JSI Notes3 indicate:

[I]n attendance were two inspectors hired by Complainant. They just observed. Persons named on license, Pace Morby and Michael Fischer, were not in attendance and the individual they sent out did not work on this project and seemed unfamiliar with its history/details. Respondent has not obtained permit to date despite my telling him to do so prior to the inspection. This is a violation of ARS 32-1154(A)(2).

Last date of work was March 2018. Complaint Item 1: Insulation missing/displaced by contractor work Investigator’s Observation: I entered the attic and observed insulation around the can lights installed by Respondent pushed back. Likely pushed away to install the light but no re-installed. This is poor work.

Complaint Item 2: Improper duct work for office area…Unsubstantiated.

Complaint Item 3: Unsafe wiring/switches that don't appear to connect to anything. …I cannot substantiate a violation.

Complaint Item 4: Leaking pipe/no backflow installed. Investigator’s Observation: Item fixed by others hired by Complainant.

Complaint Item 5: Doors and windows leak/not installed properly Investigator’s Observation: …I cannot substantiate a workmanship violation with the windows at this time. Complaint Item 6: Pavers/patio grade slopes toward house Investigator’s Observation: The rear patio has concrete pavers installed over an existing concrete pad. At the swing door there is not positive slope and water pools at the door around the foundation. Respondent should have identified the condition of the concrete pad and installed his work so

Mr. Gunstra’s was no longer employed by the Registrar as of the date of the hearing in this case. Mr. Steve Lawton, Chief Investigator, testified that he had supervised Mr. Gunstra’s at the time of the filing of the Complainant and thereafter. On the record at hearing, Mr. Lawton reviewed Mr. Gunstra’s Registrar File in this case including Agency Record documents “Rcc100 Job Site Inspection Notes1.rtf.” See, Agency Record at “Rcc100 Job Site Inspection Notes1.rtf” and “Rcc 014 Corrective Work Order.rtf.” RECEIVED 9.24.2018 ROC LEGAL

that it meets ROC standards which require positive drainage from the foundation. Complaint Item 7: Grout cracked/missing/multiple colors used throughout house. Investigator’s Observation: In several areas of the shower I observed irregular grout color and finish. Some areas have minor cracking which should be corrected one time in the first year. I found a few voids in the floor tile grout. Complaint Item 8: Ceilings not painted. Investigator’s Observation: In the bedroom, bathroom, and living room I observed variation in paint color. It appears there were drywall repairs in these areas that either were not painted or were not painted in a color that closely matches existing. There is an obvious transition in the middle of the living room ceiling. This is poor work. Complaint Item 9: All cabinetry has issues-primed only, not finished, warped drawers/doors, doors hang below boxes. Investigator’s Observation: Many areas of the cabinets and trim have inconsistent paint in sheen or color. Several cabinet doors are warped outside the maximum tolerance of ROC standards. The construction of the cabinets is not professional in my opinion. The doors are 1/2" longer than the boxes, there are joints in the face of several cabinets that are not necessary. The nook is missing a top and the bottom of the upper cabinet is bowed/not flat. The kitchen countertop overhang is too large and does not match the overhang across the kitchen. The backsplash was extended to match the counter and it looks poorly done. Many of the doors and drawers need adjustment so the spacing and reveal is consistent. The glass panes are not securely fastened and are loose. There are missing handles. The pantry cabinet has a wood wedge installed under it because the boxes were not built properly. Overall the cabinets and trim do not appear to be installed in a professional and workmanlike manner. Other issues exist. Complaint Item 10: Interior trim not finished. Investigator’s Observation: Many areas of missing paint exist. Some exposed nails exist. There is paint overspray on the tile floor.

Complaint Item 11: Bath shower pan appears to be installed incorrectly-no drainage, tile discoloring due to standing water. Investigator’s Observation: Complainant did not indicate a current issue with drainage, however, the floor drain is fixed into the tile grout and is not removable. This is required to be removable for service to the drain.

Complaint Item 12: Dishwasher missing kick plate and backflow loop

RECEIVED 9.24.2018 ROC LEGAL

Investigator’s Observation: Appliance was provided by Complainant but installed by Respondent. Respondent did not report missing parts during unboxing. Complaint Item 13: Neutral wires bundled together on bus bar. Investigator’s Observation: Item repaired by others hired by Complainant Complaint Item 14: Light needs to be hung for banquette. Investigator’s Observation: Light fixture is missing from ceiling at this time. Complainant report it is on site. Respondent's scope of work includes installing this fixture. Complaint Item 15: Patio screen door needs adjusting. Investigator’s Observation: I cannot substantiate a workmanship issue with the door. Complaint Item 16: Crown molding missing/installed unprofessionally Investigator’s Observation: Crown molding has poorly fitted butt joints. Complaint Item 17: Drain in master bath not connected to faucet Investigator’s Observation: The drain is not properly connected to the handle and cannot be operated.

Complaint Item 18: Nook bench/cabinetry unfinished Investigator’s Observation: This is incomplete work.

Complaint Item 19: Hardware not installed on cabinetry Investigator’s Observation: Several handles are missing.

Complaint Item 20: Broom closet needs 2 doors not 4 and door is loose Investigator’s Observation: I can confirm the broom closet has four doors and not two long doors. Complainant sent me a photo of what she expected and says Respondent was given the same photo. The doors are loose and not securely installed. There is paint overspray on the interior of the cabinets and on the hinges. Complaint Item 21: 2nd glass shelf needed in master shower Investigator’s Observation: The master shower has a very large niche in the wall with only one shelf. While this is very odd to not use the space with more than one shelf I have not been given a plan or specification stating what it was supposed to look like. Governing Rule: N/A: Complaint Item 22: Vanity missing caulk Investigator’s Observation: I observe this condition, which should be corrected.

RECEIVED 9.24.2018 ROC LEGAL

Complaint Item 23: Most cabinets missing scribe pieces Investigator’s Observation: …Unsubstantiated. Complaint Item 24: Guest closet doors installed improperly and missing hardware. Investigator’s Observation: The doors were moved to another location in the same room. One door opens in a manner making it harder to access than others. One door is missing a guide pin. I will require Respondent install the doors as they originally were. Complaint Item 25: Missing materials purchased by complainant contractor claims they were thrown away. Investigator’s Observation: This is not violation of ARS 32-1154 and I cannot verify the status of these materials. Governing Rule: N/A:

Complaint Item 26: Incorrect flooring tile installed for main body of house Investigator’s Observation: Pending further evidence from Complainant Governing Rule: N/A:

5. On May 14, 2018 Investigator Gunstra issued a Written Directive with a Corrective Work Order [“CWO”] to AZ Contracting which provided as follows:4

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 notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on 6/1/18. [emphasis in original]. You are hereby directed to remedy the following violations by the appropriate means: NOTE: Many of the items identified as poor work have been marked with blue tape which should be referenced by the Respondent. Respondent should contact the investigator regarding any clarification of this Directive. Complaint Item 1: Insulation missing/displaced by contractor work Complaint Item 5: Doors and windows leak/not installed properly

See, Agency Record at “Rcc 014 Corrective Work Order.rtf,” supra. RECEIVED 9.24.2018 ROC LEGAL

Directive: Rear swing door leaks at threshold. Ensure door is installed per manufacturer instructions and does not leak. Complaint Item 6: Pavers/patio grade slopes toward house Directive: Exterior surface should slope away from the foundation per code. Interlocking pavers may not have standing water exceeding 3/32”. Complaint Item 7: Grout cracked/missing/multiple colors used throughout house. Directive: Areas of missing grout in showers and floor should be corrected. Cracks in grout exceeding 1/16” should be corrected. Areas of grout in which the color does not closely match should be corrected. Complaint Item 8: Ceilings not painted. Directive: Areas of ceilings with color variation or unpainted drywall work shall be corrected by appropriate means. In addition, areas of overspray on flooring and other items not intended to receive paint shall be corrected by appropriate means.

Complaint Item 9: All cabinetry has issues-primed only, not finished, warped drawers/doors, doors hang below boxes. Directive: Paint color/coverage is not consistent on all cabinets. Several cabinet doors are warped over 1/8” in 30”. Cabinet doors are larger than the boxes at the bottom. All doors and drawers have inconsistent reveals. Kitchen cabinet near window has an improperly repaired section of the frame beside the door. Cabinet glass doors are not properly adhered/fastened to door. Kitchen pantry cabinet is improperly built and installed (shim at bottom is not acceptable). Pantry door stops are not acceptable. Kitchen countertop and backsplash overhang is not consistent from one side to the other. Overhang on one side is excessive. Bathroom vanity cabinet frame and drawer do no line up. Underside of countertop has tape on it. Complaint Item 10: Interior trim not finished. Directive: Several locations of interior trim are not painted, are inconsistently painted, or have irregular caulking that should be corrected by appropriate means. Some areas of baseboards have exposed nails or improperly filled nail holes. Several hinges have paint overspray on them. Complaint Item 11: Bath shower pan appears to be installed incorrectly-no drainage, tile discoloring due to standing water. Directive: Shower drain strainer is grouted in place and cannot be removed for maintenance

Complaint Item 12: Dishwasher missing kick plate and backflow loop Directive: Dishwasher shall be completely installed as required by manufacturer Complaint Item 14: Light needs to be hung for banquette.

RECEIVED 9.24.2018 ROC LEGAL

Complaint Item 16: Crown molding missing/installed unprofessionally Directive: Crown molding does not return properly at kitchen cabinet. At least one section of crown molding has a butt joint that is not tight fitting. Complaint Item 17: Drain in master bath not connected to faucet. Directive: Respondent shall installed sink drain to function as intended by manufacturer.

Complaint Item 18: Nook bench/cabinetry unfinished. Directive: Bench top is not installed. Bench cabinet box construction is irregular with visible joint where bottom joints cabinet face. Similar condition exists above at crown molding. Nook cabinet bottom is not flat. Complaint Item 19: Hardware not installed on cabinetry. Directive: Cabinets intended to receive hardware should get hardware installed Complaint Item 20: Broom closet needs 2 doors not 4 and door is loose Directive: Broom closet should be built per contract, plan, or verbal agreement to perform as intended. Door hinges are not secured properly and are loose. Paint overspray inside cabinet. Complaint Item 21: 2nd glass shelf needed in master shower. Directive: Shower niche appears to be sized for multiple shelves but only has one. Niche should be installed per contract, plan and/or verbal agreement or as otherwise accepted in the industry.

Complaint Item 22: Vanity missing caulk.

Complaint Item 24: Guest closet doors installed improperly and missing hardware. Directive: Doors shall be installed in a manner consistent with original installation Complaint Item 25: Missing materials purchased by complainant contractor claims they were thrown away Complaint Item 26: Incorrect flooring tile installed for main body of house Directive: Floor tile shall be installed as specified in contract, written change order, verbal agreement or other document noting selection. The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action.

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

RECEIVED 9.24.2018 ROC LEGAL

6. Following the issuance of the CWO, the Investigator testified that AZ Contracting did not correct the items listed in the CWO before the deadline on June 1, 2018. 7. On June 8, 2018, the Registrar issued a Citation against AZ Contracting, charging the following possible violations:

Charge 1: A violation of A.R.S. § 32-1154(A)(2);5 Charge 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);

Charge 3: A violation of A.R.S. § 32-1154(A)(9);6 and Charge 4: A violation of A.R.S. § 32-1154(A)(22)7

7. This matter was referred by the Registrar for hearing to the Office of Administrative Hearings, an independent agency. A hearing was held on September 10, 2018. 8. Registrar Chief Investigator Steve Lawton8 reviewed the Registrar’s files created by Mr. Gunstra and testified regarding the findings, conclusions and actions of Investigator Matt Gunstra in this case. Investigator Lawton testified that his subordinate documented his May 2, 2018 JSI with his Job Site Inspection Notes9 and his CWO.10 Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.. Aiding or abetting a licensed or unlicensed person to evade this chapter, knowingly or recklessly combining or conspiring with a licensed or unlicensed person, allowing one's license to be used by a licensed or unlicensed person or acting as agent, partner, associate or otherwise of a licensed or unlicensed person with intent to evade this chapter. 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. See footnote 2, supra. Agency Record at “Rcc100 Job Site Inspection Notes1.rtf,” supra Agency Record at “Rcc 014 Corrective Work Order.rtf,” supra. RECEIVED 9.24.2018 ROC LEGAL

9. He testified that twenty items were identified in AZ Contracting’s work that were below workmanship standards,11 that at AZ Contracting has not passed final inspection by the City and that the project had been “Red Tagged” 10. By the June 7, 2018 Compliance Inspection, Inspector Lawton testified that AZ Contracting had still not obtained the proper building permits. In the CWO,12 Mr. Lawton testified, Mr. Lawton testified that as of the Compliance Inspection, AZ Contracting had still not complied with the CWO. 11. Pursuant to A.R.S. § 32-1154(E},“[t]he registrar may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of subsection A, paragraph 22 of this section.”13 12. Administrative notice is taken of AZ Contracting’s prior License record as reflected on the Registrar’s public website on September 20, 2018. AZ Contracting holds a current General Dual KB-2 Dual Residential and Small Commercial Contractors License

first issued by the Registrar on February 2, 2014. License record reflects that AZ

Contracting’s License has twice been disciplined for prior citizen complaints.

CONCLUSIONS OF LAW

13. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. 14. Complainant bears the burden of proof to establish AZ Contracting’s statutory violation 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, 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). 15. By a preponderance of the evidence, the uncontested testimony of Investigator Lawton and Mr. Gunstra’s corroborating Job Site Inspection Notes14 ¶4 and ¶5, supra. Agency Record at “Rcc 014 Corrective Work Order.rtf,” supra.. See Footnote Number 7, supra. Agency Record at “Rcc100 Job Site Inspection Notes1.rtf”, supra RECEIVED 9.24.2018 ROC LEGAL

demonstrate that the AZ Contracting was required to obtain a building permit before commencing work and that AZ Contracting did not obtain the required permit or permits before the deadline imposed by the CWO. Therefore, Complainant has established AZ Contracting has violated A.R.S. § 32-1154(A)(2). 16. By a preponderance of the evidence presented, AZ Contracting did violate A.A.C. Rule 4-9-108, and thereby of A.R.S. § 32-1154(A)(3). 17. Complainant has not met its burden to prove by a preponderance of evidence that AZ Contracting had violated A.R.S. § 32-1154(A)(9) 18. By a preponderance of the evidence it is proven that AZ Contracting did violate A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, IT IS RECOMMENDED that on the effective date of the Order, the Registrar shall suspend the Contractors License number 303463 held by AZ Contracting Group LLC for five (5) days. FURTHER IT IS RECOMMENDED that on or before the effective date of the final Order in this matter, AZ Contracting Group LLC must pay to the Registrar of Contractors in certified funds a civil penalty of $500.00. 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 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 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.

RECEIVED 9.24.2018 ROC LEGAL

Done this day, September 21, 2018.

/s/ Randolph D. Wolfson Administrative Law Judge Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors