ALJDEC decisions subject to certification as final

2018A-1632-CHC-ROC · Registrar of Contractors · 2018-10-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 1, 2018 APPEARANCES: Steve McKeage, Complainant; John Marsh, Respondent; Lee Fry, Tony Ventura. ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson _____________________________________________________________________ FINDINGS OF FACT Floors Unlimited Inc. (Respondent) is the holder of license number 086526, a Specialty Dual CR-8 Floor Covering license, issued by the Arizona Registrar of Contractors (ROC).[1] On or about March 30, 2017, Steven Paul McKeage (Complainant) entered into a contract with Respondent to, among other things, provide materials, labor and installation of Heirloom Collection White Oak Rift flooring in Complainant’s kitchen, family room, office, laundry room., entry, master bedroom, two walk-in closets and three additional bedrooms and closets and grind top coat of floor in addition to grinding some high spots.[2] On or about April 9, 2018, the Registrar received a Complaint against Respondent from Complainant alleging Respondent performed poor work and abandoned the job. The Registrar assigned the Complaint to ROC Investigator Matt Gunstra On or about May 9, 2018, a Job Site Inspection [“JSI”] was conducted by Mr. Gunstra,[3] Following the JSI, Investigator Gunstra issued a Written Directive[4] containing a Corrective Work Order [“CWO”] to Respondent which stated:

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 5/31/18. [emphasis in original]. You are hereby directed to remedy the following violations by the appropriate means:

Complaint Item 1: Floor is unlevel and slopes in some areas Investigator’s Observation: Using a 4' level I measured various areas of the wood floor installation. In one bedroom the floor is out of level by 1/2" in 4' near the door to the room. The main floor of the room seems to be acceptably [sic] level. An additional room has an out of level area as well. The manufacturer calls for floors to be level within 3/16" in a 10' radius or 1/8" in a 6' radius. The noted areas are not within this requirement and are not acceptable.

Complaint Item 2: Floor has high and low spots. Investigator’s Observation: Using a 4' level I measured various areas of the wood floor installation. The joints between planks appear to be raised across the majority of the installation. This "peak" causes the level to rock and the floor to have an unevenness. The cupping of the planks is subtle and not easily observed from standing height but can be seen with a straight edge. Complainant has a left over box of uninstalled flooring which I observed. The planks from the box also have this cupping which suggests a possible manufacturing issue. I cannot inspect the concrete due to the flooring being installed so I cannot comment on its condition. ROC workmanship standards for hardwood floors requires they be installed per manufacturer recommendations and do not curl, pop, or buckle. Complainant showed me the Bona Hardwood Floor cleaning device he uses to clean the floors. It seems appropriate and I have no evidence the floor was affected by misuse or abuse. Respondent should make necessary repairs.

Complaint Item 3: Floor was not properly glued down to the concrete. Investigator’s Observation: By tapping on the floor I found some areas of hollowness but do not consider it excessive at this time due to the plank being solidly bonded to the floor. At least one plank was not glued at all or has come loose near the garage door.

Complaint Item 4: Wood floor was cut too short so base board does not cover it. Investigator’s Observation: In select areas, primarily the hallway, the wood flooring was cut too short and the baseboard will not cover the gap. The majority of the installation is installed appropriately so the base will cover the gap. Baseboards are not installed at this time.

Complaint Item 6: Manufactured damaged floor was laid and not inspected prior to install. Investigator’s Observation: I observed 3-5 locations where the wood flooring is defective. They appear to be issues with the finish of the wood splintering or delaminating. Complainant notified Respondent timely of these issues and there is no evidence to suggest the floor was damaged by abuse. Respondent should correct by appropriate means.

The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action. By its July 29, 2018 e-mail to the Office of Administrative Hearings,[5] Respondent Answered the Complaint. It its Answer, Respondent admits “I am responding to case number 2018-1632. In reference to a complaint by Steven Paul McKeage. Floors Unlimited, Inc. agrees with the findings of the investigator Matt Gunstra that relate to workmanship.” Following the issuance of the written directive, Respondent did not repair or correct the items listed in the CWO before the CWO’s stated deadline of May 31, 2018. On June 4, 2018,the ROC issued a Citation against Respondent, charging possible violations of A.C.C. Rule 4-9-108, titled “Minimum Construction Standards,” i and thereby of A.R.S. § 32-1154(A)(3) and of A.R.S. § 32- 1154(A)(22)[6] The matter was referred to the Office of Administrative Hearings, an independent agency from the ROC, for the purpose of conducting a hearing to determine the merits of the Citation. A hearing was held on October 2, 2018. At the hearing, Complainant testified that this job was contracted to be completed in two weeks, namely July 29, 2017 through August 18, 2017 . Complainant moved out of the residence to allow the work to commence and left a key to the residence in a lockbox for the Respondent so it may gain access as needed, 24 hours a day. When Complainant moved back into his home he discovered that no flooring had been laid in the Master Bedroom (although the floor had been prepared by the Respondent). On August 22, 2017, Respondent refused to return to complete the job unless Complainant made an additional advanced payment to re-grind and re-prep the floors. Respondent never returned to complete the job. August 22, 2017 was the last date the Respondent worked at the Complainant’s residence. In addition, Respondent directed that Complainant was required to sign-off for the completion of the floor preparation. Because Complainant’s position was that it had already paid for floor preparation for the job and because flooring was laid on top of the slab that Respondent had prepared such that the quality and completeness of the floor preparation by then could not be visualized (since the surface was covered by flooring), the Complainant refused to make additional payment or to sign off on the floor preparation. The original floor was not installed by the Respondent. The original floor had defects in that it improperly sloped in many areas and in other areas was waivy and uneven. Respondent’s contract required it to grind down and prepare the surface to accept Respondent’s flooring install. In areas where flooring was installed before the Respondent left the job, the flooring was uneven, showed cupping of planks, was wavy in spots, and was overall was not level. Mr. Lee Fry, an employee of the Respondent, testified for the Respondent. Mr. Fry was the job supervisor for this contract. He said that from the JSI he was concerned that ROC investigator was unable to see the surface under the flooring that had been laid arguing that this fact impacts the credibility of the ROC Investigator’s opinions. Respondent defends by asserting that the flooring upon which its product was to be installed was poured by another contractor when the original home was built. Therefore, it was argued that Respondent should not be responsible for defects in the surface that it did not create. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on October 19, 2018. Such prior License record reflects that Respondent’s License No. 086526 was first issued on June 4, 1990. The licensee has been disciplined once previously arising out of a Complaint.

CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction. A.R.S. § 32-1101 et seq. Complainant bears the burden of proof to establish Respondent’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, 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). 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). 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."). 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). By a preponderance of the evidence the Respondent is not an unscrupulous, unqualified, or a financially irresponsible contractor. “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). 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. Ariz. Admin. Code section R4-9-108(A) provides that “A contractor shall perform all work in a professional manner.” “As a general principle in construction, a subcontractor who performs work on top of a surface prepared by another accepts the surface. The subcontractor should have inspected the surface for any flaws or defects that would affect the work he proposes before performing the work. If he found the surface to be unacceptable, he should have called any defects to the owner’s or general contractor’s attention so that the owner can choose whether to pay for the defective surface to be corrected or if the owner is not willing to pay to correct the surface, the contractor may obtain an explicit warranty disclaimer.” Deeb v. Checks Epoxy, No. 2014A-3258 (ALJ Decision at 11:11–19). In this case, Respondent was aware of the uneven and unlevel flooring on this bid and, in its contract, agreed to “Grind top coat of floor in addition to grinding some high spots.”[7] No Arizona authority addresses the Registrar’s policy that a subsequent contractor who accepts a surface prepared by an earlier contractor also accepts full responsibility for the outcome. The policy is supported by case law from other jurisdictions. See generally cases cited at “Duty of Contractor to Warn Owner of Defects in Subsurface Conditions,” A.L.R.3d 1213 (1976). A contractor who knew or should have known of a defect in the surface does not perform construction in a workmanlike manner if the contractor fails to notify the owner of the defect and the construction later fails due to the defective surface. See, e.g., Parker v. Thornton, 596 So. 2d 854, 858 (Miss. 1992); Lewis v.Anchorage Asphalt Paving Co., 535 P.2d 1188, 1199 (Alaska 1975). The principle is based on common sense and a need for fair dealings between contractors and property owners: For the requirements of public order and the obligation implicit in every contract that the work will be done in a good and workmanlike manner would compel us to reject a contention that an undertaker is not responsible for building upon a site which he knows to be defective. In such a case, the barest standards of care would require him to bring the defect to the attention of the owner before proceeding. The owner would then have an opportunity to make the indicated adjustment in the contract to provide against. Wurst v. Pruyn, 202 So. 2d 268, 271-72 (La. 1967) (citation omitted); Deeb v. Checks Epoxy, No. 2014-3258 (ALJ Decision at 11:20–30).[8] That Respondent defends by asserting that the flooring upon which its product was to be installed was poured by another contractor when the original home was built. Therefore, it was argued that Respondent should not be responsible for defects in the surface that it did not create. Such argument is not a reasonable excuse for non-compliance with the CWO or to defend against a poor workmanship clam. Respondent “accepted the surface” of Complainant’s floor in its bid and contract and Respondent is responsible to correct Complainant’s flooring defects before flooring was laid. As to the issue of poor workmanship, the unrebutted evidence established six separate workmanship deficiencies.[9] Moreover, Respondent in its Answer admits “…Floors Unlimited, Inc. agrees with the findings of the investigator Matt Gunstra that relate to workmanship.” Therefore, Complainant has established that Respondent did not perform the work in a professional and workmanlike manner in violation of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3). By a preponderance of the evidence it has been established that Respondent violated A.R.S. § 32-1154(A)(22) by its refusal or failure to comply with the CWO prior to the stated deadline contained in the CWO of 5:00 p.m. on May 31, 2018. Respondents below standard workmanship and prior discipline record are aggravating circumstances. That the evidence showed Respondent’s willingness to return to the job site after the CWO deadline to complete its performance and to comply with the CWO is neither aggravating nor mitigating. There are no mitigating circumstances. The aggravating circumstances outweigh the mitigating circumstances for purpose of determining discipline in this case. Pursuant to A.R.S. §32-1154(D), the Registrar may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of A.R.S. §32-1154(A)(22). By its failure to comply with the CWO, the ROC should impose a civil penalty of $500.00.[10]

RECOMMENDED ORDER

IT IS RECOMMENDED it be ordered that on the effective date of this order, the license number 086526 held by Respondent Floors Unlimited Inc, shall be suspended for one (1) day. FURTHER IT IS RECOMMENDED it be Ordered that in accordance with A.R.S. §32-1154(D), a civil penalty in the amount of $500.00 is imposed against license number 086526 held by Respondent Floors Unlimited Inc. FURTHER IT IS 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. Done this day, October 19, 2018. /s/ Randolph D. Wolfson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] Administrative Judicial Notice is taken of the entirety of the ROC record in this case [2] Agency Record, “Intake Complaint Submittal”, page 3, March 30, 2017, Contract Extension #1462. [3] See, Agency Record, “Rcc100 Job Site Inspection Notes.” [4] Agency Record, “Rcc14 Corrective Work Order1.rtf.” [5] Office of Administrative Hearings Docket “7/22/2018 2018A-1632-CHC- ROC.msg” [6] 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…. [7] Agency Record, “Intake Complaint Submittal”, page 3, March 30, 2017, Contract Extension #1462, supra [8] Ibid. [9] See, Agency Record, Rcc100 Job Site Inspection Notes and “Rcc14 Corrective Work Order1.rtf, supra. [10] R4-9-131. Assessment of Civil Penalties: In assessing a civil penalty as provided for under A.R.S. § 32-1166(A), the Registrar shall give due consideration to whether the person cited or any individual acting on that person's behalf has committed one or more of the following acts in determining the gravity of the cited violation:…8. Performed work that failed to meet minimum acceptable trade or industry standards or practices or was not performed in a good and workmanlike manner.

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