ALJDEC decisions subject to certification as final

2018A-2069-CHC-ROC · Registrar of Contractors · 2018-10-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 9, 2018, at 1:00 p.m. APPEARANCES: Richard Seth Dobrusin (“Complainant”) appeared on his own behalf; Custom Homes By Mark Steimer Inc. (“Respondent”) was represented by James Hanson, Lang & Klain, P.C. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. According to the Registrar of Contractors’ (“the Registrar’s”) public website, on or about May 17, 2009, the Registrar issued License No. B.255612-R for residential general contracting to Respondent. 2. On or about May 3, 2018, Complainant filed a complaint with the Registrar against Respondent, alleging eleven specific items of poor workmanship at a house Respondent had constructed at 13750 East Yucca Street, Scottsdale, Arizona 85259.[1] 3. The Registrar assigned the complaint to its Investigator Steve Klein for investigation. On June 6, 2018, Investigator Klein performed a jobsite inspection. On June 7, 2018, Investigator Klein issued a Directive that required Respondent to correct eight items of Complainant’s complaint, in relevant part as follows: Complaint Item 1: There are scratches and long scuffs on the "Cambria" kitchen countertop" • Verified scuff marks on the kitchen counter top. Complainant supplied documentation showing Respondent was notified within 10 days of installation.

Complaint Item 2: There are cracked tiles throughout the house in all bathrooms. • Verified cracked tiles in all showers.

Complaint Item 3: We have 4 tiled showers all of which have cracking on all the walls. • Verified cracked tiles in all showers.

Complaint Item 4: There are shower drainage and leveling problems with the shower floors. • Respondent agreed to correct. (M/bath only)

Complaint Item 5: There are rust spots developing in the showers. • Respondent agreed to correct while addressing shower ponding issue. (M/bath only)

Complaint Item 6: The shower floors have dark discoloration and water stays puddled for days. • Respondent agreed to correct while addressing shower ponding issue. (M/bath only)

Complaint Item 7: Most of the areas where grout meets the countertops are cracking and coming off. • Verified voids and cracking

Complaint Item 8: The builder is refusing to complete touch up painting and caulking work. • Verified drywall touch up in workout room bath at shower opening return wall, paint on cabinet in laundry, paint on grout in laundry, paint on wood beams next to walls in several areas, and paint touch up needed in hall in few areas near base.[2]

The deadline for Respondent to comply with the Directive was June 28, 2018, at 5:00 p.m.

4. On July 27, 2018, Investigator Klein referred the complaint to the Registrar’s Legal Department. On July 30, 2018, the Registrar issued a Citation that charged cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9- 108, and A.R.S. § 32-1154(A)(22). 5. Respondent’s qualifying party/president Mark Steimer filed a timely written answer to the Citation, denying any statutory violations. Mr. Steimer stated that Respondent had difficulty completing the items on the Directive due to the limited access to the job that Complainant and his wife provided and requested a 30-day extension to complete repairs.[3] Complainant opposed the extension.[4] 6. The Registrar referred Complainants’ complaint to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on October 9, 2018. Complainant submitted 21 exhibits, testified on his own behalf, and presented the testimony of his wife, Sheri Dobrusin. Respondent submitted fourteen exhibits and presented the testimony of Mr. Steimer and Richard Murray, Respondent’s superintendent on the job. Hearing Evidence 7. Investigator Klein testified that when he called Complainant to schedule a compliance inspection, Complainant stated that nothing had been done. Investigator Klein testified that he gave Complainant the choice of either closing the complaint or moving forward by referring it to the Legal Department. Investigator Klein testified that he advised Complainant to give Respondent an opportunity to correct remaining items. 8. On October 5, 2018, Investigator Klein performed a prehearing jobsite inspection, which both parties attended. The Cracked Tiles in the Bathrooms (Directive Item #2 and #3) 9. When Investigator Klein performed his June 6, 2018 jobsite inspection, Respondent had taken apart one of the showers to figure out while the tile was cracking. Investigator Klein testified that Mrs. Dobrusin had provided a magnifying glass to examine the tile that remained in one of the bathrooms, saying, “This is how the cracks start,”[5] but testified that he did not use the magnifying glass to examine the tile. 10. Complainant and Mrs. Dobrusin contacted Terry Brown, the owner of Dust- B-Gone and Vinyl Concepts LLC, and Emser, the supplier of the tile, to find out why the tiles in the bathrooms was cracking.[6] Emser agreed to come to the house at no charge. Respondent refused to meet with Dust-B-Gone, Vinyl Concepts, or Emser. 11. Complainant and Mrs. Dobrusin initially requested that Respondent work on one shower at a time, but eventually agreed that Respondent could work on the showers in the two bathrooms at the east end of the house at the same time to comply with the Directive.[7] These two bathrooms did not include the master bathroom. 12. Respondent took out all the tile down to the drywall and replaced the tile in three of the four bathrooms. Because the tile in the master bathroom was different, Respondent did not take all the tile out of the master bathroom, but instead planned to repair the master shower by replacing individual cracked tiles.[8] 13. Complainants felt that Respondent should also replace all the tiles in the master bathroom. 14. On September 7, 2018, Mr. Steimer sent an email to Mrs. Dobrusin, stating in relevant part as follows: Richard when Rich [Murray} and I met with Sheri on Tuesday and expressed our interest in moving into the master shower that day she said that she would talk to you and that you would give me a call that evening. I never heard from you and subsequently you sent me an e-mail that said you were not allowing us to move into the master shower until the third shower was totally completed. Again if you would grant us access into the master shower it would be helpful so that we can see whether we are going to just replace the cracked tiles per the ROC directive order or whether we will be redoing the entire shower. We have always wanted to move forward and get into that Master shower and start work so if you have changed you mind please let us know and we will get in there and start work immediately. That course of action would be the most efficient way of getting your project completed.[9]

Mr. Steimer testified that Complainant and Mrs. Dobrusin had never responded to his email and did not allow access to even look at the master bathroom shower to see what repairs were needed. 15. Mr. Steimer testified that Respondent’s subcontractor was eventually allowed to perform some repairs to the master bathroom and he asked Mrs. Dobrusin whether his tile subcontractor could complete work on the master bathroom shower before the prehearing inspection, but she stated that would not be convenient. 16. Investigator Klein testified that on October 5, 2018, there were still cracked tiles in the master bathroom (Directive Item #2). 17. Mr. Steimer testified that after the prehearing inspection, he, Mr. Murray, and Respondent’s tile subcontractor went to the house, rang the doorbell, and asked Complainant and Mrs. Dobrusin whether Respondent could replace the three cracked tiles in the master bathroom shower, but they said “no.” Levelling Floor in Master Bathroom (Directive Item #6) 18. Investigator Klein testified that the hexagonal marble tiles that Respondent had replaced when it levelled the master bathroom floor were a little shinier than the surrounding tiles.[10] Investigator Klein testified that the Registrar does not require a perfect match when tiles are replaced and Respondent had stated that it used the same tiles that it had installed in the master bathroom floor. 19. Investigator Klein acknowledged that he had not seen documentation of the tile that Respondent installed in the master bathroom. He informed Complainant and Mrs. Dobrusin that because the tile was natural stone white marble with gray streaks, it would dull over time. 20. Mr. Steimer testified that the time when marble is taken out of the earth changes its appearance. Complainant and Mrs. Dobrusin have been using the master bathroom for over a year, which causes calcium and lime to be deposited on the tile. Mr. Steimer testified that, in a short time, the new tile will look like the old tile. Paint on Beams (Directive Item #8) 21. Investigator Klein acknowledged that at the October 5, 2018, there was still some paint on the beams in the media room, near the gaps between the beams and drywall. 22. Investigator Klein testified that he informed Complainant and Mrs. Dobrusin that wood beams could be expected to twist. Although he initially felt that the paint on the beams should be corrected, Mr. Steimer called his attention to the Registrar’s Workmanship Standards that allowed dissimilar surfaces to pull away from each other. The paint on the beams was the result of the wood beams twisting, shrinking, or pulling away from the painted drywall, not paint overspray. Investigator Klein testified that in his opinion, the flecks of paint on the beams did not violate the Registrar’s workmanship standards. 23. Mr. Steimer pointed to the Registrar’s Workmanship Standards for Gypsum Wall Board No. 2, which stated “Normal conditions such as hairline cracks where drywall meets a dissimilar material should be considered acceptable and can be readily corrected by the homeowner.”[11] Mr. Steimer testified that based on this Workmanship Standard, Respondent is not responsible for a gap between the drywall and a dissimilar material like the wood beams. Evidence of Access 24. Mr. Steimer testified that he has been a contractor in Arizona for 30 years. He has never had a complaint filed against one of his licenses. 25. Mr. Steimer testified that the house was a spec house that Respondent had constructed. On September 30, 2017, Complainants did a two-and-a- half hour walkthrough doing only right turns so that they saw everything. Mr. Steimer testified that Complainants came up with a punch-list that had 12 items on it, which Respondent completed by October 5, 2017. Complainants closed escrow on October 6, 2017. Over the next six months, Complainants came up with eight more punch-lists, which Respondent mostly completed. 26. Mr. Steimer testified that Complainant and Mrs. Dobrusin’s relationship with Respondent soured after mid-November 2017, they asked him for plans for the house and he refused to provide the plans.[12] Mr. Steimer testified that if Respondent had contracted with Complainant and Mrs. Dobrusin to build the house from scratch, plans would have been provided, but because the house was a spec house, the plans were trademarked and there could be some minor deviations from the plans in construction, such as a hallway that was 3’ rather than 3’6” wide. Respondent’s policy is never to provide plans for spec houses it constructs, although it will provide specific specifications upon request. 27. Complainant testified that, initially, Mrs. Dobrusin was available 40 hours a week to allow Respondent’s subcontractors to perform work to comply with the Directive.[13] Complainant testified that no workers appeared until the dispute was referred to the Registrar’s Legal Department.[14] 28. Complainant testified that on several occasions, Respondent’s workers failed to appear. Mr. Steimer testified that on several occasions, Complainants refused to allow Respondent’s workers or subcontractors to work on the project. Mrs. Dobrusin twice cancelled one subcontractor from working on the project on the day before the subcontractor was scheduled to work on the project.[15] 29. Mr. Steimer testified that Respondent was not allowed to have more than one subcontractor onsite at a time, which slowed down the pace of repairs.[16] 30. On June 14, 2108, Mr. Steimer sent an email requesting available dates on which Complainant and Mrs. Dobrusin would allow access for Complainant to perform repairs to comply with the Directive, which had a deadline of June 28, 2018. On June 28, 2018, Mr. Steimer sent another email to Complainant and Mrs. Dobrusin, stating that if the showers had to be done at separate times, “it could take as much as one week per shower and that would be a total of four weeks to complete to job.”[17] Because three of the showers were retiled before Investigator Klein’s October 5, 2018 prehearing inspection, the Administrative Law Judge infers that Complainant continued to allow at least some access. 31. Mr. Steimer testified that Complainant had hired Respondent’s audiovisual subcontractor directly to install some equipment and that Complainant had failed to pay the subcontractor. After Mr. Steimer sent an email to Mrs. Dobrusin asking her to pay the subcontractor, on September 29, 2018, Complainant sent an email to Mr. Steimer, stating that “if you act aggressively or in a threatening manner in any way you will be asked to leave” and that “[f]ailure to comply with this request will result in us calling the police to stop you from trespassing.”[18] 32. Mr. Murray testified that he has been working in construction in Arizona since 1985 and working for Respondent for five years. He has never dealt with such difficult clients as Complainant and Mrs. Dobrusin. Three tile subcontractors have quit and most of the other subcontractors do not want to go back to the job. 33. Mrs. Dobrusin testified that getting the house fixed has been a stressful and devastating experience. She does not want to see Respondent’s license revoked. She is concerned about continued cracking in the showers in the house. She and Complainant cannot sell the house with cracked tile and a mismatched floor. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[19] 2. Complainants bear the burden of proof to establish cause to discipline Respondent’s licenses by a preponderance of the evidence.[20] Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.[21] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[22] A preponderance of the evidence is “[t]he 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.”[23] 4. Investigator Klein testified about only three potential deficiencies in Respondent’s repair of the items on the Directive: (1) The three cracked tiles in the master bathroom shower; (2) The new hexagonal marble tiles that did not match exactly the old hexagonal tiles in the master bathroom floor; and (3) the flecks of paint on the beams in the media room. Complainant did not challenge any of Respondent’s other repairs. 5. Investigator Klein testified that the new hexagonal marble tiles that Respondent installed in the master bathroom complied with the Registrar’s standards. Mr. Steimer credibly testified that after use, the new tiles would match the old tiles. Therefore, Complainant did not establish that the mismatched tiles furnish cause to suspend or revoke Respondent’s contractor’s license. 6. Mr. Steimer pointed out that the Registrar’s Workmanship Standards allow gaps between drywall and dissimilar materials, such as the wood beams, and that the flecks of paint on the beams is the result of the beams twisting and pulling away from the drywall. Investigator Klein accepted Respondent’s defense. Therefore, Complainant did not establish that the flecks of paint on the beams furnishes case to suspend or revoke Respondent’s contractor’s license. 7. Investigator Klein testified and Respondent acknowledged that three cracked tiles remain in the master bathroom shower. Therefore, Complainant potentially established cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(3),[24] namely A.A.C. R4-9-108.[25] 8. This is an extremely unfortunate case because, although the parties managed to work together to resolve numerous problems over almost a year, their relationship has deteriorated to a point that they are no longer able to continue in any kind of productive relationship. Although Complainant and Mrs. Dobrusin allowed Respondent to perform repairs for longer than the time specified in the Directive, Respondent established that they restricted Respondent’s access to the master bathroom shower until after the deadline in the Directive and refused to allow access to Respondent to complete the last minor repair. Given the minor nature of the three cracked tiles that still need to be replaced and the hostility between the parties, it would be unjust to suspend Respondent’s contractor’s license.[26] 9. Because construction is not a perfect art, contractors must be allowed reasonable access to complete repairs. Because Complainant and Mrs. Dobrusin did not allow reasonable access for Respondent to complete all repairs required by the Directive, specifically, the three remaining cracked tiles, Complainant has not established cause to revoke or suspend Respondent’s licenses under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, and A.R.S. § 32-1154(A)(22).[27] RECOMMENDED ORDER Based on the foregoing, it is ordered that on the effective date of the final order in this matter, Complainant Richard Seth Dobrusin’s complaint in Case No. 2018-2069 against Respondent Custom Homes By Mark Steimer Inc.’s License No. B.255612-R shall be dismissed. 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 five days from the date of that certification. Done this day, October 19, 2018.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See Complainant’s Exhibit 4. [2] Complainant’s Exhibit 7. [3] See Respondent’s Exhibit 10 at 54. [4] See Complainant’s Exhibit 16, 17. [5] See Complainant’s Exhibit 6 (photographs). [6] See Complainant’s Exhibit 3. [7] See Complainant’s Exhibit 14. [8] See Complainant’s Exhibit 12. [9] Respondent’s Exhibit 10 at 51. [10] See Complainant’s Exhibit 21. [11] Workmanship Standards for Licensed Contractors at 16 (June 2009). [12] See Respondent’s Exhibit2 at 22-23. [13] See Complainant’s Exhibit 15. [14] See Complainant’s Exhibit 16. [15] See Respondent’s Exhibit 5. [16] See Respondent’s Exhibit 9. [17] Respondent’s Exhibit 9 at 38. [18] Respondent’s Exhibit 12 at 60. [19] See A.R.S. § 32-1154(A). [20] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [21] See A.A.C. R2-19-119(B)(2). [22] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [23] Black’s Law Dictionary at page 1220 (8th ed. 1999). [24] 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.” [25] 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.” [26] Complainant and Mrs. Dobrusin may seek damages from for the three cracked tiles and any other remaining construction deficiencies in a court of competent civil jurisdiction. [27] 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.”

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