ALJDEC decisions subject to certification as final

2018A-2443-CHC-ROC · Registrar of Contractors · 2018-11-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 25, 2018 at 8:30 AM. APPEARANCES: Michael J. Wimberly (“Complainant”) appeared on his own behalf with Terry Lynn Wimberly as a witness. Timothy Pennington appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Kenneth Henry appeared on behalf of Moseley Contracting LLC (“Respondent”) with Andrew Moseley and Michael Scott Schenk as witnesses. ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Registrar. FINDINGS OF FACT Background and Procedure 1. Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s license file as shown on the Registrar’s public website on October 25, 2018. The Registrar issued License No. 316271 for B General Residential contracting license to Respondent on November 14, 2017.[1] There is one open complaint against the license, which is presumably Complainant’s.[2] The license has an active surety bond from RLI Insurance Company for $9,000.00 effective October 10, 2017.[3] Andrew Stephan Mosely is listed as the Qualifying Party/Manager on the license.[4] Respondent’s address of record on the license is 9825 W Maya Way Peoria, AZ 85383-2933.[5] 2. On May 31, 2018, the Registrar received a complaint from Complainant alleging six specific instances poor workmanship by Respondent on Complainant’s new home project.[6] The Registrar assigned Complaint Number 2018-2443 to investigator Timothy Pennington (“Investigator Pennington”) for review. 3. On June 05, 2018, Investigator Pennington issued a Jobsite Inspection Notification letter to the parties on behalf of the Registrar, advising that he would conduct an onsite review of the project on June 26, 2018, at 9:00 a.m.[7] 4. On June 05, 2018, Complainant supplied the Registrar with an addendum to Complaint Number 2018-2443, along with copies of his Buyer Agreement and Settlement Statement.[8] 5. On June 08, 2018, Investigator Pennington reissued the Jobsite Inspection Notification letter to the parties with Complainant’s addendum attached.[9] 6. On June 26, 2018, Investigator Pennington inspected the work that had been done on the project to date and took nine photographs of various parts of the project.[10] When he was finished, Investigator Pennington drafted inspection notes whereby he substantiated five complaint items.[11] 7. On June 26, 2018, Investigator Pennington issued a Directive from the Registrar to Respondent because he substantiated Complainant’s allegations that the work Respondent had done on Complainant’s project failed to meet minimum workmanship standards in violation of Ariz. Admin. Code R4-9-108.[12] Respondent was put on notice that it had until 5:00 p.m. on July 14, 2018, to notify the Registrar of its compliance with the corrective order or face discipline including the issuance of a Citation, discipline of Respondent’s license, and/or a civil penalty pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32- 1154(E).[13] Respondent was required to remedy the following by appropriate means: Complaint Item 1: Roof is short of foam. Not installed per manufacturer specs to meet IRC code of 1” thickness. Complaint Item 2: Valley View Window & Door, ROG 244196; Windows on both sides of the back door- 1-scratched, 1 gasket seal is broken, 1 window front bedroom air bubbles in glass Complaint Item 3: Exterior Laundry door is warped, repair not completed. Complaint Item 4: Cabinets throughout the house are lacking stain, warp doors, trim, and adjustment. Doors need adjustment some look warped, Lack of stain in areas, Crown molding gapes and poor connection to extend length. Complaint Item 5: Floor tile in hallway lifting and moving.

8. On June 28, 2018, the Registrar received a second addendum to Complaint Number 2018-2443 from Complainant whereby Complainant alleged seven additional specific instances poor workmanship against Respondent on the project.[14] 9. On June 28, 2018, Investigator Pennington issued another Jobsite Inspection Notification letter to the parties on behalf of the Registrar, advising that he would conduct an onsite review at the project site by on July 26, 2018, at 3:00 p.m. to address the addendum complaint items submitted to the Registrar by Complainant.[15] 10. On July 03, 2018, Investigator Pennington mailed the parties a notice of rescheduled jobsite inspection due to a scheduling conflict, whereby both parties were put on notice the inspection would take place on August 01, 2018, at 3:00 p.m.[16] 11. On July 19, 2018, Investigator Pennington mailed the parties a notice of rescheduled jobsite inspection due to a scheduling conflict, whereby both parties were put on notice the inspection would take place on August 09, 2018, at 3:00 p.m.[17] 12. On August 09, 2018, Investigator Pennington issued a Compliance Inspection Notification letter to the parties on behalf of the Registrar, advising that he would conduct an onsite review at the project site on August 14, 2018, at 3:00 p.m. to determine adherence to his previously issued Directive.[18] 13. Investigator Pennington completed a Compliance Inspection on August 14, 2018, whereby he inspected the work that had been done on the project to date and took three photographs of various parts of the project. [19] When he was finished, Investigator Pennington drafted compliance notes in which he found that Respondent failed to properly remediate the five complaint items outlined in the June 26, 2018 Directive. 14. Investigator Pennington forwarded his findings to the Registrar’s legal department. 15. On August 15, 2018, the Registrar issued a Citation to Respondent that charged cause to suspend or revoke Respondent’s license under Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22), as well as Ariz. Admin. Code R4-9-108.[20] The Citation reads, in pertinent parts, as follows: The Registrar hereby notifies Moseley Contracting, LLC that if the act or acts charged in the written complaint are proved at an administrative hearing, then Moseley Contracting, LLC may be found to have violated the following statutory provisions and rules: Charge 1: 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). Furthermore, on June 26, 2018, the Registrar issued Moseley Contracting, LLC a written directive to take appropriate corrective action. Under A.R.S. § 32-1154(A)(22), Moseley Contracting, LLC’s license may not be revoked or suspended, nor may any other penalty be imposed on Moseley Contracting, LLC, for a failure to take that appropriate corrective action until after a hearing has been held. Therefore, the administrative law judge presiding over the hearing will determine whether the following charge against Moseley Contracting, LLC has merit: Charge 2: A violation of 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. 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.”). If the administrative law judge determines the validity of any of the charges listed above, then Moseley Contracting, LLC’s license may be subject to suspension or revocation, and Moseley Contracting, LLC may be subject to other penalties provided by law.

16. Respondent submitted a timely Answer to the Registrar’s Citation on August 27, 2018.[21] 17. The Registrar referred the complaint to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 18. An evidentiary hearing was held on October 25, 2018. Michael J. Wimberly, Terry Lynn Wimberly, and Timothy Pennington testified on behalf of Complainant. Complainant submitted two exhibits. Kenneth Henry, Andrew Moseley, and Michael Scott Schenk testified on behalf of Respondent. Respondent also submitted two exhibits. The Registrar’s electronic file was also admitted into the record. Hearing Evidence 19. At the hearing, Mr. Wimberly testified that he purchased a brand new residential home, located at 28419 N Rambling Rock Court, Wittmann, Arizona 85361, on March 29, 2018. Per his purchase agreement, Mr. Wimberly testified, Respondent was contracted to construct the home. During the inspection of the property at the close of escrow, Mr. Wimberly identified a number of deficiencies with various parts of Respondent’s work on the project, including improperly installed roofing, windows, doors, tiles, cabinetry, and subpar application of interior and exterior paint. Although Respondent remediated several areas of concern, Respondent’s failure to address the six aforementioned areas of concern resulted in Complainant filing a complaint with the Registrar. Mr. Wimberly testified that as of the day of the hearing, the only remaining issue on the project was the cabinetry: including a warped door, outstanding handles to be affixed or centered, and stain correction as the colors were inconsistent. 20. Mrs. Wimberly testified that she obtained a remediation bid from another contractor in August 2018 for $7,500.00 to complete the outstanding repairs, and that she had already provided a $2,500.00 deposit.[22] Mrs. Wimberly denied refusing Respondent access to the project site. 21. Mr. Moseley testified that he had not received written notification that the Wimberlys were unhappy with Respondent’s workmanship until they received word from the Registrar after the complaint was filed, but that he did authorize remediation work to remedy the issues Complainant identified on the project. 22. Mr. Schenk testified that working on the Wimberly project was stressful for him, as the homeowners would inspect his work closely and regularly. Mr. Schenk denied being scheduled to work daily, but agreed that he missed several days on the project due to suffering an unforeseen illness.[23] 23. During his testimony Mr. Henry argued that the Wimberly home was sold “as is” which relieved Respondent of any liability regarding dissatisfaction or remediation on the project. Mr. Henry admitted, however, that Respondent remediated nearly all of Mr. Wimberly’s areas of concern regarding workmanship on the project, and that Respondent had installed the cabinets supplied directly from the manufacturer in the Wimberly home. Although Mr. Henry questioned whether the cabinetry in the Wimberly home arrived warped and improperly stained from the manufacturer or whether the issues were weather related, Mr. Henry further admitted that one of his trades used a “touch up kit” provided by the manufacturer to even the stain on the Wimberly cabinets. Although Mr. Henry agreed that the Wimberly cabinetry still needs repair, he opined that the homeowners could remediate the stain themselves by utilizing the manufacturer’s “touch up kit.” 24. Investigator Pennington testified that he completed a Prehearing Inspection on October 24, 2018, whereby he noted the cabinetry had not been fully repaired or replaced.[24] Investigator Pennington noted that although the Wimberly complaint had been amended twice, no citation had been issued prior to his final inspection. Investigator Pennington also testified that Respondent failed to request a compliance extension. Lastly, Investigator Pennington testified that Respondent alleged there had been denial of access to the property, but had not provided any evidence to substantiate the allegation. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction and has been properly brought before the Office of Administrative Hearings for adjudication.[25] 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[26] Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.[27] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[28] 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.”[29] 4. Ariz. Admin. Code R4-9-108(A) holds, in pertinent part, that “[a] contractor shall perform all work in a professional and workmanlike manner. 5. Ariz. Admin. Code R4-9-108(B) holds, in pertinent part, that “[a] contractor shall perform all work in accordance with any applicable building codes and professional industry standards. 6. Ariz. Admin. Stat. § 32-1154(A)(3) holds that a holder of a license may not violate a rule adopted by the Registrar. 7. Ariz. Admin. Stat. § 32-1154(A)(22) holds, in pertinent part, that a holder of a license may not fail to take appropriate corrective action to comply with this chapter or 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. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held. The Registrar has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award. 8. Ariz. Admin. Stat. § 32-1154(E) holds, in pertinent parts, that the Registrar may impose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. It also holds that no future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered. 9. Here, it is undisputed that the Registrar issued its Directive to Respondent on June 26, 2018, and required Respondent’s full compliance by July 14, 2018. It is also undisputed that Respondent failed to comply. 10. Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to timely complete Complainant’s project. This is an affirmative defense that Respondent bears the burden to establish. 11. None of the “defenses” Respondent raised are viable. Mr. Henry’s argument about the home’s “as is” sales clause is inapplicable to the contract Complainant had with Respondent. Furthermore, Respondent was afforded more time than provided in the Directive to complete the Wimberly project, whereby the timely replacement of Mr. Schenk could have taken place, but no sound reason(s) have been offered by Respondent failed to complete the project. 12. It is undisputed that Respondent installed the cabinetry in the Wimberly’s home. Respondent approved the condition of the cabinets and assumed liability for their condition upon installation. Moreover, Respondent admitted to making at least one attempt to remediate the condition of the stain on the cabinets, and further admitted that the warping on the cabinets needed repair. 13. Based upon a review of the credible and relevant evidence in the record, the tribunal holds that Respondent failed to adhere to a Registrar Directive, and had no affirmative defense(s) for doing so. 14. Because Complainant established by a preponderance of the evidence that Respondent failed to perform the scope of work outlined in its contractual agreement with Complainant, specifically noting the five action items identified for remediation by the Registrar in its Directive and the one left outstanding at the time of hearing, Complainant has shown that Respondent did not completed the job per their agreement pursuant to Ariz. Admin. Code R4-9-108, and thereby Ariz. Rev. Stat. § 32-1154(A)(3). 15. Additionally, because Complainant established by a preponderance of the evidence that Respondent failed to take appropriate corrective action to comply with the Directive that was issued in this matter, Complainant has also established cause for the Registrar to suspend or revoke Respondent’s contractor’s license under Ariz. Admin. Stat. § 32- 1154(A)(22) and/or issue a civil penalty pursuant to Ariz. Rev. Stat. § 32-1154(E). 16. Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter, as the Tribunal has no jurisdiction to award a refund of the underlying amount contracted between the parties. RECOMMENDED ORDER Based on the foregoing facts and conclusions of law, IT IS RECOMMENDED that that on the effective date of the final order in this matter, Respondent Moseley Contracting, LLC License No. 316271 shall be suspended for two (2) business days. It is further recommended that the Registrar require Respondent to pay the sum of $200.00 as a civil penalty pursuant to Ariz. Rev. Stat. § 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 Ariz. Rev. Stat. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty via certified funds. 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, November 13, 2018.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See https://roc.az.gov/contractor-search?Id=a0Yt000000ACWJsEAP. [2] Id. [3] Id. [4] Id. [5] Id. [6] See the Registrar’s electronic file at Intake Additional Docs Submitted1.pdf. [7] See the Registrar’s electronic file at Rcc012 Formal Inspection Jobsite1.rtf. [8] See the Registrar’s electronic file at Intake Additional Docs Submitted2.pdf. [9] See the Registrar’s electronic file at Rcc090 Addendum To Formal Complaint2.rtf. [10] See the Registrar’s electronic file at Inv Photographs1.docx. [11] See the Registrar’s electronic file at Rcc100 Jobsite Inspection Notes1.rtf. [12] See the Registrar’s electronic file at Rcc014 Corrective Work Order1.rtf. [13] Id. [14] See the Registrar’s electronic file at Intake Additional Docs Submitted1.pdf. [15] See the Registrar’s electronic file at Rcc090 Addendum To Formal Complaint1.rtf. [16] See the Registrar’s electronic file at Rcc063 Re Schedule Of Jobsite Inspection2.rtf. [17] See the Registrar’s electronic file at Rcc063 Re Schedule Of Jobsite Inspection1.rtf. [18] See the Registrar’s electronic file at Rcc078 Compliance Jobsite1.rtf. [19] See the Registrar’s electronic file at Rcc104 Compliance Jobsite Inspection Notes1.rtf. [20] See the Registrar’s electronic file at Rch424 Citation Multiple Charges Workmanship W221.rtf. [21] See the Registrar’s electronic file at Lg Citation2.pdf; see also the Registrar’s electronic file at Lg Corres1.pdf. [22] See Complainant Exhibit 2. [23] See Respondent Exhibit A. [24] See Complainant Exhibit 1. [25] See Ariz. Rev. Stat. §§ 32-1154(A) and 41-1092 et seq. [26] Ariz. Rev. Stat. § 41-1092.07(G)(2); Ariz. Admin. Code R2-19- 119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [27] See Ariz. Admin. Code R2-19-119(B)(2). [28] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [29] Black’s Law Dictionary at page 1220 (8th ed. 1999).

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