FINACT2018A-2563-CHC-ROC.pdf

2018A-2563-CHC-ROC · Registrar of Contractors · 2019-03-11

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Terry Johnson, Case No. 2018-2563 COMPLAINANT, Docket No. 2018A-2563-CHC-ROC v. FINAL ADMINISTRATIVE DECISION Scottsdale Fence and Iron Works Inc., AND ORDER License No. ROC 161230, 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 April 20, 2019.

Dated March 11, 2019. Registrar of Contractors /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Copy mailed via USPS First Class mail March 11, 2019 to: Respondent Scottsdale Fence and Iron Works Inc 8711 E Pinnacle Peak Rd #220 Scottsdale, AZ 85255 Matthew J. Pierce, Esq. WARNER ANGLE HALLAM JACKSON & FORMANEK PLC 2555 E Camelback Rd Ste 800 Phoenix, AZ 85016 Complainant Terry Johnson 29423 N 144th St Scottsdale, AZ 85262 AND copy electronically mailed this same date to: Respondent at email address on record with the Registrar Respondent’s Attorney at email address of record with Registrar Complainant at email address on record with the Registrar Office of Administrative Hearings Velva Moses-Thompson, Administrative Law Judge

Case No. 2018-2563 / AN

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 2.25.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Terry Johnson No. 2018A-2563-CHC-ROC

COMPLAINANT , ADMINISTRATIVE LAW JUDGE DECISION v.

Scottsdale Fence and Iron Works, Inc., License No: 161230,

RESPONDENT.

HEARING: November 26, 2018 and February 5, 2019. APPEARANCES: Complainant Terry Johnson appeared on behalf of himself. Matthew Pierce, Esq. appeared on behalf of Respondent Scottsdale Fence and Iron Works, Inc. ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson _____________________________________________________________________ FINDINGS OF FACT 1. On October 3, 2018, the Registrar of Contractors, (“Registrar”), issued a Notice of Hearing setting the above-captioned matter for hearing on November 26, 2018, by the Office of Administrative Hearings in Phoenix, Arizona. 1 2. Respondent Scottsdale Fence and Iron Works, Inc., (“Scottsdale Fence”), holds license No. 161230 issued by the Registrar. 3. William Nathan Prewitt is Scottsdale Fence’s qualifying party. 4. The Notice of Hearing shows that the hearing was set to consider the charges made in the CITATION and COMPLAINT.

1 The hearing did not conclude on November 26, 2018 and was set for further hearing on February 5, 2019. Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 2.25.2019 ROC LEGAL

5. Through the CITATION, the Registrar alleges that Scottsdale Fence may have violated A.A.C. Rule 4-9-108 and ARIZ. REV. STAT. sections 32-1154(A)(3), (A)(12) and (A)(22). The Registrar also alleges that Scottsdale Fence may have violated ARIZ.

REV. STAT. section 32-1158(B). The CITATION shows that if the Administrative Law

Judge finds that any of the alleged charges are valid, the Registrar may suspend or

revoke Scottsdale Fence’s license.2

6. On or about December 27, 2017, Scottsdale Fence and Complainant

Terry Johnson entered into a contract wherein Scottsdale Fence would fabricate and

install a fence on Mr. Johnson’s property.

7. On or about January 3, 2018, Mr. Johnson and Scottsdale Fence

executed a revised contract regarding the construction of the fence.

8. On March 31, 2018, Mr. Johnson sent an electronic mail message (“e-

mail”) which stated, “Looks fantastic so far!!!”. See Exhibit R9. The subject of the e-

mail was entitled, “Re: Update on fence”. See id.

9. On April 1, 2018, Mr. Johnson informed Scottsdale Fence that he had

additional time to “ponder” the wall and had additional concerns. See Exhibit 5.1.

The April 1, 2018 e-mail provided, in relevant part, as follows:3 The panels are all upside down. And flipped left to right. But I think this will not be an issue as the [sic] are symetrical [sic]. We did discuss the bottom plate extending ¾” beyond wall out the back so rust liquid would tend to miss wall. This may not be an issue as long as I paint the back side a dark brown, which I wanted to do anyway.

The frame was to be at the top of the panels. Is there a reason they are about an inch raised? One, it creates a long straight gap at the bottom, and two, it puts the frame in some of the holes at the top. ……The gap at the bottom isn’t so bad, but covering holes, and at the top with frame covering holes is bad.

The Citation shows that the Registrar could not determine whether any violations had actually occurred, which is why the matter was set for hearing. 3 See id. RECEIVED 2.25.2019 ROC LEGAL

I hope there is a solution for this. I assume you have triangular pieces for the holes at each drop? 10. On April 1, 2018, Mr. Prewitt responded to Mr. Johnson’s email. The e- mail provided, in relevant part, as follows:

……. I did not want the frame to show in anyway at the top or the bottom, thus the 1” inset [sic] around the edge. …..Framework obscuring some holes was inevitable…….As for the pan, it does extend ¾” beyond the wall on the outside. It was never our intent to have it extend 3/4 “out, and then the 45% angle down, for a total of 1 1/2” out (that would look bad and ill fitted). The ¾” angel down IS the roughly ¾” beyond the wall. There are no triangular pieces for the bottoms. You asked me to cut the angled tops on the stairsteps after we did the design, which [sic] said I could do. At that time I said there would still be the gaps at the bottom and you said that was fine. Those were 3’ x 10’ sheets, there’s no extra material to create “bottoms”. The drops from the tops would not match the pattern. The 1” gap at the bottom was discussed. It is obscured by the pan edge, and it will keep material and debris for collecting in the bottom of the pan. Anything less than an inch would cause the debris to accumulate and build up, and not blow out or was out like it will wit [sic] the 1”gap. Again, always the intent. I hope this answers your questions.

11. On April, 2018, Mr. Johnson sent an e-mail to Scottsdale Fence expressing his dissatisfaction with its responses. Mr. Johnson also stated in the e-mail, “Maybe there’s a solution of cutting parts or sides of frame out so as to not cover holes but keep structural integrity.” 12. On April 12, 2018, the parties executed an addendum to the contract wherein Mr. Johnson agreed to accept the fence in its current state. See Exhibit R2. At the time that the addendum was executed, the rust on the fence varied in color. The addendum provided, in relevant part, as follows:4 …………………

4 See id. RECEIVED 2.25.2019 ROC LEGAL

This Addendum and Punch List is provided for the information and protection of both buyer, Terry Johnston [sic], and Seller, Scottsdale Fence & Iron Works, Inc., to clearly identify any and all incomplete items, or modifications to completed items. By acceptance and execution of the Addendum, any all and all work, including the design, fabrication, installation, and execution of the work completed to date, unless specifically identified below, is deemed accepted as is.

Item #1. Framework modification. Modify top horizontal frame members so as to minimize visibility or not be seen through decorate holes. Specific locations as follows – Cut away top and bottom frame, marked with white paint #1 thru $19 ……

Item #2. Triangular fill pieces. These pieces were specifically not included in the original design or agreement. …Pieces will be cut and fit to fill triangular voids at the stairsteps in the panels. As these are added “after the fact” they will not be part of, or made to look like part of, the original panels. We will do our best to integrate them in to [sic] the design, however some spacing and some gap will remain between horizontal panels and these fill pieces. They will not be added to the original panels.

Item #3 Clear Coat. After all modifications are completed, the entire fence structure (not including powder coated drip pan) will be electro-statically clear coated. Single coat application. Item #4 Repair 5 broken tiles, damaged during construction. ……………………….

13. Scottsdale Fence performed the additional work under the addendum with the exception of Item #3. 14. On May 14, 2018, Mr. Johnson told Scottsdale Fence through an e-mail that he could not perform any further work on his property without notice and approval.

RECEIVED 2.25.2019 ROC LEGAL

Mr. Johnson stated that the fence was not ready for clear coating. See Exhibit 6.3. The May 14, 2018 e-mail provided, in relevant part, as follows:5 The tile is not acceptable. It is 1. not cut right 2. not flat title to tile 3. caulk job is terrible 4. there is no paint 5. there is no tile paint on the edge

Triangles are not acceptable. They 1. have to much gap at the bottom 2. holes are not what we discussed 3. rust color is that way off orange

Two 5’ panels at left end and piece on right end, 1. The rust is night/day different on whole pane. This may change over time, but as of now is not ready for clear coating.

DO NOT CLEAR COAT UNTIL I HAVE APPROVED TO DO IT You do not have permission to enter the property without prior notice and permission to do work. …… Failure to perform the amendment will result in that being void and the original contract enforceable. (Emphasis Added.)

15. On or about June 6, 2018, Mr. Johnson filed a COMPLAINT with the

Registrar alleging poor workmanship on the part of Scottsdale Fence. 16. Mr. Johnson submitted the revised contract and the addendum with the COMPLAINT. 17. On or about June 27, 2018, Registrar Investigator Steve Lawton (“Investigator Lawton”), conducted a job-site inspection in response to the COMPLAINT. Investigator Lawton’s jobsite inspection notes provided, in relevant part, as follows: Complaint Item 1: Framing not per specs discussed. Investigator’s Observation: Substantiated Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9-108 5 See id. RECEIVED 2.25.2019 ROC LEGAL

Complaint Item 2: Frame covered holes because of first complaint item. Investigator’s Observation: Substantiated Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9-108 Complaint Item 3: Panels mounted to high. Investigator’s Observation: Cannot substantiate Governing Rule: N/A: Complaint Item 4: Tray does not extend 1" beyond wall edge. Investigator’s Observation: Substantiated Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9-108 Complaint Item 5: Frame post mounted incorrectly. Off center top of wall. Investigator’s Observation: Substantiated. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9-108 Complaint Item 6: Triangle pieces to fill step gap made with to much to wall gap. Investigator’s Observation: Substantiated Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9-108 Complaint Item 7: Triangle pieces made with incorrect holes. Investigator’s Observation: Substantiated Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9-108

Complaint Item 8: Rust color of far left panels way off from the next 4-5 panels. Investigator’s Observation: Substantiated Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3);

Namely R4-9-108

Complaint Item 9: Rust color of short piece on right, way off from other panels. RECEIVED 2.25.2019 ROC LEGAL

Investigator’s Observation: Substantiated Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9-108 Complaint Item 10: Incorrect measuring of panel length created gaps between panels. Investigator’s Observation: Substantiated. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9-108 Complaint Item 11: Contractor damaged and broke tiles on bench wall. Investigator’s Observation: Substantiated. Respondent stated in e-mail that he would correct tiles and agreed that it was his workers that did break tiles. Governing Rule: Workmanship Rule: ARS 32-1154 (A) (3); Namely R4-9-108

18. At the job-site inspection, Complainant provided a written document to Investigator Lawton which Complainant asserted represented the verbal agreement between the parties regarding the project. See Complainant’s Exhibit 203. No representative for Respondent was present at the job-site inspection. 19. On July 20, 2018, Investigator Lawton issued a DIRECTIVE to Scottsdale Fence. The DIRECTIVE provided, in relevant part, as follows: After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). You are hereby directed to remedy the following violations by the appropriate means:

1. Complete and correct fencing per original agreement between parties.

2. Correct damaged tile on bench seat. (Emphasis Added.) 20. Through the DIRECTIVE, the Registrar ordered Scottsdale Fence to remedy the alleged violations by appropriate means no later than August 13, 2018.

RECEIVED 2.25.2019 ROC LEGAL

21. On August 8, 2018, Investigator Lawton performed a compliance inspection. Investigator Lawton found that the items listed on the DIRECTIVE were not completed at the time of inspection.

22. Scottsdale Fence filed a timely appeal to the CITATION.

23. The matter was referred to the OAH for an evidentiary hearing.

24. At hearing, Mr. Johnson testified on behalf of himself and presented the

testimony of his wife, Myra Johnson. Scottsdale Fence presented the testimony of

William Nathan Prewitt and Matthew Aaron McCartney. Investigator Lawton testified

regarding his investigation of the compliant and issuance of the DIRECTIVE.

25. During cross examination, Investigator Lawton explained that he was not

aware of the addendum at the time that he issued the DIRECTIVE. Investigator Lawton

explained that he issued the DIRECTIVE because Scottsdale Fence did not fabricate and

install the fence in compliance with the drawings and conversations between the

parties as reflected in exhibit R17 and Complainant’s exhibit 203. Investigator Lawton

further explained that he substantiated complaint items 1 and 2 because the framing

did not comply with the design as reflected in exhibit R17. Investigator Lawton

explained that he substantiated complaint item 4 and 5 because Scottsdale Fence did not comply with the requirements outlined in Complainant’s exhibit 203. Investigator Lawton acknowledged that there were no specifications related to the issues identified in complaint items 4 and 5. 26. Investigator Lawton testified that he reviewed all contracts to substantiate complaint item 6. However the addendum did not specify the maximum size of the gaps. Instead, the addendum stated that some gaps would remain. 27. Investigator Lawton explained that he was not aware that the parties had discussed the deficiencies with the rust color before the addendum was signed. Investigator Lawton explained that he substantiated complaint item 10 based upon the agreement between the parties as reflected in R17. Investigator Lawton acknowledged that there were no minimum standards for gaps between panels, only the parties’ agreement. RECEIVED 2.25.2019 ROC LEGAL

28. Investigator Lawton was not aware of the condition of the fence at the time that the addendum was signed. 29. Investigator Lawton substantiated complaint item 11 because the tiles

were broken. However, at the time that the complaint was filed, Scottsdale Fence had

already installed new tiles. Mr. Johnson did not complain that the tiles were cracked

but that the tile was flat, uneven, and there was no paint on the edge. Investigator

Lawton did not even allege in his notes or testimony that tile was not flat, that it was

uneven, not that the tiles were not painted. Investigator Lawton testified and his notes

show he substantiated complaint item 11 because the tile had been cracked.

30. Mr. Johnson did not dispute that he executed the addendum on April 12,

2018. Mr. Johnson contended that under common law, the addendum is void because

Scottsdale Fence did not perform the additional terms under the addendum.

Mr. Johnson provided no legal authority to support his contention.

31. Mr. Johnson contended that Scottsdale Fence did not fulfil the terms of

the addendum.

32. Mr. Johnson also asserted that when Scottsdale Fence replaced the

broken tiles, the grout lines were uneven. 33. Scottsdale Fence contended that the addendum represented the final binding agreement between the parties at the time that the complaint was filed. 34. Mr. Prewitt explained that Scottsdale performed all parts of the addendum with the exception of Item #3 because Mr. Johnson insisted that Scottsdale Fence not apply clear coat until it had made other corrections to the fence. Because Scottsdale Fence argued that it has corrected all items properly as outlined in the addendum, Scottsdale Fence did not perform any additional work. 35. Matthew Aaron McCartney is an employee at Scottsdale Fence. Mr. McCartney installed the new tile because the prior tile had been cracked. Mr. McCartney installed the tile in the same manner that Mr. Johnson originally installed the tile. 36. At hearing, Scottsdale Fence provided a hearing a contract that complies with 32-1154(A)(12). See Exhibit R21. RECEIVED 2.25.2019 ROC LEGAL

CONCLUSIONS OF LAW

1. This matter lies within the Registrar’s jurisdiction. See Ariz. Rev. Stat.

section 32-1154(A).

2. The burden of proof at an administrative hearing falls to the party

asserting a claim, right, or entitlement and the standard of proof on all issues in these

matters is by a preponderance of the evidence. See A.A.C. R2-19-119.

3. 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).

4. Ariz. Rev. Stat. section 32-1154 (A)(22) provides:

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. 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. 5. Construction is not a perfect art and, generally, contractors must be afforded an opportunity to correct their workmanship before their licenses may be suspended or revoked. 6. The preponderance of the evidence does not show that Scottsdale Fence’s work failed to meet minimum workmanship standards. The preponderance of the evidence shows that Investigator Lawson determined that Scottsdale Fence’s work did not meet minimum workmanship standards because the fabrication and installation of the fence did not comply with the design in R17 and the agreement reflected in Complainant’s exhibit 203. 7. Investigator Lawton substantiated item #11 because the tiles were cracked. However, the tile was replaced before the complaint was filed. Investigator Lawton did not conclude that Scottsdale Fence’s work failed to meet minimum workmanship standards based upon other standards of workmanship separate from Mr. RECEIVED 2.25.2019 ROC LEGAL

Johnson’s assertions regarding the design for the fence and the parties’ agreement. The preponderance of the evidence did not show that Scottsdale Fence failed to perform Items 1, 2, and 4 of the addendum. Scottsdale Fence never performed item 3

of the addendum because Mr. Johnson told Scottsdale Fence to cease from performing

additional work on his property without notice and approval, and that the fence was not

ready for a clear coat.

8. The preponderance of the evidence shows that Mr. Johnson agreed to

accept all of the items substantiated by Investigator Lawton in the addendum that was

executed on April 12, 2018. The preponderance of the evidence shows that Mr.

Johnson had previously expressed concerns about the issues stated in his complaint

before the addendum was executed. Mr. Johnson’s May email shows that he believed

that the original agreement controlled because he believed that Mr. Johnson had not

fulfilled the terms of the addendum. However, the preponderance of the evidence

shows that the addendum was the effective contract between the parties.

9. The preponderance of the evidence does not show that Scottsdale Fence

failed to comply with the Directive without valid justification. Investigator Lawton

directed Scottsdale Fence to complete the fencing per the original agreement. However the weight of the evidence shows that the addendum superseded the original agreement. Furthermore, Investigator Lawton directed Scottsdale Fence to cored damaged tile. However, there the preponderance of the evidence did not show that the tile was damaged at the time that the complaint was filed because Scottsdale Fence had previously replaced the broken tiles. Investigator Lawton did not observe or note any other damage to the tile other than the broken tiles. 10. This Tribunal concludes that the preponderance of the evidence of record is insufficient and fails to support a conclusion that Respondent violated the charged provisions of ARIZ. REV. STAT. section 32-1154(A)(3), namely, A.A.C. R4-9-108, and ARIZ. REV. STAT. section 32-1154(A)(22) and (A)(12). 11. Scottsdale provided a contract that complies with Ariz. Rev. Stat. section 32-1154(A)(12) at hearing. RECOMMENDED ORDER RECEIVED 2.25.2019 ROC LEGAL

Based on the foregoing, it is recommended that this matter 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 is forty days after the date of that certification.

Done this day, February 22, 2019.

/s/ Velva Moses-Thompson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractor