ALJDEC decisions subject to certification as final

2018A-288-CHC-ROC · Registrar of Contractors · 2018-07-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Dawn Suzann Schenk and Douglas Schenk,

COMPLAINANTS,

v.

Ultimate Custom Ltd. LLC dba Ultimate Services,

License No. KB-1.228261-D,

RESPONDENT.

No. 2018A-288-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 10, 2018, at 1:00 p.m.

APPEARANCES: Douglas Schenk appeared on his own and his wife Dawn Suzann Schenk’s (“Complainants’”) behalf; Ultimate Custom Ltd. LLC dba Ultimate Services (“Respondent”) appeared through Richard Brown, its qualifying party/member, and Charlee Minnissa Brown, its member.

ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

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FINDINGS OF FACT

According to the Registrar of Contractors’ (“the Registrar’s”) public website, on or about January 9, 2007, the Registrar issued License No. KB-1.228261-D for dual building contracting to Respondent.

On or about January 22, 2018, Complainants filed a complaint with the Registrar against Respondent, alleging that it had performed poor work in building an addition to their house at 3351 Hilldale Dr., Lake Havasu City, Arizona 86406. The complaint enumerated fifteen alleged specific workmanship deficiencies.

According to the complaint, Complainants had paid $43,000.00 of the $46,610.00 contract amount.

Complainants attached to the complaint the proposal that became the parties’ contract. The contract was on Respondent’s letterhead and provided that it would construct a 570 square foot “Exterior Room Addition Bathroom/Kitchenette/Livingroom” for a contract price of $46,610.00, including taxes. The contract did not include Respondent’s license number, the amount of any progress payments, although it appears progress payments were made, notice of the property owner’s right to file a written complaint with the Registrar for an alleged violation of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(B), or the Registrar’s telephone number and website address.

The Registrar assigned the complaint to its Investigator Cliff Corlett for investigation. On February 2, 2018, Investigator Corlett performed a jobsite inspection. On March 16, 2018, Investigator Corlett issued a Directive that required Respondent to correct ten of Complainants’ fifteen items of complaint. The deadline for Respondent to comply with the Directive was April 5, 2018, at 5:00 p.m.

On April 20, 2018, Investigator Corlett performed a compliance inspection and determined that Respondent had corrected six of the items on the March 16, 2018 Directive. Investigator Corlett’s Compliance Jobsite Inspection Notes opined that Respondent had not complied with the Directive with respect to the following four workmanship deficiencies:

Complaint (allegation) Item 1: Floor bubbling, not done properly. Looks wet and stained in places and gaps.

Investigator’s Observation: Respondent[’]s repairs appear to be acceptable with the exception of the open “pitting” observed in the bedroom.

RESPONDENT NOT IN COMPLIANCE.

Complaint Item 2: Hose bib not installed per e-mail.

Investigator’s Observation: New hose bib installed. Respondent needed to complete stucco repairs.

[RESPONDENT] IS NOT IN COMPLIANCE.

Complaint Item 4: Outdoor shower not done.

Investigator’s Observation: Respondent has completed the outdoor shower wall tile and hardware.

Respondent needs to complete some type of drain grating installation.

RESPONDENT IS NOT IN COMPLIANCE

. . . .

Complaint Item 9: Bathroom cabinet colors off.

Investigator’s Observation: Respondent had begun re-staining of cabinet. Waiting to get proper stain.

RESPONDENT IS NOT IN COMPLIANCE.

On May 2, 2018, Investigator Corlett referred the complaint to the Registrar’s Legal Department.

On May 3, 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, A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158(A), and A.R.S. § 32-1154(A)(22).

Respondent filed a timely written answer to the Citation, denying that any cause existed to revoke or suspend its license.

The Registrar referred Complainants’ complaint to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A videoconference hearing was held from the Registrar’s Flagstaff office on July 10, 2018. Respondent’s members, Mr. and Mrs. Brown, testified. Complainant Mr. Schenk testified. Investigator Corlett testified telephonically.

Investigator Corlett testified consistently with the March 16, 2018 Directive and Compliance Jobsite Inspection Notes. Investigator Corlett testified that he performed a prehearing jobsite inspection on July 6, 2018.

Investigator Corlett testified that Complaint Item No. 1, the floor finish, had tiny bubbles that exposed the white coating underlying the finish. There were several areas, primarily in the bedroom, that had pinholes in the finish that resulted from the bubbles. Respondent’s work on the floor still did not comply with the Registrar’s workmanship standards.

With respect to Complaint Item No. 2, the hose bib that Respondent installed, Investigator Corlett testified that by the time of the July 6, 2018 prehearing jobsite inspection, Respondent had repaired the stucco texture to comply with the Registrar’s standards. However, because the color of the stucco was a poor match, he felt that the whole area should have been fog-coated. Respondent’s repair to the hose bib still did not comply with the Registrar’s workmanship standards.

Investigator Corlett testified that at the prehearing jobsite inspection, Complaint Item No. 3, the wall tile and hardware for the outdoor shower, had been corrected to comply with the Registrar’s workmanship standards.

With respect to Complaint Item No. 9, the poorly matched stain on the cabinets in the bathroom, Investigator Corlett testified that there was a shop-built mirror above a factory-built vanity and that Complainants had contracted for a tall linen closet to the side of the vanity and mirror. Respondent had contracted to stain the linen closet, mirror, and vanity to match.

Investigator Corlett testified that he understood that Respondent had obtained stain from the manufacturer of the vanity. Investigator Corlett testified that it was not unusual to have some color variation and that his opinion that the variation was excessive was somewhat subjective. Inspector Corlett’s rule of thumb was that if he walked up to furniture that was supposed to match and had to ask where variation was, the color match complied with workmanship standards. In Complainants’ bathroom, the linen closet was a distinctly different color from the vanity. The match of the stain on the vanity, mirror, and linen closet still did not comply with the Registrar’s workmanship standards.

Both parties agreed with Investigator Corlett’s hearing testimony.

Respondent’s witnesses testified that Complainants still owed money to Respondent.

Pursuant to A.A.C. R4-9-117, administrative notice is taken of Respondent’s prior disciplinary history as shown on the Registrar’s public website on this date. Respondent’s license was current and in good standing. The record does not show any prior discipline against the license, although it was administratively suspended between March 27, 2013, and April 25, 2013, for lack of bond. Respondent’s good record is considered as a factor in mitigation of the recommended penalty.

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CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainants bear the burden of proof to establish cause to discipline Respondent’s contractor’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

The Registrar requires that if a contractor performs contracting work, it must perform the work to comply with the Registrar’s workmanship standards, as required by A.A.C. R4-9-108 and A.R.S. § 32-1154(A)(3). Although Complainants’ alleged failure to pay Respondent the full contract amount is not relevant to their workmanship complaint, if Complainants later make a claim to the Registrar’s Residential Contractors’ Recovery Fund under A.R.S. § 32-1132(A) to recover the damages caused by Respondent’s poor workmanship, the Registrar will deduct any amount that Complainants owe under the contract from any damages that Complainants would otherwise be entitled to recover.

The record in this matter establishes that Respondent’s proposal/contract with Complainants did not contain all the terms required by A.R.S. § 32-1158(A) because it did not include Respondent’s license number, advice to the property owner of his or her right to file a complaint with the Registrar for an alleged violation of A.R.S. § 32-1154(A) within the time allowed by A.R.S. § 32-1155(B), or the Registrar’s website address and telephone number. Cause therefore exists to revoke or suspend Respondent’s contractor’s license under A.R.S. § 32-1154(A)(12).

Respondent did not dispute that its repairs to the floor finish, Item No. 1 on the complaint, the hose bib, item No. 2 on the complaint, and the mismatched mirror, vanity, and linen closet in the bathroom, Item No. 9 on the complaint, did not comply with the Registrar’s workmanship standards. Therefore, Complainants established 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.

Respondent also did not dispute that it had not fully complied with the Registrar’s March 16, 2018 directive. Therefore, Complainants established cause to revoke or suspend Respondent’s licenses under A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is ordered that on the effective date of the final order in this matter, as a result of Complainants Dawn Suzann Schenk and Douglas Schenk’s complaint in Case No. 2018-288, Respondent Ultimate Custom Ltd. LLC dba Ultimate Services’ License No. KB-1.228261-D shall be suspended for one business day.

It is further recommended that Respondent shall pay the sum of $250.00 to the Registrar as a civil penalty pursuant to A.R.S. § 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 Order, the Registrar shall 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 prior civil penalty.

It is further recommended that on or before thirty calendar days after the effective date of the order, Respondent shall provide satisfactory written proof to the Registrar that it has revised its proposal form and/or contract form to include all of the elements required by A.R.S. § 32-1158(A). If Respondent fails to timely provide such written proof, its licenses shall be suspended until it provides such proof.

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, July 20, 2018.

/s/ Diane Mihalsky

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors