FINACT2018A-3227-RFA-ROC.pdf

2018A-3227-RFA-ROC · Registrar of Contractors · 2020-02-10

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Rozalyn S Capps, Case No. 2018-3227 COMPLAINANT, Docket No. 2018A-3227-RFA-ROC v. FINAL ADMINISTRATIVE Brian Francis Winstanley, DECISION AND ORDER DBA: Tumblewood Remodeling, License No. ROC 276057,

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 of each finding of fact or conclusion of law.

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 accepts it.

CONCLUSION AND ORDER

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 March 14,

2020.

FINAL NOTE

Throughout, replace “Rollings” with “Rolling.”

On page one, paragraph two, line 26, remove “Either Respondent or.”’ On page one, paragraph two, line 27, remove footnote 1.

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. – Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602) 542-1525 Toll Free (877) 692-9762 Lg131 8/19 On page five, paragraph 16, line two, “$13,049.00” should be “$13,582.80.” On page five, paragraph 18, line 11, “$38,848.04” should be “$38,847.76.” On page five, paragraph 18, line 12, “$22,799.64” should be “$22,739.64.” Dated February 3, 2020. By: /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund Arizona Registrar of Contractors Copy mailed via USPS First Class Mail February 3, 2020 to: Respondent Brian Francis Winstanley DBA: Tumblewood Remodeling 7344 W Tumblewood Dr Peoria, AZ 85382 Complainant Rozalyn S Capps 18453 W Saguaro Ln Surprise, AZ 85388 Copy sent electronically this same date to: Registrar’s Counsel John Tellier, Assistant Attorney General Office of Administrative Hearings Diane Mihalsky, Administrative Law Judge Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar Case No. 2019-01923 / KR

of 3 REGISTRAR OF CONTRACTORS 1700 W. Washington St. – Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602) 542-1525 Toll Free (877) 692-9762 Lg131 8/19 RECEIVED 1.7.2020 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Rozalyn S. Capps, No. 2018A-3227-RFA-ROC

ADMINISTRATIVE LAW JUDGE COMPLAINANT, DECISION v.

Brian Francis Winstanley, DBA: Tumblewood Remodeling, License No. ROC 276057,

RESPONDENT.

HEARING: December 18, 2019, at 9:00 a.m. APPEARANCES: Brian Francis Winstanley, DBA: Tumblewood Remodeling (“Respondent”) appeared on his own behalf; Rozalyn S. Capps (“Complainant”) appeared on her own behalf; the Arizona Registrar of Contractors (“the Registrar”) was

represented by Michael Raine, Esq., Assistant Attorney General.

ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT

BACKGROUND

1. According to the Registrar’s public website, on September 25, 2017, the

Registrar issued License No. ROC 276057 for Specialty Dual CR-61 Carpentry,

Remodeling and Repairs contracting to Respondent. 2. The Registrar issued a Notice of Claim for Administrative Payout, notifying the parties of an intended payout to Complainant from the Residential Contractors’ Recovery Fund (“the Fund”). Either Respondent or Complainant requested a hearing on the amount of the payout.1

The notice was not submitted. RECEIVED 1.7.2020 ROC LEGAL

3. The Registrar referred Complainant’s claim to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. 4. A hearing was held on December 18, 2019. The hearing in this matter was originally consolidated with the hearing in Case No. 2019A-01923-RFA-ROC, Complainant’s claim to the Fund for damages caused by the violations of contracting statutes involving workmanship by Savvy Floor Design LLC, License No. ROC 258545 (“Savvy”). Savvy failed to appear at the hearing, but Respondent indicated that Savvy’s qualifying party/member’s father was dying of cancer and that he could not leave the hospital. Because there was not time to present the Registrar’s and Complainant’s case regarding Savvy and to avoid a possible rehearing, the Administrative Law Judge severed this matter from Complainant’s claim to the Fund against Savvy and set that case for a further hearing. 5. The Registrar presented the testimony of Katelyn Rollings, a Legal Assistant II in the Registrar’s Legal Department/Fund who had analyzed Complainant’s claim, and Steven Lawton, the Investigator assigned to the underlying workmanship complaint, and submitted six exhibits. Respondent testified on his own behalf. Complainant testified on her own behalf and submitted two exhibits. BACKGROUND: THE UNDERLYING WORKMANSHIP COMPLAINT 6. On or about July 16, 2018, Complainant filed a complaint against Respondent with the Registrar alleging poor work in connection with its performance of its contracts to remodel three bathrooms at Complainant’s house at 18453 W. Saguaro Lane, Surprise, Arizona 85388 (“the project”) Complainant attached to her complaint various invoices and estimates that Respondent had prepared for the project.2 7. The complaint was assigned to Investigator Lawton. Investigator Lawton performed a jobsite inspection on August 6, 2018, which both parties attended.3 8. On August 22, 2018, Investigator Lawton on behalf of the Registrar issued a directive that required Respondent to correct certain deficiencies in Respondent’s work on or before September 10, 2018, at 5:00 p.m., in relevant part as follows: See the Registrar’s Exhibit 8. 3 See the Registrar’s Exhibit 9. 2 RECEIVED 1.7.2020 ROC LEGAL

1. Complaint item 4: Caulking/silicone cracking, coming out. 2. Complaint item 7: Bench in master bath not pitched correctly. 3. Complaint item 11: Tunnel grinded into quartzite slab improperly (Master) 4. Complaint item 12: Led lighting installed and not functioning properly. Permits not pulled 5. Permit required for remodel. Respondent is to obtain building permits from local jurisdiction required to complete project, if the local jurisdiction determines that there are corrective issues during the inspection the Respondent will have to correct by Appropriate Means.4 9. Investigator Lawton performed a compliance inspection on October 4, 2018, and found that Respondent had not obtained permits and that repairs had not been completed to any of the four workmanship issues identified on the August 22, 2018 directive. Investigator Lawton referred the complaint to the Registrar’s Legal Department. 10. The Registrar issued a Citation on October 11, 2018, that charged cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(2),5 A.R.S. § 32-1154(A)(3),6 namely A.A.C. R4-9-108,7 and A.R.S. § 32-1154(A)(22),8 as well as an administrative violation of A.R.S. § 32-1154(A)(12), namely A.R.S. § 32- 1158.9 Id. A.R.S. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications or any building codes of any state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner’s duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.” A.R.S. § 32-1154(A)(3) includes among the grounds to suspend or revoke a contractor’s license, “[v]iolation of any rule adopted by the registrar.” 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.” A.R.S. § 32-1154(A)(22) includes among the grounds to suspend or revoke 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.” A.R.S. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” A.R.S. § 32-1158(B) provides that any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved after December 31, 2007 must be in 3 RECEIVED 1.7.2020 ROC LEGAL

11. After Respondent filed a written answer to the Citation, the Registrar referred Complainant’s workmanship complaint to OAH for an evidentiary hearing. On January 24, 2019, the Administrative Law Judge (“ALJ”) assigned to the case issued a decision that concluded that Complainant had established that Respondent had violated the statutes charged in the Citation, but that she had acted as her own general contractor on the project and had contracted directly with “Ryan,” who installed the shower pans in the bathrooms on the project.10 12. On February 22, 2019, the Registrar issued a Final Administrative Decision and Order, substantially adopting the ALJ’s Decision.11 Complainant requested a rehearing, which the Registrar denied. Neither Complainant nor Respondent appealed the Registrar’s final order. As a result of the Registrar’s final order, Respondent’s license was suspended for five days and he was required to pay a $500.00 civil penalty. COMPLAINANT’S CLAIM TO THE FUND 13. On or about August 2, 2019, Complainant submitted a claim to the Fund to recover the damages that were allegedly caused by Respondent’s poor work on the project, requesting a payout in the amount of $30,000.00.12 14. Ms. Rollings testified that Complainant met all the statutory requirements to be eligible to make a claim for a payout from the Fund. Respondent’s license was active and in good standing when it contracted to perform and actually performed the work. Ms. Rollings noted that Complainant submitted documentation to establish that she had attempted to make a clam against Respondent’s bond, but that the bond company had required her to submit a judgment, not a final administrative decision.13 15. Complainant submitted with her claim to the Fund evidence of the payments that she had made to Respondent on her credit card, by check, and by electronic transfer, as well as purchases of material before she filed the complaint.

writing and must include the nine specifically enumerated terms. Because this charged violation does not involve workmanship, it does not entitle Complainant to any greater payout from the Fund. See the Registrar’s Exhibit 10. Savvy’s qualifying party/member is Ryan James Prokopec. 11 See the Registrar’s Exhibit 10. See the Registrar’s Exhibit 11. 13 See the Registrar’s Exhibit 11 at 164. 4 RECEIVED 1.7.2020 ROC LEGAL

16. Complainant also submitted with her claim itemized estimates from Home Solutionz to repair Respondent’s work in the amounts of $25,264.96 and $13,049.00. These combined amounts constituted the low bid but did not include tax.14 17. Ms. Rollings testified that the amount to repair a contractor’s work should include tax. At Ms. Rollings’ request, Complainant later submitted amended estimates from Home Solutionz in the amounts of $25,264.96 and $13,582.80, which included sales tax.15 18. Ms. Rollings testified that she compared the scope of work in Home Solutionz’ estimates to Investigator Lawton’s jobsite inspection notes, the directive, and the Registrar’s final order to determine whether the work described in the itemized estimates had been found to be defective and to be Respondent’s responsibility in the Registrar’s final order on the workmanship complaint. Of the $38,848.04 in the combined estimates,16 she disallowed $22,799.64, either because the defect was attributable to Savvy’s work or because the repair exceeded Respondent’s scope of work, and calculated the cost of repairing Respondent’s work to be $16,108.10.17 19. Ms. Rollings noted that Respondent had been found to have violated A.R.S. § 32-1154(A)(2) by performing work even though a necessary permit had not been obtained and that the local jurisdiction required much of Respondent’s work to be removed to expose the shower pan that Savvy installed for inspection.18 Therefore, her calculation of the amount of Complainant’s payout from the Fund included the cost of removing and replacing some of Respondent’s work that had not been found to be deficient. 20. Ms. Rollings testified that she also calculated the amount that Complainant still owed under the contract, considering the invoices and estimates that Complainant had attached to her workmanship complaint and provided with her claim to the Fund.

See the Registrar’s Exhibit 11 at 188-189. See the Registrar’s Exhibit 12, 16 The total of Home Solutionz amended bids is $38,847.76, according to the ALJ’s calculations, which is 28¢ less than the total of Ms. Rolling calculation of allowed and disallowed work. The record does not explain the discrepancy, which the ALJ considers to be de minimus. See the Registrar’s Exhibit 13. 18 See Complainant’s Exhibit 11. 5 RECEIVED 1.7.2020 ROC LEGAL

Based on this documentation, Ms. Rollings calculated that Complainant had an unpaid balance on her contract with Respondent in the amount of $10,154.89.19 21. Complainant challenged the profit and overhead on Respondent’s invoices and estimates because she argued that he was not entitled to these charges if he were not the general contractor. 22. Respondent testified that he tried to be transparent and that all contractors’ and subcontractors’ charges include profit and overhead, or they would not be in business. 23. Complainant also challenged the credit card charge on some of Respondent’s invoices and estimates because she did not always pay Respondent by credit card. 24. Ms. Rollings testified that the Registrar does not question the wisdom or legitimacy of the terms of a homeowner’s contract with a contractor, but instead considers the contract as written to determine the scope of work and the amount still owed. 25. Based on disallowed and unpaid amounts, Ms. Rollings calculated Complainant’s payout on her claim to the Fund against Respondent to be $5,953.21.20 CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.21 2. When the Registrar has calculated the amount of a Complainant’s compensable damages and proposed a payout from the Fund to which she is entitled, the calculation is a prima facie showing of the amount that the Complainant is entitled to recover as a payout from the Fund. The burden shifts to the party challenging the amount of the payout to establish that the Registrar’s calculations were erroneous or not supported by a preponderance of the evidence.22

19 See the Registrar’s Exhibit 13. See the Registrar’s Exhibit 13. 21 See 32-1101 et seq. See A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). 6 RECEIVED 1.7.2020 ROC LEGAL

3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”23 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.”24 4. A.R.S. § 32-1132(A) provides that “[t]he residential contractors' recovery fund is established, to be administered by the registrar, for the benefit of a claimant damaged by an act, representation, transaction or conduct of a residential contractor licensed pursuant to this chapter that is in violation of this chapter or the rules adopted pursuant to this chapter.” The Registrar’s final decision in the underlying workmanship case on the complaint that Complainant filed with the Registrar establishes that Respondent’s work violated the sections of A.R.S. § 32-1154(A) that were charged in the Citation. 5. For the purposes of an award under A.R.S. § 32-1132(A), A.R.S. § 32- 1133.01(B) provides as follows: An award from the residential contractors' recovery fund may not exceed the actual damages suffered by the claimant as a direct result of a contractor's violation. Actual damages:

1. May not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines. 2. Must be established by bids supplied by or the value of work performed by a person that is licensed pursuant to this chapter if the person is required to be licensed pursuant to this chapter.25

6. Neither Complainant nor Respondent appealed the Registrar’s final order in the underlying workmanship complaint that made Respondent responsible for the MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). 24 BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999). See also Ramsey v. Arizona Registrar of Contractors, 241 Ariz. 102, 106, 384 P.3d 316, 320 (App. 2016). 7 RECEIVED 1.7.2020 ROC LEGAL

workmanship deficiencies described in the order. Respondent did not establish that any of the amounts that the Registrar allowed from Home Solutionz’ estimates were improper. Complainant did not establish that the Registrar disallowed any amounts for items for which Respondent was responsible or that the Registrar improperly calculated the amounts that she still owed Respondent under the parties’ contract. 7. Therefore, the evidence establishes that Complainant is entitled to a payout in the amount of $5,953.21 from the Fund for the workmanship deficiencies for which she established that Respondent was responsible in the workmanship complaint. RECOMMENDED ORDER In view of the foregoing, IT IS ORDERED that on the effective date of the final order in this matter, the Residential Contractors’ Recovery Fund shall pay $5,953.21 to Complainant Rozalyn S. Capps. IT IS FURTHER ORDERED that under A.R.S. § 32-1139(B), the Registrar shall charge $5,953.21, plus interest at a rate of ten percent a year, to Respondent Brian Francis Winstanley, DBA: Tumblewood Remodeling’s License No. ROC 276057. 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, January 6, 2020.

/s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

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