ALJDEC decisions subject to certification as final

2018A-3317-ROC · Registrar of Contractors · 2019-05-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 6, 2019 APPEARANCES: Randall Scott Johnson, Complainant; Steve Philpott, ROC Investigator. ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson _____________________________________________________________________ FINDINGS OF FACT According to the public website of the Registrar of Contractors (“the Registrar”), [1] on or about December 20, 2005 License Number ROC 214887 [General Dual KB-1 Dual Building Contractor] was issued to Respondent F H B Flagstaff Home Builder Inc., [hereinafter, “FHB”]. FHB’s last known address of record filed with the Registrar is 12130 N Peaks Pkwy, Flagstaff, AZ 86004-5588. On or about August 8, 2018, Complainant Randall Scott Johnston [hereinafter, “Johnston”] filed a Complaint[2] with the Registrar against FHB’s license based on its alleged abandonment of its July 21, 2017 contract with Johnston to remodel Complainant’s house at 17655 Mustang Road, Munds Park, Arizona 86017. Johnston alleges that he had paid FHB $98,905.00 of the $101,940.00 contract price. The Complaint alleges abandonment and poor, below standard workmanship. The Registrar assigned the complaint to its Investigator Steve Philpott to investigate. Investigator Philpott sent a letter to Complainant and to Respondent at its address of record to notify them that he had scheduled a jobsite inspection [“JSI”] on September 6, 2018. Respondent and Complainant attended the JSI. Investigator Philpott noted that the job was incomplete and abandoned. [3] His JSI Inspection Notes report: I arrived at the complainant’s residence at the scheduled time. We proceeded to inspect the items on the complaint list and I found the following: I took 49 photos with my Cannon PowerShot A2600 Digital camera. The photos have been scanned into ROCIMS as a PDF file.

Complaint item 1. Investigator’s Observation: This complaint item is substantiated. 1. Cracks are present that exceed the acceptable standards as listed in the ROC workmanship standards for licensed contractors. Respondent shall correct by appropriate means. Governing Rule: §32-1154. …3. Violation of any rule adopted by the registrar. RULE 4-9-108 WORKMANSHIP STANDARDS A contractor shall perform all work in a professional manner. 2. PD Cracks in basement floors. AT Cracks in excess of 3/32” width or 1/8” vertical displacement or compound cracks in excess of 1/16” in width are not acceptable. CR If vertical displacement in excess of 1/8” or compound cracking in excess of 1/16” in width is present, affected area should be replaced. 3. PD Cracking of garage slabs, carports, exterior slabs, patios, driveways and sidewalks. AT Cracks in excess of 3/32” width or 1/8” vertical displacement or compound cracks in excess of 1/16” in width are not acceptable. Cracks of 3/16” are acceptable for sidewalks. CR If cracks in excess of 3/32” width are present (3/16” for sidewalks), or compound cracking is in excess of 1/16” in width, or vertical displacement exceeds 1/8”; the affected areas are to be replaced.

Complaint Item 2: Missing plumbing fixtures, vanity, sink, towel bars Investigator’s Observation: This complaint item is substantiated. It is not uncommon for unforeseen conditions to occur in the construction industry. The time line on this project has exceeded what would be generally acceptably by professional industry standards. Respondent shall perform work in a timely fashion as agreed upon in the contract. Respondent shall complete project per original contract agreement, properly executed change orders, local building codes, and manufactures installation instructions. Governing Rule:§32-1154(A)(3), Namely,RULE 4-9-108 WORKMANSHIP STANDARDS….

Complaint Item 4: Missing water heater. Investigator’s bservation: This complaint item is substantiated. It is not uncommon for unforeseen conditions to occur in the construction industry. The time line on this project has exceeded what would be generally acceptably by professional industry standards. Respondent shall perform work in a timely fashion as agreed upon in the contract. Governing Rule: §32- 1154(A)(3) Namely RULE 4-9-108 WORKMANSHIP STANDARDS

Complaint Item 7: Missing light fixtures. Investigator’s Observation: This complaint item is substantiated. It is not uncommon for unforeseen conditions to occur in the construction industry. The time line on this project has exceeded what would be generally acceptably by professional industry standards. Respondent shall perform work in a timely fashion as agreed upon in the contract. Respondent shall complete project per original contract agreement, properly executed change orders, local building codes, and manufactures installation instructions. Governing Rule: §32-1154(A)(3) Namely RULE 4-9-108 WORKMANSHIP STANDARDS

Complaint Item 8: Missing electrical outlets and switches Investigator’s Observation: This complaint item is substantiated. It is not uncommon for unforeseen conditions to occur in the construction industry. The time line on this project has exceeded what would be generally acceptably by professional industry standards. Respondent shall perform work in a timely fashion as agreed upon in the contract. Respondent shall complete project per original contract agreement, properly executed change orders, local building codes, and manufactures installation instructions. Governing Rule: §32-1154(A)(3) Namely RULE 4-9-108 WORKMANSHIP STANDARDS

Complaint Item 9: Need to add outlet under sink Investigator’s Observation: This complaint item is substantiated. It is not uncommon for unforeseen conditions to occur in the construction industry. The time line on this project has exceeded what would be generally acceptably by Professional industry standards. Respondent shall perform work in a timely fashion as agreed upon in the contract. Respondent shall complete project per original contract agreement, properly executed change orders, local building codes, and manufactures installation instructions. Governing Rule: §32-1154(A)(3) Namely RULE 4-9-108 WORKMANSHIP STANDARDS

Complaint Item 10: Install stud and outlet over fireplace. Investigator’s Observation: Respondent was in the process of correcting this item prior to the JSI. This complaint item is substantiated. It is not uncommon for unforeseen conditions to occur in the construction industry. The time line on this project has exceeded what would be generally acceptably by professional industry standards. Respondent shall perform work in a timely fashion as agreed upon in the contract. Governing Rule: §32- 1154(A)(3) Namely RULE 4-9-108 WORKMANSHIP STANDARDS.

Complaint Item 12: Fix foundation by front door. Investigator’s Observation: This complaint item is substantiated. It is not uncommon for unforeseen conditions to occur in the construction industry. The time line on this project has exceeded what would be generally acceptably by professional industry standards. Respondent shall perform work in a timely fashion as agreed upon in the contract. Respondent shall complete project per original contract agreement, properly executed change orders, local building codes, and manufactures installation instructions. Governing Rule: §32-1154(A)(3) Namely RULE 4-9-108 WORKMANSHIP STANDARDS

Complaint Item 13: Fix siding on northwest corner. Investigator’s Observation: This complaint item is substantiated. The siding shown in photo 35 and 36 is not cut straight and has an improper reveal above the shingles. Siding/cladding must be at least 2" (51 mm) above the roof surface and covering flashing at least 2" (51 mm). (ref to GAF installation instructions) Governing Rule: §32-1154(A)(3) Namely RULE 4-9-108 WORKMANSHIP STANDARDS

Complaint Item 17: Repair Drywall over entrance door Investigator’s Observation: This complaint item is substantiated. Respondent shall correct by appropriate means. Governing Rule: §32-1154(A)(3) Namely RULE 4-9-108 WORKMANSHIP STANDARDS.

Complaint Item 19: Repair ceiling where AC lines came in by walk in door. Investigator’s Observation: This complaint item is substantiated. Respondent shall correct by appropriate means. Governing Rule: §32-1154(A)(3) Namely RULE 4-9-108 WORKMANSHIP STANDARDS

Investigator’s Observation: Th[ese] complaint item[s] [were] added at the job site inspection. The Respondent agreed to address the allegations. This is substantiated as the interior doors do not properly close and the reveals are not consistent. Respondent shall correct by appropriate means. Governing Rule: §32-1154(A)(3) Namely RULE 4-9-108 WORKMANSHIP STANDARDS

PD Doors bind or rub against jamb. AT Doors should clear 1/8" at top and sides. CR Contractor should make necessary repairs one time within first year. PD Door will not stand open. AT Doors should not move to open or closed when 45º to opening. CR Contractor should make necessary repairs. PD Interior or exterior door warped. AT Warping more than 1/4" when measured in any direction is unacceptable. CR Contractor should replace warped door and finish to match existing doors one time within first year.

Investigator Philpott issued a Written Directive with a Corrective Work Order [“CWO”] on September 20, 2019 stating as follows:[4] You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on October 8, 2018, [emphasis in original]. You are hereby directed to remedy the following violations by the appropriate means:

Complaint Item l: Cracks in the concrete slab. Investigator's Observation: This complaint item is substantiated. Cracks are present that exceed the acceptable standards as listed in the ROC workmanship standards for licensed contractors. Respondent shall correct by appropriate means.

Complaint Item 2: Missing plumbing fixtures, vanity, sink, towel bars Complaint Item 4: Missing water heater

Complaint Item 7: Missing light fixtures

Complaint Item 8: Missing electrical outlets and switches

Complaint Item 9: Need to add outlet under sink

Complaint Item 10: Install stud and outlet over fireplace

Complaint Item 12: Fix foundation by front door.

Complaint Item 13: Fix siding on northwest corner

Investigator's Observation: This complaint item is substantiated. The siding shown in photo 35 and 36 is not cut straight and has an improper reveal above the shingles. Siding/cladding must be at least 2" (51 mm) above the roof surface and covering flashing at least 2" (51 mm). (ref to GAF installation instructions)

Complaint Item 16: Frame attic entrance and install door

Complaint Item 17: Repair Drywall over entrance door

Complaint Item 19: Repair ceiling where AC Iines came in by walk in door

Complaint Item 21: Doors don't shut correct[ly] (sic).

On October 12, 2018, Investigator Philpott conducted a Compliance Inspection at the Johnston residence. Mr. Philpott notes that although two of the items in the CWO were attempted to be corrected, the attempt did not address the required repair and none of the remaining items were in compliance with the CWO. On October 12, 2018, Investigator Philpott referred the complaint to the Registrar’s Legal Department with the recommendation that it charge FHB with abandonment. On October 15, 2018, the Registrar issued a Citation, charging cause to discipline Respondent’s license under A.R.S. §32-1154(A)(1);[5] A.R.S. §32- 1154(A)(3)[6] /A.A.C. R4-9-108; and A.R.S. § 32-1154(A)(22).[7] Respondent filed a timely written answer to the citation, denying that cause existed under the charged statute to discipline his license. The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent agency, for an evidentiary hearing. On November 21, 2018, the Registrar issued a Notice of Hearing, setting hearing on January 18, 2019 The Registrar mailed the Notice of Hearing to FHB at its last known official address of record with the Registrar. Hearing was continued by subsequent party Motions to May 6, 2019. A hearing was held on May 6, 2019. Investigator Philpott testified. Complainant Johnston testified. Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed twenty minutes to allow Respondent additional travel time, FHB did not appear, through an authorized member, employee, or attorney, and did not contact OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend its license. Investigator Philpott testified consistently with his Job Site Inspection and Compliance Inspection Notes that FHB’s work was below professional workmanship standards, that FHB had abandoned the project months before the Complaint was filed, that FHB did not comply with the CWO before the deadline for compliance had expired and that Respondent’s written answer did not change his opinion that FHB had abandoned the contract. Pursuant to A.A.C. R4-9-117, administrative notice is taken of FHB’s license history at the Registrar’s public website. Respondent’s license has been disciplined five (5) times and has two currently pending Complaints on record with the Registrar. FHB’s license status is currently suspended. FHB’s license history, FHB’s failure to comply with the CWO and FHB’s failure to appear for hearing are aggravating circumstances to be weighed in recommended discipline. There are no mitigating circumstances presented. CONCLUSIONS OF LAW The Notice of Hearing that the Registrar mailed to FHB at its address of record was reasonable and FHB is deemed to have received notice of the hearing.[8] The suspended status of FHB’s license does not deprive Johnston of his right to prosecute his Complaint against FHB nor does it prevent the Registrar from determining the merits of Complainant’s complaint.[9] This matter lies within the Registrar’s jurisdiction.[10] Complainant Johnston bears the burden of proof to establish cause to suspend or revoke Respondent’s license by a preponderance of the evidence.[11] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[12]

By a preponderance of the evidence, Complainant Johnston established that FHB abandoned performance of its contract with Johnston without legal excuse. Therefore, Complainant established cause to suspend or revoke Respondent’s license under A.R.S. § 32-1154(A)(1).[13] By a preponderance of the evidence, Complainant Johnston established that FHB’s workmanship on this project was below industry workmanship standards in violation of A.R.S. §32-1154(A)(3). By a preponderance of the evidence, Complainant Johnston established that FHB failed to comply with the CWO before the CWO’s stated deadline for compliance, all in violation of A.R.S. § 32-1154(A)(22) The suspended status of Respondent’s license, its prior history of disciplinary action by the Registrar, its pending current history of two Complaints and its failure to appear at the hearing in this case show that, at this time, FHB cannot or refuses to be regulated. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final Order in this matter, Respondent F H B Flagstaff Home Builder Inc.’s License Number ROC 214887 shall be revoked. 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, May 21, 2019. /s/ Randolph D. Wolfson Administrative Law Judge Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] Administrative Judicial Notice is taken of the entirety of the Registrar’s physical and electronic records in this matter, including, but not limited to information displayed on the Registrar’s Public Access Website [2] See, Complaint, Agency Record, pages 90 and 91. [3] See the Registrar’s electronic record “Jobsite Inspection Notes” at pages 81-88. [4] Agency Record, Written Directive, pages 178 and 179. [5] Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal. [6] Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9- 108 – poor/substandard workmanship... [7] 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. [8] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [9] See A.R.S. § 32-1154(C). That statute provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . . .” [10] See A.R.S. § 32-1154(A). [11] See A.R.S. § 41-1092.07(G)(2); 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). [12] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [13] A.R.S. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”

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