ALJDEC decisions subject to certification as final

2018A-3898-ROC · Registrar of Contractors · 2019-04-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 22, 2019, at 1:00 p.m. APPEARANCES: Dave McKibbin (“Complainant”) was represented by Laura J. Taylor, Esq.; ABC Restoration LLC DBA Rod’s Restoration (“Respondent”) was represented by Jeffrey R. Adams, Esq. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. According to the Arizona Registrar of Contractors’ (“the Registrar’s”) public website,[1] on October 8, 2013, the Registrar issued License No. ROC 287187, Class KB-2 for dual general residential contracting and small commercial contracting Respondent. Rodney Leon Stevens is the qualifying party and a member on the license. 2. On August 20, 2018, Complainant filed a complaint with the Registrar, alleging that 20 complaints about the work that Respondent had performed at Complainant’s residence at 330 N. Angeline Circle, Prescott, Arizona 86303. 3. The complaint was assigned to the Registrar’s Investigator Chris Allison for investigation. Investigator Allison performed a jobsite inspection. On October 2, 2018, the Registrar issued a Directive based on Investigator Allison’s inspection that required Respondent to correct by appropriate means 15 of Complainant’s 20 complaint items on or before October 19, 2018. 4. Respondent requested an extension of time to comply with the Directive, but Complainant informed Investigator Allison that he did not agree to the extension and that Respondent had not performed any work. Investigator Allison referred the matter to the Registrar’s Legal Department. 5. On November 2, 2018, the Registrar issued a Citation against Respondent’s contractor’s license, charging cause to suspend or revoke the license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108, and A.R.S. § 32-1154(A)(22). 6. Mr. Stevens on behalf of Respondent filed a timely written answer to the Citation, stating that Complainant’s insurance company had not paid Respondent for the job and that Mr. Stevens had offered Complainant “a proposal to cash out for the balance due along with a charge of $9,500 for a custom closet package” after the directive was issued. After Complainant rejected the offer, Respondent indicated that it made further attempts to repair the job and would like to finish the project so that it could get paid by the insurance company. 7. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 8. A videoconference hearing was held from the Registrar’s Flagstaff office on March 22, 2019. Complainant testified on his own behalf. Respondent presented the testimony of three witnesses: (1) Mr. Stevens; (2) Matthew Henning, whom Respondent hired to do drywall repairs, drywall texture, and apply primer and paint to the drywall; and (3) Matthew Menger, Respondent’s construction superintendent on the job. Investigator Allison also testified. 9. At the beginning of the hearing, Respondent’s attorney moved to consolidate the hearing on this complaint with the hearing on a second complaint that Complainant had filed with the Registrar against Respondent. Because the second complaint had not yet been referred to the Office of Administrative Hearings, the Administrative Law Judge denied the motion. Additional Hearing Evidence 10. Complainant’s house is large, approximately 3,000 or 3,500 square feet on two levels. The house was damaged after another contracted attempted to fix a small leak in the fire suppression system in the upstairs bedroom. After the contractor and Complainant left the house, a major leak developed in the fire suppression system that caused a flood and significant damage to the master bedroom, stairwell, and other areas of the house. 11. Respondent does not advertise and only performs insurance restoration work after floods, fires, and other insured risks. Emergency Services did the initial remediation after the flood in Complainant’s house and referred Complainant to Respondent as a local contractor who could repair the significant damage caused by the flood. 12. The drywall in Complainant’s house originally had a Santa Fe finish, which is a fairly rough finish that results from a skip trowel technique. Although Complainant’s insurer would not pay for changes or upgrades to finishes in his house, Complainant requested that Respondent apply a smooth finish to the drywall it repaired. Respondent did the best it could to accommodate him. 13. Investigator Allison performed a prehearing jobsite inspection on March 7, 2019. Investigator Allison testified that, at the beginning of the inspection, Mr. Stevens stated that Respondent was willing to correct anything that Complainant remained unsatisfied with. Investigator Allison testified that he asked Complainant if he wanted to proceed with the inspection and Complainant answered he did want to proceed. 14. Investigator Allison submitted his prehearing jobsite inspection notes, which reflected that Respondent had worked on all remaining items but that it had not fully corrected seven items to comply with the Registrar’s and industry standards, in relevant part as follows, showing the original complaint item from the directive in brackets and italics: 5. [Only painted partial walls causing blotches on nearly every wall.] At the time of the pre-hearing inspection the Complainants [sic] stated that [their] only concerns were on the lower level of the home. They pointed out several areas in the living room, hallway/foyer, and master bedroom. In viewing most of these areas in normal lighting conditions I was unable to see any difference in the paint from the surrounding areas with the exception of the wall behind the log post next to the stairs and a wall in the master bedroom.

The wall behind the log post has a long strip that does not match. There also appears to be stain on the wall from the [re-staining] of the log post.

The wall in the master bedroom appears to have been patched. There is visible discoloration on the patch compared to the rest of the wall.

6. [Failed to stain & finish (repair chip) – Inside front door & Threshold.] At the time of the pre-hearing inspection the threshold has been replaced but it does not appear to have been stained to match the door. . . . .

8. [Failed to sand, stain, finish, & hang wood doors, trim, jambs, throughout house.] At the time of the pre-hearing inspection . . . it does not appear that the doors, trim, and jambs were sanded or re-stained. All door[s] close appropriately with the exception of the right door of the hall closet next to the master bedroom door.

9. [Numerous cracks, Dents, and Seams showing in drywall installed throughout.] At the time of the pre-hearing inspection there were several areas [where] the drywall had dents and dings that were not consistent with the finish. There are also areas that are not sanded smooth to be consistent with finish.

10. [Failed to properly mask-off rocks & tile causing paint & stain damage.] At the time of the pre-hearing inspection there was still paint on the rock and tile.

11. [Failed to repair grout on tile floors, stairs and bathroom sinks.] At the time of the pre-hearing inspection the grout was replaced and in compliance with the exception of the stairs where there is cracking grout. . . . .

16. [Failed to properly install metal clothes racks in master closet. Missing parts.] At the time of the pre-hearing inspection the missing pieces were installed on the metal [clothes] rack. There is one rack that the push button on the adjustable arm does not seem to secure the holes. This however does not seem to be a workmanship issue. The Complainant may need to contact the manufacturer and file a warranty claim.

15. Investigator Allison acknowledged that Complainant had allowed Respondent access in January 2019, for it to perform repairs. Investigator Allison opined that the majority of Complainant’s complaints had been resolved and that there was minimal work remaining. 16. Mr. Stevens testified that the damage to Complainant’s house was a good- sized loss and that Respondent had performed repairs to electrical, insulation, plumbing, drywall, and taping, texturing, and painting the drywall repairs, although Respondent did not have to repair any framing. 17. Mr. Stevens testified that Complainant had removed the lockbox in August 2018, and that Respondent did not have access to the jobsite until the jobsite inspection in early October 2018. Complainant’s insurer has not paid Respondent for the job because Complainant refuses to sign off on payment. After the directive was issued, Respondent offered Complainant a financial settlement. Complainant stated that he needed time to think about the settlement but did not reject it until the time allowed for repairs on the directive was almost past. 18. Mr. Stevens testified that during the job, Complainant either refused to sign off on repairs or signed off and then changed his mind. Some walls had been painted eight or nine times. Mr. Stevens testified that Respondent had done everything it could to appease Complainant. 19. Mr. Stevens testified that it would only take two men two days to perform the remaining repairs. 20. Mr. Manning testified that he tried to smooth out all the divots in the original Santa Fe finish on the drywall. If an area needed to be repainted, he painted the entire wall, corner to corner. 21. Mr. Manning and Mr. Menger testified that Complainant and his wife placed hundreds of pieces of blue tape on the wall to mark areas they were dissatisfied with. After Respondent performed repairs, Mr. Manning and Mr. Menger would return to find hundreds more pieces of blue tape on the area that they had just painted. 22. Complainant stated that he preferred to have a completely new contractor finish repairs on his job. 23. Pursuant to A.A.C. R4-9-116, administrative notice is taken of Respondent’s license history on the Registrar’s public website on this date. Respondent’s license was current and in good standing. No discipline has ever been taken against the license and it appears that Complainant’s complaints are the only complaints pending against the license. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[2] 2. Complainant bears the burden of proof to establish cause to suspend or revoke Respondent’s contractor’s licenses by a preponderance of the evidence.[3] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[4] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] 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.”[6] 4. Complainant established that Items Nos. 5, 6, 8, 9, 10, and 11 on the directive, as described in Investigator Allison’s prehearing jobsite inspection notes, still do not comply with the Registrar’s or industry standards. Although remaining needed repairs are minimal, according to Investigator Allison, Complainant established potential cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32- 1154(A)(3),[7] namely A.A.C. R4-9-108.[8] 5. Because construction is not a perfect art, normally a contractor must be allowed a reasonable opportunity to remedy poor workmanship before the Registrar will suspend or revoke the contractor’s license. 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.” (Emphasis added.) It appears that Complainant did not allow Respondent to have the full time allowed by the Registrar’s directive to perform repairs because Complainant was considering Respondent’s settlement offer. However, it also appears that Complainant allowed Respondent to perform additional work in January 2019, after the deadline on the directive had expired. Although it is a close question, Respondent did not establish that Complainant failed to provide reasonable access to Respondent to allow it to perform repairs. Therefore, Complainant established cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(22). / / / / / / / / RECOMMENDED ORDER Based on the foregoing, it is ordered that, in the effective date of the final order in this matter, Respondent ABC Restoration LLC’s License No. ROC 287187 shall be suspended for one business day. Under the circumstances of this case, it is not appropriate to require Respondent to pay a civil penalty in any amount under A.R.S. § 32- 1154(E). 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, April 5, 2019.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See A.A.C. R4-9-117 (“In any disciplinary proceeding conducted by the registrar, the licensee’s entire license file including the record of prior citations and decisions may be considered by the registrar in making a decision and order in the case.”). [2] See A.R.S. § 32-1154(A). [3] See A.R.S. § 41-1092.07(G) (2); A.A.C. R2-19-119(A) and (B) (1); see also Vaiano v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [4] See A.A.C. R2-19-119(B) (2). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] Black’s Law Dictionary at page 1220 (8th ed. 1999). [7] A.R.S. § 32-1154(A) (3) includes among the grounds to suspend or revoke a contractor’s license, “[v]isolation of any rule adopted by the registrar.” [8] 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.”

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