PDF copy: ALJDEC decisions subject to certification as final

2018A-426-CHC-ROC · Registrar of Contractors · 2018-06-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Victor P Janule, No. 2018A-426-CHC-ROC

COMPLAINANT, ADMINISTRATIVE LAW JUDGE DECISION v.

Progressive Painting LLC , License No: 0259555 and 259556, RESPONDENT.

HEARING: May 18, 2018

APPEARANCES: Victor Janule, Complainant, Diana Janule, Complainant,

Kenneth Muhamad, Respondent, Paulette Mohamad, Respondent Employee, Matt Gunstra, Inspector, Registrar of Contractors. ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson.

FINDINGS OF FACT 1. Respondent Progressive Painting LLC. (hereinafter, “PP”) is the holder of a CR34 Dual Painting and Wall Covering Contractors’ License numbers 0259555 and 259556 issued by the Arizona Registrar of Contractors (Registrar) on or about October 8, 2009. PP’s qualifying party is Orji Jay Rahsaan. Appearing at hearing for PP is Kenneth Muhamad. 2. On or about July 15, 2015, Complainant) entered into a contract with PP to prep, apply an elastomeric coating and paint the exterior walls of Complainant’s residence. 3. On or about January 29, 2018, the Registrar received a Complaint against PP from Complainant alleging Respondent performed poor work.1 The Registrar assigned

This Complaint was filed over two years after the alleged contract for the project was executed. Per A.R.S. §32-1155(A) On the filing of a written complaint with the registrar charging a licensee with the commission, within two years before the date of filing the complaint, of an act that is cause for suspension

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 the complaint to Investigator Matt Gunstra, who after a jobsite inspection [“JSI”] on February 15, 2018 issued a written directive [“CWO”] to PP on February 23, 2018 which provided as follows: You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on 3/12/18. You are hereby directed to remedy the following violations by the appropriate means:

Complaint Item 1: After initial painting a number of areas started to bubble. Respondent re-sanded and re-sprayed the house. The bubbling reoccurred. Progressive painting has re-sanded the bubbled spots. Repainting has not been done. Directive: Respondent shall correct by appropriate means.

The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action. 4. Following the issuance of the CWO, the Registrar issued a Citation against PP charging two possible violations: 1.) violation of Arizona Administrative Code Rule 4-9-108 titled “Minimum Construction Standards,” and, thereby a violation of A.R.S. § 32-1154(A)(3) and 2.) violation of A.R.S. § 32-1154(A)(22) [failure to comply with the CWO]2. 5. A hearing was conducted on May 18, 2018 before the Office of Administrative Hearings, an independent agency, to determine whether the allegations of the Citation have merit.3

or revocation of a license, including an act that is in violation of title 44, chapter 11, article 11, the registrar after investigation, in its sole discretion, may issue a citation directing the licensee. Failing to file a Complaint within the two year period is jurisdictional. However, in this matter, PP’s “act that is cause for suspension or revocation of a license” as alleged occurred within two years of the filing of this Complaint for the reason that PP’s repair efforts on the site continued until at least January of 2017. See, Exhibit C- 4B of Complainant’s Exhibits and ¶7 and ¶8 of the Findings of Fact, herein below.

2 A.R.S. § 32-1154(A)(22) “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...” 3 Administrative Judicial Notice is taken of the entirety of the Agency documents on file with the Office of Admistrtive Hearings in this matter and of all of the Exhibits attached to the Complainant’s Disclosure and Exhibits. 6. Registrar of Contractors Inspector Matt Gunstra testified that the Complaint was assigned to him on January 24, 2018. A JSI was noticed to the parties for February 15, 2018. On February 15, 2018, the JSI was conducted by Mr. Gunstra Mr. Gunstra testified that, typically, Complaints with contracts or start dates older than two years fall outside the jurisdiction of his Agency. However, he said, according to the Complainant, the work and repairs on this job continued well into late 2017 - even as late as January 2018. So, he concluded, the work he observed at the JSI had been done well within two years of the filing of the Complaint. 7. At the February 15, 2018 JSI, present was the Complainant, a representative of PP and a representative from Dunn Edwards paint [Mr. Wade Gresham]. Mr. Gunstra’s jobsite notes from the JSI reveal: Complainant stated that the first issue with the paint was observed about 3 months after substantial completion. Respondent sanded and repainted at this time. Respondent returned in summer of 2016 to make further repairs and then again in late 2017. This brings the repairs into ROC 2 year jurisdiction. Complaint Item 1: After initial painting a number of areas started to bubble. Respondent re-sanded and re-sprayed the house. The bubbling reoccurred. Progressive painting has re-sanded the bubbled spots. Repainting has not been done.

Investigator’s Observation: I observed that there are sections of the exterior paint that have been sanded down but not repainted. This is mainly at the garage doors but there are spots around the home. I also observed a section of repainted stucco over the garage that has bubbles in the paint. It appears that the bubbling of the paint has not been properly corrected by Respondent. I cannot determine why the paint is bubbling or what the proper remedy is, however, Respondent's work does not meet ROC standards at this time and is not complete. Governing Rule: Workmanship Rule: ROC Workmanship Standard for Paint. 8. Mr. Gunstra issued his CWO on February 23, 2018. The CWO provided, in pertinent parts, as follows: You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on 3/12/18. [Emphasis is in the original].

You are hereby directed to remedy the following violations by the appropriate means: Complaint Item 1: After initial painting a number of areas started to bubble. Respondent re-sanded and re-sprayed the house. The bubbling reoccurred. Progressive painting has re-sanded the bubbled spots. Repainting has not been done.

Directive: Respondent shall correct by appropriate means. The Registrar has determined that any workmanship violations alleged in the complaint but not listed above are unsubstantiated and do not require corrective action.

8. Mr. Gunstra noted that although it has not be determined, to his knowledge, why the paint on this job has been repeatedly bubbling, the contractor is deemed to have accepted the substrate and is expected to use the proper paint required for the surface and

conditions. He said that bubbling paint surfaces are below workmanship standards

because paint should not bubble.

9. Mr. Gunstra conferred with the Complainant on March 13, 2018, the day after

the CWO’s stated deadline for compliance. At that time, the Complainant advised by

telephone that PP had again sanded some of the surfaces with areas of bubbling paint, but

that repainting had not be done. On March 13, 2018, the Citation in this case was issued

by the Registrar.

10. The Complainant, Victor P Janule, testified that he engaged PP to paint his 4,800 square foot residence. The Complaint itself, he pointed out, only pertains to the East wall – which is where 95% of the surface paint bubbling had occurred. Mr. Janule posited several theories in an effort to explain why the paint surface was bubbling, but presented no credible evidence in support of a causation in this record. He did confer, along with PP representatives, with other paint contractors in an effort to get his home painting completed, but none of the contractors contacted would accept the job to repair PP’s work. Mr. Janule admits that PP has been to the residence multiple times since they first painted the home and has made numerous sanding, repainting and other repair efforts to resolve the bubbling paint issue. To date, PP has been unsuccessful.

11. Complainant admitted in testimony that PP suggested a sub-contractor be hired to take on the repairs. Mr. Janule admited that he refused to allow PP to engage a sub-contractor to perform the repair work on this job because, Mr. Janule said, he was concerned that if someone else began work on the paint job that PP would “be let off the hook” and that “I did not know whether Progressive Painting would pay for the sub- contractor.” 12. Ms. Paulette Mohammad, an employee for the Respondent, testified that she has provided security for PP for the past 8 years. She said PP has been to the Complainant job site for an unusually high number of times. She referred to reviewing over 20 work orders for PP to go out to this job site to fix paint bubbles. She said she spoke to Mr. Janule at least 40 separate times about scheduling repair work for the bubbling paint issue. Per the work orders for this client, PP, she said, would take off all the paint, sand the surface down and start all over again. PP had both Sherwin Williams and Dunn Edwards representatives come to examine the site for them. She said no one had any solutions to offer and no one was able to say why the bubbling condition was occurring. 13. Referring to a March 12, 2018 e-mail from PP to Mr. Gunstra,4 Ms. Paulette Mohammad said that PP had decided that since it was not able to determine the cause of the paint’s bubbling and, after repeated efforts to remove the surface and re-paint, PP had determined to utilize another contractor to do the repairs needed in this matter. She said Mr. Janule refused to permit a sub-contractor to be used by PP on this job.5

4 See, Agency Record file “Lg Misc Correspondence2.pdf” 5 Ibid: March 12, 2018 To Whom It May Concern: This morning at 8:21am. Ken Muhammad contacted the complainant Mr. Victor Janule to advise him that Progressive Painting has been unable to resolve the reoccurring bubbling on select areas of his residence so we would like to hire and pay another contractor to resolve the issue. Mr. Janule was advised that contractor’s work would also be warranted work. At 8:33 am. Ken Muhammad contacted… Mr. Matt Dominy of MBD Design Builders, Inc….the contractor that Mr. Janule had received a $7670 bid from in August 2018. (sic) Mr. Dominy was advised of the situation and stated that he would not be able to work for another contractor but that he would be willing to sign a contract with the customer to warranty his work. At 8:35 am. Ken Muhammad contacted Mr. Janule and explained that Progressive would pay MBD but that MBD would have to sign a contract with the homeowner. Mr. Janule informed Ken Muhammad that he was not willing to do business with the contractor that he had received the bid from in August 2018. Mr. Janule further stated that his business was with Progressive Painting, so he wanted Progressive to resolve the issue. At 8:43 am. Ken Muhammad contacted ROC inspector, Matt Gunstra, and advised him of Mr. Janule’s decision.

14. Mr. Kenneth Mohammad, Respondent’s job supervisor, testified that he has spoken to the Complainant at least 40 times since the bubbling of paint on his paint job had occurred. He said he went to the Complainant’s home over and over to sand off the bubbled paint and make a paint repair. Still, paint bubbling reappeared. He said PP changed the paint product and even had a chemist from Sherwin Williams paint examine the locations where bubbling was occurring. The Sherwin Williams’ chemist, Mr. Mohammad said, had no explaination for what was causing the paint to bubble. 15. In April of 2017, Mr. Mohammad suggested to Mr. Janule that another contractor be called in. He said Mr. Janule agreed and several contractors came to the site to evaluate undertaking the repair. None of the contractors would agree to take on the job because, Mr. Mohammad said, “they had never seen such a problem and would not do the work.” 16. Mr. Mohammad testified that he spoke to Mr. Janule at the JSI, to advise that PP had decided that they wanted MBD Design Builders, Inc., - a contractor that Mr. Janule had received a bid from – to sub-contract the repair work. Mr. Mohammad testified that Mr. Janule refused to allow another contractor to do the repair work. He stated that Mr. Janule was adamant, “No, you are on the hook and I do not want you using somebody else. You can’t bring someone else on my property.” Mr. Mohammad submits, therefore, that PP was not permitted back on the site to remedy the item in the CWO. 17. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on June 4, 2018. Such prior License record reflects that Respondent’s License numbers 0259555 and 259556 have never been subject to discipline as a result of a Complaint or otherwise.

CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. 2. Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. ARIZ. ADMIN. CODE § R2-19-119. 3. A preponderance of the evidence is: The 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. BLACK’S LAW DICTIONARY 1373 (10th ed. 2014). 4. Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011) (citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes."). 5. “Statutes shall be liberally construed to effect their objects and to promote justice.” ARIZ. REV. STAT. § 1-211(B). 6. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 7. PP is not an unscrupulous, unqualified, and financially irresponsible contractor 8. As a general principle in construction, a subcontractor who performs work on top of a surface prepared by another accepts the surface. The subcontractor should have inspected the surface for any flaws or defects that would affect the work he proposes before performing the work. If he found the surface to be unacceptable, he should have called any defects to the owner’s or general contractor’s attention so that the owner can choose whether to pay for the defective surface to be corrected or if the owner is not willing to pay to correct the surface, the contractor may obtain an explicit warranty disclaimer.” Deeb v. Checks Epoxy, No. 2014A-3258 (ALJ Decision at 11:11–19).6 “No Arizona authority [directly] addresses the Registrar’s policy that a subsequent contractor who accepts a surface prepared by an earlier contractor also accepts full responsibility for the outcome. The policy is supported by case law from other jurisdictions. See generally cases cited at “Duty of Contractor to Warn Owner of Defects in Subsurface Conditions,” 73 A.L.R.3d 1213 (1976). A contractor who knew or should have known of a defect in the surface does not perform construction in a workmanlike manner if the contractor fails to notify the owner of the defect and the construction later fails due to the defective surface. See, e.g., Parker v. Thornton, 596 So. 2d 854, 858 (Miss. 1992); Lewis v. Anchorage Asphalt Paving Co., 535 P.2d 1188, 1199 (Alaska 1975). The principle is based on common sense and a need for fair dealings between contractors and property owners: For the requirements of public order and the obligation implicit in every contract that the work will be done in a good and workmanlike manner would compel us to reject 9. Although Respondent has demonstrated that there has been no direct or proximate cause established for the paint bubbling that occurred on this job, the contractor is deemed to have “accepted the surface” when it undertook to paint Complainant’s residence. “A professional licensed contractor must comply with the workmanship standards, and if it cannot comply with the standards, it must not undertake the job.7 10. Therefore, as to the issue of poor workmanship in this case, the evidence established that the paint application and the attempted repairs resulted in persistent paint bubbling which, by a preponderance of the evidence, is poor workmanship. Therefore, Complainant did meet its burden of proof to establish that Respondent failed to perform the work in a professional and workmanlike manner in violation of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3).8 11. After repeated and reasonable efforts, PP determined it did not have the expertise or knowledge to respond to the CWO properly. It is established that PP was under a duty to comply with the CWO “…to remedy the…violations by the appropriate means.” [Emphasis added]. By a preponderance of the evidence, it is established that the “appropriate means” chosen by PP was to bring a sub-contractor into the job to effect repairs. 12. By a preponderance of the evidence, it is demonstrated that Complainant rejected and refused to allow Complainants to engage MBD Design Builders, Inc., - the contractor that Mr. Janule had received a bid from – to sub-contract the repair work.

a contention that an undertaker is not responsible for building upon a site which he knows to be defective. In such a case, the barest standards of care would require him to bring the defect to the attention of the owner before proceeding. The owner would then have an opportunity to make the indicated adjustment in the contract to provide against the defective soil condition of which he had no prior knowledge. . . Wurst v. Pruyn, 202 So. 2d 268, 271-72 (La. 1967) (citation omitted).” Source: Deeb v. Checks Epoxy, No. 2014- 3258 (ALJ Decision at 11:20–30). 7 Evans v. Creative Finishing Services, No. 2016A-1138-ROC (ALJ Decision 7:13–17). 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.” A.R.S. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.”

Respondents are not prevented from refusing access because of their right to exclude others from their homes and it would not be appropriate to require contractors to trespass. [But it] is recognized that lack of access impinges on one party’s ability to defend itself and utilizing the benefits of the Registrar of Contractors is a privilege. Therefore, it is recommended that the Registrar dismiss complaints in which access is denied.” BB Ewing Property Management v. Khart Management LLC No. 2015-1168(ALJ Dec. 15:19–25). Similarly, “Unless expressly waived, the right to cure is implied in every contract as a matter of law.” Philip L. Bruner and Patrick J. O’Connor, Jr., Bruner & O’Connor on Construction Law, § 18:15 (West Group 2002).9 Therefore, by a preponderance of the evidence, Respondent has proven that Complainant’s refusal to cooperate10 in PP’s decision to bring in a licensed sub-contractor to finish the CWO work that PP was unable over months and months of its efforts to repair, is a refusal of access to and cooperation with PP - which refusal is a reasonable valid justification for PP’s failure to comply with the CWO. The Complainant has failed to meet its burden of proof to prove PP violated A.R.S. § 32-1154(A)(22).11 9. Considering the nature of the violation and that Mr. Janule refused to allow PP access to bring in a licensed subcontractor to comply with the CWO, PP should be afforded an opportunity to remedy by appropriate means the area where paint bubbling has occurred. In the alternative, if the parties can reach and conclude a financial arraignment that is satisfactory to both parties, then this matter should be dismissed. The agreement of the parties in this case is the July 15, 2015 proposal attached to the Complaint. There is no language waiving the right to cure or binding the Respondent from using sub-contractors of its choice in performing this job’s work. American jurisprudence implies in all contracts the obligation to cooperate in the performance of the contract and not to delay, hinder, or interfere with the performance of other parties. Over the years, owners have been found on numerous occasions to have breached their implied duty of cooperation in the context of construction contracts. Such instances have included failure to provide timely site access, failure to inspect the work or complete other work necessary to allow the contractor to proceed, and failure to reasonably schedule and coordinate owner-controlled work.” Source: Philip L. Bruner and Patrick J. O’Connor, Jr., Bruner & O’Connor on Construction Law, § 12:55 (West Group 2002) (citing inter alia Restatement (Second) of Contracts §§ 212 to 223); See also, § 9:99, Ibid. A.R.S. § 32-1154(A)(22) includes among the grounds for suspension, revocation, or other disciplinary action against 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). RECOMMENDED ORDER IT IS RECOMMENDED that thirty days after the effective date of the final Order in this matter, Progressive Painting LLC, license numbers 0259555 and 259556 are suspended for one day unless the Registrar of Contractors receives sufficient proof that Progressive Painting LLC has complied with the CWO. PROVIDED THAT, Complainant Victor P Janule must allow Progressive Painting LLC and its subcontractors reasonable access to make the required repairs ordered herein. IN THE ALTERNATIVE, if within thirty (30) days after the effective date of the Final Order in this matter the parties file with the Registrar sufficient proof that the parties have reached and concluded a financial settlement and resolution, then Progressive Painting LLC licenses will not be suspended as ordered hereinabove.

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. Ordered this the 5th day of June, 2018.

/s/ Randolph D. Wolfson Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors

By:____________

Done this day, June 5, 2018 /s/ Randy Wolfson Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors