ALJDEC decisions subject to certification as final

2018A-669-CHC-ROC · Registrar of Contractors · 2018-06-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Sandra Sue Gary,

COMPLAINANT,

v.

Robinson Roofing & Sheet Metal Inc,

License No: 306437

RESPONDENT.

No. 2018A-669-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 1, 2018, 8:30 A.M.

APPEARANCES: Complainant Sandra Gary appeared on her own behalf; Lewie Robinson, Jr., President, appeared on behalf of Respondent

ADMINISTRATIVE LAW JUDGE: Roger A. Geddes

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

1. Robinson Roofing & Sheet Metal, Inc., (Respondent), is the holder of License Number 306437 issued by the Registrar of Contractors (Registrar).

2. On or about February 12, 2018, Sandra Gary (Complainant), filed a Complaint against Respondent with the Registrar alleging she made a payment to Respondent for roofing repair for hail damage at Complainant’s residence in Tucson, Arizona, but that Respondent has never started the work

3. After an inspection performed by the Registrar on March 5, 2018, the Registrar issued a Directive, dated March 9, 2018, requiring Respondent to correct various alleged deficiencies in Respondent’s work by March 28, 2018, as follows:

“Liberty Mutual Insurance paid $2340.22 on 9/22/16 to begin repairs, remainder when work complete. Contingency Agree with Robinson on 10/06/16, paid $2340.22 to begin. As of 2/5/18, still no work has been done. Repeated phone/email contacts to Robinson to return $2340.22 so that Liberty can authorize a new company. Robinson refuses to refund money, stating they used it to hire an attorney. No attorney, no action for over 1 year. No work performed, Robinson refuses to work without more money and refuses to refund when they've done no work at all and have no attorney. Liberty contract allows 1 year for litigation, Robinson cannot sue due to their own negligence in this matter.”

Respondent to complete work per 10/6/2016 proposal.

4. After a compliance inspection on March 29, 2018, at which the Registrar observed that no corrective work had been done, the Registrar then issued a Citation to Respondent, dated April 2, 2018, for the alleged violation of the following:

a. A.R.S. § 32-1154(A)(1) (abandonment of a contract or refusing to perform without legal excuse for the abandonment);

b. A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108 for failure to meet minimum workmanship standards);

c. A.R.S. § 32-1154(A)(12) (violation of A.R.S. § 32-1158(A) for failure to include information in contract);

d. A.R.S. § 32-1154(A)(22) (failure to perform corrective action without valid justification).

5. The Registrar issued a Notice of Hearing, setting a hearing for June 1, 2018, at 8:30 A.M. At the hearing, Complainant Sandra Gary presented the testimony of Terrence McCarthy. Lewie Robinson, Jr., President, testified on behalf of Respondent and presented the testimony of John Granberry. Arlo Houston, the Investigator, testified on behalf of the Registrar. The Tribunal received and admitted Complainant’s exhibit numbers 1 - 3 and Respondent’s exhibit numbers 1 - 6.

6. Arlo Houston on behalf of the Registrar testified as to his communications with Complainant and Respondent, his inspections of the job site, and the Directive issued by the Registrar as a result of his observations from his inspection. Mr. Lawton testified that he observed during the inspection that no work had been done on the project.

7. Terrence McCrary, son-in-law of Complainant Sandra Gary, testified on behalf of Complainant that the agreement between the parties was entered into on or about October 6, 2016, for the contract amount of $7,587.98, with a down-payment of 2,340.22. (Complainant’s Exhibit 1). He stated that Complainant paid Respondent $2,340.22, the amount she received from Liberty Mutual Insurance (“Liberty Mutual”). (Complainant’s Exhibit 2). He stated that Respondent has performed no work.

8. Lew Robinson testified on behalf of Respondent that Respondent performed no work on the roof prior to the Directive Deadline. He stated that when Respondent bids on repairing roof damage, Respondent includes in its contract with the homeowner the initial damage amount assessment and scope of work recommended by the homeowner’s insurance adjustor. He further stated that it is Respondent’s practice to then negotiate with the insurance company on behalf of the homeowner for additional coverage and funds for work over and above the initial scope of work recommended by the insurance adjustor. He stated that while the insurance companies typically at first deny requests for additional work, he has been successful in most cases in expanding the scope of work that a homeowner’s insurer will cover for roof repair.

9. Mr. Robinson stated that in this case, Liberty Mutual approved a contract amount of $7,587.98 with $2,340.22 down and the remaining $4,747.46 upon completion which Respondent included in its contract with Complainant along with“... any and all monies approved by the insurance company.” He further testified that to date he has been unable to convince the insurance company to approve any additional funds or scope of work for Complainant’s roof. Documentation presented from Liberty Mutual reflects that the initial scope of the work accepted by the insurer only covered hail damage to the roof, and that the Liberty Mutual denied any further work for pre-existing conditions or deficiencies that in its view were unrelated to the hail damage.

10. Mr. Robinson further stated that Complainant signed an “Assignment of Insurance Claim,” dated December 30, 2016, assigning to Respondent all her rights, benefits, and proceeds due to Complainant under the specific policy relating to wind/hail damage at the subject residence. (Respondent’s Exhibit 5). He further stated that he used the down-payment from Complainant to retain an attorney to dispute Liberty Mutual’s denial of additional coverage. He acknowledged that Complainant did not authorize the use of the payment for an attorney.

11. John Granberry, a salesperson for Respondent, testified on behalf of Respondent that the Liberty Mutual adjustor performed an inspection without anyone from Respondent present thereby depriving Respondent of an earlier opportunity to negotiate the scope of work. Mr. Granberry further testified that the scope of the work under Respondent’s contract with Complainant would not remedy the various deficiencies in the roof, bring it up to code, or make the roof safe and that the roof needs to be replaced. He testified to the various deficiencies with the roof (whether or not related to hail damage) that were apparent to him when Respondent bid the job.

CONCLUSIONS OF LAW

1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154.

2. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by preponderance of the evidence. See Arizona Administrative Code Rule 2-19-119.

3. To warrant such sanctions by the Registrar, a Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” BLACK’S LAW DICTIONARY 1182 (Rev. 6th ed. 1990).

4. A.R.S. § 32-1154(A) includes in pertinent part among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, any of the following acts:

1. Abandonment 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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3. Violation of any rule adopted by the registrar.

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12. Failure in any material respect to comply with this chapter.

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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. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive.

5. As it relates to A.R.S. § 32-1154(A)(3) concerning a violation of any rule adopted by the Registrar, Arizona Administrative Code Rule 4-9-108(A), provides that “A contractor shall perform all work in a professional and workmanlike manner.”

6. As it relates to A.R.S. § 32-1154(A)(12) concerning failure in any material respect to comply with the chapter, A.R.S. § 32-1158(A) requires in pertinent part that any “[a]ny contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information:

...

9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative....”

7. Complainant has presented sufficient evidence to establish cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(1) for Respondent’s refusal to perform work without a legal excuse for the refusal. There is no dispute that Respondent refused to perform work on the subject contract. Respondent’s purported legal excuse for refusing to perform the work was because Complainant’s insurer had refused to approve additional funds for work beyond the scope of the original contract between Complainant and Respondent, a contract drafted by Respondent. While Respondent may very well be correct that performing the work on the original contract would not address all of the issues with the roof, this does not excuse Respondent from proceeding with the work. The evidence reflects that Respondent prematurely entered into the contract with Complainant and accepted a down-payment knowing it would not perform unless Complainant’s insurer approved additional funds or an expanded scope of work. It is apparent that this situation arose because Respondent did not wait to enter into a contract with Complainant until there was a final agreement with Complainant’s insurer to provide additional funds to correct the deficiencies with the roof or replace the roof. Had Respondent waited and Complainant’s insurer then denied the additional funds, as was the case here, then Respondent could then have decided not to enter into a contract with Complainant. In entering into a contract with Complainant when it did, Respondent assumed the risk that Liberty Mutual would not approve additional funds.

8. Complainant has presented sufficient evidence to establish cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(3) for Respondent’s failure to perform the work in a professional and workmanlike manner. Respondent’s acceptance of Complainant’s down-payment and its refusal to perform work constituted a failure to perform work in a professional and workmanlike manner.

9. Complainant has presented sufficient evidence to establish cause to discipline Respondent’s contractor’s license under of A.R.S. § 32-1154(A)(12) for the failure on the part of Respondent in a material respect to comply with Chapter 10 of Title 32 of the Arizona Revised Statutes. The evidence presented showed that Respondent had violated A.R.S. § 32-1158(A) because the contract between the parties was in excess of $1,000.00 and did not include a notice of the owner’s right to file a complaint with the Registrar.

10. Complainant has presented sufficient evidence to establish cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(22) for the failure on the part of Respondent to undertake corrective action. Respondent’s election to not perform corrective action until Complainant’s insurer approved additional funds is not legal justification for failure to undertake corrective action. Further, the Assignment of Insurance Claim has no bearing on the issues. It simply grants rights to Respondent to proceed against Complainant’s insurer. It does not excuse Respondent’s failure to do work or permit Respondent to retain Complainant’s down-payment without doing any work.

11. Complainant has established that Respondent’s license should be disciplined for a violation of § 32-1154(A)(1), A.R.S. § 32-1154(A)(3), A.R.S. § 32-1154(A)(12), and A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of this Order, Robinson Roofing & Sheet Metal, Inc.’s., License Number 306437 is suspended until the Registrar receives and accepts written verification that the Robinson Roofing & Sheet Metal, Inc., has paid $2,340.22 to Complainant in certified funds.

It is further recommended that if and when the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $2,340.22 in certified funds, the Registrar may close the Complaint in Case No. 2018A-669-CHC-ROC.

In the event of certification of this 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 the certification.

Done this day, June 21, 2018.

/s/ Roger Geddes

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors