ALJDEC decisions subject to certification as final

2019A-00096-ROC · Registrar of Contractors · 2019-06-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 16, 2019 APPEARANCES: Brian Bloom on his own behalf; Pat Loescher for Respondent ADMINISTRATIVE LAW JUDGE: Thomas Shedden FINDINGS OF FACT 1. On March 26, 2019, the Registrar of Contractors (“ROC”) issued a Notice of Hearing setting the above-captioned matter for hearing on May 16, 2019 at the Office of Administrative Hearing. 2. Respondent Pat Loescher Concrete LLC, holds license No. 278468 issued by ROC. Pat Loescher is a member of the LLC and the qualifying party on the license. 3. The Notice of Hearing shows that the hearing was set to consider the charges made in the Citation and complaint. 4. Complainant Brian R. Bloom hired Respondent to install a concrete patio at his house in Flagstaff. The concrete was poured on June 19, 2018. 5. Although Respondent installed the patio, Mr. Bloom did not pay Respondent to seal the concrete, but rather he sealed it himself. The sealant was necessary to prevent the concrete from deteriorating as a result of Mr. Bloom’s dog urinating on the patio. 6. Mr. Bloom filed a complaint against Respondent. 7. ROC Investigator Steve Philpot conducted a jobsite inspection that resulted in ROC issuing to Respondent a Directive dated February 20, 2019 that provides in part: You are hereby directed to remedy the following violations by the appropriate means: Complaint Item 4: Debris filled surface cavity present immediately after installation. Dismissed. Investigator’s Observation: This complaint item is substantiated. The void in the concrete is unsightly and fails to meet minimum industry standards. Respondent shall correct by appropriate means. Complaint Item 8: Surface blister/deterioration after less than- six months. Accused me of damage Investigator’s Observation: This complaint item is substantiated. All concrete should be placed in compliance with applicable codes and standards. The documentation submitted with this complaint indicates 3,000 PSI concrete has been used on this project. For Residential projects within the city of Flagstaff, 3,500 PSI concrete is the minimum allowable design strength for flat work exposed to weather. Respondent shall correct by appropriate means. Complaint Item 11: Contractor has expired Residential License. Investigator’s Observation: This is a residential project and the Respondent currently only is licensed to perform commercial work. The respondent is out of scope on this project. Respondent: You may not perform or hire other contractors to perform work that is outside the scope of your license. If any workmanship violations listed above are designated as outside the scope of your license, then you may remedy those violations only by paying a properly licensed contractor hired by Complainant to correct your deficient workmanship or by reaching a financial settlement with Complainant. 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. ROC’s Directive required Respondent to provide ROC with proof that it had made the repairs by 5:00 p.m. on March 8, 2019. Respondent did not complete the repairs ROC ordered it to complete within the time allotted and had not completed that work as of the hearing date. 9. ROC issued to Respondent a Citation dated March 11, 2019. 10. Through the Citation, ROC notified Respondent that if the act or acts charged in Mr. Bloom’s written complaint were proved at an administrative hearing, then Respondent may be found to have violated Ariz. Rev. Stat. sections 32-1154(A)(3), (A)(12)(two counts, sections 32-1124(B) and 32-1158), and (A)(16). 11. The Citation shows that ROC could not determine whether the allegations in Mr. Bloom’s complaint are supported by legally sufficient evidence to prove that Respondent has violated the cited provisions of Ariz. Rev. Stat. section 32-1154 and that a hearing would be conducted for that purpose. Through the Citation, ROC also notified Respondent that it may have violated Ariz. Rev. Stat. section 32-1154(A)(22). 12. Regarding complaint Item 4, surface cavity, Mr. Philpot testified to the effect that there is a cavity in the concrete that is a little bigger than a quarter. It is likely that there was some dirt or other debris in the pump-line when the concrete was applied. Mr. Loescher testified as to his willingness to make a repair to that area, but he has acknowledged that Respondent is not licensed to do residential work. 13. Mr. Philpot acknowledged that there is no objective standard for determining whether a cavity in concrete violates the workmanship standards. 14. Regarding complaint Item 8, surface blistering or spalling, Mr. Philpot testified to the effect that he was of the opinion that the spalling could have been caused by Mr. Bloom using ice-melt on the patio or because the design strength of the concrete used was 3000 psi. Because Mr. Bloom informed Mr. Philpot that he had not used any ice-melt on the patio, Mr. Philpot assumed that the spalling was due to the strength of the concrete. 15. Mr. Philpot cited the Flagstaff building code showing that concrete for a patio such as Mr. Bloom’s must have a design strength of 3500 psi at 28 days. 16. Respondent purchased the concrete from Arizona Materials. Although Respondent ordered concrete at 3000 psi, Respondent had entered into evidence a letter from Arizona Materials showing that to account for the freeze/thaw cycles in the area, it overdesigns its mixes by 25%. When he ordered the concrete Mr. Loescher was aware that Arizona Materials overdesigned its mixes. 17. Although it appears that Arizona Materials did not test the batch of concrete that was delivered to Mr. Bloom’s house, Respondent’s exhibit shows that between August 2017 and January 2019, Arizona Materials tested thirty batches of that mix and on average, the mix had a 28-day strength of 3755 psi. The batches tested in June 2018 ranged from 3250 to 4080 psi. 18. Mr. Loescher explained that the concrete actually used at Mr. Bloom’s house could be tested, but that would require taking a core from the patio. 19. Dog urine can also cause spalling, which is why it was necessary for the patio to be sealed. Mr. Bloom did not dispute that his dog urinates on the patio, but testified that this had not occurred before he completed the sealing. 20. Mr. Loescher testified to the effect that when he observed the patio during Mr. Philpot’s inspection, he could see that not enough sealant had been applied. Mr. Bloom disputed this and testified that he had followed the manufacturer’s specifications when sealing the patio. 21. Mr. Loescher was of the opinion that the spalling had been caused by dog urine. This opinion was based in part on the fact that only a two-foot by two-foot area was affected and that area was close to the access point to the patio. 22. Mr. Bloom testified that additional spalling has occurred since Mr. Philpot’s inspection. 23. Regarding complaint Item 11, Mr. Loescher acknowledged that Respondent’s residential license has expired. But he explained that when Respondent obtained its commercial license in 2012 he thought that the residential one would remain in effect. He also explained that ROC had an old address for Respondent’s residential license but the correct address for the commercial license. 24. ROC’s website shows that Respondent’s residential license (#146154) was issued on June 14, 1999 and expired on July 1, 2014, and that its commercial license (#27848) was issued on April 26, 2012. 25. There has been no prior discipline against either of Respondent’s licenses. CONCLUSIONS OF LAW 1. 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. 2. “At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2). 3. “At a hearing on an agency's imposition of fees or penalties or any agency compliance order, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(3). 4. 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). 5. An Administrative Law Judge Decision’s findings of fact shall be based exclusively on the evidence and on matters officially noticed. Ariz. Rev. Stat. § 41-1092.07(F)(6). 6. 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."). 7. “Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B). 8. 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). 9. The Administrative Law Judge may consider ROC’s administrative record. See Ariz. Admin. Code § R4-9-118. 10. Ariz. Rev. Stat. section 32-1154(A) provides that: The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: ***** 3. Violation of any rule adopted by the registrar. ***** 12. Failure in any material respect to comply with this chapter. ***** 16. Knowingly contracting beyond the scope of the license or licenses of the licensee. ***** 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. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held.

11. Ariz. Rev. Stat. section 32-1154(E) provides that ROC may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of Ariz. Rev. Stat. section 32- 1154(A)(22). 12. Ariz. Admin. Code section R4-9-108(A) provides that “A contractor shall perform all work in a professional and workmanlike manner.” 13. The preponderance of the evidence shows that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(3) because the concrete patio has a small cavity. 14. With respect to the strength of the concrete, although it is a workmanship violation to use concrete that is not in conformity with the applicable building code, it has not been shown by a preponderance of the evidence that Respondent used concrete that does not meet Flagstaff’s code requirement. Although Respondent ordered concrete with a 3000-psi strength, Mr. Loescher was aware that Arizona Materials would over-design the mix, the evidence shows that the mix used had an average strength of 3755 psi, and Mr. Bloom presented no evidence as to the actual strength of the batch of concrete that was used. 15. It has not been proven by a preponderance of the evidence that the spalling was the result of a workmanship violation by Respondent as opposed to dog urine. 16. The preponderance of the evidence shows that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(16) by conducting residential work at a time when Respondent was not licensed to do so. That Mr. Loescher was not aware that he was not properly licensed to do residential work is not a defense to this allegation. See Ariz. Rev. Stat. § 1-215(17)(“knowingly” requires “[o]nly a knowledge that the facts exist that bring the act or omission within the provisions of the statute using such a word” and “[d]oes not require any knowledge of the unlawfulness of the act or omission.”). 17. The preponderance of the evidence shows that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(22) because it failed to correct the cavity in the patio in the time ROC ordered it to do so. 18. Because it has not been proven that the spalling was the result of poor workmanship by Respondent, its failure to correct that spalling within the time ROC ordered it to do so is not a violation of subsection 32-1154(A)(22). 19. Respondent was not licensed to perform residential work when it conducted the work at Mr. Bloom’s. It was not possible for Respondent to correct this deficiency, consequently his failure to do so cannot fairly be considered a violation of subsection 32-1154(A)(22). See Gutierrez v. Industrial Commission of Arizona. 20. The Notice of Hearing shows that the scope of the hearing is limited to the issues raised in the Citation and Mr. Bloom’s complaint. ROC’s Citation shows that Mr. Bloom’s complaint was the basis for the allegations that Respondent may have violated of Ariz. Rev. Stat. sections 32-1124(B) and 32-1158. In his complaint, Mr. Bloom did not allege that Respondent’s estimate did not contain the acronym “ROC” before his license number, nor did he allege that the contract between the parties did not contain the minimum elements required by statute. Consequently, although Mr. Bloom had entered into evidence letters from ROC to Respondent showing that Respondent may have violated section 32- 1124(B) by failing to include “ROC” before his license number on the estimate he provided to Mr. Bloom, and that Respondent may have violated section 32-1158(A)(minimum elements of a contract), these allegations are not within the scope of this hearing and not properly before the tribunal. See Ariz. Rev. Stat. § 41-1092.07(F)(6). 21. Because Respondent has violated Ariz. Rev. Stat. sections 32- 1154(A)(3), (A)(16) and (A)(22), its license is subject to discipline. 22. In this matter, Respondent’s workmanship violation was minor. Nevertheless, performing residential work without the appropriate license is a serious violation because a homeowner cannot access the residential recovery fund unless the contractor is properly licensed. Considering the facts and circumstances of this matter, including that Respondent has no prior discipline, a five-day suspension and a civil penalty of $250 are appropriate. RECOMMENDED ORDER IT IS ORDERED that on the effective date of the final Order in this matter Respondent’s license number 278468 is suspended for five days; IT IS FURTHER ORDERED that within ten days of the final Order in this matter, Respondent must pay to the Registrar a civil penalty of $250.00 in certified funds.

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. Done this day, June 3, 2019.

/s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors -----------------------

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