ALJDEC decisions subject to certification as final

2019A-00495-CHC-ROC · Registrar of Contractors · 2020-03-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ronald J Washington,

COMPLAINANT

Buildco LLC,

ROC License: ROC 292223,

RESPONDENT

No. 2019A-00495-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 2, 2020.

APPEARANCES: Ronald Washington, Complainant, appeared on his own behalf. Nelson Mixon, attorney, represented Buildco LLC, Respondent.

ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera.

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FINDINGS OF FACT

On or about July 2, 2014, the Registrar of Contractors (ROC) issued License No. 292223 for General Dual KB-1 Dual Building Contractor to Buildco LLC. (Respondent). Respondent’s address of record for the license is P.O. Box 5906, Glendale, AZ 85312. Duane Lee Ferra is listed on the license as Qualifying Party and Member.

Administrative Notice is taken of Respondent’s prior License record, for License No. 292223, as reflected on the ROC’s public website on March 2, 2020. Such prior License record reflects that the license is currently active. License no. 292223 has never been disciplined by the ROC and has one resolved/settled case. The record also reflects that License no. 292223 has one open complaint against Respondent’s license, which is presumed to be related to this matter. Respondent has an active $14,000.00 surety bond issued through RLI Insurance Company.

On or about March 29, 2017, Scott Burke entered into a contract with Respondent to do a complete remodel located at 1634 East Aire Libre Avenue, Phoenix, AZ 85022 (Aire Libre). The total contract amount was $107,800.00. The project commenced on March 29, 2017, and completed on August 31, 2017.

In March 2018, Ronald Washington (Complainant) purchased the remodeled house at Aire Libre.

On or about January 28, 2019, the ROC received a workmanship Complaint from Complainant alleging poor workmanship.

On or about February 1, 2019, the ROC issued a Jobsite Inspection Notification letter to the parties, providing proper notice to them, and advising that an onsite review would be conducted at the project site by an ROC investigator on March 22, 2019, at 9:00 a.m.

On or about February 1, 2019, ROC Investigator Beau Cruz (Investigator Cruz) inspected the work that had been done on the project to date and took approximately 33 photographs. All parties were present during the inspection.

On or about March 26, 2019, Investigator Cruz issued a Directive from the Registrar (Directive) to Respondent because he substantiated Complainant’s allegation that Respondent’s work failed to meet minimum ROC workmanship standards. Specifically, Respondent was ordered to remediate Complaint items 3, 5, 6, 10, 14-15, and 20-23 via appropriate means. Respondent was put on notice that it had until May 10, 2019, to notify the ROC of its compliance with the corrective order or face discipline pursuant to Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. § 32-1154(A)(22) and 32-1154(E).

On or about April 4, 2019, Respondent filed its Answer to the Directive. Respondent disagreed with Complaint items 10, 15, and 23. Respondent stated that the garage floor, driveway elevations, and drainage issues existed when the house was built. The architect was responsible for any changes to the elevation. As to items 15 and 23, Respondent emphasized that it contracted with the original owner to perform specific contractual items as instructed by the original owner. However, Respondent installed the flooring according to Complainant’s advice and request. Respondent agreed to correct the remaining items on the Directive. Respondent stated that it was denied access by Complainant to perform any corrective work.

On or about June 6, 2019, the ROC issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. § 32-1154(A)(3) and 32-1154(A)(22), and Ariz. Admin. Code R4-9-108. Respondent was given until August 5, 2019, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1154(A)(22) and 32-1155.

On or about July 5, 2019, a Compliance Jobsite Inspection was conducted. Both parties were present.

Per the Citation, the issue to be determined was whether the ROC had cause to discipline Respondent’s license based on the following charges:

Charge: 1 Ariz. Rev. Stat. § 32-1154(A)(3) - R4-9-108

Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108.

Charge: 2 Ariz. Rev. Stat. § 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. 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.

On or about August 9, 2019, the ROC referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on September 24, 2019. Prior to that date, the parties requested a continuance. The hearing was continued to March 2, 2020.

On or about February 25, 2020, a Prehearing Jobsite Inspection was conducted. The inspection was not recorded by Investigator Cruz because the recorder was not charged. Investigator Cruz determined that the HVAC unit and exposed ductwork that were installed by a contractor hired, and paid for, by Mr. Burke was the cause of the water leaks. Investigator Cruz also found that Respondent failed to fix the cracks, baseboards, garage flooding, loose seam joints, flooring in various rooms, stucco cracks, and garage air vents. Respondent was not present at this inspection.

On or about March 2, 2020, Complainant presented the testimony of Ashley Washington and submitted 20 exhibits. Respondent presented the testimonies of Duane Ferra and Michael Bills and submitted 20 exhibits.

HEARING EVIDENCE

At the hearing, Investigator Cruz testified to his observations during the Jobsite Inspection. When asked if Respondent complied with the Directive, Investigator Cruz responded “yes and no.” After the Directive was issued, Respondent “attempted to comply” with Complaint items 3-6 and 20. The testimony with respect to which items Respondent complied with was unclear.

Investigator Cruz testified that he did not want to address the issue of denial because he was not there to testify about that. Additionally, Investigator Cruz did not bring his notes to verify which items Respondent did not correct because it was denied access.

Investigator Cruz opined that Devil Dog Development, LLC’s (Devil Dog), not Respondent, was responsible for the water stain and roof damage. Investigator Cruz did not assess who was responsible for the cracks. Ultimately, Investigator Cruz testified that Respondent was in compliance with all items except for the flooring in the kitchen. Even though there were aesthetic issues, Respondent was in compliance per industry standards with everything else.

At the hearing, Complainant introduced the testimony of Ms. Washington. Ms. Washington testified that the leaks began during monsoon season in 2018. The leaks were around the areas where the HVACs were placed. The paint bubbled up where the water leaked.

After the Directive, Complainant did not deny access to Respondent. Complainant allowed Respondent to correct the issues even after the deadline passed. Ms. Washington acknowledged that Complainant wanted stipulations before Respondent could come to fix anything. The first communication between Complainant and Respondent occurred April 10, 2019.

Respondent made superficial repairs but did not fix the items on the Directive. However, the repairs completed by Respondent caused additional damages. Respondent improperly tiled the flooring which caused the dishwasher to not fit and the dishwasher broke. Additionally, the fridge did not fit and the island was at an angle.

Ms. Washington videotaped Michael Bills, Respondent’s project manager, when he met with Ms. Washington at her home to discuss the work completed. In the video, Mr. Bills acknowledged that the foundation was at different levels and agreed that some adjustments needed to be made. Mr. Bills stated that he was not done and intended to come back to fix the dishwasher.

At the hearing, Mr. Bills testified that he managed the project at Aire Libre for Mr. Burke. When Mr. Bills informed Mr. Burke of issues with the garage, Mr. Burke did not want the issues to be fixed. The HVAC work was done by another contractor. Any leaks that resulted from the installation of the HVAC was that contractor’s responsibility. Mr. Bills agreed to fix the issues with flooding in the garage on his own accord and with his own funds. Mr. Bills acknowledged that while there were issues that needed to be fixed, Complainant threatened a lawsuit and was uncooperative. Ten days before the compliance deadline, Complainant agreed to have Respondent come to the house. However, Respondent was unable to schedule any repairs until after the compliance deadline.

Mr. Ferra, Respondent’s Qualified Party and owner, testified that Mr. Burke did not want any additional work done in the garage and, thus, was not responsible for any issues related to the garage floor. Mr. Ferra acknowledged that the floors were an issue, however, Complainant prevented Respondent from correcting the issues due to denial of access. Complainant put conditions on Respondent’s access.

On or about April 10, 2019, Respondent requested to schedule repairs but Complainant refused.

On or about May 17, 2019, Respondent was scheduled to repair the flooring. On or about May 20, 2019, Complainant informed Respondent to not perform any tile repairs.

On or about June 7, 2019, when Respondent offered to correct the items on the Directive, Complainant refused. Respondent continued to request Complainant to correct the items until January 2020.

CONCLUSIONS OF LAW

The ROC has jurisdiction over this matter pursuant to Ariz. Rev. Stat. § 32-1101 et seq. and 32-1154(A). The matter was properly brought before the Office of Administrative Hearings pursuant to Ariz. Rev. Stat. § 41-1092 et seq.

The ROC may resolve contractual disputes if such resolution in ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.

The purpose of the ROC’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

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.”

Ariz. Admin. Code 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.”

Ariz. Rev. Stat. § 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.”

Ariz. Rev. Stat. § 32-1154(A)(22) holds, in pertinent part, that “[a] holder of a license may not fail to take appropriate corrective action to comply with this chapter or 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. The ROC has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.”

Complainant established, by a preponderance of the evidence that the work Respondent completed fell below the ROC’s minimum workmanship standards. Respondent was initially hired to remodel a home by Mr. Burke. Respondent installed substandard flooring. Respondent’s work initial work resulted in poor workmanship but Respondent’s corrective work resulted in additional issues. Thus, Respondent did not complete the project in a workmanlike manner in violation of Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108.

Respondent, however, established that it was unable to fully comply with the Directive due to Complainant’s non responsiveness to Respondent’s requests and refusal to grant Respondent access.

Denial of access constitutes a valid justification for failing to comply with a written directive of the ROC. Respondent established by a preponderance of the evidence that it contacted Complainant, on multiple occasions, to perform corrective work. Regardless of when Respondent contacted Complainant, the ROC allows contractors the opportunity to perform corrective work before the compliance deadline. The evidence established that Complainant denied it access to his property. Therefore, Respondent cannot properly be disciplined for the violation of Ariz. Rev. Stat. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that on the effective date of the Order, the Registrar of Contractors shall suspend Respondent Buildco LLC’s ROC License number 292223 for a period of one (1) day.

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 40 days from the date of that certification.

Done this day, March 23, 2020.

/s/ Antara Nath Rivera

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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