FINACT2019A-00539-CHC-ROC-FinalAgencyAction-6849.pdf

2019A-00539-CHC-ROC · Registrar of Contractors · 2020-03-18

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Scott J Brady, Case No. 2019-00539 COMPLAINANT, Docket No. 2019A-00539-CHC-ROC v. FINAL ADMINISTRATIVE Southwest Coating Solutions LLC, DECISION AND ORDER License No. ROC 317816, RESPONDENT.

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject

an administrative law judge’s written decision. If the Registrar modifies or rejects that

decision, then the Registrar must provide written justification setting forth the reasons for the

modification or rejection of each finding of fact or conclusion of law.

MODIFICATION AND WRITTEN JUSTIFICATION

In this case, a hearing was held, and the administrative law judge issued a written

decision. See Administrative Law Judge Decision, attached. The administrative law judge’s

decision contains errors in paragraphs four through eight in its conclusions of law, and the

Registrar modifies the decision to correct and clarify those findings. For example, although

complaint item 12 is mentioned in the findings of facts, it is not addressed anywhere in the

conclusions of law. Similar errors occur in other parts of the administrative law judge’s

conclusions of law.

The Registrar accepts the Administrative Law Judge’s ultimate recommendation to

suspend Respondent’s license for a period of one day and to order the payment of a $250 civil

penalty.

of 5 REGISTRAR OF CONTRACTORS 1700 W. Washington St. – Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602) 542-1525 Toll Free (877) 692-9762 Lg131 8/19 CONCLUSION AND ORDER The Registrar modifies the administrative law judge’s decision by the following: • Striking paragraphs four through eight. • Replacing paragraphs four through eight with the following: 4. The preponderance of the evidence shows that Respondent did not perform the work in a professional and workmanlike manner as alleged in complaint items 3 through 8, which is a violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. If Respondent could not repair Mr. Brady’s home without complying with the Registrar’s workmanship standards, it should not have undertaken the job without a written waiver signed by Mr. Brady. Respondent did not obtain such a warranty disclaimer in this case. 5. The preponderance of the evidence shows that Respondent failed to correct complaint items 3 through 8 listed in the Registrar’s Directive without a valid justification, which is a violation of A.R.S. § 32-1154(A)(22). 6. The preponderance of the evidence shows that respondent performed poor work on items 1, 10, 11, 12, and 13 in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108. However, there is not sufficient evidence that Respondent violated A.R.S. § 32- 1154(A)(22) with respect to those items. The preponderance of the evidence shows that Respondent appropriately corrected the complaint items 11 and 13. The preponderance of the evidence shows that Respondent and a different contract hired by Complainant appropriately corrected complaint item 1. The preponderance of the evidence shows that Complainant hired a contractor other than Southwest Coating to repair complaint item 10. The preponderance of the evidence of record is insufficient and fails to support a conclusion that Respondent failed to comply with the written directive under A.R.S. § 32-1154(A)(22). Accordingly, even though Complainant has established a violation of A.R.S. § 32- 1154(A)(3), Complainant has failed to establish that Respondent’s license should be

of 5 REGISTRAR OF CONTRACTORS 1700 W. Washington St. – Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602) 542-1525 Toll Free (877) 692-9762 Lg131 8/19 disciplined for a violation of A.R.S. § 32-1154(A)(3) and (A)(22) for complaint items 1, 10, 11, 12, and 13 because the work was corrected by Respondent or another. 7. The preponderance of the evidence shows that Respondent failed to meet the minimum workmanship standards with regard to complaint item 2, which is a violation of A.R.S. 32-1154(A)(3), namely R4-9-108. The preponderance of the evidence shows that Respondent failed to appropriately correct the epoxy residue present on the bases of the columns in the front entry area, the hall wall and baseboard, the entrance to the kitchen and study, and the powder room bathroom toilet, as alleged in complaint item 2, which is a violation of A.R.S. § 32-1154(A)(22). 8. The preponderance of the evidence shows that Complainant hired a contractor other than Southwest Coating to repair epoxy residue on the doors, door jambs, casing trim, and cabinet toe kicks. As a result, this Tribunal concludes that the preponderance of the evidence of record is insufficient and fails to support a conclusion that Respondent failed to correct that portion of complaint item 2 in violation of A.R.S. § 32-1154(A)(22). Accordingly, even though Complainant has established a violation of A.R.S. § 32- 1154(A)(3), Complainant has failed to establish that Respondent’s license should be disciplined for a violation of A.R.S. § 32-1154(A)(3) and (A)(22) with respect to that portion of complaint item 2. The Registrar accepts the remainder of the Administrative Law Judge’s Decision, including all footnotes, which becomes effective on April 20, 2020. IT IS FURTHER ORDERED that Respondent pay a civil penalty in the amount of $250.00 payable to the Registrar on or before 30 days from the effective date of this Order. Payment may be hand-delivered to the Registrar’s physical address or mailed to: Registrar of Contractors P.O. Box 6748 Phoenix, Arizona 85505-6748

of 5 REGISTRAR OF CONTRACTORS 1700 W. Washington St. – Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602) 542-1525 Toll Free (877) 692-9762 Lg131 8/19 FINAL NOTE Because the administrative law judge’s decision makes no conclusions regarding complaint item 12, the Registrar will treat the complaint item as unproven. On page one, paragraph three, line 25, “Dreamstyle” should be “Southwest Coating.” On page one, paragraph three, line 25, “(B)” should be “(A).” On page two, paragraph six, line four, “Floor Store” should be “Southwest Coating.” On page three, paragraph six, line six, “32-1155(B)” should be “32-1162(A).” On page four, paragraph 13, line 26, add “part of complaint item 2 and all of” between “repaired” and “complaint.” On page five through six, renumber paragraphs 13 through 22 as 14 through 21. On page five, paragraph 14, line two, add “laundry room” after “the.” On page five, paragraph 14, line three, “toe/kicks” should be “toe kick.” On page five, paragraph 14, line three, remove “other than those situated to the left of the kitchen sink.” On page five, paragraph 15, line 12, “study” should be “study room.” On page five, paragraph 17, line 16, “items” should be “item.” On page five, paragraph 17, line 16, remove “12 and.” On page six, paragraph 20, line one, “wee” should be “were.” On page six, paragraph 20, line three, “no” should be “not.” On page eight, paragraph 9, line 12, “Floor Store” should be “Southwest Coating.” On page eight, paragraph 9, line 14, “1155(B)” should be “1162.” Dated March 11, 2020. By: /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund Arizona Registrar of Contractors

of 5 REGISTRAR OF CONTRACTORS 1700 W. Washington St. – Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602) 542-1525 Toll Free (877) 692-9762 Lg131 8/19 Copy mailed via USPS First Class Mail March 11, 2020 to: Respondent Southwest Coating Solutions LLC PO Box 13114 Tempe, AZ 85284 Complainant Scott J Brady 5501 E Jeffrey Trl Apache Junction, AZ 85119 Copy sent electronically this same date to: Office of Administrative Hearings Velva-Moses Thompson, Administrative Law Judge Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar Case No. 2019-00539 / KR

of 5 REGISTRAR OF CONTRACTORS 1700 W. Washington St. – Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602) 542-1525 Toll Free (877) 692-9762 Lg131 8/19 RECEIVED 2.11.2020 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Scott J. Brady, No. 2019A-00539-CHC-ROC

COMPLAINANT, ADMINISTRATIVE LAW JUDGE DECISION v.

Southwest Coating Solutions, LLC, ROC License: ROC 317816 RESPONDENT.

HEARING: January 22, 2020 APPEARANCES: Complainant Scott J. Brady appeared on behalf of himself. Mandy Scott appeared on behalf of Respondent Southwest Coating Solutions, LLC. ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson _____________________________________________________________________ FINDINGS OF FACT 1. On August 13, 2019, the Registrar of Contractors, (Registrar), issued a NOTICE OF HEARING setting the above-captioned matter for hearing on September 13, 2019, by the Office of Administrative Hearings in Phoenix, Arizona. 1 2. Southwest Coating Solutions LLC (Southwest Coating) holds License No. ROC 317816 issued by the Registrar. 3. The NOTICE OF HEARING shows that the hearing was set to consider the charges made in the CITATION and COMPLAINT. Through the CITATION, the Registrar alleges that Southwest Coating may have violated violated A.A.C. Rule 4-9-108 and ARIZ. REV. STAT. sections 32-1154(A)(3), (A)(12) and (A)(22). The Registrar also alleges that Dreamstyle may have violated ARIZ. REV. STAT. section 32-1158(B).

4. The CITATION shows that if the Administrative Law Judge finds that the

alleged charges are valid, the Registrar may suspend or revoke the license of

Southwest Coating Solutions LLC (Southwest Coating).

The hearing was continued to January 22, 2020. RECEIVED 2.11.2020 ROC LEGAL

5. On or about August 6, 2018, Mr. Brady and Southwest Coating entered into a residential repair construction contract. 6. Southwest Coating did not provide Mr. Brady with a contract which advised him of his right to file a complaint with the Registrar against Floor Store for an alleged violation of ARIZ. REV. STAT. section 32-1154(A) within the time allowed by ARIZ. REV. STAT. section 32-1155(B). 7. On or about September 5, 2018, Southwest Coating began work on Mr. Brady’s home. 8. On or about November 28, 2018, Southwest Coating stopped work on Mr. Brady’s home. 9. On or about February 1, 2019, the Registrar received a COMPLAINT from Mr. Brady alleging poor workmanship on the part of Southwest Coating in connection with a residential repair contract. 10. On or about March 26, 2019, Registrar Investigator Beau Cruz conducted a jobsite inspection. 11. On April 1, 2019, Investigator Cruz issued a DIRECTIVE. 12. The April 1, 2019 DIRECTIVE provides, in relevant part, as follows: After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a Citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. Failure to comply with this Directive may also be treated as an aggravating factor should the Registrar pursue discipline of your license, You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on April 16, 2019. You are hereby directed to remedy the following violations by the appropriate means: Complaint Item 1: Epoxy on appliances Floor epoxy residue on kick plate of refrigerator, floor epoxy residue and tape on kick plate on dishwasher kick plate, on cabinet toe kicks, and on dishwasher door panel, floor epoxy residue on cabinet toe kick to left of 2 RECEIVED 2.11.2020 ROC LEGAL

kitchen sink, as well as other toe kick of cabinets throughout the structure. Complaint Item 2: Epoxy on walls/doors Epoxy residue on door and door jambs of kitchen pantry, epoxy residue on hall wall and baseboard, epoxy residue on garage fire door and threshold, epoxy residue on door and door jambs of powder room, epoxy residue on tiled wall behind toilet, and both vanity legs of powder room, epoxy residue on door and door jambs of laundry room, epoxy residue toe kick for laundry room cabinet, epoxy residue on door and door jambs and jamb trim casing of front entry coat closet, epoxy residue on cabinet toe kick of office room, and epoxy residue master bathroom, master bathroom door and door jambs and jamb trim casing of master bathroom linen closet, and back side of master bathroom water closet room, and central vacuum connection port in master bathroom is partially covered by epoxy and epoxy coated tape, floor tile at entrance to master bathroom walk-in shower covered by epoxy and epoxy coated tape. It should be noted that majority of doors, door jambs, casing trim and cabinet toe kicks have epoxy residue (overspray) as well as bases of columns in front entry area and entrance to kitchen and study.

Complaint Item 3: Divots in epoxy Divots (recesses) in the surface of the epoxy floor coating in the master bathroom at bases of cabinets, in the surface of the epoxy floor coating and tape residue on west side of kitchen island counter cabinets, by right leg of vanity in the powder room. Divots around bases of columns in front entry area and entrance to kitchen and sitting/study room as well as other areas in the structure.

Complaint Item 4: Wood chips/tape in epoxy Debris under the epoxy floor coating in the powder room floor, debris under the epoxy floor coating in the master bathroom water closet floor at right side of toilet as well, as throughout epoxy floor coating throughout residence.

Complaint Item 5: Dirt/Bugs/Hair in epoxy Epoxy floor coating on the carpet of master bedroom at entrance to master bathroom as well, and throughout epoxy floor coating throughout residence. 3 RECEIVED 2.11.2020 ROC LEGAL

Complaint Item 6: top coat peeling Top coat peeling off epoxy floor coating in the master bathroom near the tub area, by patio door from kitchen to rear patio area, north post of entry to kitchen area from dining room and /study room, other areas throughout epoxy floor coating throughout residence.

Complaint Item 7: Air bubbles throughout epoxy Air bubble (gassing) in the epoxy floor coating in the master bathroom area, and areas throughout epoxy floor coating throughout residence. Complaint Item 8: uneven top coat Uneven application of top coat not on epoxy floor coating throughout the residence.

Complaint Item 10: over spray on outside of house Epoxy coating overspray on exterior stucco surfaces in the patio area as well as on all patio columns. Complaint Item 11: over spray on windows Epoxy coating overspray surfaces of windows, and arcadia (patio door). Addendums, respondent not present to object. Complaint Item 12: Contractor damaged stucco surfaces when power washing. Power washing burns on surfaces of stucco in several areas.

Complaint Item 13: Contractor dumped epoxy in soil on and around telephone pole on east side of driveway. Epoxy in soil on and around telephone pole based on east side of driveway. 13. On January 3, 2020, Investigator Cruz conducted a pre-hearing inspection. Investigator Cruz found that Southwest Coating had not repaired complaint items 3 through 8, and 11.

4 RECEIVED 2.11.2020 ROC LEGAL

13. Investigator Cruz found that Respondent appropriately corrected complaint item 1, but observed that Mr. Brady hired another contractor repair the cabinet toe/kicks other than those situated to the left of the kitchen sink. See Exhibit A. 14. With regard to Complaint Item 2, Investigator Cruz found that the “majority of doors, door jambs, casing trim and cabinet toe kicks” were corrected by a contractor that was not Southwest Coating. See Exhibit A. Investigator Cruz was unable to substantiate Mr. Brady’s allegation that Southwest Coating damaged the laundry room appliances because he could not determine whether the damage was preexisting. However, Investigator Cruz found that Southwest Coating had not complied with complaint item 2 due to the epoxy residue present on some of the bases of columns in the front entry area, epoxy residue on hall wall and baseboard, and epoxy residue on the entrance to the kitchen, study, and powder room bathroom toilet. See id. 15. Investigator Cruz found that Mr. Brady hired another contractor to correct complaint item 10. See Exhibit A. 16. Investigator Cruz found that Southwest Coating appropriately corrected complaint items 12 and 13. See Exhibit A. 17. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing. 18. At hearing, Scott J. Brady testified on behalf of himself. Mr. Brady presented the testimony of Korah A. Hart. 19. Southwest Coating presented the testimony of Mary Scott and Joshua Scott. Investigator Cruz testified regarding his job site inspections and issuance of the DIRECTIVE. 20. Mr. Brady and Ms. Hart testified that Southwest Coating performed poor work when it repaired Mr. Brady’s home. 21. Ms. Scott and Mr. Scott denied that the work of Southwest Coating failed to meet minimum workmanship standards. Ms. Scott and Mr. Scott denied that Southwest Coating failed to comply with the DIRECTIVE. Mr. Scott stated that the metallic floor will reflect what appears to be gas bubbles because metallic floors move. Mr. Scott also contended that the cracks in the floor were caused by moisture in the floor. 5 RECEIVED 2.11.2020 ROC LEGAL

However, Southwest Coating provided no evidence that cracks in Mr. Brady’s floor wee caused by moisture in the floor. Mr. Scott stated that the contract between Mr. Brady and Southwest Coating states that Southwest Coating is no responsible for moisture in the floor. However, Mr. Scott and Ms. Scott failed to provide written evidence that it warned Mr. Brady about the possible appearance of gas bubbles in the metallic floors and obtained a written waiver. 22. Administrative notice is taken of the Registrar’s public website. According to the information available on the website on February 11, 2020, Southwest Coating’s license was first issued on February 12, 2018 and is active. Such prior License record also shows that there is only one open complaint against Southwest Coating. Southwest Coating’s license has never been disciplined. The lack of prior discipline taken is considered a mitigating factor in imposing discipline. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See ARIZ. REV. STAT. sections 32-1101 et seq. 2. Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. See ARIZ. REV. STAT. section 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960) 3. The preponderance of the evidence does not show that Respondent damaged Complainant’s laundry room appliances. 4. The preponderance of the evidence shows that Respondent did not perform the work in a professional and workmanlike as alleged in complaint items 3 through 8, which is a violation of ARIZ. REV. STAT. section 32-1154(A)(3), namely A.A.C. R4-9-108.2 . If Respondent could repair Mr. Brady’s home without complying with the

Registrar’s workmanship standards, it should not have undertaken the job without a written waiver signed by Mr. Brady.3 Respondent did not obtain such a warranty disclaimer in this case. 5. The preponderance of the evidence shows that Respondent appropriately corrected the complaint items 11, and 13. The preponderance of the evidence shows that Respondent and different contractor hired by Complainant appropriately corrected complain item 1. The preponderance of the evidence shows that Complainant hired a contractor other than Southwest Coating to repair complaint item 10. This Tribunal concludes that the preponderance of the evidence of record is insufficient and fails to support a conclusion that Respondent’s work failed to meet minimum workmanship standards as alleged in complaint items 1, 11, 10, and 13. 6. The preponderance of the evidence shows that Respondent failed to Correct complaint 3 through 8 items listed in the Registrar’s DIRECTIVE without valid justification, which is a violation of ARIZ. REV. STAT. section 32-1154(A)(22). 7. The preponderance of the evidence shows that Respondent failed to appropriately correct the epoxy residue present on the bases of columns in the front entry

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.” See Nastri v. Wood Bros. Homes, Inc., 142 Ariz. 439, 441-42, 690 P.2d 158, 160-61 (App. 1984) (citing Darner Motor

Sales, Inc. v. Universal Underwriters Insurance Co., 140 Ariz. 383, 682 P.2d 388 (1984) and Peterson v. Hubschman Construction Co., Inc., 76 Ill. 2d 31, 389 N.E.2d 1154 (1979)). With respect to warranty disclaimers or waivers, according to the Arizona Court of Appeals’ authority,

Although the implied warranty of habitability is a creature of public policy, we do not consider a knowing disclaimer to be against the public policy of this State. However, we do hold that any such disclaimer must strictly be construed against the builder-vendor. . . . We refer to the well-reasoned opinion of the Supreme Court of Missouri in Crowder v. Vandendeale (Mo. 1978), 564 S.W.2d 879, where it was held that “boilerplate” clauses, however worded, are rendered ineffective in such a disclaimer (564 S.W.2d 879, 881), and the court further stated:

“[O]ne seeking the benefit of such a disclaimer must not only show a conspicuous provision which fully discloses the consequences of its inclusion but also that such was in fact the agreement reached. The heavy burden thus placed upon the builder is completely justified, for by his assertion of the disclaimer he is seeking to show that the buyer has relinquished protection afforded him by public policy. A knowing waiver of this protection will not be readily implied.” (Emphasis in original.) Crowder v. Vandendeale (Mo. 1978), 564 S.W.2d 879, 881 n.4. Petersen, 76 Ill. 2d at 43, 389 N.E.2d at 1159 (1979) (some authorities omitted; emphases added and in original). 7 RECEIVED 2.11.2020 ROC LEGAL

area, the hall an baseboard, the entrance to the kitchen and study, and the powdered room bathroom toilet, as alleged in complain item 2, which is a violation of ARIZ. REV. STAT. section 32-1154(A)(3), namely A.A.C. R4-9-108.4 8. The preponderance of the evidence shows that Complainant hired a contractor other than Southwest Coating to repair epoxy residue on the doors, door jambs, casing trim, and cabinet toe kicks. As a result, this Tribunal concludes that the preponderance of the evidence of record is insufficient and fails to support a conclusion that Respondent’s work failed to meet minimum workmanship standards with regard to the epoxy residue on the doors, door jambs, casing trim, and cabinet toe kicks as alleged in complaint item 2. 9. The preponderance of the evidence shows that Southwest Coating violated Ariz. Rev. Stat. section 32-1158(B) by failing to provide Mr. Brady with a written contract which advised him of his right to file a complaint with the Registrar against Floor Store for an alleged violation of ARIZ. REV. STAT. section 32-1154(A) within the time allowed by ARIZ. REV. STAT. section 32-1155(B). RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s license No. ROC 317816 for one day. It is further recommended that the Registrar require Respondent to pay the sum of $250.00 as a civil penalty pursuant to ARIZ. REV. STAT. section 32-1154(E). It is further recommended that within thirty days of the effective date of the final order, Respondent shall provide to the Registrar copies of its form contract that has been revised to comply with the requirements of ARIZ. REV. STAT. § 32-1158(B). If Respondent fails to provide proof that it has so revised its form contracts, it is recommended that Respondent’s license be suspended for three days.

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.” 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.” 8 RECEIVED 2.11.2020 ROC LEGAL

It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in ARIZ. REV. STAT. sections 32-1101(A)(7), unless Respondent tenders payment of any outstanding prior civil penalty. Done this day, February 11, 2020. 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. /s/ Velva Moses-Thompson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors