ALJDEC decisions subject to certification as final

2019A-00760-CHC-ROC · Registrar of Contractors · 2020-01-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Donna Gardner,

COMPLAINANT

Sun Valley Remodeling Inc.,

ROC License: ROC 128499,

RESPONDENT

No. 2019A-00760-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 27, 2019 and January 10, 2020.

APPEARANCES: Donna Gardner, Complainant, appeared on her own behalf. Erika Johnsen, attorney, appeared on behalf of Sun Valley Remodeling Inc., Respondent.

ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera.

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FINDINGS OF FACT

On or about October 29, 1997, the Registrar of Contractors (“ROC”) issued License No. 128499 for General Residential B-3 General Remodeling and Repair Contract to Sun Valley Remodeling Inc. (“Respondent”). Respondent’s address of record for the license is 11405 North 126th Drive, El Mirage, AZ 85335-5290. Douglas Guy Mack is listed on the license as Officer and Qualifying Party and Patricia Jean Mack is listed on the license as Officer.

Administrative Notice is taken of Respondent’s prior License record, for License No. 128499, as reflected on the ROC’s public website on January 10, 2020. Such prior License record reflects that the license is currently active. License no. 128499 has been disciplined by the ROC on one case. The record also reflects that License no. 128499 has one open complaint against Respondent’s license, which is presumed to be related to this matter. Respondent has an active $9,000.00 surety bond issued through Developers Surety and Indemnity Company.

On or about May 4, 2018, Donna Gardner (“Complainant”) entered into a written contract whereby Respondent agreed to build an addition, referred to as a casita, at Complainant’s residential property located at 8804 South 229th Street, Buckeye, AZ 85326 for the sum total of $56,000.00. The project commenced on September 13, 2018. Complainant paid Respondent a total $42,000.00.

On or about February 14, 2019, the ROC received a workmanship Complaint from Complainant which included a copy of the contractual agreement between the parties.

On or about March 3, 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 April 10, 2019, at 9:00 a.m.

On or about April 5, 2019, Douglas Mack, Respondent’s owner, sent a letter to ROC Investigator Lisa Melton (“Investigator Melton”), the ROC investigator assigned to the case. In the letter, Mr. Mack addressed all items on Complainant’s Complaint. Mr. Mack indicated that the project was not finished and the work was still in progress for most of the items. He indicated that there were issues beyond his control specifically Complainant’s amendment to the blueprints, the presence of other contractors, and the weather. Mr. Mack acknowledged the water damage and complications that occurred due to the rain.

On or about April 10, 2019, Investigator Melton conducted a review of the contract executed between the parties. Investigator Melton also inspected the work that had been done on the project to date and took approximately 20 photographs. All parties were present during the inspection.

On or about May 17, 2019, Investigator Melton 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 2, 11-13, 15-16, 18-19, 25-26, 33, and 36-41 via appropriate means. Respondent was put on notice that it had until June 4, 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 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 June 24, 2019, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1154(A)(22) and 32-1155.

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 June 21, 2019, the ROC referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on September 27, 2019.

On or about September 27, 2019, Complainant presented her case. Due to time constraints, the hearing was continued for Respondent’s case. The second day of the hearing commenced on January 10, 2020.

HEARING EVIDENCE

At the hearing, Investigator Melton testified that the workmanship on the items listed on the Directive did not meet industry standards. Investigator Melton emphasized that the mold that resulted from the water damage was not within the ROC’s jurisdiction.

On or about September 26, 2019, Investigator Melton conducted a prehearing inspection. Investigator Melton determined that the Directive items 2, 12, and 19 were corrected and that item number 13 was not completed. She opined that while Respondent’s corrective work was minimal, this was a big project. The amount of corrective work that was required could not be completed within the allotted two week timeline and, therefore, the compliance deadline.

At the hearing, Complainant introduced the testimony of Russ Galler. Mr. Galler testified that he performed electrical work at Complainant’s home. He acknowledged that he was responsible for all of the electric work and that the electric work did not pass the Maricopa County inspection.

Complainant also introduced the testimony of her husband, Brandon Gardner. Mr. Gardner testified that he continually informed Respondent of poor workmanship issues and discrepancies throughout the duration of the project. Respondent was not denied access to the addition but was not allowed in his home to address the mold issue. Respondent had open access to the addition because the fence and gate were not locked. Mr. Gardner opined that he wanted the project and corrective work completed.

Complainant testified that she paid Respondent $42,000.00. Complainant wanted Respondent to complete the job after she learned that other contractors did not want to complete the project. From February 5, 2019, through June 2019, Complainant made several attempts to contact Respondent to perform the corrective work. Complainant acknowledged that, in May 2019, Mr. Mack indicated that he had medical issues and was busy with other jobs. Following the Jobsite Inspection, Complainant and Respondent agreed to have Respondent move forward with the project.

Complainant and Respondent discussed the interior wall that sustained water damage due to the rain. The wall sustained water damage because of Respondent’s failure to properly seal the work area from the rain. Respondent apologized to Complainant for that oversight and fired the employee who was in charge of protecting the home from the rain.

Complainant acknowledged that she told Respondent to stay away from the interior of the house not the addition. However, on or about June 8, 2019, Complainant allowed Respondent to correct all issues, including issues inside the house. Complainant opined that she relied on Respondent’s expertise with respect to paperwork, construction, installation, and timeline.

On the second day of the hearing, Mr. Mack testified that was hired to construct a detached casita type addition to the house. He was responsible for the structure of the addition and Complainant supplied the appliances and amenities. Complainant also hired architects and other contractors to perform septic and electrical work. Although the original plans were drawn up to build a detached casita, Complainant changed the plans to build an attached casita. There was no change order to reflect that deviation.

Mr. Mack argued that the new plan affected the construction the casita. According to Mr. Mack, the changes resulted in the following issues:

Some of the appliances did not fit or were no longer needed because of the connection between the existing house and the casita.

The walls and door frames were adjusted to fit the appliances.

The demolition left exposed areas to the inside of the house.

The roof tiles and pitches did not line up with the existing house.

The layout of the flooring changed.

The electrical wires were changed from outside to inside.

The direction the doors opened changed.

There were discussions that the location of the bathroom should be changed.

Mr. Mack did not request or execute change orders because he wanted to accommodate Complainant. Despite the changes, Mr. Mack continued to work on the project. Mr. Mack obtained the proper permits for this project. Mr. Mack successfully passed the inspections in all areas except for the electrical. However, the electrical work was not attributable to Respondent because it was done by Mr. Galler.

Mr. Mack testified that the weather in October 2018, was unusually rainy. Due to the plan changes, the structure was open longer than normal. Mr. Mack acknowledged that, as a result, there was excess moisture and that water leaked into the structured area. Mr. Mack immediately assessed and addressed the situation, Mr. Mack discovered the leak was within the existing house. Mr. Mack offered to fix it.

Once mold was discovered, Complainant instructed Mr. Mack not to address it. Mr. Mack, certified to treat mold, began to remediate the mold. Complainant became extremely upset and accused Mr. Mack of destroying evidence and kicked Mr. Mack out of the house.

Despite that fact, Mr. Mack called his insurance company to attempt to remediate the mold. Mr. Mack offered to remediate it through his insurance. Mr. Mack continued to make attempts to help Complainant fix the issues that resulted from the water damage.

After the Complaint was issued, Mr. Mack corrected as many issues as reasonably possible. Mr. Mack emphasized that Investigator Melton observed corrective work done prior to the Jobsite Inspection. Investigator Melton also indicated, in the Directive, that Respondent’s work was not complete on the majority of the items. Mr. Mack argued that the investigator meant that the project was not finished before the Complaint was filed. Despite the deviations from the original plans, Mr. Mack offered to continue working on the project but Complainant would not allow Mr. Mack to finish.

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 performed fell below the ROC’s minimum workmanship standards. The evidence showed that despite some challenges, Respondent’s workmanship resulted in damage to Complainant’s house. Mainly, Respondent failed to properly seal the portion of the existing house that resulted in damage to the interior wall. Respondent acknowledged that the damage resulted from its work and failure to seal.

There was evidence that some of the materials bought by Respondent did not match or fit resulted in poor workmanship. Even though Respondent did not execute a change order, the evidence showed that the original plans were changed by Complainant. The poor workmanship that resulted in uneven roof tiles, inconsistencies in bathroom wall tile and flooring, and the poor transition from the existing home to the now attached casita were attributable to deviation from the original blueprints. The deviation also resulted in electrical issues, however, Complainant established that Mr. Galler, not Respondent, was responsible.

Respondent argued that once the plans changed from building a detached casita to an attached casita, the dynamic of the project changed. Respondent corrected many of the items and expressed a willingness to correct the remainder of the items. While there was evidence of inconsistencies, mistakes, and flaws made by Respondent, the ROC does not expect or demand perfection from licensees. Thus, Respondent cannot be properly disciplined for the violation of Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108.

The evidence showed that Respondent was unable to fully comply with the Directive, specifically Complaint item 2, due to Complainant’s refusal to let Respondent in the interior of the existing house even after she was informed that Mr. Mack was certified in mold remediation. Even though Complainant persistently contacted Respondent to do corrective work, Complainant did not allow Respondent inside her house until after the compliance deadline had expired. Thus, Respondent was precluded from addressing all issues especially those related to internal matters.

Additionally, Investigator Melton opined that the amount of corrective work that was needed, in the case, could not have been completed within the allotted two week period.

The ROC allows contractors the opportunity to perform corrective work. 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 attempted to complete the corrective work but was not allowed the full access it needed to properly address all issues. 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 ROC’s final order in this matter, ROC close as dismissed Complainant Donna Gardner’s complaint in Case No. 2019A-00760 against Respondent Sun Valley Remodeling Inc. License No. 128499.

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, January 27, 2020.

/s/ Antara Nath Rivera

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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