ALJDEC decisions subject to certification as final

2019A-00865-CHC-ROC · Registrar of Contractors · 2019-10-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 10, 2019, 1:00 P.M. APPEARANCES: Complainant Deborah Porpora appeared on her own behalf; Drew Kernaghan, owner, appeared on behalf of Respondent ADMINISTRATIVE LAW JUDGE: Roger A. Geddes _____________________________________________________________________ FINDINGS OF FACT Background and Procedure 1. Tier 4 Consultants, LLC, DBA: T4C Construction (Respondent), is the holder of License Number 295823 issued by the Registrar of Contractors (Registrar). 2. On or about February 22, 2019, Deborah E. Porpora (Complainant) filed a Complaint against Respondent with the Registrar alleging poor work in connection with a remodel by Respondent at a residence in Scottsdale, Arizona (“project”). 3. The Registrar performed an inspection of the project on April 2, 2019. Thereafter, the Registrar issued a Directive, dated April 16, 2019, requiring Respondent to correct various alleged deficiencies in Respondent’s work by May 24, 2019, as follows: The Respondent is to ensure that any and all required building permits are obtained from the Local Building Authorities prior to making corrections listed in this Directive. If the local jurisdiction finds corrective issues relating to the respondent’s work, the respondent will be required to correct those issues by appropriate means. The respondent is required to submit a copy of the approved inspection results to the ROC Investigator. Complaint Item #1: T4C removed a section of a wall (Between Kitchen & Family room) ceiling is cracking & sagging. (Ceiling cracking and sagging is to be corrected by appropriate means.) 4. After the Registrar was informed that corrective work had not been fully performed or completed, the Registrar issued a Citation to Respondent, dated June 7, 2019, for the alleged violation of the following:

a. A.R.S. § 32-1154(A)(2) (departure from or disregard of plans or specifications or any building code standards); 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)(22) (failure to perform corrective action without valid justification). 5. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. The Registrar issued a Notice of Hearing setting a hearing after a continuance for September 10, 2019, at 1:00 P.M. 6. At the September 10, 2019, hearing, Complainant Deborah Porpora testified on her own behalf and presented the testimony of Marcus Porpora, Chuck Leyva, and Mike Marchi. Respondent presented the testimony of Drew Kernaghan, owner. Dennis Bierman, the Registrar Investigator (Investigator), testified on behalf of the Registrar. The Tribunal received and admitted Complainant’s exhibit numbers 1 - 23 and 1A and Respondent’s exhibit numbers 1 - 21 and exhibit numbers 22 - 24 which were submitted after the hearing with the permission of the Tribunal.[1] The Tribunal also considered Complainant’s response to Respondent’s exhibit numbers 22 - 24, dated September 14, 2019. 7. The Investigator on behalf of the Registrar testified as to his communications with Complainant and Respondent, his inspections of the project, and the Directive issued by the Registrar as a result of his observations from his inspections. Specifically, he testified that he observed cracking and sagging in the ceiling at or near where Respondent remove a wall. 8. Complainant Deborah Porpora testified that as part of the remodel, Respondent removed a wall and she later observed cracking in the ceiling and then the ceiling began to sag near the area of the wall removal. She stated that she signed a release in the previous case under duress because she needed to get back into her house. She further stated that she retained an energy auditor who refused to go into the attic and who explained to her that the attic was unsafe. 9. Marcus Porpora, father of Complainant, testified on behalf of Complainant that he was able to see up into the attic during the work and he saw. He stated he was told by Respondent that the removed wall was not a load bearing wall. 10. Chuck Leyva, a flooring contractor of Complainant, testified on behalf of Complainant that he could see into the attic as the work was being performed. 11. Mike Marchi, a contractor of Complainant, testified on behalf of Complainant that he believed it to be unsafe to go into attic because there were no supporting beams. He stated he could see the sagging in the ceiling and that a post had been removed from the corner. 12. Drew Kernaghan testified on behalf of Respondent that there was a complete and final release between the parties in an earlier Case No. 2017A-05044. (Respondent’s Exhibit 22). Said release, signed only by Complainant, and dated by her on November 15, 2017, reflected a release of Respondent of all current and future liability. He stated further that Respondent also forgave further amounts owed by Complainant to Respondent as part of the agreement. However, in connection with the agreement, Respondent indicated to Complainant by email dated October 13, 2017, that he requested that she sign a complete release of any further liability “outside future warrantee [sic] issues.” (Respondent’s Exhibit 23). He stated the wall removed was not structural, and consequently be believed no permit was required. He further testified that as a possible resolution, he proposed that Complainant hire an engineer to determine whether the removed wall was a load bearing wall and determine the reason for sagging and that Respondent would then proceed with necessary repairs. 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, 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:

2. Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative….

3. Violation of any rule adopted by the registrar. …

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.….

5. As it relates to the grounds under 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. A.R.S. § 32-1154(A)(2). Complainant has presented sufficient evidence to establish cause to discipline Respondent’s contractor’s license under A.R.S. § 32-1154(A)(2), the departure from or disregard of plans or specifications or any building codes. The evidence presented established that Respondent proceeded with the project without a building permit. Respondent contended that it was the obligation of Complainant to obtain the permits. However, even if that were the case, it was the obligation of Respondent to not to proceed with work until correct permits were obtained regardless of who had the obligation to obtain them. The city of Scottsdale required a building permit for the work performed and Respondent proceeded with the work without such a permit. (Complainant’s Exhibit 21). 7. A.R.S. § 32-1154(A)(3). Complainant has presented sufficient evidence to establish that Respondent’s work was not performed in a professional and workmanlike manner in violation of A.R.S. § 32-1154(A)(3). There was no dispute that the ceiling was cracked and was sagging. At issue was whether Complainant’s signing of a release (Respondent’s Exhibit 22) in which Respondent agreed to release a lien against Complainant’s property in exchange for Complainant’s release of all “current or future liability” of Respondent would negate any implied warranty of workmanship and habitability relating to the ceiling. (See Kubby v. Crescent Steel, 105 Ariz 459, 460 (1970). The release further stated that the “agreement” was a full and final settlement of all grievances or claims, past, present, or future, although it was only signed by Complainant. 8. The Tribunal need not determine the general legal question as to whether the implied warranty of workmanship in a contract between parties or a statutory duty to perform work in a professional and workmanlike manner can ever be negated by a release signed by the parties. Here, the Tribunal finds that it was never the intent of the parties to have Complainant release Respondent from liability relating to the removal of the wall. The Tribunal finds it noteworthy that Respondent sought to have Complainant release it only from all liability outside of warranty issues. (Respondent’s Exhibit 23). Indeed, in the very same request by Respondent to have Complainant sign a release, Respondent acknowledged a two year warranty period imposed by the Registrar. Thus, it was reasonable for Complainant to assume in signing the release that Respondent’s warranty, particularly with respect to the removal of the wall, would remain in effect. Accordingly, the Tribunal does not find the release to be an effective defense to the failure to perform work in a professional and workmanlike manner. 9. A.R.S. § 32-1154(A)(22). Complainant has presented sufficient evidence to demonstrate a violation of A.R.S. § 32-1154(A)(22) for the failure on the part of Respondent to complete corrective action without a valid justification. Respondent argued that it was excused from any corrective work because it had presented a proposal to Complainant to do the corrective work which included payment by Complainant for a structural engineer prior to Respondent proceeding with any corrective work. Complainant rejected such a proposal, which was within her right. Nothing, including the contract between the parties, obligated Complainant to retain a structural engineer; thus, Respondent’s rejected conditional proposal to perform corrective work was not a valid justification for not proceeding with such. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of this Order, Tier 4 Consultants, LLC’s, License Number 295823 is suspended for two days. IT IS FURTHER RECOMMENDED that pursuant to A.R.S. § 32-1154(E), Respondent must pay to the Registrar, a civil penalty of $500.00 in certified funds 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

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 A.R.S. § 32-1101(A)(7), unless Respondent tenders payment of the outstanding prior civil penalty. 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, October 8, 2019.

/s/ Roger Geddes Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] The Tribunal also took administrative notice of the Registrar’s document submissions to the Arizona Office of Administrative Hearings.

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