ALJDEC decisions subject to certification as final

2019A-01014-CHC-ROC · Registrar of Contractors · 2019-07-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 9, 2019 APPEARANCES: Benjamin Henry Dragoo (“Complaint”) appeared on her own behalf. Oscar Gomez appeared on behalf of Sun Valley Roofing (“Respondent”). ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera _____________________________________________________________________ FINDINGS OF FACT 1. On February 22, 1994, the ROC issued License No. 101059 for specialty dual CR-42 roofing contracting to Sun Valley Roofing (“Respondent”).[1] Respondent’s address of record for the license is PO Box 3038, Sierra Vista, AZ 85363-3038.[2] Kelvin Lumpkins is listed on the license as Qualifying Party and Owner.[3] 2. Administrative Notice is taken of Respondent’s prior License record, for License No. 101059, as reflected on the ROC’s public website on July 9, 2019. Such prior License record reflects that Respondent’s license is currently active.[4] The license has been disciplined by the ROC on four cases and has had one case settle between the parties on one prior occasion.[5] The record also reflects that there are two open complaints against Respondent’s license, one of which is presumed to be related to this matter.[6] Respondent has an active $6,750.00 surety bond issued through Western Surety Company effective January 07, 2007.[7] Notably, the ROC issued License No. 101064, for specialty dual CR-42 roofing contracting, to Respondent on February 22, 1994, which was voluntarily cancelled by Respondent on April 15, 2015.[8] 3. On May 18, 2018, Benjamin Henry Dragoo (“Complainant”) entered into the first contract agreement whereby Respondent agreed to re-roof Complainant’s residential property located at 1774 C Paseo De La Luna, Sierra Vista, AZ 85635 for the sum total of $6,500. On July 8, 2018, Complainant entered into a second contract agreement whereby Respondent agreed to re-roof Complainant’s residential property for the sum total of $11,900.00. The second contract was created as a result of an error committed by Respondent. The project commenced on July 5, 2018. No project completion date was identified. Complainant paid Respondent a total $5,900.00 by the time Respondent stopped working on the date of January 10, 2019. 4. On March 1, 2019, the ROC received a workmanship complaint from Complainant which included a copy of the contractual agreement between the parties. The ROC received proof of balance due from Complainant. 5. Between March 1, 2019 and March 26, 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 27, 2019, at 10:00 a.m. 6. On March 27, 2019, ROC investigator Mike Springer (“Investigator Springer”) conducted a review of the contract executed between the parties. Investigator Springer also inspected the work that had been done on the project to date and took thirty photographs of the property. When he was finished, Investigator Springer drafted Jobsite Inspection Notes. 7. On or about March 27, 2019, Investigator Springer issued a Directive from the Registrar 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 1-8 via appropriate means. Respondent was put on notice that it had until April 16, 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). Respondent failed to timely comply. 8. On April 17, 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 May 3, 2019, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155. 9. Respondent filed an Answer to the Citation, with the ROC, on an unknown date. 10. On May 10, 2019, the ROC referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on April 19, 2019. Per the Notice of Hearing[9] the issue to be determined is whether the ROC has cause to discipline Respondent’s license based on the following charges: Charge 1: A violation of Rule 4-9-108, titled “Minimum Construction Standards,” in the Arizona Administrative Code, and thereby of A.R.S. § 32-1154(A)(3). Charge 2: A violation of A.R.S. § 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.”).

11. At hearing, Complainant testified on his own behalf and submitted one exhibit. Oscar Gomez testified for Respondent. The ROC’s electronic hearing file and Notice of Hearing were also admitted into the evidentiary record. 12. Complainant testified that at all times relevant he was the owner of 1774 C Paseo De La Luna, Sierra Vista, AZ 85635. 13. Per Complainant, he discovered workmanship deficiencies in his roof in early July. Complainant discovered that Respondent removed roofing from the incorrect section of the house. Complainant testified that Respondent removed the front section of the roof instead of the back section. He stated that this resulted in the second contract dated July 8, 2018. 14. Complainant stated that Respondent was supposed to remove the air- conditioning unit to allow for placement of the roofing tile. Complainant stated that the unit was never removed on July 19, 2018, as scheduled. 15. Complainant testified that prior to Respondent attempting to make repairs, a home-buying inspection took place, on July 10, 2018, and the inspector noted that the roof was in need of repair. 16. Complainant testified that, although Respondent had agreed to perform the repairs that he had requested, the work was not done. Complainant testified to the following unworkmanlike issues, including but limited to: failure to repair rotted drywall, failure to repair a broken drain gutter, failure to use correct matching steel, failure to repair exposed wood, failure to properly re-install the water heater vent pipe according to current industry standards failure to properly seal the water heater vent pipe causing internal property damage, failure to replace the T-top, failure to match new roofing tile to existing roofing tile with regard to color and shape, failure to properly install mud balls causing mortar to come down on even and staining the eve and sidewalk, failure to clean the jobsite leaving behind hazardous debris (including cigarette butts), moving gravel not requested to be moved, and failure to maintain professionalism with Complainant when addressing the above mentioned issues. 17. Complainant further testified that when a roof inspection was conducted, thereafter, the roof was not up to code. Complainant stated that he paid for the inspection. He also stated that Respondent kept asking Complainant for payment. 18. Per Complainant, although the ROC substantiated his allegations of poor workmanship against Respondent, Respondent failed to adhere to the resulting Directive. 19. Mr. Gomez testified that he has been listed on ROC License No. 101059 as a Qualifying Party for the last eleven years, and has worked for Respondent for the last forty years. 20. Per Mr. Gomez, he was directly involved with Complainant’s project. 21. Mr. Gomez admitted that he was in receipt of the ROC’s Directive. Mr. Gomez testified that he failed to comply because Complainant breached the contract when Complainant failed to pay Respondent the remaining balance of $8,576.00. 22. Mr. Gomez admitted to beginning work on the wrong side of the roof, per the first contract. Mr. Gomez admitted that Respondent’s representative told Complainant that they had matching tiles. Mr. Gomez blamed Complainant’s previous roofer for doing a poor job. Mr. Gomez stated that he replaced the plywood and agreed to fix the fascia, at a later date. 23. Mr. Gomez stated that the gutter was 20-30 years old and was brittle so any damage to that was not his fault. Mr. Gomez stated that he used the kind of steel that he felt was appropriate because there were no specified color or type mentioned in the contract. Mr. Gomez testified that the tile that he and Complainant agreed to was no longer available. Mr. Gomez admitted that he could not find matching tile in that area and that was why the tile he installed did not match the existing tiles. 24. Mr. Gomez apologized for his mistakes. He apologized for leaving debris at the jobsite, for moving gravel that was not supposed to be moved, and for causing Complainant additional property damage. Mr. Gomez also apologized for being aggressive with Complainant. 25. Mr. Gomez admitted that he did not comply with ROC’s Directive. Mr. Gomez admitted to being negligent and stated that he is “motivated to close the business.” CONCLUSIONS OF LAW 1. 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. 2. 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.[10] 3. The purpose of the ROC’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.[11] 4. Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence.[12] Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.[13] 5. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[14] 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.”[15] 6. 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.” 7. 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.” 8. 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.” 9. Ariz. Rev. Stat. § 32-1154(E) holds, in pertinent parts, that the ROC may “[i]mpose a civil penalty not to exceed five hundred dollars on a contractor for each violation. The failure by the licensee to pay any civil penalty imposed results in the automatic revocation of the license thirty days after the effective date of the order providing for the civil penalty. It also holds that no future license may be issued to an entity consisting of a person who is associated with the contractor, unless payment of any outstanding civil penalty is tendered.” 10. Here, the material facts are not in dispute. It is undisputed that Complainant contracted with Respondent for a residential roofing project that Complainant paid the agreed upon fees for Respondent’s services/maintenance and materials, and the work that Respondent completed fell below the ROC’s minimum workmanship standards. It is further undisputed that the ROC issued its Directive to Respondent on March 27, 2019, and required Respondent’s full compliance by April 16, 2019. It is also undisputed that Respondent failed to comply. There are insufficient facts in the record to conclude that Respondent violated Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22), and Ariz. Admin. Code R4-9-108 by a preponderance of the evidence. 11. Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to timely and completely finish Complainant’s project per contract. This is an affirmative defense that Respondent bears the burden to establish. Respondent did not provide evidence in mitigation to refute Complainant’s evidence or justify his inaction in this matter. Thus, his burden has not been sustained. The record shows that Respondent failed to adhere to an ROC corrective work order, and had no affirmative defense(s) for doing so. 12. Because Complainant established by a preponderance of the evidence that Respondent failed to perform the scope of work included in her signed and paid for contract with Respondent, Complainant has also established cause for the ROC to suspend or revoke Respondent’s contractor’s license under Ariz. Rev. Stat. § 32-1154(A)(22). 13. Complainant may petition the ROC’s Recovery Fund for financial recompense regarding this matter, as the Tribunal has no jurisdiction to award a refund of the underlying amount contracted between the parties. RECOMMENDED ORDER Based on the foregoing findings of fact and conclusions of law, IT IS RECOMMENDED that on the effective date of the Final Order in this matter Respondent Sun Valley Roofing, ROC License No. 101059 shall be revoked. It is further recommended that the ROC require Respondent to pay the sum total of $500.00 as a civil penalty pursuant to Ariz. Rev. Stat. § 32- 1154(E). 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 ROC’s Order, the ROC 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. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty. 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, July 29, 2019.

/s/ Antara Nath Rivera Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See https://roc.az.gov/contractor-search?Id=a0Yt000000ACZLbEAP. [2] Id. [3] Id. [4] Id. [5] Id. [6] Id. [7] Id. [8] See https://roc.az.gov/contractor-search?Id=a0Yt000000ACQi5EAH. [9] See Notice of Hearing. [10] See Ariz. Rev. Stat. § 32-1156.01; Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990). [11] See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). [12] Ariz. Rev. Stat. § 41-1092.07(G)(2); Ariz. Admin. Code R2-19- 119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [13] See Ariz. Admin. Code R2-19-119(B)(2). [14] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [15] Black’s Law Dictionary at page 1220 (8th ed. 1999).

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