ALJDEC decisions subject to certification as final

2019A-01611-CHC-ROC · Registrar of Contractors · 2019-10-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 13, 2019 APPEARANCES: Kevin Berman (Complainant) appeared on behalf of himself. Todd Singer appeared on behalf Redesign Green Build LLC (Respondent). ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera _____________________________________________________________________ FINDINGS OF FACT 1. On December 29, 2007, the Registrar of Contractors (ROC) issued License No. 240701 for General Residential B-3 General Remodeling and Repair Contractor to Redesign Green Build LLC (Respondent). Respondent’s address of record for the license is 4345 West Ruth Avenue, Glendale, AZ 85302-5323. Todd Vincent Singer (Mr. Singer) is listed on the license as Qualifying Party and Member.[1] 2. Administrative notice is taken of Respondent’s prior License record, for License No. 240701, as reflected on the ROC’s public website on September 13, 2019. Such prior License record reflects that Respondent’s license is currently active. The license has never been disciplined by the ROC. The record also reflects that there is 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 Merchant’s Bonding Co. effective December 29, 2007.[2] 3. Before November 2016, Kevin Berman (Complainant) verbally agreed with Respondent to remodel Respondent’s property located at 5301 East Buckhorn Road, Morristown, AZ 85342. The project commenced on or about November 2016 and ended on or about November 2018. Complainant paid Respondent a total of $150,000.00. According to the Complainant, the work was not completed successfully. 4. On or about April 1, 2019, the ROC received a poor workmanship complaint from Complainant. The ROC received estimates and invoices from Respondent to Complainant. The ROC also received a handwritten list of check numbers and respective payment amounts made by Complainant to Respondent. Complainant did not provide proper proof of payment. 5. On April 10, 2019, the ROC issued a Jobsite Inspection Notification letter to the parties, provided proper notice to them, and advised that an onsite review would be conducted at the project site by an ROC investigator on May 6, 2019, at 12:30 p.m. 6. On or about May 6, 2019, ROC investigator Phillip Jaegge (Investigator Jaegge) conducted a jobsite inspection regarding the complaint filed by Complainant. During the inspection, Investigator Jaegge reviewed the work completed by Respondent, to date, and took about 12 photographs of the property. Respondent was present during the inspection. 7. On or about May 13, 2019, Investigator Jaegge issued a Directive From The Registrar (Directive) to Respondent because he substantiated Complainant’s allegation that Respondent exhibited poor workmanship on work that was not completed per industry standards. Specifically, Respondent was ordered to remediate complaint item 5, correction of the installation of French doors; complaint item 8, installation of overhead lighting; complaint item 11, installation of trim on the bedroom door; and complaint 16, proper installation of plumbing pipes. Respondent was put on notice that it had until May 31, 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). 8. On or about June 3, 2019, Investigator Jaegge received correspondence from Complainant that the light fixtures were not corrected. 9. On or about June 4, 2019, Investigator Jaegge notified Complainant and Respondent that a compliance jobsite inspection would be conducted on June 17, 2019. Following that inspection, Investigator Jaegge found that Respondent corrected all matters except for correction of the plumbing pipes. 10. On June 18, 2019, the ROC issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(12), 32- 1154(A)(16), and Ariz. Admin. Code R4-9-108. Respondent was given until August 20, 2019, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155. 11. Respondent did not file an Answer to the Citation with the ROC. 12. On August 12, 2019, the ROC referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on September 13, 2019. Per the Citation, 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)(12) (Failure in any material respect to comply with this chapter; namely A.R.S. § 32- 1158.) Charge 3: A violation of A.R.S. § 32-1154(A)(16) (Knowingly contracting beyond the scope of the license or licenses of the licensee.) Charge 4: 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.). HEARING EVIDENCE 13. After the June 17, 2019, jobsite inspection, Investigator Jaegge determined that Respondent corrected all issues except for the plumbing pipes. Investigator Jaegge heard a knocking noise in the pipes after he turned the water for the kitchen sink on and off, in the main house. Investigator Jaegge gave Respondent 24 hours to fix the pipes. After the expiration of the 24 hours, Investigator Jaegge was informed, by Complainant, that the pipes were not fixed because Complainant and Respondent no longer wished to work together. Respondent informed Investigator Jaegge that it originally attempted to correct the issue by putting hammer arresters on the pipes. The hammer arresters did not eliminate the knocking noise. 14. During his investigation, Investigator Jaegge learned that Respondent performed electrical work without a license and permit, through Respondent’s own admission. Investigator Jaegge issued a citation for contracting beyond the scope of the license because the ROC told him to include it as an infraction. 15. At hearing, Complainant testified, on his own behalf. Todd Singer (Mr. Singer), owner of Respondent, testified on behalf of Respondent. The ROC’s electronic hearing file and Notice of Hearing were admitted into the evidentiary record. 16. Complainant testified that he and his co-owner, Scott Stowe (Mr. Stowe) verbally entered into an agreement with Mr. Singer. Complainant paid a total of $194,395.00 to Respondent remodel the main house and guest house located at 5308 Buckhorn Road, Morristown, AZ 85342.[3] 17. Complainant stated that Mr. Stowe handled the management of the project. Mr. Stowe and Mr. Singer had a contentious relationship causing Complainant to be the referee. After the Directive was issued, Mr. Singer agreed to fix the items and, in fact, fixed all the items on the Directive, except the pipes. Complainant acknowledged that following the compliance jobsite inspection, Mr. Stowe became uncooperative and refused to let Respondent on the property to correct the pipe issue. 18. While Respondent corrected the items listed on the Directive, Mr. Stowe was still not satisfied with the corrections for many reasons. Mr. Stowe believed that Respondent was not successful that the high top chairs, in the guest house, did not properly fit the height of the counter. However, Complainant’s chairs did not fit because Complainant changed the specifications for the bar area, due to the location of the oven. Furthermore, Mr. Stowe was not satisfied with the high top chairs in the main house because of the same issue. Respondent suggested that Complainant buy different chairs because he adhered to the Complainant’s specifications. Lastly, Complainant was not satisfied with Respondent’s correction, despite the fact that Respondent sent another plumber to correct the issue, because the pipes continued to make a knocking noise. 19. Mr. Stowe admitted that he did not want Respondent on the property, following the jobsite compliance inspection, because Respondent brought different young boys, as crew members, on to Complainant’s property. This made Mr. Stowe uncomfortable. However, despite feeling uncomfortable around them, Mr. Stowe admitted to paying one of the young crew members $300.00 because Mr. Stowe learned that the crew member was not being paid by Respondent. Moreover, at one point in the hearing, Mr. Stowe became agitated and accused Respondent of “sleeping with” his crew members. 20. What Respondent believed to be a small project turned into a bigger project because of Complainant and Mr. Stowe’s continuous additions to the project. Respondent acknowledged that the pipes made a knocking noise despite his many attempts to fix the pipes, even after he hired another plumber. 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.[4] 3. The purpose of the ROC’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.[5] 4. Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 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). 5. 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.” 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)(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.” 8. Ariz. Rev. Stat. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” 9. Ariz. Rev. Stat. § 32-1158 holds, in pertinent part, that “[a]ny contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information: 1. The name of the contractor and the contractor's business address and license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.” 10. Ariz. Rev. Stat. § 32-1154(A)(16) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.” 11. There is evidence that Respondent violated A.R.S. § 32-1154(A)(12) when he entered into a verbal contract with Complainant, for work amounting to more than $1,000.00, without specifying elements of a contract. However, in this case, absent any proof of immeasurable repercussions to Complainant, there shall be no civil penalties imposed on Respondent. 12. There is also evidence that Respondent was in violation of A.R.S. § 32- 1154(A)(16). While Complainant did not present any evidence that Respondent performed electrical work, the invoices reflected electrical work that was completed. Thus, the evidence established that Respondent knowingly contracted beyond the scope of the license. 13. The evidence also established that some of Respondent’s work was not in conformity with the Registrar’s standards. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C R4-9-108. Respondent completed all but one of the corrective work pursuant to the Directive. Respondent established that it was unable to properly fix the pipes following Investigator Jaegge’s 24 hour instruction because Mr. Stowe did not allow Respondent on the property with his crew members due to the fact that he was uncomfortable around them. Respondent hired another plumber to correct the pipe issue, however, the pipes still were not fixed and the knocking noise continued. 14. The fact that the original work was still not completed despite the fact that Respondent sent out a different plumber, Respondent’s workmanship was not in compliance with the ROC’s standards. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C R4-9-108. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar suspend Redesign Green Build LLC’s License No: 240701, issued by the Registrar, until it has provided to the Registrar, and the Registrar has accepted, a form contract that is in accordance to the requirements set forth in Ariz. Rev. Stat. § 32-1158. It is further recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 240701 for a period of one 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, September 13, 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=a0Yt000000ACJZnEAP. [2] Id. [3] 5308 Buckhorn Road, Morristown, AZ 85342 is the address for Happy Endings Ranch & Retreat which includes housing for guests. The property has a main house and guest houses. [4] 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). [5] See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

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