FINACT2019A-01923-RFA-ROC.pdf

2019A-01923-RFA-ROC · Registrar of Contractors · 2020-02-10

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Rozalyn S Capps, Case No. 2019-01923 COMPLAINANT, Docket No. 2019A-01923-RFA-ROC v. FINAL ADMINISTRATIVE Savvy Floor Designs LLC, DECISION AND ORDER License No. ROC 258545, 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. REGISTRAR’S ACCEPTANCE In this case, a hearing was held, and the administrative law judge issued a written decision. See Administrative Law Judge Decision, attached. The Registrar reviewed that decision and accepts it. CONCLUSION AND ORDER Because the Registrar has accepted the administrative law judge’s decision, that decision is the final administrative decision in this case and becomes effective on March 14, 2020. FINAL NOTE Throughout, replace “Rollings” with “Rolling.” On page six, paragraph 22, line 13, “tax” should be “the sales tax rate.” On page six, paragraph 22, line 15, add “rate” after “sales tax.”

of 2 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 Dated February 3, 2020. By: /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund Arizona Registrar of Contractors Copy mailed via USPS First Class mail February 3, 2020 to: Respondent Savvy Floor Designs LLC 8201 W Beardsley Rd Apt 2005 Peoria, AZ 85382 Complainant Rozalyn S Capps 18453 W Saguaro Ln Surprise, AZ 85388 Copy sent electronically this same date to: Registrar’s Counsel John Tellier, Assistant Attorney General Office of Administrative Hearings Diane Mihalsky, Administrative Law Judge Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar Case No. 2019-01923 / KR

of 2 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 1.23.2020 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Rozalyn S. Capps, No. 2019A-01923-RFA-ROC

COMPLAINANT, ADMINISTRATIVE LAW JUDGE DECISION v.

Savvy Floor Design LLC, License No. ROC 258545,, RESPONDENT.

HEARING: December 18, 2019, at 9:00 a.m. and January 17, 2020, at 1:00 p.m. APPEARANCES: Rozalyn S. Capps (“Complainant”) appeared on her own behalf at both hearing dates; Savvy Floor Design LLC (“Respondent”) did not appear at either hearing date; the Arizona Registrar of Contractors (“the Registrar”) was represented at both hearing dates by Michael Raine, Esq., Assistant Attorney General. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________ FINDINGS OF FACT BACKGROUND 1. According to the Registrar’s public website, on September 8, 2009, the Registrar issued License No. ROC 258545 for Specialty Dual CR-48 Ceramic, Plastic and Metal Tile contracting to Respondent. 2. On October 11, 2019, the Registrar issued a Notice of Claim for Administrative Payout, notifying the parties that, “[a]fter review of the claim and all supporting documentation, the [Residential Contractors’ Recover Fund (“the Fund”)] determined that Complainant is to be awarded $22,739.64 in the form of a payment issued by the Fund.”1 The Notice was sent to Respondent at its address of record. 3. Respondent requested a hearing on the amount of the payout.

The Registrar’s Exhibit 18. RECEIVED 1.23.2020 ROC LEGAL

4. The Registrar referred Complainant’s claim to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing. The hearing in this matter was originally consolidated with the hearing in Case No. 2019A-3227- RFA-ROC, Complainant’s claim to the Fund for damages caused by the violations of contracting statutes involving workmanship by Brian Francis Winstanley DBA: Tumblewood Remodeling, License No. ROC 276057 (“Mr. Winstanley”). 5. On November 18, 2019, the Registrar issued a Notice of Consolidated Recovery Fund Hearing, setting a hearing on December 18, 2019 before OAH. The Registrar sent the Notice of Consolidated Recovery Fund Hearing to Respondent at its address of record. 6. A hearing was held on December 18, 2019. Respondent failed to appear at the hearing, but Mr. Winstanley indicated that Respondent’s qualifying party/member’s father was dying of cancer and that he could not leave the hospital. Because there was not sufficient time to present the Registrar’s and Complainant’s cases regarding Respondent and to avoid a possible rehearing, the Administrative Law Judge severed this matter from Complainant’s claim to the Fund against Mr. Winstanley and set this matter for a further hearing. 7. On December 19, 2019, the Administrative Law Judge issued an order severing this matter from Case No. 2019A-3227-RFA-ROC and setting a further hearing in this matter on January 17, 2020, at 1:00 p.m. OAH staff sent the December 19, 2019 order to Respondent at its address of record. 8. A further hearing was held on January 17, 2020. Respondent did not request to appear telephonically at the further hearing and did not request that the further hearing be continued. Although the start of the duly noticed further hearing was delayed fifteen minutes to allow Respondent additional travel time, Respondent did not appear, through an authorized member, employee, or attorney, and did not contact OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to contest the amount of Complainant’s compensable damages. 9. The Registrar presented the testimony of Katelyn Rollings, a Legal Assistant II in the Registrar’s Legal Department/Fund who had analyzed Complainant’s claim, and 2 RECEIVED 1.23.2020 ROC LEGAL

submitted eighteen exhibits. Complainant testified on her own behalf and submitted one exhibit. Investigator Steve Lawton was available to testify, but neither the Registrar nor Complainant planned to call him as a witness, so he was released. THE UNDERLYING WORKMANSHIP COMPLAINT 10. On or about April 15, 2019, Complainant filed a complaint against Respondent with the Registrar alleging poor work in connection with its performance of its contracts to install shower pans and to perform other work to remodel three bathrooms at Complainant’s house at 18453 W. Saguaro Lane, Surprise, Arizona 85388 (“the project”). According to the complaint, Respondent’s contract was written and oral and she had paid it the total $1,550.00 contract price.2 11. On or about April 15, 2019, Complainant clarified to the Registrar that she did not have a written contract with Respondent because it never provided one to her, but that it had given her an invoice, which she had attached to her complaint.3 12. The complaint was assigned to Investigator Lawton. Investigator Lawton performed a jobsite inspection on June 5, 2019, which Respondent did not attend.4 13. On June 18, 2019, Investigator Lawton on behalf of the Registrar issued a directive that required Respondent to correct certain deficiencies in Respondent’s work on or before July 9, 2019, at 5:00 p.m., in relevant part as follows: 1. Complaint Item 1: Shower has 2 major leaks into kitchen. Per City of Surprise inspector, shower liner in both bathrooms were not installed per manufacturer specification. Investigator’s Observation: It was observed that the shower pans were installed and per complaint 2018-3227 when directive was issued for that complaint, it has been determined that the work performed was not permitted through local jurisdiction. The Respondent on that complaint pulled permit and was inspected by the local jurisdiction and was determined that shower pans had to be removed and installed per manufacturer specification. During the hearing for complaint 2018-3227 it was determined by the ALJ that the contractor responsible for the installation was not Respondent in complaint 2018-3227. Therefore, Complainant file[d] complaint against this Respondent . . . . It has been 2 See the Registrar’s Exhibit 1. See the Registrar’s Exhibit 2. 4 See the Registrar’s Exhibit 4. 3 RECEIVED 1.23.2020 ROC LEGAL

determined by this Inv. That the Respondent of this complaint needs to correct issues found by the local jurisdiction . . . . 2. Complaint item 2: Soap dish/niche is uneven/crooked. Investigator’s Observation: It was observed that the soap dish is uneven and crooked. . . .5

14. On August 5, 2019, after Respondent failed to comply with the June 18,

2019 directive, the Registrar issued a Citation against Respondent’s license, which

charged cause to suspend or revoke Respondent’s contractor’s license under A.R.S. §

32-1154(A)(2),6 A.R.S. § 32-1154(A)(3),7 namely A.A.C. R4-9-108,8 and A.R.S. § 32-

1154(A)(22),9 as well as an administrative violation of A.R.S. § 32-1154(A)(16).10

15. Respondent failed to file a timely written answer to the Citation. On August

27, 2019, the Registrar issued a Final Administrative Decision and Order, finding that

under A.R.S. § 32-1155(B), by failing to file a written answer, Respondent was deemed

to have admitted having violated the statutes charged in the Citation.11 As a result of the Registrar’s final order, Respondent’s license was suspended for three days and it was required to pay a $500.00 civil penalty. ////

See the Registrar’s Exhibit 5. A.R.S. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications or any building codes of any state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner’s duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.” 7 A.R.S. § 32-1154(A)(3) includes among the grounds to suspend or revoke a contractor’s license, “[v]iolation of any rule adopted by the registrar.” 8 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.” A.R.S. § 32-1154(A)(22) includes among the grounds to suspend or revoke a contractor’s license, “[f]ailure 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.” 10 A.R.S. § 32-1154(A)(16) includes among the grounds for suspension, revocation, and other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.” Because this charged violation does not necessarily involve workmanship, it does not entitle Complainant to any greater payout from the Fund. See the Registrar’s Exhibit 9. 4 RECEIVED 1.23.2020 ROC LEGAL

COMPLAINANT’S CLAIM TO THE FUND 16. On or about September 30, 2019, Complainant submitted a claim to the Fund to recover the damages that were allegedly caused by Respondent’s poor work on the project, requesting a payout in the amount of $38,000.00.12 17. With her claim to the Fund, Complainant submitted an explanation for the amount of the claim, in relevant part as follows: According to the city of Surprise inspector, both shower pans/liners were installed incorrectly so they must both come out and be replaced. Both showers were done with solid surface quartzite slabs which will not come out in one piece and will not be salvageable. The master bath was done using the Azul Imperial purchased from Tintas Granite. The receipt has been included. This is an exotic stone and I was lucky enough to get a discount due to the fact there was only 2 slabs left. A replacement for this stone has been almost impossible to find as the colors vary quite a bit. The ones that I have been able to locate are significantly higher in price. I have included estimates that have quotes for the price of this stone. The guest bathroom was done using the Taj Mahal Quartzite purchased at Arizona tile. The receipts are included. I found this stone at the boneyard they have and was able to obtain it at a very reasonable price. I have not been able to locate it at the boneyard again, so I will have to pay a significantly higher price to replace it. According to every contractor who I have contacted regarding fixing these shower pans, the entire slabs have to come out in order to access the shower pan/liner. The only way to remedy this is to demolish the entire shower and start over.13 18. Ms. Rollings testified that Complainant met all the statutory requirements to be eligible to make a claim for a payout from the Fund. Respondent’s license was active and in good standing when it contracted to perform and actually performed the work. Ms. Rollings noted that Complainant submitted documentation to establish that she had

See the Registrar’s Exhibit 10. 13 The Registrar’s Exhibit 11; see also the Registrar’s Exhibit 3 and Complainant’s Exhibit 11 (documentation from City of Surprise inspector that shower pans and all work surrounding them would have to be removed to pass City’s inspection). 5 RECEIVED 1.23.2020 ROC LEGAL

attempted to make a claim against Respondent’s bond, but that the bond company had required her to submit a judgment, not a final administrative decision.14 19. Complainant submitted with her claim to the Fund evidence of the payments that she had made to Respondent, as well as her payments for the materials that were used on the project.15 20. Complainant also submitted with her claim itemized estimates from three appropriately licensed contractors, including Home Solutionz, to repair Respondent’s work, which did not include sales tax.16 21. Ms. Rollings testified that she provided the two low bids to Investigator Lawton for him to determine which bid most accurately described the repairs that would be necessary to repair Respondent’s scope of work and he advised her that Home Solutionz’ bid was the most accurate. 22. Ms. Rollings testified that the amount to repair a contractor’s work should include tax. At Ms. Rollings’ request, Complainant later submitted amended estimates from Home Solutionz in the amounts of $25,264.96 and $13,582.80, which included sales tax.17 23. Ms. Rollings testified that, of the $38,848.04 in the combined estimates, she disallowed $16,108.40, either because the defect was attributable to Mr. Winstanley’s work or because the repair exceeded Respondent’s scope of work, and calculated the cost of repairing Respondent’s work to be $22,739.64.18 24. Ms. Rollings noted that Respondent had been found to have violated A.R.S. § 32-1154(A)(2) by performing work even though a necessary permit had not been obtained and that the local jurisdiction required much other contractors’ work to be removed to expose the shower pan that Respondent installed for inspection.19 Therefore, her calculation of the amount of Complainant’s payout from the Fund

See the Registrar’s Exhibits 12 and 13. 15 See the Registrar’s Exhibit 14. See the Registrar’s Exhibit 15. 17 See the Registrar’s Exhibit 16, See the Registrar’s Exhibit 18. 19 See Complainant’s Exhibit 11. 6 RECEIVED 1.23.2020 ROC LEGAL

included the cost of removing and replacing some work that Respondent had not performed that had not been found to be deficient. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.20 2. When the Registrar has calculated the amount of a Complainant’s compensable damages and proposed a payout from the Fund to which she is entitled, the calculation is a prima facie showing of the amount that the Complainant is entitled to recover as a payout from the Fund. The burden shifts to the party challenging the amount of the payout to establish that the Registrar’s calculations were erroneous or not supported by a preponderance of the evidence.21 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”22 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.”23 4. A.R.S. § 32-1132(A) provides that “[t]he residential contractors' recovery fund is established, to be administered by the registrar, for the benefit of a claimant damaged by an act, representation, transaction or conduct of a residential contractor licensed pursuant to this chapter that is in violation of this chapter or the rules adopted pursuant to this chapter.” The Registrar’s final decision in the underlying workmanship case on the complaint that Complainant filed with the Registrar establishes that Respondent’s work violated the sections of A.R.S. § 32-1154(A) that were charged in the Citation.

See 32-1101 et seq. See A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). Since Respondent did not appear and the Administrative Law Judge took evidence, she makes a recommendation to the Registrar based on the record, not on Respondent’s failure to appear or to present evidence to support its request for hearing. MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999). 7 RECEIVED 1.23.2020 ROC LEGAL

5. For the purposes of an award under A.R.S. § 32-1132(A), A.R.S. § 32- 1133.01(B) provides as follows: An award from the residential contractors' recovery fund may not exceed the actual damages suffered by the claimant as a direct result of a contractor's violation. Actual damages: 1. May not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.

2. Must be established by bids supplied by or the value of work performed by a person that is licensed pursuant to this chapter if the person is required to be licensed pursuant to this chapter.24 6. The evidence establishes that Complainant is entitled to a payout in the amount of $22,739.64 from the Fund for the workmanship deficiencies for which she established that Respondent was responsible in the workmanship complaint. RECOMMENDED ORDER In view of the foregoing, IT IS ORDERED that on the effective date of the final order in this matter, the Residential Contractors’ Recovery Fund shall pay $22,739.64 to Complainant Rozalyn S. Capps. IT IS FURTHER ORDERED that under A.R.S. § 32-1139(B), the Registrar shall charge $22,739.64, plus interest at a rate of ten percent a year, to Respondent Savvy Floor Designs, LLC’s License No. ROC 258545. 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 five days from the date of that certification. Done this day, January 22, 2020. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: See also Ramsey v. Arizona Registrar of Contractors, 241 Ariz. 102, 106, 384 P.3d 316, 320 (App. 2016). 8 RECEIVED 1.23.2020 ROC LEGAL

Jeffrey Fleetham, Director Registrar of Contractors

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