FINACT2019A-02392-CHC-ROC.pdf

2019A-02392-CHC-ROC · Registrar of Contractors · 2020-02-19

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Catherine J Daye, Case No. 2019-02392 COMPLAINANT, Docket No. 2019A-02392-CHC-ROC v. Prevent LLC FINAL ADMINISTRATIVE License No. ROC 284078, DECISION AND ORDER 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. MODIFICATION AND WRITTEN JUSTIFICATION 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 modifies it as set forth below. The administrative law judge determined that “… the hearing record established that Respondent is in violation of ARIZ. REV. STAT. § 32-1154(A)(3), namely ARIZ. ADMIN. CODE Section R4-9-108.” ALJ Dec. 9:8-9. The administrative law judge further determined that “the hearing record established that Respondent had not taken appropriate corrective action following the written Directive and the Addendum. Thus, the Administrative Law Judge concludes that Respondent is in violation of ARIZ. REV. STAT. § 32-1154(A)(22).” ALJ Dec. 9:11-14. The administrative law judge recommended a two-day suspension and a $500 civil penalty fine. The administrative law judge further recommended that Respondent’s license be suspended “until such time that Respondent provides written proof that is

of 3 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 acceptable to the Registrar that it has corrected the workmanship issues, determined herein to continue to exist, no later than thirty days following the effective date of the Registrar’s final order. In the event that Respondent fails to correct those workmanship issues, within that time period, the Registrar shall revoke Respondent’s license, effective on such deadline date.” ALJ Dec. 10:1-7. Title 32, Chapter 10 of the Arizona Revised Statutes does not provide a licensee with an additional opportunity to correct poor workmanship after the Registrar issues a citation. Here, Respondent was given an opportunity to correct the poor workmanship prior to the expiration of the written directive. Respondent failed to complete the corrections prior to the deadline. The Registrar has determined a finite suspension is the appropriate disciplinary action. The Registrar hereby modifies the Administrative Law Judge Decision, so that on the effective date of this order Respondent’s License No. 284078 is suspended for two days. CONCLUSION AND ORDER The Registrar modifies the Administrative Law Judge Decision by: • Striking the second paragraph of the Recommended Order, beginning on page 9, line 28 with “It is further recommended…”, and ending on page 10, line 9 with “… issues within the thirty-day time period.” IT IS FURTHER ORDERED that Respondent pay a civil penalty in the amount of $500.00 payable to the Registrar 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

of 3 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 FINAL NOTE On page 1, line 14 replace “2014” with “2013”. On page 2, line 24 replace “Investigator Grimm conducted a second inspection” with “Investigator Grimm conducted

a compliance jobsite inspection”. On page 9, line 28 replace “226450” with “284078”. On

page 10, line 17 replace “A.R.S. § 32-1101(A)(5)” with “A.R.S. § 32-1101(A)(7)”. The Registrar accepts the remainder of the Administrative Law Judge Decision, which becomes effective on March 29, 2020. Dated February 18, 2020. By: /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund

Copy mailed via USPS First Class mail February 18, 2020 to: Respondent Prevent LLC 3317 S Higley Rd Ste 114-497 Gilbert, AZ 85297

Complainant Catherine J Daye 9302 W San Miguel Ave Glendale, AZ 85305 Copy sent electronically this same date to: Office of Administrative Hearings Kay Abramsohn, Administrative Law Judge

Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar Case No. 2019-02392 / SA

of 3 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

Catherine J. Daye, No. 2019A-02392-CHC-ROC COMPLAINANT ADMINISTRATIVE LAW JUDGE v. Prevent LLC, DECISION ROC License: ROC 284078, RESPONDENT

HEARING: December 23, 20191 APPEARANCES: Catherine J. Daye (Complainant) appeared on her own behalf. Owner/Qualifying Party Mason Lundell represented Prevent LLC (Respondent). ADMINISTRATIVE LAW JUDGE: Kay Abramsohn _____________________________________________________________________ FINDINGS OF FACT 1. Prevent LLC (Respondent) is the holder of License No. 284078, a KB-2 Dual Residential and Small Commercial license, issued by the Arizona Registrar of Contractors (Registrar) in 2014. 2. There was a fire at Complainant’s home in 2016 and she contracted with Respondent for the rebuild. 3. Respondent was the general contractor on the project, which Respondent noted was completed sometime in the summer of 2017, but acknowledged that he had “employees out there to do work … [in] the summer of 2018.”2 4. On May 8, 2019, the Registrar received Complainant’s Complaint. Complainant listed twenty-one (21) items for which she alleged poor workmanship. 5. Following a July 15, 2019, jobsite inspection, the Registrar’s Investigator, Jack Grimm, issued a Directive to Respondent regarding nine items that were substantiated as needing corrective action. Investigator Grimm also noted that the allegations of

Respondent failed to make pre-hearing disclosure; Complainant made a pre-hearing disclosure. At hearing, the Administrative Law Judge admitted the Administrative Record to the hearing record; those are the documents forwarded from the Registrar for the administrative hearing. Many of the background facts herein are noted to have been taken from the Administrative Record (AR) containing 165 pages. AR at 48 of 165. RECEIVED 1.23.2020 ROC LEGAL

unlicensed subcontractors were under review. Finally, he noted that any other items alleged in the Complaint were unsubstantiated and did not require corrective actions.3 6. The nine items to be corrected were noted as follows: a. Item #1, the front door that was defective and had already been replaced once, to be replaced and finished according to manufacturer instructions. b. Item #4, the ceiling in the front hall that had already been patched once, the drywall repair to be corrected and repainted. c. Item #6, grout cracked and breaking in the kitchen floor, to correct missing or poor grout between kitchen cabinets and island. d. Item #7, loose tiles in the kitchen family room, to be corrected (rebounded). e. Item #10, badly painted and rough doors, walls, baseboards and ceiling, only door casings and door frames to be corrected because the finish on the doors was found to be acceptable.4 f. Item #14, certain cabinet or island doors/drawers not closing, to be adjusted to close the gaps. g. Item #15, a spice rack door that had been replaced had a “notch,” the finish of which to be corrected. h. Item #17, flexible wire conduit above the stove top was hanging loose, to be corrected. i. Item #22, drawer face in master bath fell off, to be reattached.5 7. The Directive was issued to require Respondent to perform corrective work and to so notify the Registrar “prior to 5:00 p.m. on August 14, 2019.” 8. After Complainant raised continued concerns with the interior doors and unlicensed subcontractors, Investigator Grimm conducted a second inspection and, on September 25, 2019, issued an Addendum to the Directive.

Investigator Grimm’s jobsite notes detail both the substantiated and unsubstantiated items. 4 Initially, Investigator Grimm believed that Complainant’s concern was that the top and bottom of the doors were not painted, and he found that was acceptable. However, Complainant was concerned with the painted finish on the doors themselves (which she had believed were coming in as manufacturer- finished), alleging that the painting work had been done by an unlicensed subcontractor. This was an item agreed by the parties to be added to the Complaint. 2 RECEIVED 1.23.2020 ROC LEGAL

9. The Addendum indicated that, as to Item #10, the interior doors, Respondent was to correct the poor finish on six of the hallway doors. The corrective work was to be completed by October 14, 2019. 10. Based on a second compliance inspection, on October 18, 2019,6 Investigator Grimm found that, with the exception of the following, the Directive items were corrected: a. Item #2 (front door) remained incomplete as it was likely defective and not yet replaced;7 b. Item #4 (hallway ceiling patch) remained incomplete due to the poor results of the corrective repair with mismatched texture and paint;8 and c. Item #10 (six interior hallway doors9) remained incomplete as the corrective repainting left the doors with rough and unacceptable finishes.10 11. Investigator Grimm subsequently referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 12. The Registrar issued a Citation on October 21, 2019, charging Respondent with possible violations of: ARIZ. REV. STAT. § 32-1154(A)(3), namely ARIZ. ADMIN. CODE Section R4-9-108; and ARIZ. REV. STAT. § 32-1154(A)(22). 13. 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.” 14. ARIZ. ADMIN. CODE Section 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.”

Neither the October 18, 2019 inspection notes nor any Directive Addendum other than the September 25, 2019 Addendum could be found in the Registrar’s administrative record forwarded to the Tribunal. It is not clear whether Respondent was present at the October 18, 2019 compliance inspection. 7 See Exhibit A. See Exhibit C; see also AR at 134 of 165. 9 There was a reference in one of Complainant’s emails in the AR that there were seven such doors; the hearing record is not clear on this fact. See Exhibit D. 3 RECEIVED 1.23.2020 ROC LEGAL

15. ARIZ. REV. STAT. § 32-1154(A)(22) includes among the grounds for suspension, revocation, or other disciplinary action against 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.” 16. On October 31, 2019, Respondent filed its written Answer (Answer) to the Citation.11 Respondent denied all the allegations not specifically addressed therein and opined that its work had satisfied all building codes and minimum construction standards. However, Respondent did acknowledge that the Registrar had issued the July 25, 2019 Directive and Addendum. 17. As to the existing remaining items, Respondent answered that it had installed and painted (i.e., replaced) the front door, had repaired the hallway ceiling (one-required time) within the first year, and indicated that the Investigator had already found the finish on the doors to be acceptable.12 18. The Registrar’s Notice of Hearing set the hearing for December 23, 2019. At the hearing, Exhibits A-G were marked and admitted from Complainant while Exhibits 1 and 2 were admitted from Respondent.13 19. At hearing, Investigator Grimm testified regarding the background of the matter including his inspections. Investigator Grimm indicated that he had received insufficient information to demonstrate that unlicensed subcontractors were used on the project. Investigator Grimm specifically noted that one person complained of, i.e., the framer, did have a license.14 20. At hearing, Complainant specified, in agreement with the Investigator, that the Items #2, #4, and #10, as directed and/or found at the compliance inspections, were

The Answer appeared to be drafted by a law firm. See AR at 6-9 of 165. However, Respondent was not represented by counsel at the administrative hearing. Respondent referenced the Directive and the Addendum, but did not reference the final compliance inspection of October 18, 2019. Complainant’s pre-hearing disclosure contained multiple exhibits, not all of which were utilized during the hearing; the documentation that was admitted was re-designated with different lettering. This person is believed to be named in an email from the Investigator to Complainant as Luis Estrada. See email dated 8-26-2019 (10:33 a.m.) within Exhibit D. 4 RECEIVED 1.23.2020 ROC LEGAL

not completed or corrected at this time. Complainant argued that the Investigator and Respondent were erroneously referring to the hallway ceiling issue (Item #4) as a “crack” while in reality it was a taping issue. Complainant described the poor finish on the interior hallway doors as comparable to the roughness of an emery board.15 21. No other person testified on behalf of Complainant. 22. Complainant pursued other items at hearing.16 a. Complainant maintained that there were unlicensed persons or subcontractors on the project, arguing that she had given some names, a phone number, a business card, and a copy of check written to the drywaller (from Respondent) to Investigator Grimm.17 Complainant argued that neither the drywaller nor the person on the business card were licensed. b. Complainant maintained that the metal compartment box installed for the computer/internet wiring was “too small.”18 The hearing record documented that the metal door/cover would not be able to close due to the number and size of plug/connections made to the box. c. Complainant maintained that the termites discovered in November of 2018 were the result of Respondent’s construction and failure to pre-treat.19 23. Regarding termites, the hearing record demonstrated that Complainant had emailed Respondent on November 1, 2018, and Respondent had responded, indicating that he did not have to pre-treat unless he had done foundation work or disturbed the footings (which he denied having done).20 24. Complainant argued that a pre-treat for termites had needed to be done for two reasons: because the foundation had been cut through to the soil for the plumbing and because there was an “addition” on the home.

See Exhibit D. Complainant’s pre-hearing disclosure written statement contained some further details, which she did not specifically reference during the hearing. 17 See Exhibit E. See Exhibit F. 19 See Exhibit G, which includes the parties’ email communications regarding the termites and an invoice dated December 8, 2018 for termite treatment and remediation. Id. 5 RECEIVED 1.23.2020 ROC LEGAL

25. Regarding termites, Respondent noted that the Registrar had not determined that any action was necessary for the reason that Complainant had remedied the matter without following the requisite procedure in ARIZ. REV. STAT. § 32-1160(A). Respondent noted that Complainant had filled in the sunken living room, which had required rebar into the foundation and that Complainant herself was familiar with concrete work; she indicated she had not pretreated for that concrete work. Finally, Respondent noted that the county had approved the home construction and had not required any pre-treat for the construction. See Exhibit 2. 26. Regarding the wiring box, Complainant argued that the internet, cable, etc., connections simply did not fit into the installed box and that she had not been given a choice either as to having/needing a box or the size of such a box. Complainant argued that it is a fire hazard and believed that Respondent could have been required to put in a deeper box. 27. Regarding the wiring, Respondent indicated that its responsibility was to bring the wiring to the box and that it was the service providers’ responsibility to make the connections into the box/wiring. 28. Regarding the alleged unlicensed workers, Complainant argued that the painter (a unnamed woman), the roofer (Respondent’s superintendent, Matt Gallego), the drywaller (Ernesto Castro), the person who made the initial repairs (Vincent Cortes), and the stucco person were unlicensed, and also may not have been employees for whom Respondent paid payroll taxes.21 Complainant believed that the Registrar had not thoroughly looked into this allegation and she argued that no contractor should be allowed to use unlicensed workers and then not be held responsible for such a violation. 29. Regarding licensing, Respondent indicated that his KB-2 license enables him to do all work except plumbing, electrical, and HVAC. Respondent argued that this issue was not a matter before the Tribunal in this hearing. Respondent did not address the hearing evidence that Complainant brought forward in this regard.

Complainant argued that Respondent does not have any employees or, even if he does, those employees do not do the construction work. 6 RECEIVED 1.23.2020 ROC LEGAL

30. Regarding the front door, Respondent noted that “Lamoni” who had been the original purchaser was the person who had to deal with the warranty issue (with the manufacturer), and that “Lamoni” had ordered another door which Respondent was awaiting delivery of the door so it could be painted and installed.22 31. Regarding the hallway ceiling, Respondent argued that drywall cracks were only required to be fixed once within the first year and that a repair had already been done. 32. Regarding the interior hallway doors, other than acknowledging (through his questions to Complainant) that the doors had been painted three times, Respondent did not address the existing poor-finish issue as noted by the Investigator as of the October 18, 2019 compliance inspection. 33. Administrative notice is taken of Respondent’s License record with the Registrar, which reflects that there was one prior complaint that was closed as resolved in July 2019 and further reflects that the instant complaint remains open. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See ARIZ. REV. STAT. § 32-1101 et seq. 2. Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense.23 The standard of proof on all issues in this matter is that of a preponderance of the evidence. ARIZ. ADMIN. CODE section R2-19-119. 3. In this case, Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See ARIZ. REV. STAT. § 41-1092.07(G)(2); ARIZ. ADMIN. CODE Section R2-19-119(A) and ARIZ. ADMIN. CODE Section 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

See Exhibit B, emails from September 2019. 23 “At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” ARIZ. REV. STAT. § 41- 1092.07(G)(2). 7 RECEIVED 1.23.2020 ROC LEGAL

fact that the contention is more probably true than not.” MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). 4. A preponderance of the evidence is: The 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. BLACK’S LAW DICTIONARY 1373 (10th ed. 2014). 5. Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes."). 6. “Statutes shall be liberally construed to effect their objects and to promote justice.” ARIZ. REV. STAT. § 1-211(B). 7. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 8. Construction is not a perfect art and, normally, contractors must be allowed an opportunity to correct poor workmanship before their licenses may be suspended or revoked as a result of a failure to comply with workmanship standards. 9. The hearing record demonstrated that the front door issue has not been completed due to “Lamoni” not providing the door; however, that situation has been ongoing, apparently since September of 2019, and Respondent has not demonstrated that any efforts have been made in this regard, despite three months having passed since the last of the two Directive completion dates. The hearing record demonstrated that the front door remains in need of a corrective replacement and installation that meets workmanship standards. 10. The hearing record demonstrated, through photographs, that the ceiling issue appears to be more the result of a taping problem, as argued by Complainant, rather 8 RECEIVED 1.23.2020 ROC LEGAL

than a “drywall crack.” Further, the Investigator noted the attempted repairs remained in need of a corrective repair that meets workmanship standards. 11. The hearing record demonstrated that the attempted repairs on the interior doors remained in need of corrective repairs that meet workmanship standards. 12. Therefore, the hearing record established that workmanship issues remain resulting from Respondent’s work/installation regarding the front door, the hallway ceiling, and the interior hallway doors, i.e., Items #2, #4 and #10. Thus, the Administrative Law Judge concludes that the hearing record established that Respondent is in violation of ARIZ. REV. STAT. § 32-1154(A)(3), namely ARIZ. ADMIN. CODE Section R4-9-108. Further, the failure of Respondent to complete the corrective work within the Directive time period was not demonstrated to be justified. Therefore, the hearing record established that Respondent had not taken appropriate corrective action following the written Directive and the Addendum. Thus, the Administrative Law Judge concludes that Respondent is in violation of ARIZ. REV. STAT. § 32-1154(A)(22). 13. The hearing record failed to demonstrate that Complainant followed the requisite process set forth in ARIZ. REV. STAT. § 32-1160 regarding termites. 14. The hearing record failed to demonstrate a workmanship issue by Respondent with regard to the wiring box. 15. On its review, the Registrar did not find evidence to charge Respondent with the use of unlicensed contractors in the Citation. Therefore, while Respondent failed to specifically address the “unlicensed” evidence that Complainant raised at hearing, the Tribunal has no jurisdiction to further investigate such allegations and is without authority to “charge” a contractor with alleged violations. Thus, the hearing record demonstrated that Complainant failed to provide sufficient evidence to the Registrar in regard to her allegations of unlicensed activity. RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge recommends that Respondent’s ROC License 284078 shall be suspended for a period of two days. It is further recommended Respondent’s License No. 226450 shall be suspended based on its violation of ARIZ. REV. STAT. § 32-1154(A)(3), namely ARIZ. ADMIN. CODE 9 RECEIVED 1.23.2020 ROC LEGAL

Section R4-9-108, and its violation of ARIZ. REV. STAT. § 32-1154(A)(22), until such time that Respondent provides written proof that is acceptable to the Registrar that it has corrected the workmanship issues, determined herein to continue to exist, no later than thirty days following the effective date of the Registrar’s final order. In the event that Respondent fails to correct those workmanship issues, within that time period, the Registrar shall 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, or another appropriately-licensed contractor, completes correction of the determined workmanship issues within the thirty-day time period. It is further recommended that the Registrar require Respondent to pay the sum 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 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 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. Recommended this date, January 21, 2020 /s/ Kay Abramsohn Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors

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