ALJDEC decisions subject to certification as final

2019A-03419-RFA-ROC · Registrar of Contractors · 2021-05-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Kristi R. Lattin and

Robert DeRuiter

COMPLAINANTS

Ardavan Ashkanian

DBA: Chromatic Coatings

License No. 320983,

RESPONDENT

No. 2019A-03419-RFA-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: February 1, 2021, with further hearing on April 26, 2021

APPEARANCES: Complainants Kristin R. Lattin and Robert DeRuiter appeared on their own behalf. Assistant Attorney General John Tellier represented the Arizona Registrar of Contractors. Respondent Ardavan Ashkanian, doing business as Chromatic Coatings, did not appear. David Fagerburg, Katelyn Rolling, and Jeff Christman appeared as witnesses.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this Recommended Order to the Director of the Arizona Registrar of Contractors (“Registrar”).

FINDINGS OF FACT

Background and Procedure

According to the Registrar’s public website, on July 27, 2018, the Registrar issued License No. 320983, Specialty Residential R-62 Minor Home Improvements contracting license to Ardavan Ashkanian, doing business as Chromatic Coatings (“Respondent”). Ardavan Ashkanian is listed on the license as the Qualifying Party and Owner.

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior license record as reflected on the Registrar’s public website on April 27, 2021. Respondent’s License No. 320983 is active and currently renewed through July 31, 2022. There are no open complaints against the license, but there is one record of prior discipline that has been taken against the license. Respondent has a $4,250.00 surety bond for the license issued through RLI Insurance Company, effective July 3, 2018.

On or about July 3, 2019, the Registrar received a Complaint filed by Complainant Kristi Lattin against Respondent alleging abandonment and poor workmanship of a kitchen and bathroom remodel project. The Registrar assigned David Fagerburg (“Investigator Fagerburg”) to investigate the Complaint.

Investigator Fagerburg conducted a jobsite inspection at the project site on September 16, 2019. During that inspection, Investigator Fagerburg took photographs of Respondent’s work. After the inspection, Investigator Fagerburg drafted Jobsite Inspection Notes.

On October 7, 2019, Investigator Fagerberg issued a Written Directive from the Registrar to Respondent due to having substantiated Complainant’s allegation that the work Respondent had performed failed to meet minimum workmanship standards. Respondent was put on notice that it had until 5:00 p.m. on October 25, 2019, to notify the Registrar of its compliance with the Written Directive or face discipline pursuant to Ariz. Rev. Stat. § 32-1154(A)(3); Ariz. Admin. Code R4-9-108, Ariz. Rev. Stat. § 32-1154(A)(22), and Ariz. Rev. Stat. § 32-1154(E).

Respondent failed to perform the required corrective work. Consequently, Investigator Fagerburg referred the Complaint to the Registrar’s legal department.

On October 30, 2019, the Registrar issued a Citation and Complaint to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22).

After receiving Respondent’s Written Answer to the Citation and Complaint, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent State agency, for an evidentiary hearing to determine whether the Registrar had cause to discipline Respondent’s license based upon Respondent’s alleged violations of this State’s contracting laws.

On January 13, 2020, an administrative evidentiary hearing took place at OAH.

On or about February 3, 2020, OAH transmitted the Administrative Law Judge Decision to the Registrar which recommended that discipline be imposed against Respondent’s contracting license as the Administrative Law Judge concluded that Respondent had violated the charged provisions of this State’s contracting laws. The Order also recommended that Respondent’s license be suspended for one day and that Respondent pay a civil penalty in the amount of $250.00.

On February 14, 2020, the Administrative Law Judge Decision was accepted by the Registrar.

On March 25, 2020, the Final Administrative Decision and Order became effective.

On or about May 23, 2020, the Registrar received Complainant’s petition for payment from the Residential Contractors’ Recovery Fund (“Fund”), pursuant to Ariz. Rev. Stat. §§ 32-1132(A) and 32-1154(G), in the amount of $7,900.00.

On September 25, 2020, the Registrar issued a Notice and Order of Recovery Fund Claim Denial.

Complainants appealed the Registrar’s Recovery Fund Claim Denial and the matter was referred to OAH for an independent evidentiary hearing. Per the Notice of Hearing sent to the parties on November 9, 2020, the issue for hearing is to determine if an award and payment from the Fund pursuant to Ariz. Rev. Stat. § 32-1131 et seq., is justified by the evidence.

Hearing Evidence

At the hearing, the Registrar called Investigator Fagerburg and Katelyn Rolling as witnesses. Complainants testified on their own behalf and called Jeff Christman as a witness. Respondent failed to appear for both hearing dates, and consequently, did not present any evidence. The parties stipulated to the admission of all exhibits and administrative notice was taken of the agency record.

Investigator Fagerburg’s testimony

Investigator Fagerburg testified regarding the Complaint, his jobsite inspections, and the Written Directive. Investigator Fagerburg further testified regarding Respondent’s scope of work which included two bathtub surrounds and countertops to be refinished/recoated in the bathrooms, and the kitchen cabinets and doors were to be refinished. All of the doors, drawer fronts, and face frames, in the kitchen had been refinished. Investigator Fagerburg assumed that all of those components were sanded and painted. However, the refinishing did not cover the old finish ad the previous color bled through. Investigator Fagerburg opined that Respondent used a standard satin finish paint without a clear coat which was inappropriate due to the fact that the original paint was an oil base, and therefore, a latex paint will not adhere properly.

Investigator Fagerburg testified regarding the poor quality of Respondent’s work, specifically, that the new finish on the kitchen cabinets did not adequately cover the original color and the original color was bleeding through, there were brush marks in the paint, and the holes for the hardware were not uniformly drilled. Investigator Fagerburg opined that Respondent used an inappropriate type of paint to refinish the cabinets. Investigator Fagerburg further explained that the bathtubs and surrounds, as well as the countertops were streaked during refinishing. Investigator Fagerburg opined that removal and replacement was not necessary and that refinishing would remedy the workmanship issues.

Investigator Fagerburg testified that he spoke with Katelyn Rolling, the individual who reviewed Complainants’ claim, and reviewed the estimates for the repairs that were provided by Complainants. Investigator Fagerburg also compared the photos from his three jobsite inspections (as he had conducted a pre-hearing inspection as well) and testified that the countertops in the bathroom appear to be a different material and the cabinets doors in the kitchen were not refinished, but rather replaced with a different style door front and soft close hinges, as well as painted with a lacquer paint. Investigator Fagerburg opined that the estimates provided by Complainants were beyond what was necessary and not in alignment with the original scope of work. Inspector Fagerburg opined that the subsequent work that Complainants had done was an “upgrade.” Specifically, Investigator Fagerburg testified that two coats of lacquer and one coat of clear lacquer were not in the original contract with Respondent. Investigator Fagerburg testified that the appropriate course of corrective work would have been light sanding, an application of primer, two coats of paint and then an application of clear coat to the existing cabinets, and that new cabinets were not necessary. Investigator Fagerburg also testified that the patching of the hardware holes was a “minimal project.” However, Investigator Fagerburg acknowledged that it would be difficult to determine whether replacement or refinishing would have been more cost effective based upon the time/labor entailed in both versus the expense of new cabinets.

Katelyn Rolling’s testimony

Ms. Rolling is a Legal Assistant II for the Registrar and she reviewed Complainants’ claim to the Fund. Ms. Rolling testified that she reviewed Respondent’s scope of work, the Complaint, the payments made to Respondent, the Written Directive, and the Fund claim form which included the amounts paid to Grapevine Cabinets (“Grapevine”) and Marlam Industries (“Marlam”) for the bathtub surrounds and the cabinets.

Ms. Rolling testified that upon review, she determined that Complainants were eligible for an administrative payout from the Fund, having met all statutory requirements for eligibility. However, in order to calculate Complainants’ damages, Complainants were required to obtain bids from other contractors so that the lowest one could be chosen by the Registrar, and then permissible remediation costs could be tallied to calculate Complainants’ award. Ms. Rolling testified that the quote from Grapevine was $11,960.00, however that quote included new cabinet doors, lacquer finish, and new hardware, which were upgrades from Complainants’ contract with Respondent. Further, that quote also included bathroom and laundry room cabinets and the Complaint only specified the kitchen cabinets. Also, the quote included a Geneva door style upgrade for the replacement doors. Ms. Rolling testified that the invoice from Marlam included replacing the bathroom countertops with Corian or marble, however, those materials were not specified in the parties’ contract.

Ms. Rolling testified that Investigator Fagerburg determined that the cabinets did not need to be replaced, but rather only required light sanding and painting, and that a lacquer finish was an upgrade because it was not specified in the original contract. Ms. Rolling determined that many items were outside the scope of the original contract. As such the Registrar denied Complainants’ claim to the Fund, having found the repairs excessive. Ms. Rolling testified that Complainants would have been eligible for a payout if the quotes they received had been in alignment with the Written Directive.

Ms. Rolling calculated Complainants’ damages by going line by line between the bids submitted by Complainants, the parties’ original contract, and consulting with Investigator Fagerburg about his insights on the underlying project and the bids. Ms. Rolling testified that the Marlam bid was not compensable because it was for Corian and marble which were both upgraded materials that were not originally contemplated by the parties’ contract and not present in the home during the jobsite inspection, as Investigator Fagerberg advised her that the original material was cultured marble. Ms. Rolling further testified that the Grapevine bid was not compensable except for $1,100.00 for sanding and cleaning of the cabinet surfaces because all other items contained in the bid were determined to be upgrades and/or not in alignment with the parties’ original contract or Written Directive. Ms. Rolling explained that Complainants did not obtain a bid from Marlam for cultured marble in alignment with what they originally had, and they did not obtain a quote from Grapevine for refinishing the existing cabinets in the same manner as specified in their contract with Respondent. Ms. Rolling subtracted the amount Complainants paid to Respondent, $8,400.00, from the contract amount of $9,760.00, which left an unpaid balance of $1,360.00 from which the allowed $1,100.00 was subtracted, rendering Complainants ineligible for a payout from the Fund.

Ms. Rolling testified that Complainants had the cabinets and countertops replaced prior to submitting their claim to the Fund, and therefore, could not obtain additional quotes for the Registrar to consider.

Jeff Christman’s testimony

Mr. Christman, owner of Grapevine, testified that he has been in the business of refinishing cabinets for approximately twelve years. Mr. Christman testified that when he inspected the work that Respondent had performed, he “noticed a pink color on very door” and explained that this was due to the fact that the doors were not properly primed. Mr. Christman further testified that the finish quality was “orange peel” due to the cabinets being improperly sprayed with paint, and because the paint was too thick. Mr. Christman also testified that the finish was “soft” and would degrade quickly, and the handles were crooked throughout the project. Mr. Christman explained that he suggested new cabinets to Complainants because if the cabinets simply received another coat of paint, the finish would fail and he would have assumed responsibility for Respondent’s poor work.

Mr. Christman further explained that stripping the paint with a chemical remover and sanding the original cabinets would have been an option, but in his opinion, it would have been “quite an undertaking” due to how labor intensive removing the paint would have been. Mr. Christman opined that it was more cost effective for Complainants to purchase new cabinet doors.

Mr. Christman acknowledged that he had not seen the Written Directive, and did not provide a quote to Complainants for stripping and repainting the cabinets as he does not perform chemical stripping. Consequently, Mr. Christman could not testify as to the cost of that service.

Kristi Lattin’s testimony

Ms. Lattin testified that the parties’ contract amount was actually $8,860.00, and that Complainants paid Respondent $8,700.00. Ms. Lattin also testified that Complainants are requesting $7,000.00 from the Fund, rather than the original requested amount of $7,900.00 because they are satisfied with the bathtub re-glazing performed by Respondent. Ms. Lattin acknowledged that the original vanity countertops were a white cultured marble, and that Complainants replaced them with Corian. Ms. Lattin testified that Complainants paid $7,870.00 to correct Respondent’s work, and then spent an additional $5,071.00 on upgrades.

Complainants argued that in addition to the allowable amount of $1,100.00 for sanding the cabinets, Complainants should be able to recover the amount of what it would have cost to refinish the cabinets. However, Complainants did not provide a bid to the Registrar to establish the cost of refinishing the existing cabinets in the manner in which they contracted with Respondent to perform that work and in a manner that would have remedied Respondent’s deficient work. Therefore, the Registrar is unable to calculate the cost of that work.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. The matter was properly brought before OAH.

Complainants bear the burden of establishing by a preponderance of the evidence that the Fund improperly denied their claim.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

Ariz. Rev. Stat. § 32-1154(F) provides that “if a contractor’s license has been revoked or has been suspended as a result of an order to remedy a violation of this chapter the registrar may order payment from the residential contractors’ recovery fund to remedy the violation.”

A.R.S. § 32-1132.01(B) provides:

An award from the [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.

A.R.S. § 32-1132.01(H) defines "actual damages" as “the reasonable cost of completing the contract and repairing the contractor's defective performance, minus the part of the contract price still unpaid.”

In this case, Complainants did not obtain and submit bids to the Registrar for the reasonable cost of completing the contract and repairing Respondent’s defective work. Instead, Complainants submitted bids from Marlam and Grapevine that contemplated work that was outside the scope of Complainants’ contract with Respondent, and also contained upgraded materials. While there is ample evidence that Complainants sustained damages as a result of Respondent’s poor workmanship, the evidence before the tribunal does not establish the actual damages for which Complainants should be reimbursed because Complainants did not submit bids in an amount that did “not exceed an amount necessary to complete or repair” Respondent’s work. The evidence of record established that Respondent’s work could be repaired. What was not established was the cost to perform those repairs. Complainants only submitted bids for replacement.

Therefore, the undersigned Administrative Law Judge concludes that the Registrar properly denied Complainants’ claim to the Fund. Complainants’ appeal is denied. However, nothing in this order would prevent Complainants from seeking a monetary award against Respondent from a civil court of competent jurisdiction.

RECOMMENDED ORDER

Based on the foregoing,

it is recommended that Complainants’ appeal be denied.

IT IS FURTHER RECOMMENDED that the Registrar affirm the denial of Complainants’ claim to the Fund.

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 forty (40) days from the date of that certification.

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-137160-45720000Done this day, May 3, 2021.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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