ALJDEC decisions subject to certification as final

2020A-00577-CHC-ROC · Registrar of Contractors · 2020-08-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Janet Mata,

COMPLAINANT,

v.

Bare Floors LLC,

License No. ROC 291163,

RESPONDENT.

No. 2020A-00577-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 14, 2020 at 9:00 AM.

APPEARANCES: Janet Mata (“Complainant”) appeared on her own behalf with Beau Cruz as a witness. Amir Kajtezvoc appeared on behalf of Bare Floors LLC (“Respondent”). Ralph Williamson observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Director of the Arizona Registrar of Contractors (“Registrar”).

FINDINGS OF FACT

Background and Procedure

On May 01, 2014, the Registrar issued License No. 291163 for specialty dual CR-8 floor covering contracting to Respondent. Respondent’s address of record for the license is 11201 N. 23rd Ave. Phoenix, Arizona 85209. Amir Kajtezovic is listed on the license as the Qualifying Party and Member.

Pursuant to Arizona Administrative Code (“Ariz. Admin. Code”) R4-9-117, Administrative Notice is taken of Respondent’s prior License record, for License No. 291163, as reflected on the Registrar’s public website on July 14, 2020. Such prior License record reflects that Respondent’s license is active and renewed through May 31, 2022. The license has not been previously disciplined. The record reflects that there is one open complaint against Respondent’s license, which is presumed to be related to this matter. The license has a $6,750.00 surety bond issued by RLI Insurance Company effective March 12, 2014.

On February 04, 2020, Complainant filed a complaint against Respondent with the Registrar alleging abandonment and poor workmanship of a new residential construction project. Complainant included a punch list, residential listing, party purchase agreement, and title documents.

On February 14, 2020, the Registrar issued a Jobsite Inspection Notification letter to the parties, advising that an onsite review would be conducted at the project site by an investigator from the Registrar on March 20, 2020, at 8:30 a.m.

On March 20, 2020, Registrar investigator Beau Cruz (“Investigator Cruz”) conducted a review of the contract executed between the parties. Investigator Cruz also inspected the work that had been done on the project to date and took 22 photographs of the property. When he was finished, Investigator Cruz drafted Jobsite Inspection Notes.

On March 23, 2020, Investigator Cruz issued a Written Directive from the Registrar (“Directive“) to Respondent because he substantiated Complainant’s workmanship complaints item numbers 4-5, 15-16 and 18 that the work Respondent had done failed to meet minimum workmanship standards. Respondent was put on notice that it had until April 23, 2020, to notify the Registrar 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).

On April 02, 2020, Investigator Cruz issued an Amended Written Directive from the Registrar Replacing Directive (“Amended Directive”) of March 23, 2020 to Respondent. Respondent was put on notice that it had until April 23, 2020, to notify the Registrar 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).

On April 24, 2020, investigator Cruz issued a Minimum Elements of a Contract Warning Letter to Respondent to advise that its contract with Complainant violated Ariz. Rev. Stat. § 32-1158.

On April 24, 2020, Investigator Cruz escalated Complaint 2019-00577 to the Registrar’s legal department with a Citation Recommendation.

On May 06, 2020, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); namely Ariz. Admin. Code R4-9-108, 32-1154(A)(12); namely 32-1158, and 32-1154(A)(22). Respondent was given until May 21, 2020, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On May 19, 2020, the Registrar received Respondent’s Answer whereby Respondent stated that he “contacted the homeowner and scheduled an appointment with Ms. Mata at her residence” to “go over the items included in the directive” “at 10 a.m. on April 22, 2020.” Respondent further stated that “we were prepared to be at her house on Monday, April 27th to perform all of the repairs listed in the Directive.” Respondent alleged that Complainant had informed him that wanted to obtain a competing bid, so Respondent instructed her to let him know her decision by April 23, 2020. Respondent argued that because Complainant did not contact him by April 23, 2020, she had effectively denied him access to the project site.

On May 20, 2020, the Registrar referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on July 14, 2020. Per the Notice of Hearing the issue to be determined is whether the Registrar 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) – A.R.S. § 32-1158. (“Failure in any material respect to comply with this chapter; namely 32-1158.”)

Charge 3: 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

Complainant appeared on her own behalf with Investigator Cruz as a witness, and submitted Exhibits 1-40. Amir Kajtezvoc testified on behalf of Respondent. The Registrar’s electronic hearing file and Notice of Hearing were also admitted into the record as their own exhibits. The substantive facts are as follows:

Complainant is the owner of residential property located at 10010 N. 34th Place Phoenix, Arizona 85028.

On an unknown date in Autumn of 2019, Complainant’s residence sustained damage resulting from sewage overflow. To redress the damage, Complainant filed a claim with her homeowner’s insurance company.

On or about October 31, 2019, the parties entered into a contractual agreement whereby Complainant agreed to pay Respondent the sum total of $6,510.00 in exchange for Respondent’s installation of travertine flooring in Complainant’s residence.

On November 04, 2019, work on the project commenced after Complainant issued a $3,500.00 down payment to Respondent via check. Respondent assigned one tradesman (“Tradesman“) to perform the work on Complainant’s project.

On December 11, 2019, Complainant tendered Respondent a $1,500.00 progress payment via check.

On or about January 09, 2020, work on the project stopped. Tradesman left the jobsite at the onset of the COVID-19 global pandemic because he was “not comfortable.” Respondent did not have another employee available to replace Tradesman on Complainant’s project.

On January 11, 2020, Complainant had an inspection of Respondent’s tile installation inspected by Ralph Williamson of the Ceramic Tile Institute of America, Inc. for $350.00. On January 22, 2020, Mr. Williamson provided Complainant with a copy of his subsequent report, whereby he opined that Respondent’s workmanship failed to meet industry and manufacturer standards. Mr. Williamson recommended that Respondent’s tilework be removed and re-installed.

On March 20, 2020, Investigator Cruz completed his jobsite inspection with both parties were present.

Respondent received the Registrar’s Amended Directive issued April 02, 2020.

On April 21, 2020, the parties had their first communication with each other since the receipt of the Registrar’s Amended Directive. At that time the parties agreed to meet the following day to discuss the remediation for their project. Complainant requested that Respondent bring a written schedule that outlined his intended remediation steps for the project.

On April 22, 2020, the parties met at the project site. No remediation work was performed. Respondent did not provide Complainant with a remediation schedule, written or otherwise, nor was Respondent accompanied by his “tile guy.”

On April 23, 2020, Complainant provided Investigator Cruz with notice that Respondent did not comply with the Registrar’s Directive.

At no time had the parties executed a formal settlement agreement.

In closing, Respondent alleged that Complainant’s home had been occupied by several other tradesmen, who were working on other post-flood remediations in their areas of expertise unrelated to flooring, and argued that the damage to Complainant’s floors must have come from one or more of the other tradesmen.

In closing, Complainant argued that although Respondent was afforded time to complete the project and make necessary repairs, Respondent failed to do so. Complainant denied having ever denied Respondent access to the project site.

CONCLUSIONS OF LAW

The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before OAH pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

The Registrar 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.

The Notice of Hearing the Registrar mailed to Respondent’s address of record is sufficient, and Respondent is deemed to have received notice of the hearing in this matter. Because the Registrar mailed all correspondence to Respondent in the same manner and failed to receive any mail returned as undeliverable, Respondent is deemed to have received all correspondence regarding this matter from the Registrar as well.

Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

“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(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.”

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.”

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.”

Ariz. Rev. Stat. § 32-1158(A) holds, in pertinent parts, that a contract between a contractor and property owner amounting to more than one thousand dollars must contain the following information in writing:

The name of the contractor and the contractor's business address and license number.

The name and mailing address of the owner and the jobsite address or legal description.

The date the parties entered into the contract.

The estimated date of completion of all work to be performed under the contract.

A description of the work to be performed under the contract.

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.

The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.

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.

That the property owner has the right to file a written complaint with the Registrar for an alleged violation of Ariz. Rev. Stat § 32-1154(A). The contract shall contain the Registrar's telephone number, website address, and shall state that complaints must be made within the applicable time period as set forth in Ariz. Rev. Stat § 32-1155(A). The information must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor.

Ariz. Rev. Stat. § 32-1154(A)(22) provides, 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 Registrar has the authority to issue license discipline under this provision, including summary suspension, revocation, or imposing a civil penalty or recovery fund award.”

The material facts in this case are not in dispute.

It is undisputed that Complainant paid Respondent $5,000.00 on their $6,510.00 flooring contract. It is also undisputed that the work Respondent performed on the project did not meet the Registrar’s minimum workmanship standards. It is further undisputed that the Registrar’s post-investigative Amended Directive required Respondent’s full compliance by April 23, 2020, and that Respondent did not timely comply.

Therefore, the only remaining issue to address is whether Respondent raised sufficient justification or excuse for failing to timely and completely remediate all complaint action items outlined in the Registrar’s Amended Directive. This is an affirmative defense that Respondent bears the burden to establish. Here, the record reflects that Respondent failed to adhere to a Registrar Amended Directive, and had no affirmative defense(s) for doing so. Respondent’s assertion that he contacted Complainant to schedule remediations before the expiration of the Amended Directive’s compliance deadline is not a justifiable excuse.

Because Respondent’s performance on the underlying project did not meet the Registrar’s minimum workmanship standards, Complainant has established a violation of Ariz. Rev. Stat. § 32-1154(A)(3).

Because Respondent failed to take appropriate corrective action after the Amended Directive was issued by the Registrar for the underlying project, Complainant has also established a violation of Ariz. Rev. Stat. § 32-1154(A)(22).

Because Respondent failed to take appropriate corrective action after the Directive was issued by the Registrar for the underlying project, Complainant has also established a violation of Ariz. Rev. Stat. § 32-1154(A)(22).

Complainant may petition the Registrar’s Recovery Fund for financial recompense regarding this matter, if any is permitted, as the Tribunal has no jurisdiction to award a refund of the underlying amount contracted between the parties.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that on the effective date of the Final Order in this matter Respondent Bare Floors LLC, ROC License No. 291163, shall be suspended for two (2) days.

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, August 03, 2020.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors