ALJDEC decisions subject to certification as final

2020A-03490-CHC-ROC · Registrar of Contractors · 2021-05-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Heather C Finn ,

COMPLAINANT,

v.

Baseline Distributing LLC

License No. ROC 318418,

RESPONDENT.

No. 2020A-03490-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 28, 2021 at 9:00 AM.

APPEARANCES: Heather Finn (“Complainant”) appeared on her own behalf. Ryan Palmer appeared on behalf of Baseline Distributing LLC (“Respondent”). Lisa Melton appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Kevin Finn and Renate Palmer observed.

ADMINISTRATIVE LAW JUDGE: Jenna Clark.

_____________________________________________________________________

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 Registrar.

FINDINGS OF FACT

Background and Procedure

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 March 13, 2018, the Registrar issued License No. 318418 Specialty Dual CR-61 Carpentry, Remodeling and Repair contracting to Respondent. The license is currently active and renewed through March 31, 2022. Ryan Dean Palmer is the Qualifying Party/Manager and Renate Ann Palmer is the Member on the license. Respondent’s address of record for the license is 7819 S. 22nd Ln. Phoenix, AZ 85041-2667. Respondent has an active $6,750.00 surety bond on the licensed issued by RLI Insurance Company effective February 17, 2020. There is no prior discipline noted for the license, save one open complaint which is presumably Complainant’s.

Complainant owns residential property located at 1652 W. Morelose St. Chandler AZ 85224.

On or about February 05, 2020, Complainant and Respondent entered into a $10,808.82 for the installation of 20 Low E-340 windows and replacement trim of 3 doors at Complainant’s residence. Complainant paid $6,370.32 towards the project. The project commenced on March 03, 2020, and was completed on March 06, 2020.

On July 17, 2020, the Registrar received a 7-item complaint from Complainant against Respondent’s License No. 318418 alleging poor workmanship of their project. The Registrar designated it Complaint No. 2020-03490 and assigned to Dennis Bierma (“Investigator Bierma”) for investigation.

On July 24, 2020, Investigator Bierma issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on August 11, 2020, at 8:30 a.m.

On August 11, 2020, Investigator Bierma conducted a review of the contract executed between the parties and inspected the work that had been performed on the project to date. He also took 44 photographs of the project site. When he was finished, Investigator Bierma drafted his Inspection Notes. Ultimately, Investigator Bierma substantiated 6 of 7 complaint items. Specifically, Investigator Bierma verified complaint items 1-2, and 4-7. Investigator Bierma concluded that Respondent’s window installation failed to meet the Registrar’s minimum workmanship standards.

On August 14, 2020, Investigator Bierma issued a Warning Letter to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1158(A) for Respondent’s failure to include all nine (9) required minimum elements in his contracts, including his contract with Complainant.

On August 14, 2020, Investigator Bierma issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated a majority of Complainant’s workmanship allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on September 18, 2020, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22) and 32-1154(E).

On or about September 15, 2020, Investigator Bierma received a 19-item addendum complaint from Complainant.

On September 15, 2020, Investigator Bierma issued an Addendum Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on September 30, 2020, at 8:30 a.m.

On September 25, 2020, Investigator Bierma received 5 supplemental addendum complaint items from Complainant.

On September 30, 2020, Investigator Bierma performed an addendum inspection of the project and took 42 photographs. When he was finished, Investigator Bierma drafted his Addendum Inspection Notes. Investigator Bierma consolidated a number of Complainant’s complaint items as they were redundant and had been previously identified. The addendum complaint items were simplified into a single complaint items and subcategorized into 5 parts, which were all substantiated by Investigator Bierma. With the assistance of the window manufacturer, Investigator Bierma determined that “the issues with the windows are related to the installation of the manufacturers product,” [sic] because “the windows were not installed according to their requirements and the reason the issues are happening is because of the way the windows were installed.”

On December 17, 2020, Investigator Bierma issued an Addendum Directive was to Respondent because he substantiated Complainant’s addendum workmanship allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on January 29, 2021, to notify the Registrar of its compliance with the Addendum Directive, which required remediation of complaint items 2, 4-7 and addendum item 8, or face discipline pursuant to Ariz. Admin. Code R4-9-108, and Ariz. Rev. Stat. §§ 32-1154(A)(3), 32-1154(A)(22) and 32-1154(E).

On January 29, 2021, Investigator Bierma issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on February 05, 2021, at 8:30 a.m.

On February 05, 2021, Investigator Bierma inspected the corrective work that had been performed on the project and took 37 photographs. When he was finished, Investigator Bierma drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Bierma determined that Respondent had not performed corrective work necessary to satisfactorily remediate any of the complaint items identified in the Addendum Directive.

On February 16, 2021, Investigator Bierma forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On February 19, 2021, the Registrar issued a Citation to Respondent for alleged violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22). Respondent was given until March 06, 2021, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On March 05, 2021, the Registrar received Respondent’s Answer. In pertinent parts, Respondent noted that after the work was completed Complainant contacted him with workmanship concerns as well as concerns regarding damage to some of her shutters. Respondent declined responsibility for the alleged damage to Complainant’s shutters because Complainant had been advised to remove them prior to Respondent’s window installation, and specifically warned that they may be damaged as a result, but Complainant had declined. Respondent attempted to perform corrective work for the windows but was only allowed to work on the exterior of the home due to Complainant’s COVID-19 related concerns. Although Complainant had tendered a $4,437.90 payment on March 06, 2020, Complainant subsequently filed a dispute with her credit card company who in turn reversed the charge on March 10, 2020, and credited back the disputed amount to Complainant. Respondent made several attempts to schedule time to complete corrective work but Complainant rescheduled several times and ultimately cancelled, opting instead to file a complaint against Respondent with the Registrar. After the jobsite inspection Respondent began corrective work, however, additional complaint items were filed by Complainant. Complainant would not permit Respondent to make repairs the way he wanted to and continuously interrupted Respondent’s corrective work. On September 05, 2020, Complainant asked Respondent to leave the jobsite. When Respondent returned to the jobsite to perform corrective work on January 23, 2021, Complainant would not permit corrective work to be performed on 3 windows because she insisted they needed replacing. Lastly, Respondent argued that the window manufacturer’s determination that he used incorrect screws for the project was false because Respondent has used the same screws in other projects with the windows at issue and has never had a problem before.

On March 12, 2021, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 28, 2021. Per the March 26, 2021, Notice of Hearing the issues to be determined are whether the Registrar has cause to discipline Respondent’s license based on the following alleged statutory violations:

Charge 1: A.R.S. § 32-1154(A)(3) – A.A.C. R4-9-108

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf and called Lisa Melton, Registrar Investigator, as a witness. Ryan Palmer testified on behalf of Respondent. The Registrar’s agency file and Notice of Hearing were admitted into the record as their own exhibits. The substantive evidence of record is as follows:

At the September 30, 3030, addendum inspection Respondent denied that the issued with the windows were due to poor workmanship, and instead blamed the issued with the installation on the window manufacturer (“Energy Shield”). The parties agreed to have Energy Shield present at the jobsite to perform an independent inspection.

On November 02, 2020, Energy Shield performed an inspection of the underlying windows, at both parties’ request, and determined that (1) clear silicone/caulking had been used, (2) incorrect anchors/screws had been used which caused the vinyl frame to crack, and (3) Respondent caused damage to Complainant’s drywall and blinds. Energy Shield recommended that Respondent correct the aforementioned workmanship issued as well as replace 5 windows that were identified as non-repairable.

On January 23, 2021, Respondent requested that the compliance deadline for the Addendum Directive be extended. Complainant declined.

Neither Energy Shield, nor Complainant, nor the Registrar may dictate the exact means, methods, or tools a licensed contractor uses to perform corrective work in compliance with a Directive issued by the Registrar. Instead, a contractor may use “appropriate means” to remedy one or more statutory violations.

A licensed contractor must be afforded reasonable access to the jobsite and a reasonable amount of time to perform corrective work.

By the date of the Compliance Inspection, Respondent had had 50 days from the issuance of the initial Directive to complete corrective work. However, Complainant conceded that she rescheduled “a couple of times” due to her husband’s work schedule and because she got sick on multiple occasions.

Between August 14, 2020, and January 29, 2021, Respondent presented to the jobsite on 2 occasions to perform corrective work – September 05, 2020, and January 23, 2021.

Complainant owes an outstanding balance on her underlying contract with Respondent.

Complainant declined to provide a closing argument.

In closing, Respondent argued that Complainant’s ouster of September 05, 2020, amounts to a denial of access and therefore the Registrar cannot take disciplinary action against his license under either Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22) as he was not afforded reasonable time or opportunity to perform corrective work.

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.

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)(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 the case at bar are not in dispute.

It is undisputed that the parties had a $10,808.82 window installation contract of which Complainant paid $6,370.32. It is also undisputed that the work Respondent performed did not satisfy the minimum standards set for workmanship by the Registrar, and that Respondent’s contract with Complainant did not include ROC License No. 318418. It is further undisputed that Respondent was required to timely perform corrective work and remediate workmanship deficiencies on the project identified in the Registrar’s Amended Directive, and that Respondent failed to timely comply.

Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to adhere to the Registrar’s Directive and complete Complainants’ project per contract. This is an affirmative defense that Respondent bears the burden to establish. Here, Respondent did not sustain his burden. There is no evidence in the record that excuses or otherwise justifies Respondent’s inaction and/or lack of performance on this project. Respondent’s denial of access argument is contradicted by his own testimony that after he was allegedly asked to leave the project site on September 05, 2020, he returned on January 23, 2021, to perform more repairs and asked for an extension of time on that same day. Furthermore, the parties’ financial dispute does not justify Respondent’s inaction in this matter.

Therefore, because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108, and 32-1154(A)(22), Complainant has also established cause for the Registrar to discipline Respondent’s contractor’s license.

Complainant may petition the Registrar’s Recovery Fund for financial recompense this matter.

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED that five days after the effective date of the Final Order in this matter, Respondent Baseline Distributing LLC, ROC License No. 318418, be suspended for two (2) days based on its violations of Ariz. Rev. Stat. §§ 32-1154(A)(3) and 32-1154(A)(22).

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, May 14, 2021.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors