ALJDEC decisions subject to certification as final

2020A-04113-CHC-ROC · Registrar of Contractors · 2021-02-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Amberwood Homes, LLC,

COMPLAINANT

Window Pro, LLC,

License Number ROC 234749,

RESPONDENT

No. 2020A-04113-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: January 14, 2021

APPEARANCES: Austin Slade, Esq. represented Complainant Amberwood Homes, LLC. Billy Johnson and Tina Markowski were present on behalf of Complainant Amberwood Homes, LLC. Michael Schern, Esq. represented Respondent Window Pro, LLC. Blake Bennett was present on behalf of Respondent Window Pro, LLC. Arizona Registrar of Contractors Investigator Wes Ellington was present.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Window Pro, LLC (“Respondent”) is the holder of License No. 234749 issued by the Arizona Registrar of Contractors (“Registrar”). Blake Bennett is Respondent’s qualifying party and owner.

On or about February 3, 2020, Amberwood Homes, LLC (“Complainant”) contracted with Respondent for Respondent to install shutters in a home constructed by Complainant. The contract price was $11,900.00. Complainant paid Respondent a deposit in the amount of $6,000.00.

On or about August 25, 2020, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to the project.

The Registrar assigned the Complaint to Investigator Wes Ellington. After a jobsite inspection, Investigator Ellington issued a Written Directive to Respondent that provided as follows:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. Failure to comply with this Directive constitutes a violation of A.R.S. §32-1154(A)(22) and may result in the issuance of a citation, discipline of your license, and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on October 19, 2020.

You are directed to remedy the following violations by the appropriate means:

Complaint Item 1: Full custom home shutter work incomplete (original completion promised 4-7-20). Numerous completion dates missed. Numerous phone calls not returned.

Investigator’s Observation: The ROC has no jurisdiction over completion dates or missed calls, however, some of the work has not been completed. The shutters in the study have not yet been installed. The respondent will need to complete this as per contract. The respondent agreed, and stated that this work will be done.

Complaint Item 3: Joints on molding, casing, etc. do not fit and are not securely attached.

Investigator’s Observation: I observed nothing that was not securely attached. The respondent pointed out a few areas that need caulk and this should be corrected by the respondent.

Complaint Item 4: Door units are not installed square and plumb and do not hang evenly in frame, therefore not working smoothly.

Investigator’s Observation: Plumb and square was not demonstrated by the complainant. The complainant pointed out that light can be seen around the shutter doors. The respondent pointed out that they are not “black out” shutters and there will be small gaps allowing light through. I agree. Small gaps are acceptable but should be minimized by adjustments. This will need to be corrected by the respondent.

Complaint Item 5: Doors bind and rub against jambs.

Investigator’s Observation: Some shutter doors do drag slightly. The respondent stated this can be adjusted. The respondent will need to correct this by the appropriate means.

Complaint Item 6: Door units have large and excessive gaps between frame and door.

Investigator’s Observation: This issue is the same as item #4. The respondent will need to correct this issue.

Complaint Item 9: Shutter door in hallway warped.

Investigator’s Observation: This door shutter does not appear warped, but is missing the center magnet (as pointed out by the respondent) that holds the shutter door in place. This will need to be corrected by the respondent.

The following complaint items require no action by the Respondent:

Complaint Item 2: Custom home shutter work not completed in a professional or workmanlike manner. Shutter work is substandard workmanship – does not meet professional industry standards.

Investigator’s Observation: This is a general statement and will be dealt with on a case by case basis in the following complaint items.

Complaint Item 7: Door units are nailed closed and do not open.

Investigator’s Observation: A nailed shut door was not demonstrated by the complainant. However, it is possible that this refers to the laundry room shutter that cannot be opened due to the tall sink faucet installed after the shutters were installed. The complainant states that the respondent should not have installed this type of shutter in this location. In this situation, the complainant is the contractor of the home. The contractor is responsible for the design and functionality of every component in the house. The respondent could not have known what style of faucet would be in this location, therefore it is the complainant’s responsibility to either install a different faucet, or have the respondent provide a change order for a different shutter style.

Governing Rule: N/A, shutter installed as per contract.

Complaint Item 8: Frame styles are not uniform throughout the entire custom home work.

Investigator’s Observation: The respondent stated that a slightly different frame was needed in some locations to accommodate the window style. This minimal difference is acceptable and would meet minimum industry standards.

Governing Rule: N/A, meets minimum industry standards.

Investigator Ellington testified that none of the items delineated in the Written Directive requiring corrective work were disputed by Respondent and Respondent agreed to perform all corrections. Investigator Ellington characterized the corrective work as minor hinge and magnet adjustments. Following the issuance of the Written Directive and as the deadline in the Written Directive approached, Respondent’s counsel contacted Investigator Ellington to advise that Complainant had denied Respondent access to perform the required repairs. Investigator Ellington testified that he contacted Complainant and was told that Complainant required workers’ compensation insurance verification from Respondent before Complainant would allow Respondent access to perform any corrective work. Respondent informed Investigator Ellington that it does not have any employees, and therefore, is not required to have workers’ compensation insurance. A compliance inspection was not conducted as no corrective work had been performed.

Investigator Ellington referred the matter to the Registrar’s Legal Department. The Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(A), and A.R.S. § 32-1154(A)(22). The Registrar did not charge Respondent with a violation of A.R.S. § 32-1154(A)(4) which requires a licensee to comply with the statutes or rules governing workers’ compensation.

Investigator Ellington testified that Mr. Bennett could have personally performed all of the corrective work and no other workers would have been necessary. Investigator Ellington opined that all of the items listed in the Written Directive could have been completed at the jobsite inspection as they were “relatively minor.” Investigator Ellington clarified that the Registrar “does not enforce labor laws.” Investigator Ellington testified that proof of workers’ compensation insurance or lack thereof “should not stop work from being done.”

Investigator Ellington testified consistently with the findings contained in the Written Directive and his notes.

Tina Markowski, Chief Operating Officer of Complainant, testified at hearing that Complainant had requested from Respondent at the time of contract and multiple times thereafter, proof of Respondent’s workers’ compensation insurance. Ms. Markowski acknowledged that her only communication with Respondent was through Mr. Bennett, that the installation was performed on June 1, 2020, and that she was not present for the installation, and therefore, was unaware of who performed the installation. Ms. Markowski testified that Mr. Bennett had called to inform her that one of his workers broke a toilet while on the jobsite.

Billy Johnson, owner of Complainant, is residing in the house where the shutters were installed. Mr. Johnson testified that he contacted Mr. Bennett after receiving a solicitation on Instagram from Mr. Bennett. Mr. Johnson testified that he was not present for the installation of the shutters, however, he met Mr. Bennett at the jobsite and two men were present.

Mr. Bennett testified that he received an Instagram message from Mr. Johnson on January 28, 2020, and met him at the jobsite that day. Mr. Bennett testified that the home was still under construction, but he was able to take measurements. Mr. Bennett testified that he was not able to install the shutters in the office of the home because he could not match the wood as Mr. Johnson had requested. Mr. Bennett testified that Mr. Johnson agreed to accept a credit for those shutters.

Mr. Bennett placed the order for the shutters within one week of the contract date. Mr. Bennett explained that there was a delay in installation due to delays in obtaining supplies due to the COVID-19 pandemic. Mr. Bennett testified that the installation took one day and was performed on June 1, 2020. Mr. Bennett testified that the home was still under construction on that date.

Mr. Bennett testified that he personally performed the installation at the home, and had two “helpers” with him. Mr. Bennett explained that 80% of an installation job consists of unloading and laying out the materials, adjusting, and caulking. Mr. Bennett testified that Mr. Johnson was not present for the installation.

Mr. Bennett testified that his wife called Complainant the week after the installation to schedule a time for Respondent to perform any necessary adjustments to the shutters. Mr. Bennett’s wife told him that she had an unpleasant conversation with Mr. Johnson and was in tears by the end of the conversation due to Mr. Johnson’s threats. Thereafter, Mr. Bennett called Mr. Johnson. Mr. Bennett testified that Mr. Johnson told him that he did not want him back to the jobsite and that he “would kill him.” Mr. Bennett filed a pre-lien believing that would spur Complainant to allow him back to the jobsite to perform adjustments and receive payment. The pre-lien was recorded on August 20, 2020. Complainant filed the instant Complaint on August 25, 2020.

Mr. Bennet has stood ready, willing, and able to personally perform all work in the Written Directive, however, Complainant has refused to allow him access to the jobsite. In a September 21, 2020 letter to Investigator Ellington, Complainant conditioned any corrective work upon the following terms:

As part of this directive corrective work, the Respondent will be required to provide Certificate(s) of Insurance naming Amberwood Homes, LLC as an additional insured for GL/ Workman’s Compensation and Auto Insurance before they may do this work.

See Complainant’s Exhibit 14. Emphasis in original.

The parties spent a great deal of time addressing Complainant’s requests to Respondent for proof of workers’ compensation insurance. This was not an item specified in Complainant’s filed Complaint and not ordered to be addressed in the Written Directive, nor did the Registrar charge Respondent with a violation of statutes and rules pertaining to workers’ compensation insurance. Consequently, this issue is outside the scope of the hearing.

Administrative notice is taken of Respondent’s prior License record on January 29, 2021. Such prior License record reflects that Respondent’s License No. 234749 was first issued on July 3, 2007, and is active. Such prior License record also reflects that there is only one open complaint, that being the instant Complaint, and no prior complaints or discipline against Respondent’s license.

The Registrar’s substantive policy statement 2017.01 sets out the following pertinent information:

Abuse of the Administrative Process

The Registrar of Contractors relies on complaints to carry out some of the mandates of the office. When anyone attempts to use the complaint process inappropriately, it undermines the Registrar’s ability to perform the duties that the citizens of Arizona depend on to ensure that the buildings in which they live, work, and play are safe. When that process is compromised, it is appropriate to dismiss the complaint in its entirety.

. . . .

Cooperation

“American jurisprudence implies in all contracts the obligation to cooperate in the performance of the contract and not to delay, hinder, or interfere with the performance of other parties. Over the years, owners have been found on numerous occasions to have breached their implied duty of cooperation in the context of construction contracts. Such instances have included failure to provide timely site access, failure to inspect the work or complete other work necessary to allow the contractor to proceed, and failure to reasonably schedule and coordinate owner-controlled work.”

Source: Philip L. Bruner and Patrick J. O’Connor, Jr., Bruner & O’Connor on Construction Law, § 12:55 (West Group 2002) (citing inter alia Restatement (Second) of Contracts §§ 212 to 223); id. § 9:99 (noting subsidiary duties, including “an ‘implied duty’ to make timely decisions” and “an ‘implied duty’ to exercise inspection and approval rights reasonably”).

Denial of Access

Complainants are not prevented from refusing access because of their right to exclude others from their homes and it would not be appropriate to require contractors to trespass. [But it] is recognized that lack of access impinges on one party’s ability to defend itself and utilizing the benefits of the Registrar of Contractors is a privilege. Therefore, it is recommended that the Registrar dismiss complaints in which access is denied.

. . . .

Notice and Opportunity to Cure

A breach cannot be said to be material if it is curable, notice to cure is given, and prompt steps are taken to cure or to offer assurances of cure. The right of a breaching party to be given an opportunity to cure its own material breach is an ancient equitable principle.... Cure is relevant to materiality by virtue of its focus on elimination of the breach and its implied assurance of intent to tender adequate future performance.... Providing a cure notice of curable breaches deemed by the nonbreaching party to be sufficiently material to warrant termination for cause is a fundamental prerequisite to termination.... Unless expressly waived, the right to cure is implied in every contract as a matter of law.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). A party asserting an affirmative defense has the burden of establishing the affirmative defense.

The standard of proof on all issues in this matter is that of a preponderance of the evidence. A.A.C. R2-19-119.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 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.” Black’s Law Dictionary 1373 (10th ed. 2014).

A.R.S. § 32-1154(A) provides:

The holder of a license or any person named on a license pursuant to this chapter may not commit any of the following acts or omissions:

. . . .

3. Violation of any rule adopted by the registrar.

. . . .

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. . . .

A.A.C. R49108(A) provides that “[a] contractor shall perform all work in a professional and workmanlike manner.”

Substantive policy statement means:

[A] written expression which informs the general public of an agency’s current approach to, or opinion of, the requirements of the federal or state constitution, federal or state statute, administrative rule or regulation, or final judgment of a court of competent jurisdiction, including, where appropriate, the agency’s current practice, procedure or method of action based upon that approach or opinion. A substantive policy statement is advisory only.

A.R.S. § 41-1001(22).

“Statutes shall be liberally construed to effect their objects and to promote justice.” A.R.S. § 1-211(B). 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).

The Registrar neither demands nor expects perfection from a licensee on the licensee’s first attempt at work. A licensee must be given a reasonable opportunity to remediate workmanship issues prior to the imposition of discipline against its license. In an administrative hearing, however, Respondent is responsible to establish a lack of opportunity or the preclusion from doing so.

Regarding the Registrar’s charge of poor workmanship, the credible evidence of record established that only minor adjustments to the shutter installation remained and Respondent has been ready, willing, and able to perform the work. However, Complainant placed conditions upon Respondent’s performance of that work and precluded Respondent from accessing the jobsite.

Regarding Respondent’s alleged failure to comply with the Written Directive, the Administrative Law Judge concludes based on the credible, probative, and substantial evidence presented at hearing that Respondent established valid justification for not complying with the Written Directive. Complainant placed conditions upon Respondent’s performance of that work and prevented Respondent from accessing the jobsite because Respondent did not acquiesce to those conditions.

Considering Complainant’s disingenuous dealings with Respondent, Respondent’s valid justification for not complying with the Written Directive, and the fact that Respondent has been licensed since 2007 without any other complaints against his license, are all factors in mitigation. There was no substantial evidence adduced showing that Respondent was unscrupulous, unqualified, or financially irresponsible. Consequently, it would not be fair or just to impose discipline against Respondent’s license.

Considering the factors set out in the Registrar’s substantive policy statement, it is appropriate to dismiss this matter.

RECOMMENDED ORDER

It is recommended that the Registrar dismiss Complaint Number 2020-04113 against Respondent.

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, February 1, 2021.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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