ALJDEC decisions subject to certification as final

2020A-05017-CHC-ROC · Registrar of Contractors · 2022-04-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Neil Michael Sautner,

COMPLAINANT

Acret Construction Inc.,

License No. ROC 276574

RESPONDENT

No. 2020A-05017-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: November 17, 2021, January 20, 2022, March 3, 2022 and March 30, 2022.

APPEARANCES: Tracy Essig, Esq. appeared on behalf of Complainant Neil Michael Sautner. Terry Harris appeared on behalf of Respondent Acret Construction Inc. Registrar of Contractors Investigator Cliff Corlett appeared via Google Meet.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

______________________________________________________________________

FINDINGS OF FACT

Acret Construction (Respondent) is the holder of License No. 276574, issued by the Arizona Registrar of Contractors (Registrar).

On or about June 16, 2018, Neil Michael Sautner (Complainant) signed a contract with Respondent for construction a new home in Lake Havasu, Arizona. The contract amount was for $385,841.39.

On or about October 22, 2020, the Registrar received a Complaint containing twenty-six items against Respondent from Complainant alleging poor work with respect to project.

The Registrar assigned the complaint to Investigator Cliff Corlett. The jobsite inspection was performed on November 9, 2020.

Investigator Corlett then issued a Written Directive on or about November 17, 2020 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 or before December 17, 2020.

. . .

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

Complaint allegation: 4 - Instant Hot Water

Investigator’s Observation: Respondent agreed to reinstall the previous system under kitchen sink that Homeowner stated worked better.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 6 - Carpet needs stretched in master bedroom where baseboard was replaced.

Investigator’s Observation: The carpet at the replaced baseboard in master bedroom was loose and there was a small gap.

RESPONDENT SHOULD CORRECT BY APPROPRIATE METHODS.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Complaint allegation: 9 - Door jams are cracking away from door trim.

Investigator’s Observation: Some minor joint cracking was noted on some doorjambs.

RESPONDENT SHOULD CORRECT BY APPROPRIATE METHODS.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Complaint allegation: 11 - Floor Tile. Can see waffling image thru tile.

A tile is cracked in the hallway, along with many scratches. Still not done.

Investigator’s Observation: Waffling Image in Tile. Insufficient evidence to support allegation. Recommend installer and manufacturer be contacted about having representative inspect tile for evaluation and recommendations.

Scratched tile was not discussed at onsite inspection. However, after approx. 1 year of occupancy it would be impossible to determine if Respondent was responsible for any scratched tile.

One tile in hallway was observed to be cracked.

RESPONDENT SHOULD CORRECT BY APPROPRIATE METHODS.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Complaint allegation: 18 - Baseboard installation. Plumbing hook sticking out from wall in all the bathrooms. Should be flush mount.

Investigator’s Observation: Toilet water supply angle stops and chrome trim rings are improperly spanning the top of the baseboards.

RESPONDENT SHOULD CORRECT BY APPROPRIATE METHODS.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Complaint allegation: 22 – A/C airflow. Question on why such a difference on the AC throughout the house.

Investigator’s Observation: The contractor should be responsible for balancing dampers, registers and other minor adjustments one time for one season. Deficiencies caused by malfunction of system equipment or appliances are subject to the terms of manufacturer's warranty unless workmanship by the contractor is involved.

RESPONDENT SHOULD PROPERLY BALANCE SYSTEM ONE TIME.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Complaint allegation: 23 - Door in bedroom #2. Not finished properly.

Investigator’s Observation: Door to bedroom # 2 was missing.

RESPONDENT SHOULD PROPERLY PROVIDE AND INSTALL # 2 BEDROOM DOOR FINISHED TO MATCH THE OTHER DOORS.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

(All errors contained in the original)

On January 8, 2021, a Compliance Jobsite Inspection was held. In his notes regarding the same, Investigator Corlett noted the following:

The Respondent (Acret Construction Inc) was directed to properly correct seven (7) items from the initial complaint filed by Neil M. Sautner.

Those items were:

# 4. Instant Hot Water.

# 6. Carpet stretch and attach in Master bedroom.

# 9. Repair door jamb cracks.

#11. Floor tile, replace cracked tile and continue with manufacturers independent inspection of floor tile for evaluation and recommendations.

#18. Toilet water supply line spanning top of baseboards.

#22. HVAC air flow/balancing.

#23. Missing bedroom door. Provide, paint and install.

++++++++++++++++++++++++++++++++++++++++++++++++++++++

Per Complainants 12/18/20 email response to ROC querie, it was determined which corrections were complete.

Mr. Sautner stated:

# 4. “Issue has been resolved and accepted”. (ROC: Compliance)

# 6. “Issue has been resolved and accepted”. (ROC: Compliance)

# 9. Door jamb cracks repaired however Complainant concerned over method of Repairs used by Respondent.

ROC Observation: Painters caulking and painting is acceptable methods for correcting interior cracking on painted door jambs. (ROC: Compliance)

# 11. Floor Tile issues: “Waffeling” and cracked tile in hall.

ROC Observation: This item had not changed as parties were still awaiting

The independent floor inspection service to inspect floor and make recommendations. (ROC: Non Compliance)

# 18. Toilet water supply lines spaning the top of baseboards (3 bathrooms)

ROC Observation: Respondent has added additional fill materials to comply with directive. (ROC: Compliance)

# 22. HVAC Air flow balancing.

ROC Observation: Complainant stated at Compliance Inspection 01/08/21 that the HVAC contractor has performed the balancing work.

ROC Observation: (ROC: Compliance)

# 23: Missing bedroom door.

ROC Observation: Door had been painted and installed prior to Compliance Inspection. (ROC: Compliance)

Note:

Normal procedure after a Compliance inspection, if there are item(s) that are not in compliance the case is sent to the ROC legal department for review and citation. Because the Complainant has filed an addendum and those new items are being addressed with a new Written Directive the case is not being sent to the legal department until after the compliance date for the new written directive has passed and after another Compliance Inspection has been conducted.

(All errors contained in the original)

On January 25, 2021, a second jobsite inspection was performed based upon the addendum to the complaint contained in an e-mail on January 18, 2021 to the Registrar from Complainant. The addendum contained an additional 5 complaint items.

On January 26, 2021, Investigator Corlett issued a second Written Directive. The Directive ordered that compliance on the below items was due on or before February 25, 2021:

Compliance Item: 2 - Contractor attempts to clean/remove overspray from upper area of the house exterior has left unacceptable / unsightly stucco finish.

Investigator’s Observation: Respondents efforts to clean/remove the paint overspray on the upper façade has discolored/blemished the stucco finish.

RESPONDENT SHOULD PROPERLY CORRECT THE AFFECTED AREA MATCHING THE SURROUNDING AREA AS CLOSELY AS POSSIBLE.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 3 - Floor tile inspection report from Desert Floors Inspection Inc. dated 01/08/21, (copy attached), confirmed there was no onsite or installation deficiencies that would have caused the unacceptable tile blemishes on hallway, kitchen and master bath tiles, inferring that the blemishes are manufacturer issues / defects.

Investigator’s Observation: Desert Floor Inspections Inc. has identified 26 tiles in hallway, 3 tiles in the kitchen and an 8x8 inch area in master bath with manufacturer "blemishes".

RESPONDENT SHOULD CORRECT THE BLEMISHED TILES IN THE HALL, KITCHEN AND MASTER BATH BY APPROPRIATE METHODS MATCHING SURROUNDING TILES AS CLOSELY AS POSSIBLE.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

(All errors contained in the original)

A Compliance Jobsite Inspection on the addendum was held on March 12, 2021. In his notes regarding the same, Investigator Corlett noted the following:

Compliance Findings: Respondent is not in Compliance.

Compliance Jobsite General Notes:

(Below items from 1/26/21 Written Directive)

Complaint Allegation: 2 - Contractor attempts to clean/ remove overspray from upper area of the house exterior has left unacceptable / unsightly stucco finish.

Investigator's Observation: 01/25/21. Respondent’s efforts to clean /remove the paint overspray on the upper facade has discolored /blemished the stucco finish.

RESPONDENT SHOULD PROPERLY CORRECT THE AFFECTED AREA MATCHING THE SURROUNDING AREA AS CLOSELY AS POSSIBLE.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

COMPLIANCE INSPECTION OBSERVATIONS 3/12/21:

Respondent has returned and addressed the overspray area of the upper façade above entry. Respondents repair is a reasonable match to the surrounding areas.

RESPONDENT IS IN COMPLIANCE ON STUCCO REPAIR.

Complaint Allegation: 3 - Floor tile inspection report from Desert Floors Inspection Inc. dated 01/08/21,(copy attached), confirmed there was no onsite or installation deficiencies that would have caused the unacceptable tile blemishes on hallway, kitchen and master bath tiles, inferring that the blemishes are manufacturer issues / defects.

Investigator’s Observation: 01/25/21 Desert Floor Inspections Inc. has identified 26 tiles in the hallway, 3 tiles in the kitchen and an 8x8 inch area in master bath with manufacturer "blemishes".

RESPONDENT SHOULD CORRECT THE BLEMISHED TILES IN THE HALL, KITCHEN AND MASTER BATH BY APPROPRIATE METHODS MATCHING SURROUNDING TILES AS CLOSELY AS POSSIBLE.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

COMPLIANCE INSPECTION OBSERVATIONS 3/12/21:

Parties stated that there has been an agreement to replace the floor tile beginning April 6, 2021 and scheduled to be completed by April 30, 2021. However as of the Compliance Inspection 3/12/21, no tile has been replaced. Respondent is not in Compliance.

On March 29, 2021, 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; and A.R.S. § 32-1154(A)(22).

On or about April 9, 2021, Respondent filed an Answer to the Registrar.

On or about May 6, 2021, a Notice of Hearing was issued setting a hearing on June 8, 2021, at the Office of Administrative Hearings, an independent state agency.

After several continuances and further hearings, the hearings were held on November 17, 2021, January 20, 2022, March 3, 2022 and March 31, 2022.

Investigator Corlett testified as to his involvement and the above timeline.

Investigator Corlett testified that he also conducted a prehearing inspection, and testified that after the tile was replaced under the first directive, there were further scratches on the tiles. He testified that ultimately the general contractor is responsible for the sub-contractors work, and found that Respondent had not complied with the complaint items concerning the tile.

As to Complaint item 4, the instant hot water, Investigator Corlett testified that per the Complainant’s January 18, 2021 letter, the issue was accepted by Complainant.

As to the painting issue in the addendum to the Complaint, Investigator Corlett testified that there was insufficient evidence to support the claim regarding the color scheme or what was agreed to by the parties, but he believed that the item had been satisfactorily completed.

Complainant testified on his own behalf as well as his wife, Sharon Kay Sautner, and called Mike Heptner and Daryl Acret as witnesses. Complainant also offered 39 exhibits into evidence.

Complainant testified that as to the instant hot water, he believed he requested a system where once the water faucet was turned to hot, the water would be instantly hot. Complainant testified that he had this type of system in previous homes. Complainant testified that while he informed Investigator Corlett that he accepted the modification offered by Respondent, he was not satisfied with the same now.

As to the cracking complaint item, Complainant testified that visible cracks still existed on the patio, and disagreed with Investigator Corlett that they were not large enough to be a workmanship violation.

Complainant testified that as to the min-split air conditioning unit, that the leak was worse now than before. He testified that Respondent wiped the wall off and re-painted the same and said it was fixed. Complainant stated that the unit leaked again and that caused more marks on the wall.

As to the outside paint color, Complainant testified that it was supposed to be grey. He testified further that while Mr. Acret stated he would re-paint the same when Complainant came back from vacation, Mr. Acret then changed his mind and said he was not going to re-paint the house.

As to the tile issue, Complainant stated that he noticed that the tile had a “waffle” pattern. Complainant then testified that the Directive required Respondent to have the manufacturer and installer determine the appropriate course of action. Complainant testified that MSI, the tile manufacturer, paid the installer, Beno’s, to repair the tile. Further MSI paid to have the Soutner’s stay at a hotel while the work was being performed. Complainant testified further, that after the repair, he noticed circles on the tile, which he later found out were caused from Beno’s failing to properly use spin doctors when setting the tile.

Complainant testified that the carpet cannot be re-stretched and thus cannot be used again, therefore he believed that new carpet needed to be installed.

Further, Complainant testified that the water line supply plumbing was not aesthetically pleasing, even though Investigator Corlett said the repair was acceptable.

Complainant also testified that he never fired Respondent, but refused to let them on the property while the tile was installed the second time.

Finally, Complainant testified that he accepted the repairs in the Directive because he did not see any other solution. Complainant stated that while these issues were fixed, they were not acceptably fixed.

Sharon Sautner testified that she initially pointed out the “waffle” tile to Mr. Harris, but he did not see the same. Mrs. Sautner testified that MSI determined that the tile was defective and agreed to pay for the removal and replacement of the same. She testified further that after Beno’s installed the tile again, she immediately noticed scratches even though Beno’s stated they took all necessary precautions. Mrs. Sautner testified that while Beno’s tried to buff out the scratches, nothing worked, and Beno’s own inspector determined that the installation was improperly completed. Mrs. Sautner testified that she never heard from Respondent after this, but insisted Respondent knew there was a problem with the installation. Finally, Mrs. Sautner testified that Beno’s offered her $25,000.00 to “go away”.

As to the color of the house, Mrs. Sautner testified that she wanted the house to be painted grey, but it was beige. Mrs. Sautner testified that she agreed to pay for the paint and other supplies so that Respondent would re-paint the house, but it was never completed.

Mike Heptner testified as to the instant hot. He testified that he looked at the system that was in the Sautner’s home. He testified that the system had a recirculating line, but it could not get the hot water back to the faucets. He also testified that the “fix” the plumber used was not sufficient to make the hot water recirculate.

Complainant also called Daryl Acret to testify. Mr. Acret testified as to his conversation with the Sautner’s on September 17, 2020. He testified that he was working on “punchlist” items, when he agreed to re-paint the house. Mr. Acret testified that he changed his mind after he spoke with Mr. Harris and determined that the Sautner’s were lying about their issues.

Terry Harris testified on behalf of Respondent and offered 26 exhibits into evidence. Douglas Brumett also testified as a witness.

Mr. Brumett testified as to his involvement with the instant hot water system. He testified that during construction, he explained to the Sautner’s what the comfort system entailed. Mr. Brumett testified that he re-plumbed the house for the comfort system, but admitted that he thought that the Sautner’s wanted a re-circulating system. Finally, Mr. Brumett testified that after it was finished, the Sautner’s did not like the system, and he replaced the same, and it worked as intended.

Mr. Harris testified generally that he believed that according to Investigator Corlett, they were in compliance with everything but the tile floor.

As to the tile floor, Mr. Harris testified that he never ignored the issue and was kept informed of the repairs by Beno’s. He testified further that they were not required by the Registrar to pay for the Sautner’s hotel room, or other compensation, the Sautner’s were seeking in their settlement letter. In addition, Mr. Harris testified that Beno’s offered a cash-settlement which was refused, and that the Sautner’s would not allow Beno’s back in the home.

Next, Mr. Harris testified as the stucco/paint issue. Mr. Harris testified that it was not until August 16, 2020, that the Satuner’s mentioned the stucco was the improper color. Mr. Harris testified that he used the color that was the closest to what was allowed by the HOA. Further, Mr. Harris testified that they add the color to the stucco mix and apply it to the house, which could cause some differences in shades than what was expected.

As to the issue of the staining from the AC mini split unit, Mr. Harris testified that he believed it was from the installation of the copper so they simply painted over the same. He also testified that if he was informed of a leak he would have repaired the same, but it was his understanding that at the time of Investigator Corlett’s inspection, there was no leak, and that a separate complaint would need to be filed if there was a future leak.

Mr. Harris also testified that as to the toilet angle stops, they were rough plumbed at the height they use on every house. He testified that he was not aware that the Sautner’s wanted higher baseboards until 2 months later, and that he could have made the appropriate change prior to the rough plumb.

In addition, Mr. Harris testified that the Sautner’s paid for a comfort water system in the amount of $750.00, and that a true instant hot system would have been around $10,000.00.

In closing, Complainant argued that they were entitled to receive $112,500.00 for the damages caused by Respondent.

Mr. Harris argued in closing that Respondent was a small construction company just trying to make a living, and stated that they complied with the Directive in full including the tile, and that no action should be taken on its license, and that Complainant should be denied access to the recovery fund.

Administrative notice is taken of Respondent’s prior License record on April 15, 2022. Such prior License record reflects that Respondent’s License No. 276574 was first issued on January 15, 2012, and reflects that there is 1 open complaint, namely the present complaint.

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 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).

The preponderance of the evidence established that Respondent’s work was not in conformity with the Registrar’s standards. As to the Directives, the instant hot water was incorrect, the carpet needed to be stretched, the door jambs were cracking away from the door trim, the toilet water supply angle stops, the A/C minisplit system leak, the door in bedroom 2, the overspray from the paint, and the tile issues were all not performed in a workmanlike manner, and were essentially conceded to by Mr. Harris. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.

The evidence established that as to everything but the tile, the Sautner’s either accepted the repairs, or Investigator Corlett found that Respondent had corrected the issues. Therefore, Respondent was not in violation of A.R.S. § 32-1154(A)(22) for failing to take appropriate corrective action following a written directive from the Registrar.

However, as to the tile, the evidence showed that Respondent did not properly repair the same. The evidence proved that the tiles were defective and the manufacturer, at its own expense, provided the Sautner’s with comforts which were above and beyond the Registrar’s requirements. It is unfortunate that Beno’s then did not use the appropriate methods installing the second batch of tiles. Perhaps Mr. Harris or Mr. Acret should have hired a different tile installer or have had greater oversight of the second installation. Unfortunately, that did not happen, and the therefore as to the tile, there is a violation of A.R.S. § 32-1154(A)(22).

In closing, it is a shame that the parties were unable to resolve their differences. It was clear from the testimony on both sides that there was miscommunication over what the Sautner’s were seeking, especially as to the “instant hot” system and the paint color. These proceedings however are only to determine whether any discipline should be taken on Respondent’s license. The parties may have valid claims in a different legal forum, but the Administrative Law Judge cannot and will not make any recommended order on those issues.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 276574 for a period of five days.

It is further recommended that the Registrar require Respondent to pay the sum of $300.00 as a civil penalty pursuant to A.R.S. § 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 A.R.S. § 32-1101(A)(7), 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 30 days from the date of that certification.

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-137160-45720000Done this day, April 15, 2022.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000BY Miranda Alvarez