ALJDEC decisions subject to certification as final

2020A-05250-CHC-ROC · Registrar of Contractors · 2021-06-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Karen Lynn Hunnicutt, Esq.,

COMPLAINANT,

v.

Cobblestone Stucco LLC

License No. ROC 320757,

RESPONDENT

No. 2020A-05250-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 26, 2021 at 9:00 AM.

APPEARANCES: Karen Lynn Hunnicutt, Esq. (“Complainant”) appeared on her own behalf with Dana Moir as a witness. Albert Bernal appeared on behalf of the Arizona Registrar of Contractors (“Registrar”). Joseph Bernard appeared on behalf of Cobblestone Stucco LLC (“Respondent”). NAME and NAME 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 Arizona Registrar of Contractors (“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 June 26, 2016, the Registrar issued License No. 320757 for Specialty Dual CR-36 Plastering contracting to Respondent. The license is in good standing and renewed through June 30, 2022. Joseph Claude Bernard is listed on the license as the Qualifying Party/Member. Denise Jeanine Bernard is also listed on the license as a Member. Respondent’s address of record for the license is 16413 N. Cobblestone Ln. Fountain Hills, AZ 85268-1538. Respondent has a $6,750.00 surety bond for the license issued by RLI Insurance company, effective June 19, 2018. There is no prior disciplinary record listed for the license, but there is one open complaint against the license which is presumed to be related to this matter.

On or about November 05, 2020, the Registrar received a 7-item complaint from Complainant against Respondent’s License No. 320757 poor workmanship on their project. Attached to the complaint was a copy of the parties contract, an invoice, and Complainant proof of payment(s) to Respondent. The Registrar designated it Complaint No. 2020-05250 and assigned to Mike Bernal (“Investigator Bernal”) for investigation.

On November 13, 2020, Investigator Bernal issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on December 02, 2020, at 10:30 a.m. On November 17, 2020, the parties were notified that the inspection was rescheduled for 1:30 p.m. on December 02, 2020.

On December 02, 2020, presented to the project site for inspection. Respondent was present. Investigator Bernal inspected the work that had been performed on the project to date. He also took 47 photographs of the project site. When he was finished, Investigator Bernal drafted his Inspection Notes. Ultimately, Investigator Bernal substantiated four (4) of Complainant’s complaint items. Specifically, Investigator Bernal substantiated complaint items 1 and 5-7 and noted the items were “not performed in accordance with professional industry standards.”

On December 21, 2020, 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 December 21, 2020, Investigator Bernal issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated some of Complainant’s workmanship allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on January 25, 2021, to notify the Registrar of its compliance with the Directive or face discipline pursuant to Ariz. Rev. Stat. § 32-1154(A)(22) and 32-1154(E).

On January 25, 2021, the parties agreed to extend Respondent’s Directive compliance period through February 25, 2021. Investigator Bernal issued an Amended Written Directive from the Registrar (“Amended Directive”) on the same date to memorialize the agreement.

On March 04, 2021, Investigator Bernal issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on March 05, 2021, at10:30 a.m.

On March 05, 2021, Investigator Bernal presented to the project site for the compliance inspection. Respondent was present. Investigator Bernal took 36 photos of the project site. When he was finished with his inspection, Investigator Bernal drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Bernal determined that Respondent failed to remediate the project. Investigator Bernal specifically noted that complaint items 1, 5, and 6 had not been corrected in accordance with professional industry standards.

On March 18, 2021, Investigator Bernal escalated the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On March 24, 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(a), and 32-1154(A)(22). Respondent was given until April 08, 2021, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On April 06, 2021, the Registrar received Respondent’s Answer. In pertinent parts, Respondent argued that he and an unlicensed painter were hired for the underlying project and that the painter’s workmanship was at issue, not his. Respondent also argued that he was not responsible for his own use of elasomeric paint on the project because he obtained it from a Complainant’s homeowners’ association’s (“HOA”) cabana.

On April 12, 2021, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on May 26, 2021. Per the April 21, 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(b)

Charge 2: A.R.S. § 32-1154(A)(22)

Hearing Evidence

Complainant testified on her own behalf, called Investigator Bernal and Dana Moir as witnesses, and submitted Exhibits B, D, F and I into the record. Joseph Bernard 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:

Complainant owns residential property in a planned community located at 17105 E. Montana Dr. Unit 204 Fountain Hills, AZ 85268. Complainant’s neighborhood, including her property, is governed by an HOA.

The HOA requires uniform acrylic paint to be used by all unit owners.

On an unknown date Complainant decided to replace 14 of the windows in her residence, and separated the project into three sections to be completed by three different individuals: a window installer, a stucco repair contractor, and a painter (“Painter”). Respondent was hired to perform the second phase of the project, and patch the stucco around Complainant’s replacement windows.

Per the terms of their agreement, Respondent was to “remove stucco around windows” for window installation and apply “synthetic finish corner to corner,” where possible.

Complainant paid Respondent for his portion of the project in full.

Respondent’s portion of the work on the project commenced May 15, 2020, and concluded on October 15, 2020.

Complainant’s painter did not finish the final portion of the project because of Respondent’s poor workmanship on his portion of the project.

Respondent did not remediate the project per the Registrar’s Directive because he was “afraid Complainant would not like the sandblast finish.” Respondent also accidentally used elasomeric paint on the job because he did not check the product prior to use. Instead, Respondent erroneously assumed all paint stored the HOA’s gazebo was acrylic.

In closing, Complainant argued that the Registrar should discipline Respondent’s license because he used an incorrect stucco finish on their project and failed to make corrections as instructed by the Directive.

In closing, Respondent argued that he could have made corrections to his work earlier if Painter had contacted him directly, would not have used the paint from the gazebo if Complainant had told him what paint to use, and could have utilized a sandblast finish if Complainant had stated her preference when their contract was originally executed.

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(b) requires that a contractor perform “[a]ll work in accordance with any applicable building codes and professional industry standards” and “use such skills, prudence, and diligence in performing and completing tasks undertaken that the completed work meets the standards of a similarly licensed contractor possessing ordinary skill and capacity.”

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.”

Here, the underlying contract was imprecise regarding Respondent’s specific obligations and duties and Complainant expectations and rights. It is clear that the parties failed to verbally communicate the details omitted in their contract. That being said, what the record reflects is that Complainant paid Respondent in full on their contract, and that some of the work Respondent performed fell below the Registrar’s minimum workmanship requirements. The record further establishes that Respondent failed to timely and completely comply with the Registrar’s Directive.

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 the 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 poor workmanship and failures to communicate effectively are his own. Respondent’s argument that Painter’s unlicensed work subverted his own is meritless because Respondent failed to supply the tribunal with an indicia of evidence to support his claim.

Therefore, because Complainant has established Respondent’s violations of Ariz. Rev. Stat. §§ 32-1154(A)(3); Ariz. Admin. Code R4-9-108(b), 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 Builders Cobblestone Stucco LLC, ROC License No. 320757, be suspended for two (2) business 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, June 11, 2021.

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors