ALJDEC decisions subject to certification as final

2020A-05308-CHC-ROC · Registrar of Contractors · 2021-06-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Branden R Burleson ,

COMPLAINANT

Desert Prestige Builders, Inc.

License No. ROC 329084,

RESPONDENT

No. 2020A-05308-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: March 25, 2021

APPEARANCES: Branden R. Burleson on his own behalf; Eric Linder for Respondent

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On February 23, 2021, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on March 25, 2021 at the Office of Administrative Hearing.

Through its Notice of Hearing ROC alleges that Respondent may have violated Ariz. Rev. Stat. sections 32-1154(A)(3) and (A)(22).

Respondent Desert Prestige Builders Inc. holds license No. 329084 issued by ROC. Eric Linder is an officer in the corporation and Respondent’s qualifying party. Ryan Brunelle is also an officer in the corporation.

Complainant is Branden R. Burleson.

Messrs. Linder and Brunelle appeared and testified for Respondent.

Mr. Burleson appeared and testified and presented the testimony of James Woelfel.

ROC investigator Mike Wiskow also testified.

Respondent prepared the floor and installed porcelain tile at Mr. Burleson’s house. The Burlesons had purchased the tile themselves.

Respondent applied Zep High Traffic Floor Polish to the tile.

After the work was completed, Mr. Burleson and his wife were dissatisfied with the work. It is unclear exactly when, but Respondent replaced about thirty tiles.

On or about October 12, 2020, Mr. Linder met with the Burlesons and they inspected the work.

Mr. Linder provided unrebutted testimony that the Burlesons stated that they were “embarrassed” and “nauseated” by the work, that they wanted $19,000 to replace the work, and that they did not believe Respondent was capable of correcting the work.

Mr. Linder agreed that there was some work to be corrected, but he did not agree with Mr. Burleson as to the extent of the work. Consequently, Respondent filed a request with ROC’s Building Confidence Program in an effort to get an independent party to review the work.

Over the course of several weeks, ROC attempted to contact Mr. Burleson without success. When ROC did contact Mr. Burleson, he stated his unwillingness to participate in the Building Confidence Program.

At the hearing, Mr. Burleson explained that he was unwilling to participate because ROC’s Mr. Edwards told him that ROC could not compel the Respondent to do anything, and because Mr. Linder did not agree with Mr. Burleson’s assessment of the problem, there was no way Respondent could fix those problems, and as such Mr. Burleson had nothing to gain by participating in the Program.

On October 17, 2020, Mr. Woelfel inspected the tile. He prepared a report dated October 21, 2020. Mr. Woelfel’s opinion was to the effect that there were deficiencies including: numerous areas of over grouted tile edges and corners; numerous crooked grout joint intersections; at least two tiles have excessive lippage; sloppy and misapplied sealer on the entire floor; inconsistent grout color throughout the floor; chipped tiles throughout the floor; and no movement joints installed at abutting structures.

Mr. Woelfel’s opinion was that the entire floor should be removed and replaced because any replacement tiles might not be the same shade or size as the existing tile.

Through a letter dated October 23, 2020, Mr. Burleson provided Respondent with details about what he considered to be unacceptable work, and informed Respondent that if Respondent did not pay to the Burlesons $19,757.44 by November 11, 2020, the Burlesons would pursue other legal remedies.

At the hearing, Mr. Linder testified to the effect that Respondent is a small business that could not afford to make a payment of the magnitude requested by the Burlesons.

On or about November 10, 2020, Mr. Burleson filed with ROC a complaint against Respondent alleging poor work on Respondent’s part and setting out thirteen alleged workmanship deficiencies.

ROC’s Mr. Wiskow conducted a jobsite inspection on November 23, 2020. Respondent did not attend the jobsite inspection, having informed Mr. Wiskow that it did not want to be present because things seemed a little confrontational and Respondent was of the opinion that Mr. Wiskow would provide an unbiased opinion.

On November 24, 2020, ROC issued to Respondent a Directive that provides in part:

.... You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on December 23, 2020.



DIRECTIVE REQUIREMENTS

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

Compliance Item: 2 - Excessive amount of tile lippage not within acceptable tolerances. Excessive lippage on short sides of the 12"x24" tile.

Investigator’s Observation: In five spots measured for lippage, the lippage exceeded workmanship standards of 1/32". Contractor should verify floor to make sure tile lippage is within standards. Any tile found to have lippage in excess of 1/32" should be repaired.

*Contractor should make repairs by appropriate means.

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: 4 - Chipped and jagged edge tiles installed throughout entire house.

Investigator’s Observation: There were several tiles installed that had chipped or jagged edges. Contractor should inspect entire floor and identify any tiles that are chipped or jagged.

*Contractor should make repairs by appropriate means.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(b): A contractor shall perform all work in accordance with any applicable building codes and professional industry standards. For work to be performed in accordance with professional industry standards, a contractor shall 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.

Compliance Item: 5 - Grout joint centerlines are not straight or within standard allowances.

Investigator’s Observation: Grout lines are not straight. There is a noticeable variation in the grout line when looked at down the hallway.

*Contractor should repair by appropriate means,

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 - Numerous tiles have been over grouted at joints.

Investigator’s Observation: Some tiles have grout on the edges due to excessive grout in the grout lines. This is especially noticeable in areas of excess lippage. Contractor should inspect entire floor and identify areas with excessive grout.

*Contractor should make repairs by appropriate means.

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: 8 - The floor polish/sealer was installed incorrectly/inconsistently resulting in permanent streaking and spotting throughout the entire floor.

Investigator’s Observation: There are noticeable streaks, blotchy marks and hazing (exterior) of the tiles. Contractor should repair by appropriate means.

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: 10 - Baseboards are not properly installed and finished. Grout staining on several areas of baseboards.

Investigator’s Observation: Baseboards have grout on them in some areas. Contractor should inspect baseboards and identify areas of baseboards with grout on them.

*Contractor should make repairs by appropriate means.

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.

The Directive shows that ROC had determined that the other workmanship violations alleged in Mr. Burleson’s complaint did not require correction.

On or about December 14, 2020, the parties met at the Burlesons’ house.

At that time, Respondent believed that the issues ROC ordered it to be repaired could be fixed by stripping off the Zep sealer it had applied and by replacing about 650 square feet of tile.

On December 14, 2020, Mr. Burleson wrote to Respondent stating that he expected Respondent to provide a “detailed plan of action” that included:

Square footage to be replaced

Tile replacement process

ETA of replacement tile

Anticipated demolition start date

Anticipated project completion date

Dust mitigation protocol for the entire project[]

Details of the anticipated floor stripper product, including SDS, Label and Technical Data Sheet

Details of the anticipated floor polish, including SDS, Label and Technical Data Sheet

VOC / Vapor mitigation for the floor stripper and polish application and dry/cure times

Mr. Burleson also informed Respondent that it could not begin demolition until the replacement tile had been delivered to the house.

At the hearing, Mr. Burleson volunteered that he was “micromanaging” Respondent because of Respondent’s lack of follow-through and lack of quality.

Because Mr. Burleson was of the opinion that the tile could not be salvaged, Respondent filed a claim with its insurer in the hopes of reaching a financial agreement. As of the hearing date, the insurer had inspected the work, but had not made a determination as to whether it would cover the claim.

On December 16, 2020, Mr. Linder wrote to Mr. Burleson to let him know that it had filed with its insurer and that the path forward would depend on the results of that claim. He also provided a summary of the claim information and a listing of the steps Respondent had taken to rectify the situation, which included contacting the tile manufacturer to see if the required tile was available and contacting a representative of Zep to see if the sealer could be stripped from the tile. Mr. Linder also asked if Mr. Burleson had information to show that the sealer had rendered the tile unsalvageable, which information would be helpful for the insurance claim.

On December 22, 2020, Mr. Linder wrote to Mr. Wiskow to inform him of the steps Respondent had taken to comply with the Directive and requesting an additional thirty days to comply, during which time Respondent intended to prepare a detailed scope of work for Mr. Burleson’s acceptance. Mr. Linder also informed Mr. Wiskow that Respondent was fully prepared to work with Mr. Burleson and that it would continue to do its part to get the work completed.

Mr. Wiskow was unwilling to extend the deadline and forwarded the matter to ROC’s legal department.

At the hearing, Mr. Wiskow testified that he refused to extend the deadline for Respondent to comply because Respondent had not done any construction work and he would have expected to see demolition taking place. It is not clear if Mr. Wiskow was aware that Mr. Burleson had instructed Respondent not to perform demolition work until the tile was at his house or that Mr. Burleson was micromanaging Respondent’s work.

On December 22, 2020, Respondent wrote to Mr. Burleson informing him that its insurance company had the Burlesons’ contact information and would be in contact to set up an inspection, and that Respondent had received word that the tile manufacturer did have in stock the required tile.

On December 28, 2020, ROC issued to Respondent a Citation through which ROC alleges that Respondent may have violated Ariz. Rev. Stat. sections 32-1154(A)(3) and (A)(22).

On December 29, 2020, Mr. Burleson wrote Respondent again requesting a detailed plan for repairs and the insurance claim information.

On December 31, 2020, Respondent informed Mr. Burleson that it had reserved the necessary tile, but could not provide a detailed plan until the insurance claim was resolved.

On January 29, 2021, Mr. Linder emailed Mr. Burleson to inform him that Respondent had 750 square feet of tile that it hoped to get delivered to the Burlesons’ house, and that the insurance claim was still pending. On February 5, 2021, Mr. Burleson responded stating that as he previously informed Respondent, he would not allow them into the house until Respondent provided a detailed plan and noting that Respondent had not provided him with the details of the insurance claim.

As of the hearing date that tile was in a supplier’s warehouse on “hold” for Respondent.

Mr. Brunelle acknowledged that the Zep sealer is not specifically designed for porcelain tile, but Respondent has used it on the order of 100,000 square feet without incident, including the tile in Mr. Brunelle’s own home. He noted that the product could be removed with Zep brand stripper, provided that the stripper was properly used.

Mr. Burleson had admitted into evidence two photographs showing flaking tile. Respondent had never seen that kind of flaking with the Zep High Traffic Floor Polish.

Mr. Brunelle testified to the effect that Respondent had intended to correct any deficiencies but felt rebuffed at every turn and that Mr. Burleson was of the opinion that Respondent was not competent to do the work.

Mr. Linder also testified to the effect that Respondent always intended to correct any deficiencies and he acknowledged that deficiencies did exist.

When asked why Respondent did not have a plan to correct the work before ROC issued its Directive, Mr. Linder explained that in the tile business, it is a bad idea to make snap decisions and that one must get all the information before acting. In this case, Respondent was working to gather information to determine whether Mr. Burleson’s demands had merit, and if so, to make the required corrections. This included pursuing ROC’s Building Confidence Program. Respondent did have ideas as to how to go forward, but Mr. Linder’s position was that had been premature to provide a plan.

Mr. Burleson requested that Respondent’s license be revoked or suspended so that he may access the Recovery Fund.

After the matter had been concluded, Respondent informed the tribunal that its insurance company was willing to make a payment to Mr. Burleson and that Respondent was willing to take additional steps to resolve the matter. Consequently, the matter was reopened to allow Mr. Burleson time to evaluate the new information. Mr. Burleson subsequently informed the tribunal that the insurance company had declined coverage.

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

***

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”).

***

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.”

***

Professionalism

***

Licensed contractors are expected to have sufficient professionalism to deal with difficult clients and situations.

CONCLUSIONS OF LAW

Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; 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. Ariz. Admin. Code § R2-19-119.

“At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2).

“At a hearing on an agency's imposition of fees or penalties or any agency compliance order, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(3).

A preponderance of the evidence is:

The 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).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 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).

There was no substantial evidence showing that Respondent is unscrupulous, unqualified or financially irresponsible.

The Administrative Law Judge may consider ROC’s administrative record. See Ariz. Admin. Code § R4-9-118.

Ariz. Rev. Stat. section 32-1154(A) provides that

The holder of a license or any person listed on a license pursuant to this chapter shall 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. 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.

Ariz. Admin. Code section R49108(A) provides that “A contractor shall perform all work in a professional and workmanlike manner.”

Ariz. Rev. Stat. section 32-1154(E) provides that ROC may impose a civil penalty of not to exceed five hundred dollars on a contractor for each violation of Ariz. Rev. Stat. section 32-1154(A)(22).

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....

Ariz. Rev. Stat. § 41-1001(22).

Respondent acknowledges that there are workmanship issues that require correction. The preponderance of the evidence shows that Respondent violated Ariz. Admin. Code section R4-9-108(A), which is a violation of Ariz. Rev. Stat. section 32-1154(A)(3). The scope of the deficient work is not known however because ROC’s Directive did not provide a complete assessment, but rather ordered Respondent to inspect its work to identify all deficiencies. Nevertheless, the preponderance of the evidence shows that no more than 650 square feet of tile needs to be replaced.

Although Mr. Woelfel was of the opinion that the floor needed to be replaced, his opinion is not persuasive because it was based on his assumption that any replacement tile would not be the same size or color as the existing tile. Moreover, Mr. Wiskow did not agree that all of the purported deficiencies identified by Mr. Woelfel were violations of ROC’s workmanship standards.

Although Respondent did not comply with ROC’s Directive within the time ordered, it has shown that its failure to do so was justified and not a violation of subsection 32-1154 (A)(22). This conclusion follows from the facts that Respondent was making good faith efforts to comply with the Directive and has shown a willingness to make any required repairs; Mr. Burleson acknowledged that he was trying to micromanage Respondent’s work during the time ROC allowed; and ROC did not extend the time for compliance because Respondent had not performed demolition work, whereas Mr. Burleson had directed Respondent not to perform demolition during the time at issue.

Because Respondent has committed a workmanship violation, ROC has authority to discipline its license. In this case however, no discipline is warranted because Respondent has made good faith efforts to correct its work, starting with its request to participate in the Building Confidence Program, whereas Mr. Burleson set unreasonable requirements through his efforts to micromanage Respondent and the evidence shows that Mr. Burleson was not amenable to accepting anything less than a complete replacement of the floor, which was not proven to be required.

Consequently, this matter should be dismissed.

RECOMMENDED ORDER

IT IS ORDERED that case number 2020-05308 is dismissed.

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 is forty days after the date of that certification.

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-137160-45720000Done this day, June 16, 2021.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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001

-137160-45720000