ALJDEC decisions subject to certification as final

2020A-05650-CHC-ROC · Registrar of Contractors · 2021-05-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Susan E Scott,

COMPLAINANT,

v.

Floors N More Inc.,

License No. ROC 074936,

RESPONDENT.

No. 2020A-05650-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 26, 2021 at 1:00 PM.

APPEARANCES: Susan Scott (“Complainant”) appeared on her own behalf with Stephen Lawton as a witness. James Hicks appeared on behalf of Floors N More Inc. (“Respondent”). Richard Scott and Lisa Hicks 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 January 20, 1988 the Registrar issued License No. 074936 Specialty Dual CR-8 Floor Covering contracting license to Respondent. The license is currently active and renewed through December 31, 2022. James Mathew Hicks is the Qualifying Party/Officer on the license. Respondent’s address of record for the license is 9855 W. Bell Rd., AZ 85351-1344. Respondent has an active $6,750.00 surety bond on the licensed issued by Platte River Insurance Company effective December 15, 2014. There is no prior discipline noted for the license, save one open complaint which is presumably Complainant’s.

Complainant owns residential property located at 11921 W. Jackson St. Avondale AZ 85323.

On or about February 05, 2020, Complainant and Respondent entered into a $5,136.00 for carpet in the living room and flooring in the kitchen of Complainant’s residence. Complainant paid for the project in full. The project commenced on February 13, 2020, and was completed the same day.

On December 03, 2020, the Registrar received a narrative complaint from Complainant against Respondent’s License No. 074936 alleging poor workmanship of their project. The Registrar designated it Complaint No. 2020-05650 and assigned to Stephen Lawton (“Investigator Lawton”) for investigation.

On December 07, 2020, Investigator Lawton issued a Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on December 22, 2020, at 1:30 p.m.

On December 22, 2020, Investigator Lawton 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 14 photographs of the project site. When he was finished, Investigator Lawton drafted his Inspection Notes. Ultimately, Investigator Lawton identified that Complainant’s narrative complaint contained 2 specific complaint items, of which he substantiated both. Specifically, Investigator Lawton determined that there was a visible T-seam in the carpet, as well as a visible seam running east to west in the carpet. Investigator Lawton concluded that Respondent’s carpet installation failed to meet the Registrar’s minimum workmanship standards.

On January 11, 2021, Investigator Lawton issued a Written Directive from the Registrar (“Directive”) to Respondent because he substantiated Complainant’s workmanship allegations against Respondent. Respondent was put on notice that it had until 5:00 p.m. on February 11, 2021, 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 February 11, 2021, Investigator Lawton issued a Compliance Jobsite Inspection Notification Letter to the parties, advising that he would conduct an inspection of the project on February 17, 2021, at 1:00 p.m.

On February 17, 2021, Investigator Lawton inspected the corrective work that had been performed on the project and took 2 photographs. When he was finished, Investigator Lawton drafted his Compliance Jobsite Inspection Notes. Ultimately, Investigator Lawton determined that Respondent had satisfactorily remediated complaint item 2, but that Respondent had not performed corrective work necessary to remediate complaint item 1.

On February 18, 2021, Investigator Lawton forwarded the matter to the Registrar’s legal department with the issuance of a Citation Recommendation.

On February 12, 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 13, 2021, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. §§ 32-1154(A)(22) and 32-1155.

On March 04, 2021, the Registrar received Respondent’s Answer. In pertinent parts, Respondent noted that an inspector from the manufacturer of the carpet installed in Complainant’s home inspected Respondent’s work on September 17, 2020, and determined that a “seam sealer” had not been used, and suggested Respondent utilize one to remediate the T-seam issue. On January 26, 2021, Respondent applied the seam sealer. Respondent was unaware the seam sealer failed to remediate the issue until he was advised by Investigator Lawton during the Compliance Inspection. On February 26, 2021, Respondent ordered more carpet from the manufacturer so that the affected section of Complainant’s carpet could be replaced. Delivery was scheduled for March 08, 2021. On March 03, 2021, Respondent notified Complainant of its carpet purchase and proposed installation for March 08, 2021.

On March 05, 2021, Complainant declined Respondent’s offer and countered, in pertinent part, “[Y]ou never contacted me to see if I wanted you to replace the carpet or if we could of reached some kind of cash settlement. You cannot make decisions for me to settle this. Your decision to order the carpet without reaching out to me first is all on you.”

On March 09, 2021, after verbal and written discussions between the parties took place, Complainant declined to engage in further settlement discussions with Respondent, noting in pertinent part, “Since I gave Floors ‘n More, Inc. every opportunity to correct this issue it appears you decided differently this Agreement is Voided. Please do not contact me any longer. The dissuasions are closed.” [sic]

On March 10, 2021, the Registrar referred this matter to the Office of Administrative Hearings (“OAH”), an independent state agency, for an evidentiary hearing on April 26, 2021. Per the March 19, 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)

Additional Hearing Evidence

Complainant testified on her own behalf and called Investigator Lawton as a witness. James Hicks 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:

Respondent was present for Investigator Lawton’s jobsite inspection and viewed the T-seam in Complainant’s living room carpet.

Respondent did not have the manufacturer’s inspector or Investigator Lawton verify that the seam sealer he applied satisfied the Registrar’s minimum workmanship requirement(s) between January 26, 2021, and February 11, 2021.

Respondent did not ask Complainant or the Registrar to extend the Directive’s compliance deadline.

On or about March 04, 2021, Respondent offered to refund Complainant the costs associated with her carpet install, but the parties had not entered into a settlement agreement by the date of the hearing.

The T-seam in Complainant’s carpet has not been repaired or replaced.

In closing, Complainant argued that the terms in Respondent’s March 03, 2021, letter were too vague and generic for her to accept, and that the parties likely could have resolved their dispute had Respondent communicated its intentions with Complainant prior to the expiration of the Directive’s compliance deadline.

In closing, Respondent admitted that he had misunderstood the Directive’s compliance deadline requirement and argued that he still wanted to repair the T-seam in Complainant’s carpet by replacing the affected section.

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 Complainant paid Respondent for materials and labor related to flooring and carpet installation. It is also undisputed that the work Respondent performed did not satisfy the minimum standards set for workmanship by the Registrar, and as a result Respondent was required to timely perform corrective work and remediate workmanship deficiencies on the project identified in the Registrar’s Directive. It is further undisputed that Respondent failed to timely comply with the Registrar’s Directive by February 11, 2021.

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. It is clear from the record that the parties never agreed to extend the Directive’s compliance deadline to March 08, 2021, so that Respondent could replace Complainant’s carpet. The replacement carpet was ordered 15-days after the expiration of the Directive’s compliance deadline unbeknownst to Complainant.

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 Floors N More Inc., ROC License No. ROC 074936, 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.

Office of Administrative Hearings

/s/ Jenna Clark

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors