ALJDEC decisions subject to certification as final

2021A-00217-RFA-LS-ROC-RS · Registrar of Contractors · 2024-06-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Areic E. Bailey,

COMPLAINANT,

Walk On Wood, Inc.

License No. ROC 217361,

RESPONDENT.

No. 2021A-00217-RFA-LS-ROC-RS

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: May 24, 2024

APPEARANCES: Lawrence Felder, Esq. represented Complainant Areic E. Bailey who was present. Roger Pride appeared on behalf of Respondent Walk on Wood, Inc. Assistant Attorney General Mona Baskin represented the Arizona Registrar of Contractors. Dylan Warwick, Ryan Ledverowski, and Nathan Artlit appeared as witnesses.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

EXHIBITS ADMITTED INTO EVIDENCE: Arizona Registrar of Contractors’ Exhibits 1-8.

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (“Registrar”) issued License Number 217361 to Walk on Wood, Inc. (“Respondent”).

On or about January 17, 2021, the Registrar received a Complaint against Respondent from Areic Bailey (“Complainant”) alleging poor work with respect to Respondent’s contracted scope of work. Respondent’s scope of work pursuant to the terms of the parties’ contract, as it relates to the instant matter, included installation of wood flooring throughout Complainant’s residence. The flooring was installed on all three levels and encompassed approximately three thousand square feet.

As a result of the Complaint, the Registrar issued a Citation against Respondent charging possible violations of A.R.S. § 32-1154(A)(2)(a), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(a), A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158, and A.R.S. § 32-1154(A)(22).

Respondent filed a timely answer to the Citation. An administrative hearing was held. In the December 17, 2021 Decision, the undersigned Administrative Law Judge considered Respondent’s arguments and concluded that Respondent violated all of the charged provisions of this State’s contracting laws.

On December 28, 2021, the Registrar issued a Final Administrative Decision and Order accepting the December 17, 2021 Decision and imposing a five day suspension, as well as a $500.00 civil penalty. The effective date of that Order was February 8, 2022.

Complainant thereafter filed a claim with the Residential Contractors’ Recovery Fund (“the Fund”) to recover the cost of performing the corrective work. As part of the claim process, Complainant submitted bids from two different contractors that Complainant had received to perform the repair to the project.

The Registrar issued a Notice of Administrative Award, finding that Complainant’s actual damages were $30,000.00. Respondent requested a hearing, believing the award was too high. Complainant did not contest the amount of the administrative award. The Registrar referred the matter to the Office of Administrative Hearings for an evidentiary hearing.

A hearing was held on May 24, 2024.

Hearing Evidence

The Written Directive from the Registrar specified the following in pertinent part:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A). . . .

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

Compliance Item: 1 - Floor was laid incorrectly overall. Poorly and quickly laid with the Sub contractor (Nathan) yelling at employees to finish job quick on all visits. They openly talked about under-bidding the job. One employee walked off the job 1/2 day in because they were arguing that the floor could not be laid properly in the time Walk on Wood was pushing them to meet. We have a Ring security system and have audio recordings of these conversations. If legal intervention is needed I can make these available with. Roger spent less than 10 minutes in my home after he got deposit. He inspected no work, and took 2-3 picture from a distance, collected balance and drove off

Investigator’s Observation: There are several sections of this floor that are clustered with smaller pieces, some of which are cuts, resulting in a lack of a bevel on the cut end.

In numerous areas, the lap between planks is smaller than the manufacturer installation guidelines call for.

The lap between planks is to be no less than 6". The laps that exist range from 2" to 4".

The manufacturer guidelines are silent regarding the use of cut pieces in the field.

Cut pieces are recommended to be used at the walls.

I did confirm with the flooring manufacturer that the boxes to come with varying lengths starting at 750mm (29.5") to 4'. Each box will have 4 pieces that are 4' or longer.

Every third box is to have one 7' piece. I noted no pieces that long.

I did note numerous pieces that were in the field and were less than 29.5" meaning they were likely cut.

The remainder of the allegation is not relevant to the process and is not actionable.

The respondent is to correct the improper laps and improper clustering of short pieces in an appropriate manner.

Compliance Item: 2 - Stairs were not laid properly. Multiple small boards instead of longer single boards, stairs flex and creak immediately after install

Investigator’s Observation: At the stairs, the respondent used pieces for the installation vs. full length planks.

My research indicates that this could be done but may not be the most popular method of installation.

That said, the installation at the stairs has joints that line up as you traverse the stairs.

The joints need to be staggered and not in line.

The stairs also are creaking as weight is applied to the stairs.

The respondent is to correct the installation at the stairs in an appropriate manner.

Compliance Item: 4 - Area around fireplace was left unfinished and concrete can be seen all around fireplace

Investigator’s Observation: There is a gap (necessary) at the fireplace/end of floor however that gap has not been 'finished'

The respondent is to correct the condition in an appropriate manner.

Compliance Item: 5 - large gaps throughout the floor. There are hundreds of joints where I can fit a coin/ feeler gauge between wood. The subfloor can be seen under light. This is the Entire main level (3 story home) and less throughout remaining levels

Investigator’s Observation: I only noted a couple of locations that had excessive gapping. The majority of the installation butt joints were tight.

I noted no exposed substrate. Note: flooring issues are to be viewed from a standing position and under natural light.

The respondent is to correct any open butt joints in an appropriate manner.

All errors in original.

At the Compliance Inspection, the following was determined by Registrar Investigator Jim Dimond:

Compliance Findings:

Compliance Item 1: Floor laid incorrectly overall

Investigator’s Observation: The areas of clustered smaller pieces appear to have been corrected.

There are several areas that still have an end joint lap of less than 6”. The manufacturer specs mandate 6” or more. This is on the main floor and upstairs bedrooms.

The respondent is not in compliance regarding the butt joint laps.

Compliance Item 2: Stairs were not laid properly

Investigator’s Observation: The pattern on the stairs does not appear have been corrected.

Compliance Item 4: Area around fireplace gap

Investigator’s Observation: This item has been corrected and meets standards.

Compliance Item: Large gaps throughout the floor.

Investigator’s Observation: No excessive gapping was noted at the inspection

Note: The respondent is not in compliance

All errors in original.

Dylan Warwick, Legal Assistant and Claims Reviewer for the Fund, testified that he reviewed the Complaint, the Written Directive, the Compliance Jobsite findings, the December 17, 2021 Decision regarding the underlying Complaint, the parties’ contract, the payments made by Complainant, the payment received from Respondent’s bonding company, the deed to the property, the trust documents pertaining to the property, and bids submitted by Complainant, in determining that Complainant was eligible to file a claim with the Fund and in calculating Complainant’s actual damages.

Mr. Warwick determined upon his review, that Complainant owned and occupied the home when he entered into the contract with Respondent, when he paid Respondent, and when the work was performed by Respondent.

Mr. Warwick testified that the Registrar requires a complainant to file a claim with a respondent’s bonding company as a prerequisite to obtaining a payout from the Fund. Complainant did so and received a $4,250.00 payment from Respondent’s bonding company.

Mr. Warwick testified that his calculations took into account the contract price of $33,448.06 and the payments made toward the contract price in the amount of $37,881.00, and concluded that there was no remaining balance on the contract.

Complainant submitted two estimates for completion of the project to the Fund. The initial bid from Desert Harwood Flooring was rejected by the Registrar because it included replacement of the flooring and the Registrar determined that the entire floor did not need replacement. Consequently, Complainant obtained and submitted a revised bid from Desert Harwood Flooring in the amount of $70,008.00.

After consultation with Investigator Dimond, Mr. Warwick subtracted various amounts from the bid as not being in line with the necessary corrective work. Mr. Warwick deducted a total of $29,525.00 from the $70,008.00 bid, leaving a balance of $40,483.00, from which he subtracted the bond recovery in the amount of $4,250.00, which calculated to actual damages in the amount of $36,233.00. However, the maximum allowable payout from the Fund is $30,000.00. As such, Mr. Warwick recommended a payout from the Fund to Complainant in the amount of $30,000.00.

Roger Pride, Respondent’s owner, testified that he has been in business for twenty years with an unblemished record and believes “this was done on purpose” and was a “combat mission from the beginning.” Mr. Pride asserted that Complainant should not be awarded monies from the Fund because he “has no intent to replace” the flooring. Mr. Pride testified that he believes the proposed award is excessive and that the floor does not need replacement.

Complainant did not agree with Mr. Warwick’s and Investigator Dimond’s deductions. However, such disagreement is irrelevant to the instant proceeding as Complainant did not request a hearing, and the proposed award is the maximum allowable under statute.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

A.R.S. § 32-1132(A) provides that “[t]he residential contractors' recovery fund is established, to be administered by the registrar, for the benefit of a claimant damaged by an act, representation, transaction or conduct of a residential contractor licensed pursuant to this chapter that is in violation of this chapter or the rules adopted pursuant to this chapter.” The Registrar’s final decision in the underlying workmanship case giving rise to the instant matter establishes that Respondent’s work violated the sections of A.R.S. § 32-1154(A) that were charged in the Citation.

For the purposes of an award under A.R.S. § 32-1132(A), A.R.S. § 32-1133.01(B) provides as follows:

An award from the residential contractors' recovery fund may not exceed the actual damages suffered by the claimant as a direct result of a contractor's violation. Actual damages:

May not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines.

Must be established by bids supplied by or the value of work performed by a person that is licensed pursuant to this chapter if the person is required to be licensed pursuant to this chapter.

When the Registrar has calculated the amount of a complainant’s compensable damages and proposed a payout from the Fund to which s/he is entitled, the calculation is a prima facie showing of the amount that the complainant is entitled to recover as a payout from the Fund. In this case, Respondent requested a hearing challenging the Recovery Fund payout.

“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.”

After review of all the evidence, the Tribunal concludes that Complainant is eligible for an award from the Fund and that the award proposed by the Fund accurately reflects Complainant’s actual damages. Accordingly, Complainant is entitled to a payout from the Fund in the amount of $30,000.00.

RECOMMENDED ORDER

In view of the foregoing, IT IS ORDERED that on the effective date of the final Order in this matter, the Residential Contractors’ Recovery Fund shall pay $30,000.00 to Complainant Areic E. Bailey.

IT IS FURTHER ORDERED that under A.R.S. § 32-1139(B), the Registrar shall charge $30,000.00, plus interest at a rate of ten percent a year, to Respondent Walk on Wood, Inc.’s License Number 217361.

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.

-54864001

001

-137160-45720000Done this day, June 6, 2024.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Tom Cole, Director

Registrar of Contractors

Lawrence J. Felder, Esq.

RESOLVERE LAW, PLLC

[email redacted]

Walk On Wood, Inc.

[email redacted]

Mona Baskin

Assistant Attorney General

[email redacted]

By: OAH Staff