ALJDEC decisions subject to certification as final

2021A-01628-CHC-ROC · Registrar of Contractors · 2021-10-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Keri Andrea Granado and

Gregg Granado,

COMPLAINANTS

Dwellings Design and Construction, LLC

License No. ROC 329573,

RESPONDENT

No. 2021A-01628-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: September 28, 2021

APPEARANCES: Complainants Keri and Gregg Granado appeared on their own behalf. Leonel Gallegos appeared on behalf of Respondent Dwelling Design and Construction, LLC. Investigator Jim Dimond appeared as a witness.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Dwelling Design and Construction, LLC (“Respondent”) is the holder of License No. 329573 issued by the Arizona Registrar of Contractors (“Registrar”). Leonel Gallegos is Respondent’s qualifying party and owner.

On or about March 2, 2021, Keri Granado and Gregg Granado (“Complainants”) contracted with Respondent for Respondent to perform a bathroom and bar remodel at their home.

On or about April 15, 2021, the Registrar received a Complaint against Respondent from Complainants alleging abandonment with respect to the bar remodel project.

The Registrar assigned the Complaint to Investigator Jim Dimond. After a jobsite inspection, Investigator Dimond issued a Written Directive 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 July 2, 2021.

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

Compliance Item: 6 - On March 22 the contractor came and tore out the old bar countertop and cabinets. We’ve been asking him every day to return and finish the work. Every day he says he will be here tomorrow morning and doesn’t show up. On April 13 he showed up for 20 minutes, measured some thing and then left. He said he would be back the morning of the 14th and hasn’t shown up again.

Investigator’s Observation: The evidence does not support an abandonment charge.

There appears to be several challenges inhibiting completion of the project.

The courts have determined that access is to be granted Monday thru Friday 8AM-to 5PM.

ROC policy does not allow for additional restrictions to be placed on the respondent nor can the manner of repair be dictated.

There is a time frame for completion of the items listed and completion of the project.

The parties are encouraged to work together to facilitate the completion of the project.

Additional requirements by the respondent over and above the contractual

requirements is also inappropriate and is not workmanlike.

Compliance Item: 9 - When the concrete was removed for the P-trap, nothing was covered in plastic and proper ventilation was not used. The contractor used my exhaust fan in the bathroom. I don’t even think this goes to the exterior of the house and it is completely filled with concrete dust as is my linen closet and walls and everything else in the bathroom. I also have a concern about the duct work for my AC/heat being contaminated.

Investigator’s Observation: The linen closet did exhibit dust at the time of inspection.

While construction is a noisy and dusty proposition, proper clean up should be maintained throughout the project and a final clean up at completion should be conducted.

The respondent is to make reasonable attempts at dust control for the duration of the project and at the end of the project in an appropriate manner.

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Compliance Item: 1 - I paid him $714.56 for the shower door that he did not order, then had to order it myself and he has not reimbursed me the money, or given me a receipt or put it towards my balance.

Investigator’s Observation: The respondent has provided text messages from March 25/26 that indicate that a credit on the remaining balance was agreed upon by the parties.

Upon the end of the project, the credit should be confirmed.

Governing Rule: A violation cannot be sustained regarding this item

Compliance Item: 2 - I supplied him with the photograph of shower fixtures

that I purchased prior to writing the bid upon starting the job he told me that

he did not know it would have to be re-plumbed for the new shower head and wrote me an additional Phil for $439

Investigator’s Observation: Text messages between the parties on March 30th, indicate that the change order was agreed upon.

There is not sufficient evidence to support a violation

Governing Rule: A violation cannot be sustained regarding this item

Compliance Item: 3 - Added an additional $104 to the price to move an electrical cord for the shampoo box

Investigator’s Observation: This was an unseen issue that required correction. It appears that text messages between the parties on March 30 ok'd the change order.

At the jobsite inspection, the complainant acknowledged the change and that it was necessary.

There is not sufficient evidence to support a violation

Governing Rule: A violation cannot be sustained regarding this item

Compliance Item: 4 - Add at $873.36 because he had to cut some concrete

out of the floor and add a P-trap. Said that that was labor because he claimed it took his teenage daughter 13 hours to do the work. I agree to pay him an extra fee for this unforeseen work but not and amount of money that was not agreed upon ahead of time and not 13 hours labor for his little girl.

Investigator’s Observation: Text messages provided by the complainant

indicate that the $873 was acknowledged and paid. A violation cannot be supported regarding this item.

As to the respondent's daughter performing work, that would be beyond ROC jurisdiction and may be addressed by a different government entity

Governing Rule: A violation cannot be sustained regarding this item

Compliance Item: 5 - I supplied him with photograph of the tile I had chosen and the tag from Lowe’s that states, “ verse size mosaic travertine“. Upon starting the job he claimed that he did not know it was mosaic tile and it would cost an extra $650 to float out the wall.

Investigator’s Observation: The respondent has provided supporting evidence that the estimate was given on March 4th, 2020 and the request for the mosaic tile appears to have been made on March 10th.

It appears that a money dispute has arisen regarding this item and that dispute is beyond ROC jurisdiction.

This item is better suited for adjudication in a different venue if it remains unresolved at the completion of the work.

Governing Rule: A violation cannot be sustained regarding this item

Compliance Item: 7 - They did not sweat the pipes in the wall when they replumbed for the showerhead and nothing was pressure tested.

Investigator’s Observation: This item could not be verified at the inspection as the pipes in question were not exposed.

There is not sufficient evidence to support a violation at this time.

Governing Rule: A violation cannot be sustained regarding this item

Compliance Item: 8 - Pipes in the floor were damaged while putting in the

P-trap. I’m being told that the only thing these pipes could go to were the heated flooring. I contractor said that he repaired the pipes that he damaged

but he did not sweat them and nothing was pressure tested.

Investigator’s Observation: It was relayed at the jobsite inspection that

the infloor radiant heat is not functioning at the time of inspection due to

issues not related to the current project.

I cannot determine if the pipes are sweated as they are not exposed.

If when placed in operation, the pipes exhibit leaks, the issue can be

readdressed.

There is not sufficient evidence to support a violation at this time.

Governing Rule: A violation cannot be sustained regarding this item

Compliance Item: 10 - Metal guards were not installed to protect the new

plumbing. There’s no way for anyone to know where the plumbing is if we need to drill into the wall for any reason. For example; in order to hang the shower door which is not up yet.

Investigator’s Observation: This item could not be verified as the area was covered.

There is not sufficient evidence to support a violation at this time.

Governing Rule: A violation cannot be sustained regarding this item

Compliance Item: 11 - Theres so much trash and building supplies that have been left in my garage. I can’t get my boat out or walk through.

Investigator’s Observation: This item existed but was corrected at the end of the jobsite inspection.

No further action is required other than day to day clean up.

Governing Rule: A violation cannot be sustained regarding this item

Compliance Item: 12 - This job has now been abandoned as well. The sub

contractor that did the tile in the bathroom was Jared Paxton [] He did an excellent job on the bathroom tile. He completed the tile on April 22. Leo has not been out to do any of the work to complete the bathroom.

Investigator’s Observation: This issue is addressed in item 6.

The respondent is to complete the projects in an appropriate manner.

Governing Rule: A violation cannot be sustained regarding this item

Compliance Item: 13 - The last time I saw Leo was on April 16. He showed

up at 7PM with another man I’ve never met and smelling like alcohol. One went to the front door and the other to the back door ringing the door bells at the same time. I did tell him to leave and come back during normal work hours when he had no been drinking. The last time any work was performed other than the tile was in March.

Investigator’s Observation: Hours of access are outlined in item 6.

This is a customer service matter that is beyond the ROC jurisdiction.

Governing Rule: A violation cannot be sustained regarding this Item

All errors in original.

Investigator Dimond explained that Complainants filed two separate complaints – one regarding the bathroom remodel, and one regarding the bar remodel. Both complaints were consolidated into the instant Complaint.

Investigator Dimond testified consistently with the findings contained in the Written Directive. Investigator Dimond further testified that the relationship between the parties is “extremely contentious” which may have “inhibited” completion of the project and resolution of the Complaint.

Regarding the cabinets, Investigator Dimond testified that Complainants would not accept the color of the stain. However, to achieve the color Complainants wanted would have required Respondent to apply the product in a manner inconsistent with the manufacturer’s recommendations.

Investigator Dimond also testified that Complainants imposed unreasonable conditions on Respondent during the performance of Respondent’s work, such as mandating that Respondent park off site, a “considerable distance” from the home, when Respondent needed ready access to its tools and materials. Investigator Dimond testified that Complainants should have permitted Respondent to park close to the jobsite to provide Respondent easy access to its equipment.

Regarding Complaint item number 9, Investigator Dimond testified that dust is consistent with the work that was being performed and that even with mitigation, some dust inevitably gets through. Moving forward, Respondent was ordered to take “ample and reasonable care to keep dust to a minimum.”

Regarding the items of Complaint not requiring correction, Investigator Dimond testified as to the reasons for not requiring Respondent to perform any action and those reasons are delineated within the Written Directive.

Investigator Dimond testified that he conducted a pre-hearing inspection on September 22, 2021. Investigator Dimond testified that at that time, there was no dust present, the shower door had been installed, the tile was within standards, the fixtures were installed, the shower is functional, water is available on demand, and that if there were a leak, it “would have exhibited.” Investigator Dimond testified that the bathroom is in compliance. Regarding the bar, Investigator Dimond testified that no work had been performed on site, however Respondent has worked off site on the staining of the cabinets. Investigator Dimond testified that the color of the cabinets is not acceptable to Complainants. Investigator Dimond testified that the deposit for the countertops has been paid by Respondent and they are on hold with the supplier. Investigator Dimond testified that Respondent made efforts to comply with the Witten Directive, such as contacting the distributor to inquire as to how to apply the stain to the cabinets in way in which would satisfy Complainants. However, Respondent informed Investigator Dimond that the distributor advised that there is “no way to create the result” that Complainants desire with the materials provided to Respondent. Investigator Dimond testified that Respondent offered to forgive the contract balance and return the cabinets to Complainants, however, Complainants declined the offer. Investigator Dimond further testified that Mrs. Granado had sent text messages to Respondent instructing Respondent not to text her again and did not provide Respondent “with many options.”

Investigator Dimond referred the matter to the Registrar’s Legal Department. 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(A), and A.R.S. § 32-1154(A)(22).

In response to Mr. Granado’s question at hearing as to why Respondent was not charged by the Registrar with abandonment of the project, Investigator Dimond testified that Respondent has not refused or failed to respond, as there has been communication throughout, and Respondent has performed work on the project “behind the scenes.” Investigator Dimond further testified that in regard to some of Complainants’ items of Complaint, Respondent was able to show text messages establishing agreement between the parties regarding various changes and charges.

Mrs. Granado asserted that Respondent “should know how to stain” and because she was ill, she asked him not to text her anymore. Mrs. Granado testified that this was “communication she didn’t need to know” and “lots of excuses.” Mrs. Granado asserted that Respondent was “asking her how to do things” and that she was “sick and frustrated and didn’t want to hear from him.” Mrs. Granado testified that restrictions were placed on Respondent’s parking due to “the landscapers.”

Mr. Granado testified that he and Mrs. Granado were frustrated and disappointed in Respondent because they believed they were friends with Mr. Gallegos, and did not think that “he’d do this.” Mr. Granado asserted that Complainants provided access to Respondent, and that they “never tried to make things difficult.”

Mr. Granado testified that he still does not know anything about the granite for the bar top notwithstanding having paid a $2,900.00 deposit for it, and that he is concerned with the plumbing behind the walls and wants a pressurized system to confirm there is no leak.

Mr. Granado testified that “dust covered everything,” that it was in his HVAC system, that there is still an issue with dust in the vents, that his entire family became ill, that he wants the vents cleaned, and although the HVAC system works, “it can break at any time.”

Mr. Gallegos testified that the cabinets were constructed in Respondent’s shop in a controlled environment, and that Complainants were not satisfied that work was being performed off site. Mr. Gallegos further testified that the granite would be delivered when the project was ready for granite installation as the templating still needed to be done. Mr. Gallegos also testified that he contracted with Complainants for two separate projects and that the bathroom remodel was complete.

Regarding the pressurization of the plumbing, Mr. Gallegos testified that it had been pressurized for months, and that it had been in use for months and no leaks were detected.

Regarding the dust, Mr. Gallegos testified that the area was “tented” and the fan was utilized and cleaned. However, Mr. Gallegos acknowledged that dust escaped and apologized.

The documentary evidence presented at hearing by both parties established that Respondent was diligent in his efforts to satisfy Complainants in regard to the staining of the cabinets. On June 28, 2021, Mr. Gallegos sent a text message to Mrs. Granado as follows: “Good morning, While there is a disagreement on when I should be paid for the shower remodel project I would like to schedule work to resume the bar remodel. Mr. Gallegos requested to bring the cabinets to Complainants’ home on June 29, 2021, to which Mrs. Granado responded: “That’s fine I will need to approve of the finish before you bring them in should be Spanish oak water-based satin finish should be smooth to the touch. And Cabinets will need to be wrapped in plastic if it’s raining. Please bring your paint cans.” Following several more text communications containing photographs, Mrs. Granado told Mr. Gallegos that the stain was not applied correctly and that he should “[t]ake it to Dunn Edwards and have them show you how to do it.” Mr. Gallegos replied, “[w]e did that already but we will go do it again. I would say that the alder you chose might not necessarily produce the same look as the oak in the sample picture. We are meeting a Dunn Edwards rep in the morning at 10am to give us a physical demonstration. We went to the Prescott store today but sales lady wouldn’t give us an actual demonstration. She just kept saying to go on YouTube . . .” Mrs. Granado responded, “This is the exact stain on alder wood. Please don’t text me anymore until you have it done correctly and you are ready to bring the cabinets.” The credible and substantial evidence presented at hearing established that Respondent was attempting to satisfy Complainants, and repeatedly requested to meet with Complainants in order to complete the project, however, Complainants refused to meet with Mr. Gallegos.

Administrative notice is taken of Respondent’s prior License record on October 7, 2021. Such prior License record reflects that Respondent’s License No. 329573 was first issued on July 6, 2020, and is active. Such prior License record also reflects that there is only one open complaint, that being the instant Complaint, and no prior complaints or discipline against Respondent’s license.

The Registrar’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”).

Denial of Access

Complainants are not prevented from refusing access because of their right to exclude others from their homes and it would not be appropriate to require contractors to trespass. [But it] is recognized that lack of access impinges on one party’s ability to defend itself and utilizing the benefits of the Registrar of Contractors is a privilege. Therefore, it is recommended that the Registrar dismiss complaints in which access is denied.

. . . .

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.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainants bear the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. 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.

“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.”

A.R.S. § 32-1154(A) provides:

The holder of a license or any person named on a license pursuant to this chapter may 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. . . .

A.A.C. R49108(A) provides that “[a] contractor shall perform all work in a professional and workmanlike manner.”

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.

“Statutes shall be liberally construed to effect their objects and to promote justice.” The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

The Registrar neither demands nor expects perfection from a licensee on the licensee’s first attempt at work. A licensee must be given a reasonable opportunity to remediate workmanship issues prior to the imposition of discipline against its license. In an administrative hearing, however, Respondent is responsible to establish a lack of opportunity or the preclusion from doing so.

Regarding the Registrar’s charge of poor workmanship, the credible evidence of record established that the bathroom remodel has been completed to the Registrar’s standards and that Respondent has been ready, willing, and able to perform the work for the bar remodel, however, the relationship between the parties has deteriorated to such a point that the completion of the project has been inhibited. Complainants have not permitted Respondent to park on site, Complainants have refused to communicate with Respondent further regarding a remedy for their dissatisfaction regarding the color of the stain for the cabinets, and directed Respondent not to text any further regarding the staining of the cabinets. Investigator Dimond encouraged the parties to work together to complete the project, however, the breakdown in the parties’ relationship and Complainants’ unwillingness to work with Respondent, precluded the completion of the project.

Regarding Respondent’s alleged failure to comply with the Written Directive, the Administrative Law Judge concludes based on the credible, probative, and substantial evidence presented at hearing that Respondent established valid justification for not complying with the Written Directive, specifically the complete breakdown in the parties’ relationship and inability to work together, as evidenced by Respondent’s numerous attempts to satisfy Complainants and Complainants’ demands that Respondent not park on site and for no further communication from Respondent.

Considering Complainant’s dealings with Respondent, Respondent’s valid justification for not complying with the Written Directive, and the fact that there are no other complaints against Respondent’s license, are all factors in mitigation. There was no substantial evidence adduced showing that Respondent was unscrupulous, unqualified, or financially irresponsible. Consequently, it would not be fair or just to impose discipline against Respondent’s license.

In light of the above and the factors set out in the Registrar’s substantive policy statement, it is appropriate to dismiss this matter.

RECOMMENDED ORDER

It is recommended that the Registrar dismiss Complaint Number 2021-01628 against Respondent.

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.

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-137160-45720000Done this day, October 14, 2021.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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