ALJDEC decisions subject to certification as final

2021A-02510-RFA-LS-ROC · Registrar of Contractors · 2023-05-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Dan Deary

COMPLAINANT,

Home Improvements By R M S LLC

License No. ROC 195318,

RESPONDENT.

No. 2021A-02510-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 5, 2023

APPEARANCES: Assistant Attorney General Seth Hargraves appeared on behalf of the Arizona Registrar of Contractors. Complainant Dan Deary appeared on behalf of himself. Ronald Mendicino appeared on behalf of Respondent Home Improvements By R M S, LLC.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

Complainant Dan Deary entered into a residential remodeling contract with

Respondent Home Improvements By R M S, LLC, for the amount of $25,666.00.

Complainant paid Respondent $19,000.00 under the contract.

Respondent subsequently performed construction work on Complainant’s

home.

4. On or about June 3, 2021, Complainant filed a complaint with the Arizona

Registrar of Contractors (Registrar) alleging poor workmanship on the part of Respondent.

5. The Registrar investigated the complaint and issued a Directive to

Respondent on July 14, 2021.

6. Through the July 14, 2021 Directive, the Registrar directed Respondent to

correct the following items by appropriate means:

Compliance Item: 2 - Shower Tile. There have been three attempts (original work and two reworks) to get the tile correct and there are still issues with it. The contractor (RMS) feels the work is up to standards. In order to get an unbiased professional opinion of the work, I contracted with a licensed Tile and Stone Consultant to inspect the work performed and provide me a detailed written report. His report confirms multiple problems along with a detail of work that was not completed to ANSI workmanship standards. The report is attached.

Investigator’s Observation: After reviewing the report provided and looking at ROC standards. There were a few issues with the shower tile work that need to be addressed and corrected by appropriate means. Those issues are in the report provided by the homeowner and are items: 2,4,6,8,9,11 and 12.

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: 3 - Vanity: Poor quality. The RMS's subcontractor already once replaced all drawer faces due to the faces being screwed in incorrectly, resulting in extra holes and cracked drawers. Partial drawers were then replaced a second time as the quartz subcontractor damaged multiple drawers and cabinet faces during the installation. The result is mismatched drawer and cabinet faces (darker color) and the drawer faces are still cracked inside as nearly all of them were screwed in incorrectly again. Upon closer inspection the clear coat is very thin which is resulting in water stains and a "haze" appearance. Photo documentation is available upon request

Investigator’s Observation: There are issues with the cabinet installations. There can't been cracked wood or broken hardware installed. As for the slight difference in color of the new drawer faces, these were replaced and the stain can change from batch to batch or from different cuts of wood on how they take the stain. These drawer fronts meet standard. Dark wood will always show water spots if water is felt to dry on it. This is a homeowner maintenance issue. As for the cracked drawers these will need to be repaired 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 - Outdoor electrical outlet which was added is pulling away from the home and does not appear to be secured properly. Photo documentation is available upon request

Investigator’s Observation: The outlet is not properly secured to the home and will need to be repaired 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.

7. On August 24, 2021, the Registrar issued a Citation against Respondent’s

license alleging that Respondent may have violated Arizona Administrative Code (A.A.C.) R4-9-108(A) and Arizona Revised Statues (A.R.S.) § 32-1154(A)(3); A.R.S. § 32-1154(A)(22).

8. On October 22, 2021, a hearing was conducted regarding the complaint and

the Citation.

9. In November 10, 2021, the Administrative Law Judge issued a decision

concluding that Respondent had violated A.A.C. R4-9-108(A) and A.R.S. § 32-1154(A)(3); A.R.S. § 32-1154(A)(22).

10. On December 13, 2021, the Registrar accepted the Administrative Law

Judge’s recommended decision.

11. On or about July 13, 2022, Respondent’s bond company paid

Complainant $4,250.00 for Respondent’s poor work in connection with the complaint filed with the Registrar. See Exhibit 2, Bates 093-094.

12. On or about February 6, 2023, Complainant filed a claim for a payout from

the Registrar’s Recovery fund (the Fund). Complainant reported on the claim form that he paid $1,985.00 to pay for an evaluation of the work that would need to be performed repair Respondent’s deficient work. See Exhibit 3, Bates ROC-151.

13. Complainant obtained a bid in the amount of $26,162.00 from OCD, to correct Respondent’s poor work. See Exhibit 2, ROC-140 to ROC-143. The amount of the bid was $26,162.00. Complainant submitted the bid from OCD with the claim. See id.

14. Complainant submitted a bid in the amount of $27,600 from MKG Partners, LLC, to correct Respondent’s poor work. Complainant submitted the bid from OCD with the claim.

15. The Registrar assigned the claim to Gail Matthews, Legal Assistant II at

the Registrar. Ms. Matthews determined that Complainant was eligible for a payout from the Fund based on the information provided on the claim form and other verification.

See Exhibits 1 through 3 and Ms. Matthew’s testimony on the Hearing Audio Record at 8:39 to 50:56 minutes.

16. Ms. Matthews did not include the amounts that Complainant paid for reports and evaluations performed to determine the work needed to repair Respondent’s poor work because the expenses are not compensable by the Fund.

17. Ms. Matthews used the OCM bid to calculate Complainant’s actual damages

because it was the lowest bid that appropriately addressed the items listed in the Directive. Ms. Matthews determine that the OCM bid did not exceed the scope of the contract and the Directive.

18. Ms. Matthews calculated Complainant’s actual damages by subtracting the amount left outstanding on Complainant’s contract and the bond payment from the OCM bid.

19. Ms. Matthews determined that Complainant suffered actual damages in

the amount of $15,246.00.

20. On March 6, 2023, the Registrar issued a Notice of Administrative Award awarding Complainant $15,246.00 from the Fund.

21. Respondent filed an appeal to the Notice of Administrative Award.

22. On March 17, 2023, the Registrar issued a Notice of Hearing setting

Respondent’s appeal for hearing on May 5, 2023.

23. At hearing, Ronald Mendicino testified on behalf of Respondent. Complainant testified on behalf of himself. The Registrar presented the testimony of Gail Matthews.

24. Mr. Mendicino contended that the bid used to calculate Complainant’s actual damages exceeded the scope of the contract and Directive. Complainant contended that the Registrar should have included the amount that he paid for evaluations of Respondent’s work when calculating his actual damages. Complainant explained that he obtained the evaluations to prove that Respondent performed poor work. Complainant did not request a hearing regarding the Notice of Administrative Award.

25. Ms. Matthews testified regarding her review of the claim including the determination of Complainant’s eligibility for a payout from the Fund and the actual damages suffered by Complainant.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Ariz. Rev. Stat. § 32-1132(A) provides that “[a]n award from the fund is limited to the actual damages suffered by the claimant as a direct result of the contractor's violation but shall not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines. . . .” Respondent bears the burden of proof to establish that the proposed payout from the Fund is incorrect by 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.”

After review of all the evidence, the Tribunal concludes that the award provided by the Fund is an accurate reflection of Complainant’s actual damages.

The award appears to properly remedy the workmanship violations for which Respondent was responsible. The Registrar properly excluded the amount that Complainant paid to evaluate Respondent’s poor work because the expenses are compensable under A.R.S. § 32-1132.01(B)(1). Respondent failed to establish by a preponderance of the evidence that the values provided on the bid utilized by the Registrar were outside the scope of the contract and Directive.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainant receive a payout from the Residential Contractors’ Recovery Fund in the amount of $15,246.00.

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, May 25, 2023.

/s/ Velva Moses-Thompson

Administrative Law Judge

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

Martín Quezada, Director

Registrar of Contractors

By: OAH Staff