ALJDEC decisions subject to certification as final

2021A-04911-CHC-ROC · Registrar of Contractors · 2022-07-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Dustin Creek ,

COMPLAINANT

Arizona Construction Plus LLC

License No. ROC 326865,

RESPONDENT

No. 2021A-04911-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: May 24, 2022

APPEARANCES: Joshua T. Greer, Esq. for Complainant; Karen A. Palecek, Esq. for Respondent

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On April 11, 2022, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on May 24, 2022 at the Office of Administrative Hearing.

Through its Notice of Hearing, ROC alleges that Respondent Arizona Construction Plus LLC may have violated Ariz. Rev. Stat. section 32-1154(A)(3).

Respondent holds license No. 326865 issued by ROC. License number 326865 is a plumbing license.

There is no plumbing work at issue and there is no dispute that Respondent holds another license or licenses. Respondent argues that the matter must be dismissed because the wrong license was cited. Complainant Dustin Creek argues that the fact that ROC cited the wrong license is not material because Respondent had a full opportunity to present its evidence and because ROC may discipline all licenses issued to a license holder who is found to have violated ROC’s statutes.

Both parties appeared through counsel. Complainant testified on his own behalf and also presented the testimony of Louis Hunt, a roofing consultant, Irene Clary, the principal of Arcadia Townhomes LLC, and Ronald Barrett, a roofing consultant. At Complainant’s request, after he presented his own testimony he left the hearing.

The record shows that Ms. Clary had hired Mr. Hunt through Catclar Investments LLC.

Respondent presented the testimony of its managing member, Martin Basta and its project manager, Douglas Donadio, and it also called ROC investigator Lisa Melton.

Complainant is an owner or member of an LLC that owns a townhome (Unit 21) in what the parties referred to as the Rosedale Project. Arcadia Homes LLC was the developer.

Although Mr. Creek is vice president of the Rosedale Residences HOA, he filed the complaint in his own name.

Respondent performed construction work for Arcadia Homes on Unit 21’s building, which was referred to at times as the north building.

On a date that is not in the record, Arcadia Townhomes filed with ROC a complaint against Respondent. The scope of Arcadia’s complaint is not in the record. On April 10, 2021, ROC issued to Respondent a citation in that matter. As of November 10, 2021, Arcadia and Respondent were engaged in civil litigation in Maricopa County Superior Court case number CV2021-007786. On November 10, 2021, Arcadia and Respondent entered a Limited Settlement Agreement.

In that Agreement, with respect to the roof at issue in this matter, Respondent and Arcadia agreed that:

Roofing Work. AZCP [i.e. Respondent] to make repairs to the roof of the Project. These repairs relate only to the building that AZCP constructed and include the following scope of work:

A. Removal of all existing shingles and improperly installed flashing;

B. Cleaning and repair of substrate as needed;

C. Installation of vapor barrier per the original plans as needed;

D. Installation of shingles;

E. Reinstall and paint necessary flashings;

F. Repair any defective or incomplete roofing work on the building AZCP construction as directed by the Monitor (defined below); AZCP and the Monitor will discuss and determine whether the installation method was appropriately done.

G. The parties will contact Nash Mechanical to locate and install the roof drains as it was part of their scope of work.

H. Clean up of site.

All work performed pursuant to this subsection shall be in accordance with the original project specifications, the manufacturers installation instructions and shall meet the minimum standards of workmanship of the Registrar of Contractors. The work done pursuant to this paragraph will commence no later than December 1, 2021. AZCP will complete the work within 45 days, unless the work is delayed by adverse weather conditions, that is, weather conditions that were abnormal for the period of time and that could not have been reasonably anticipated. AZCP shall choose a subcontractor of its choice to complete the roofing project. AZCP agrees to employ Louis Hunt, IIBEC (RCI), RRO of PRM (the “Monitor”) to monitor the roofing project. During the course of the repair work, the Monitor will visit the Project two times a week to inspect the roofing repairs and provide written reports summarizing each inspection to Arcadia and AZCP. Arcadia shall have the right to communicate directly with the Monitor during the duration of the work, regarding the completion of the roofing project.

On or about September 30, Complainant filed with ROC the complaint at issue alleging poor work on Respondent’s part, more specifically that there were shingles falling off the west side of the north building. The area in question is a mansard roof.

On November 1, 2021, ROC’s Ms. Melton conducted a jobsite inspection.

On November 10, 2021, 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 1, 2021.

***

DIRECTIVE REQUIREMENTS

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

Compliance Item 1: Shingles on the west side of the north building are falling off.

Investigator’s Observation: Complaint provided a copy of an independent roof inspection performed by PRM Envelope Consultants on September 22, 2021. PRM inspected the north building. Missing and failing shingles are visible from the ground on the west side of this building. They identified the following workmanship issues: 1) Improper nail position to properly secure the shingle. 2) Overdriven nails damaging the shingle and jeopardizing wind uplift value. And 3) No sealing of the shingles per manufacturer’s requirements for mansards. A copy of the independent inspection was provided to Respondent along with the Complaint. Respondent should correct these conditions as well as missing/failing shingles on the North building.

Governing Rule:

ARS §32-1154 (A) (3), 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.

On December 3, 2021, Respondent provided Ms. Melton with a copy of the Settlement Agreement between Respondent and Arcadia Townhomes.

On December 6, 2021, ROC issued a Notice of Dismissal showing that it was dismissing Mr. Creek’s complaint based on the settlement between Respondent and Arcadia Townhomes because that agreement addressed the items at issue in this matter.

Mr. Donadio acknowledged that Respondent (or its subcontractor) did not use adhesive as required by the manufacturer’s specifications when it initially installed the roof. He did not agree that the nails were in the improper positions and offered no opinion with respect to whether nails had been overdriven.

Mr. Donadio testified that it looked as though the west side of the north building had been hit by a microburst, causing the shingles to fall off.

Respondent presented credible evidence that on February 10, 2022 it conducted work on the roof at issue and that that work was conducted in conformity with the workmanship standards and the manufacturer’s specifications.

More specifically, Mr. Donadio testified that he observed roofers removing the shingles and underlying paper on the west side of the north building and that he continued to watch the work until several courses of shingles were installed, at which time he left the site, but had an assistant observe the rest of the work. In addition, Respondent had entered into evidence photographs of the west side of the north building taken on February 10, 2022, after it installed the shingles.

Mr. Hunt had not returned to the site after Respondent completed its work on February 10, 2022.

There was no evidence adduced showing that Mr. Hunt had inspected Respondent’s work as was called for in the Agreement between Respondent and Arcadia Townhomes. Mr. Hunt testified that in December 2021 he decided to retire and that he stopped taking on new jobs, but continued working to close out his existing jobs.

Ms. Clary knew that Mr. Hunt was retiring, but did not inform Respondent of this fact because it was not her obligation to do so.

Through an email dated February 15, 2022, Mr. Creek informed Ms. Melton that he had not seen anyone from Respondent on the site, no one had communicated with him, and none of the issues that were supposed to be rectified had been addressed. Mr. Creek wrote that he was sending the email his capacity as vice-president of the HOA.

ROC issued to Respondent a Citation dated February 22, 2022, through which ROC alleges that Respondent may have violated Ariz. Rev. Stat. section 32-1154(A)(3).

On March 9, 2022, Respondent filed its Answer to ROC’s Citation denying it had committed the alleged violation, and informing ROC that Respondent had completed the repair work as of February 10, 2022 and that it had requested an inspection of its corrective work.

Respondent also informed ROC that ROC had cited Respondent’s plumbing license and asserted that this deficiency required an automatic dismissal.

On March 10, 2022, Ms. Melton notified the parties that she would conduct a prehearing inspection on March 22, 2022. In that Notice, Ms. Melton informed Mr. Creek that as the Complainant he was required to attend the inspection.

Apparently, no inspection occurred on March 22, 2022. Through a Notice dated April 25, 2022, Ms. Melton informed the parties that the prehearing inspection would take place on May 5, 2022, and again she informed Mr. Creek that he was required to attend the inspection. In response to Ms. Melton’s Notice, Mr. Creek informed Ms. Melton that shingles were continuing to fall off the roof.

On May 5, 2022, Ms. Melton and ROC’s Mr. Wiskow conducted a prehearing inspection. Mr. Creek did not attend that inspection.

Ms. Melton had requested that Mr. Wiskow accompany her because he had been a roofing contractor and because she wanted him to operate the lift that would be used to access the roof.

During the prehearing inspection, the parties looked at shingles had fallen from the repaired roof. These shingles had the required adhesive.

Mr. Wiskow raised the possibility that the issue might be a manufacturing defect and apparently he suggested having the manufacturer inspect the work. As of the hearing date, Respondent had contacted its supplier, with the supplier contacting the manufacturer, but Respondent had not heard back from the supplier or the manufacturer.

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).

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).

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.

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

Ariz. Rev. Stat. subsection 32-1154(B)(3) provides that ROC “May temporarily suspend ... or permanently revoke any or all licenses issued under this chapter if the holder of the license ... commits any of the acts or omissions set forth in” subsection 32-1154(A).

Respondent argues that the Complaint should be dismissed because Complainant is not an “owner” as that word is defined in Ariz. Rev. Stat. section 32-1154(B)(2)(b). But because ROC has authority to investigate a contractor’s actions on its own motion, Complainant’s ownership status does not provide a basis on which to dismiss this matter.

Mr. Donadio acknowledged that Respondent did not use adhesive when it initially installed the roof. Consequently, Respondent violated Ariz. Admin. Code section R4-9-108(A), which is also a violation of Ariz. Rev. Stat. section 32-1154(A)(3).

Because Respondent has violated subsection 32-1154(A)(3), ROC has authority to discipline Respondent’s license.

In this case, no discipline is appropriate considering that: (1) Respondent corrected the work at issue, and although shingles continue to fall, Mr. Wiskow, who was at the inspection based on his experience in the roofing industry, was of the opinion that there may have been a manufacturer’s defect in the product; (2) the same issues are being litigated in Superior Court and may have been addressed in Arcadia Townhomes prior complaint against Respondent; and (3) Mr. Creek did not attend the prehearing inspection, despite ROC’s Notices showing that he was required to attend.

The record does not show why ROC did not amend its Citation when Respondent informed it that the wrong license had been cited. Nevertheless, because it is appropriate to dismiss this matter, that issue is effectively moot.

RECOMMENDED ORDER

IT IS ORDERED that case number 2021-04911 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, July 21, 2022.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000By Miranda Alvarez

Legal Secretary