ALJDEC - Licensing

2021A-06107-RFA-LS-ROC · Registrar of Contractors · 2023-03-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Robin Williams,

COMPLAINANT,

v.

Soler Enterprises, LLC

License No. ROC 327106,

RESPONDENT.

No. 2021A-06107-RFA-LS-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 10, 2023

APPEARANCES: Assistant Attorney General Seth Hargraves represented the Arizona Registrar of Contractors. Complainant Robin Williams appeared on her own behalf. Shane Peterson, Esq. represented Respondent Soler Enterprises, LLC, and Jose Soler was present as a representative. Tedi Quezada appeared as a witness. Assistant Attorney General Wesley Cox was present as an observer.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Background and Procedure

The Arizona Registrar of Contractors (“Registrar)” issued License No. 327106 to Soler Enterprises, LLC (“Respondent”).

On or about November 29, 2021, the Registrar received a Complaint against Respondent from Robin Williams (“Complainant”) alleging that Respondent poorly performed its scope of work pursuant to the parties’ contract, which called for the installation of hardscape. The parties’ contract specified the following:

i) 2 custom walls made with cinder block $2,000

ii) Fountain with pump and basin $950

iii) Electric line hook up $650

iv) Pavers gray color $4,636

v) Drain $150

vi) Drip system $950

The total contract price was $9,336.00. Complainant paid Respondent a total of $9,084.00.

As a result of the Complaint, and after investigation, 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, and (A)(22).

On or about July 14, 2022, the matter proceeded to an administrative hearing.

In her Decision, Administrative Law Judge Velva Moses-Thompson considered Respondent’s arguments and concluded that Complainant established the alleged violations. Administrative Law Judge Moses-Thompson recommended that the Registrar suspend Respondent’s License No. 327106 for a period of three days and that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty.

On or about August 16, 2022, the Registrar issued a Final Administrative Decision and Order (“Order”) accepting the Administrative Law Judge Decision. The Order provided that it became effective on September 25, 2022.

The Order was not appealed.

On or about November 14, 2022, Complainant filed a claim with the Residential Contractors’ Recovery Fund (the “Fund”) to recover the cost of correcting the work.

Tedi Quezada, Legal Assistant II, reviewed Complainant’s claim.

The Registrar issued a Notice of Administrative Award, determining that Complainant should be awarded $18,925.00.

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 March 10, 2023.

Hearing Evidence

The Written Directive from the Registrar specified that Respondent was to correct by appropriate means all of the issues relating to the workmanship deficiencies identified.

Ms. Quezada, Claims Reviewer for the Fund, testified regarding the above delineated procedural history of the matter, as well as the documentation submitted by Complainant to satisfy the eligibility requirements for application to the Fund, including the Special Warranty Deed, bond information, the parties’ contract, payments made thereon, as well as the repair contract and payments made for the repairs.

Ms. Quezada testified that if a claimant has a project repaired or completed prior to submitting a claim to the Fund, the contract for completed repair work “must be in line with the Written Directive and Jobsite Notes.”

Ms. Quezada testified that she utilized the contract from Scapetech Landscape and Design (“Scapetech”), the contractor that Complainant utilized to perform the corrective work. The contract was in the amount of $19,575.00, and Ms. Quezada accepted Complainant’s proof of payments in that total amount.

Ms. Quezada further testified that she contacted Investigator Wes Ellington, the assigned investigator to this matter who conducted the Jobsite Inspection, as well as the Compliance Inspection. Ms. Quezada testified that Investigator Ellington advised her that Scapetech’s contract was “in line” with the parties’ contract and “was not excessive,” and that she relied on his guidance due to the fact that he was familiar with the scope of work and observed the work performed by Respondent.

Scapetech’s contract included the following provisions relevant to this proceeding:

New high grade pavers (To replace old). To be installed on a compacted ABC and sand base for all extension areas and to include polymeric sand infill if travertine is used 800 sqft at $12.75 $10,200

Redo electric outlet done by other company on house $550.00

Custom built stucco wall with (10) apx 8x8” holes for deco glass. Wall to be apx 8” wide by 5 ft tall by a total of 15 lnft. Wall can be (1) long wall or total lnft can be broken up into (2-3) walls if wanted. Wall also to include light wire at each of (10) hole openings. (Owner to provide lights and to paint) $3,175.00

French drain system to run from side of backyard to just to fence that separates front and backyard. To use an apx 2.5-3” PVC pipe for a total of apx (150) lnft and to include (4-6) up spouts to collect water. $1,750.00

Ms. Quezada testified regarding her calculation of “actual damages” as subtracting the $252.00 balance remaining on the original contract amount from Scapetech’s contract price, resulting in a proposed award of $18,925.00.

Ms. Quezada acknowledged when questioned by Respondent’s counsel, that she has no way to verify whether pavers or travertine was installed by Scapetech, and that stucco on the wall was not included in the scope of the parties’ contract, nor were holes for glass specified in the parties’ contract.

Complainant testified that pavers were installed, not travertine. Complainant further testified that in the summer of 2022, she looked for replacement pavers and was informed by various suppliers that they were unavailable or that they could only sell to contractors and not directly to homeowners. Complainant also testified that “inflation was rampant.” Complainant explained that she “found the pavers for Scapetech” and she “took what she could find.” Complainant testified that Scapetech would not reuse the old pavers because they were “full of sand, chipped, and damaged.” Complainant did not explain why Scapetech, as the contractor, did not obtain the pavers for the project.

Complainant testified that Respondent installed fifteen (15) holes in the walls because they had discussed that she wanted to install electric and deco glass. Complainant acknowledged that she did not contract with Respondent to stucco the walls, however, Scapetech convinced her to do so, and she did not realize this was included in the estimate. Complainant presented an email from Scapetech that stated: “The cost for the wire in the walls was $225 and the stucco work was $450.”

Regarding the drain, Complainant testified that she informed Respondent that she wanted a French drain or a “u-shaped” drain.

Jose Soler testified on behalf of Respondent. Mr. Soler testified that the wiring for the lighting in the walls and the stucco were not within the scope of the parties’ contract.

Mr. Soler testified that the parties’ contract included the installation of a surface drain, not a French drain.

Mr. Soler further testified that his contract with Complainant included the installation of gray 6 x 9 concrete pavers that cost $6.25 per square foot. Mr. Soler testified that the pavers Complainant found for Scapetech are “high grade” pavers. Mr. Soler further testified that he has been performing paver installation on a weekly basis and that the cost of the material has only risen approximately ten to twenty cents per square foot, and that the only issue is the timing of the delivery of the material.

Regarding the electric outlet, Mr. Soler testified that only the cover needed to be replaced at a cost of $30.00.

Respondent’s counsel argued that given its fiduciary responsibility, the Registrar should have verified that the type of paver installed was an upgraded paver and that the parties’ contract did not specify that a French drain was to be installed. Respondent argued that Complainant should not be unjustly enriched and requested that the proposed award be reduced by the following amounts:

$1,600.00 representing the additional amount for a French drain versus the drain contained in the scope of the parties’ contract;

A reduction of $4,000.00 for the upgraded pavers;

A reduction of $225.00 for the electrical wiring in the walls that was beyond the scope of the parties’ contract;

A reduction of $450.00 for the stucco on the walls that was beyond the scope of the parties’ contract; and

A reduction of $520.00 for the electrical outlet.

Upon review of the parties’ contract and Scapetech’s contract, it appears that the scopes of those contracts differ. The parties were in agreement at hearing that the stucco and electrical wiring in the walls were not included in the parties’ contract. Therefore, $675.00 should be deducted from the proposed award amount.

Regarding the drain, the Administrative Law Judge finds that it is not reasonable for Complainant to have believed that Respondent’s contract included a French drain given the $150.00 cost, and consequently, the installation of a French drain is beyond the scope of the parties’ contract. Therefore, $1,600.00 should be deducted from the proposed award amount representing Scapetech’s cost of $1,750.00 for a French drain, minus the parties’ contract amount of $150.00 for a drain.

Regarding the cost of the pavers, Scapetech’s contract clearly indicates that it includes “new high grade pavers” at a cost of $12.75 per square foot which is more than double the contract amount. Further, there was no evidence presented as to whether Scapetech could have obtained the pavers at a reduced cost given its status as a contractor, versus Complainant choosing to obtain the pavers. Further, the Administrative Law Judge finds Mr. Soler’s testimony regarding the cost increase of ten to twenty cents per square foot to be credible and reasonable. Consequently, the Administrative Law Judge finds that the amount proposed for upgraded pavers is excessive. Using an increased cost of pavers of twenty cents per square foot of $6.45 and multiplying that amount by 800 square feet, the appropriate reimbursement amount equates to $5,160.00. Therefore, $5,040.00 should be deducted from the proposed award amount for the upgraded pavers.

Regarding the electrical outlet, Investigator Ellington’s Compliance Findings state the following:

The electric has now been permitted, and a new circuit was installed from the electric panel. However, the original connection to the exterior outlet was not returned to the original state and still has a loosely mounted extension box with a broken cover and an open penetration in the bottom where the conduit was removed. This does not meet building code or minimum industry standards.

Therefore, given those findings, the $550.00 cost to “redo electric outlet done by other company” appears reasonable.

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 Complainant is entitled to recover as a payout from the Fund. The burden shifts to the party challenging the amount of the payout to establish that the Registrar’s calculations were erroneous or not supported by a preponderance of the evidence. In this case, Respondent requested a hearing challenging the Recovery Fund payout. Therefore, the burden was on Respondent to establish by a preponderance of the evidence that the amount of the proposed payout was erroneous or inappropriate.

“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.”

In this case, Complainant had corrective work performed by Scapetech and submitted that estimate/contract to the Registrar for review in order for the Registrar to establish the value of the work. As delineated above, some of the costs set forth in Scapetech’s estimate/contract are not “in line” with the parties’ contract and the required corrective work pursuant to the Written Directive, specifically, a French drain, upgraded pavers, stucco, and electrical wiring in the walls.

The Tribunal concludes that Respondent established that the proposed award of $18,925.00 is inappropriate. After a review of the evidence presented at hearing, the Administrative Law Judge concludes that an appropriate award from the Fund based upon the particular facts and circumstances in this matter is $11,610.00. Accordingly, Complainant is entitled to a payout from the Fund in the amount of $11,610.00.

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 $11,610.00 to Complainant Robin Williams.

IT IS FURTHER ORDERED that under A.R.S. § 32-1139(B), the Registrar shall charge $11,610.00, plus interest at a rate of ten percent a year, to Respondent Soler Enterprises, LLC, License Number 327106.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

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.

Done this day, March 24, 2023.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Martín Quezada, Director

Registrar of Contractors

[email redacted]

Seth T. Hargraves

Office of the Attorney General

[email redacted]

[email redacted]

Robin Williams

[email redacted]

Shane Peterson

Peterson Law Offices, PLLC

[email redacted]

By: OAH Staff