ALJDEC decisions subject to certification as final

2022A-01305-CHC-ROC · Registrar of Contractors · 2023-01-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Nancy Chan

and

William Murphy,

COMPLAINANTS

Dipaolo Construction, LLC

DBA: Dipaolo Design & Construction

License No. ROC 320948,

RESPONDENT

No. 2022A-01305-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: January 13, 2023

APPEARANCES: Daniel Nies, Esq. represented Complainants Nancy Chan and William Murphy. Complainant Nancy Chan was present. Joseph Anthony, Esq. represented Respondent Dipaolo Construction, LLC, doing business as Dipaolo Design & Construction. Robert Dipaolo appeared on behalf of Respondent Dipaolo Construction, LLC. Arizona Registrar of Contractors Investigator Steven Avila appeared as a witness.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Dipaolo Construction, LLC, doing business as Dipaolo Design & Construction (“Respondent”), is the holder of License No. 320948 issued by the Arizona Registrar of Contractors (“Registrar”). Robert Dipaolo is Respondent’s Qualifying Party and sole Member.

Nancy Chan and William Murphy (“Complainants”) purchased a newly constructed home in 2020, which was completed in March 2021.

On March 23, 2021, Complainants contracted with Respondent for Respondent to remodel the primary bathroom, the kitchen, and powder room, and to remove and install approximately 3,400 square feet of tile throughout the home. The contract included electrical work. The contract further specified the following in regard to paint: “[c]ost to touch-up drywall work and patch areas TBD as work is completed. Paint not included.” The contract also specified that “[a]dditional or unforeseen work added to Scope will be billed accordingly.”

On or about February 16, 2022, the Registrar received a Complaint against Respondent from Complainant Nancy Chan alleging abandonment and poor work with respect to Respondent’s scope of work.

The Registrar assigned the Complaint to Investigator Steven Avila. After a June 21, 2022 Jobsite Inspection, at which both parties were present, Investigator Avila issued a July 26, 2022 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 August 12, 2022.

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

Compliance Item: 1 - Epoxy grout film all over tiles so they look dirty all of

the time. (This is the biggest issue I have with the quality of the workmanship) If they applied the grout correctly, this would never have happened.

Investigator’s Observation: At the time of the inspection the haze from

the epoxy grout could be seen throughout the tile project. Haze was present in multiple rooms and hallways. Allegation is verified. Respondent shall correct by the appropriate means.

Compliance Item: 2 - I paid the developer for upgraded baseboards. The

floor cleaner he hired came in and mashed and marred up all of my baseboards after he had touched up the paint. I discovered that they had touched up paint over grout stuck onto the baseboards and contractor had to come back and sand the baseboards down to remove the grout. Now they have to be repainted and he refuses. He is also charging me over 2k for paint touch up where the paint didn’t match and we had to repaint the walls ourselves wall to wall to cover it up, and the baseboards which now need to be repainted. The painter he used is unlicensed – had his license revoked in Arizona. He should have called me to let me know that the paint did not match because there was a paint shortage I would have told him not to touch up paint. He also never provided me with an estimate prior to doing it.

Investigator’s Observation: At the time of the inspection the baseboards in question had blemishes that are consistent with both the allegations of the cleaner created damage along with blemishes caused during the scraping and sanding of the baseboards to remove grout that was painted

over after the installation of the tile. The additional items appear to be statements and not an allegation that implicates poor work that I can inspect

and report on. Allegation of damage to the baseboards is verified.

Respondent shall correct by the appropriate means.

Compliance Item: 6 - My contractor never mentioned we needed permits in his contract or verbally and during my conversation I was asked by ROC if he pulled permits and I stated I didn’t know we had to. Am I responsible for this? Isn’t a licensed contractor supposed to specify if a permit is required and who is supposed to pull it?

Investigator’s Observation: At the time of the inspection it was determined that no permits were pulled in regards to the electrical work performed in the master bathroom. Allegation of no permit is verified. Respondent shall obtain all needed permits and pass all required inspections.

ITEMS NOT REQUIRING CORRECTION

The following complaint items require no action by the Respondent:

Compliance Item: 3 - Installed outlets in master bathroom and did not set a dedicated line so breaker keeps tripping when cleaners use the outlets in the bathroom to vacuum floors. He stated that the subcontractor that he had the original agreement to do the work should warranty the work though the sub never did it, and he wants me to chase after him to do it. The second electrician he brought in to do the outlets did it without a dedicated line which caused the problem but contractor won’t take responsibility for this.

Investigator’s Observation: At the time of the inspection the complainant was unable to recreate the allegation of the outlet in the bathroom tripping a breaker. Allegation is not verified.

Compliance Item: 4 - The pony wall he constructed and had his guy texture

the wall is still wavy. He said it was the best he can do but it looks bad. He’s

already tried sanding it down so it looks better than it did before but if there is anything we can do to get it right that would be great.

Investigator’s Observation: At the time of the inspection the complainant did not want this line item addressed

Compliance Item: 5 - He is charging me over 2k to patch holes which there

weren’t that many, he never provided me an estimate beforehand, and he won’t prove that it was reasonable and legitimate and that he has a right to make a profit without prior approval because in the contract he noted the cost to patch holes will be determined. In addition he stated it was because of all the extra holes his subcontractor made unnecessarily

Investigator’s Observation: This line items appears to be a financial dispute and not an allegation that implicates poor work that I can inspect and report on.

Compliance Item: 7 - He stated that he is going to charge late fees if I don’t

pay him the balance of the agreement which everyone has told me that I shouldn’t pay him until he has rectified all of the open issues.

Investigator’s Observation: This line items appears to be a financial dispute and not an allegation that implicates poor work that I can inspect and report on.

All errors in original.

After the issuance of the Written Directive and the expiration of the time period in which to perform corrective work, Ms. Chan emailed Investigator Avila to inform him that Respondent had not performed any of the work required by the Written Directive. Consequently, Investigator Avila did not perform a Compliance Inspection.

Thereafter, Investigator Avila forwarded 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)(2)(b), A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(a), and A.R.S. § 32-1154(A)(22).

Investigator Steven Avila’s Testimony

Investigator Avila testified consistently with his findings contained in his Jobsite Inspection Notes and the Written Directive. Investigator Avila explained that Ms. Chan filed her Complaint on February 16, 2022, however, the Complaint was closed “almost immediately” due to her desire to try to resolve the matter with Respondent. The Complaint was re-opened on May 24, 2022, at Ms. Chan’s request.

Investigator Avila testified that electrical work was part of the scope of work and was completed by an “agreed upon third party.” Investigator Avila asserted that such work fell under Respondent’s license. Investigator Avila testified that a permit was required for the electrical work performed and that a permit was not on the premises.

Investigator Avila referenced several photographs taken at the Jobsite Inspection that illustrate the deficiencies in Respondent’s work, specifically the discoloration throughout the tile installation and the damage to the baseboards.

Investigator Avila testified that the use of epoxy grout can result in haze on tile, however, if cleaned properly, there should be no haze remaining. Investigator Avila testified that Respondent is responsible for remedying the deficiencies.

Nancy Chan’s Testimony

Ms. Chan testified that she is a “stickler for details” and that she remodeled a newly constructed home.

Ms. Chan testified that there were no written change orders for the project and one verbal change order concerning piping in the primary bathroom. Ms. Chan further testified that the contract does not mention that she was responsible for obtaining a permit for the project. Ms. Chan explained that the total cost of the remodel project was over $400,000.00, and Respondent’s contract price was $85,950.00 for labor only, as she purchased the materials separately.

Ms. Chan testified regarding Respondent’s attempts at cleaning the tile. Ms. Chan referenced a text message from Mr. Dipaolo dated July 5, 2021, wherein Mr. Dipaolo stated, “[w]ith an epoxy grout, I do not have any idea of how to clean that grout. Epoxy is a glue-like resin that does not allow for absorption of water and cleaning materials. The only recommendation and suggestion I have for that is to see what the manufacturer recommends.”

Ms. Chan testified that Respondent’s first attempt at cleaning the tile was on September 27, 2021, during which Respondent cleaned “the clumps” of grout, however, afterward, Ms. Chan noticed a “film everywhere” and the tile looked “perpetually dirty.”

On September 28, 2021, the day after the cleaning, Ms. Chan contacted the cleaning company that Respondent utilized because the tile was still not clean, and the cleaning company could not remedy the issue.

Respondent’s second attempt at cleaning the tile was in March 2022. Ms. Chan testified that Respondent hired the same cleaning company that could not clean the tile during its initial attempt, and was told it would take “two moppings” for the tile to appear clean. However, even after two moppings, the tile still did not appear clean. Ms. Chan alleged that Respondent “kept adding costs to the invoice to cover the costs of cleaning.”

Ms. Chan testified that she paid an additional $8,000.00 for upgraded baseboards to be installed by the developer of her home and that the damage to the baseboards occurred during the first cleaning attempt. Ms. Chan testified that Respondent attempted to remedy the damage by painting over the grout on the baseboards and that Respondent is charging $1,200.00 for such.

Regarding the electrical work, Ms. Chan testified that the electrical work in the bathroom is within the scope of the parties’ March 23, 2021 contract and that Respondent did not mention to her that she would be responsible for obtaining the required permits. However, on March 28, 2021, five (5) days after the parties entered into their contract, Ms. Chan emailed Respondent the following:

Roberto - I feel awful – I met my sister’s friend- hes a licensed plumber and is having a hard time getting work since he’s been discriminated against because hes middle eastern and his name is Ali. Hes so nice and he deconstructed a lot of the stuff in my house in terms of plumbing and electrical. Is there any chance we can give him the 5k of work instead of your guy? I’m specifically talking about the elctical extra – can we take that out and let him do that work. It wont get in your way cuz I can have him do it when your guys aren’t there. Its only installing fans, cans, tv mounts, switching out the outlets and hanging pendants. Let me know what you think.

All errors in original.

On March 29, 2021, Mr. Dipaolo responded to Ms. Chan’s email as follows:

I spoke to my electrician and he’s declining to do the other half of the electrical work.

Mainly because we get into a conflict with who warranties the work, and quality/expertise of your other electrician (having 2 different subs on the same trade isn’t an ideal scenario). And the price he provided was for doing the whole scope (its more attractive to do all of it, rather than piece-meal it).

Also, Buildzoom suggested one sub should do the work. And I agree.

Let me know which way you want to go and we’ll make the changes.

All errors in original.

Ms. Chan decided to hire family friend, Ali Mustafa, for the electrical scope of work and used Respondent as a “pass through” for payment to Mr. Mustafa. In an email dated August 16, 2021, with the subject line, “pass through electrical,” Ms. Chan notified both Mr. Dipaolo and Mr. Mustafa of the following: “Hi here is my accounting of the status of the spreadsheet that was a pass through to Ali. . . . Ali- please review. If this looks correct, then I owe you $580.00.” The accounting included electrical work in the bathrooms.

Ms. Chan contended that Mr. Dipaolo interviewed Mr. Mustafa and decided to use him. Ms. Chan also contended that the electrical work performed by Mr. Mustafa did not require a permit. However, contrary to Ms. Chan’s testimony that the work performed by Mr. Mustafa did not require a permit, the scope of the work within the parties’ contract required a permit and that is the work that was performed by Mr. Mustafa.

Robert Dipaolo’s Testimony

Mr. Dipaolo testified that he was the project manager for the scope of work contained in the parties’ contract as Ms. Chan was supplying all of the materials.

Mr. Dipaolo testified that when he issued his Final Billing Statement dated November 17, 2021, to Ms. Chan, the grout on the baseboards was “not an issue” and she requested that all of the baseboards be painted, not simply “touched up.” Mr. Dipaolo testified that Ms. Chan instructed him to “paint over everything,” and that painting was not included in the contract terms.

Mr. Dipaolo testified that after the second cleaning of the floor, he cleaned the baseboards, and they were repainted on the same day. The November 17, 2021 invoice was sent after this work was performed and Mr. Dipaolo testified that Ms. Chan was “shocked” and refused to pay for the painting of the baseboards. Mr. Dipaolo referenced a September 28, 2021 email from Ms. Chan after the initial cleaning of the floor, wherein she stated, “so happy the floor got cleaned today! Scott said it needs more cleaning but he got a lot of grout off. . .” Mr. Dipaolo asserted that Ms. Chan “only complained after” she received the additional invoice.

Mr. Dipaolo testified that epoxy grout cleans well on glossy tile, however, with rough tile, it is “a lot of work to clean” an abrasive tile surface. Mr. Dipaolo explained that further exacerbating the situation was the fact that the project was two months behind schedule due to the delay in obtaining the cabinets. Due to the delay, Ms. Chan requested that the tile be installed. Consequently, there were six or seven months during which construction crews were walking on the tile.

Mr. Dipaolo testified that he consulted with the grout manufacturer to determine how to clean the tile effectively. Mr. Dipaolo testified that the floor was cleaned for the second time on March 7, 2022, and Ms. Chan was present for the cleaning and was satisfied upon completion.

Mr. Dipaolo acknowledged that there remains grout and haze on the tile.

Regarding the permit issue, Mr. Dipaolo testified that he consistently utilizes a particular electrical subcontractor. Mr. Dipaolo testified that when he negotiated the contract with Ms. Chan, he did so based upon the price provided by his electrical subcontractor. After the parties signed the contract, Ms. Chan wanted Mr. Mustafa to perform portions of the electrical work. Mr. Dipaolo’s electrical subcontractor did not want to share responsibility for the work with another subcontractor due to questions regarding which contractor would be responsible for potential warranty work and the potential for “finger pointing.” Mr. Dipaolo’s subcontractor declined to work with Mr. Mustafa and Ms. Chan choose to have Mr. Mustafa perform the electrical work for the project.

Mr. Dipaolo testified that he did not have any conversations regarding permits with Ms. Chan at the time the parties executed the contract because his electrical subcontractor would have done that. However, Mr. Dipaolo’s electrical subcontractor did not perform any work on the project. All electrical work was performed by Mr. Mustafa.

Mr. Dipaolo testified that payments to Mr. Mustafa were handled as “pass through payments,” meaning that he paid Mr. Mustafa from the monies paid toward the contract price by Ms. Chan. Mr. Dipaolo testified that Mr. Mustafa only accepted cash payments. After Mr. Mustafa “walked off the job,” Mr. Dipaolo researched whether Mr. Mustafa was a licensed contractor and could not find any evidence of Mr. Mustafa being a licensed electrical contractor. Given Mr. Mustafa’s unlicensed status, Mr. Dipaolo testified that he was “not surprised” that Mr. Mustafa wanted to be paid in cash and did not obtain a permit for his work.

Mr. Dipaolo testified that he did not comply with the Written Directive because Ms. Chan refused to pay the final invoice and because he did not receive a response from Ms. Chan regarding his offer of resolution.

Administrative notice is taken of Respondent’s prior License record on January 23, 2023. Such prior License record reflects that Respondent’s License No. 320948 was first issued on July 26, 2018, and is active. Such prior License record also reflects that there are no open complaints, zero resolved/settled complaints, and no discipline against Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish Respondent’s statutory violations 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.”

The evidence established that while Ms. Chan initially contracted with Respondent for Respondent to perform the electrical portion of the project, shortly after the contract was executed, Ms. Chan chose to hire Mr. Mustafa, a family friend, to perform the electrical work. The evidence further established that Ms. Chan requested that Respondent pay Mr. Mustafa through a “pass through” from funds paid to Respondent that were allocated for the electrical work and would have been used to pay Respondent’s licensed electrical subcontractor. Given the credible and probative evidence presented at hearing, the Administrative Law Judge finds that it was Ms. Chan who made the unilateral decision to utilize Mr. Mustafa to perform the electrical scope of work contained in the parties’ contract as Mr. Dipaolo was clear that Respondent’s electrical subcontractor would not divide the work. The Administrative Law Judge deems Mr. Dipaolo’s testimony credible concerning the fact that his electrical subcontractor would have managed the permitting of the project had that subcontractor been utilized. Instead, Ms. Chan chose to utilize a purported unlicensed contractor who failed to obtain the permit for the electrical work. Ms. Chan modified the terms of the parties’ contract when she communicated to Respondent: “[i]s there any chance we can give him the 5k of work instead of your guy? I’m specifically talking about the elctical extra – can we take that out and let him do that work?” Mr. Dipaolo clearly communicated to Ms. Chan that his electrical subcontractor would either do all or none of the work. When Ms. Chan made the decision to hire Mr. Mustafa, she chose not to utilize Respondent for the electrical portion of the contract within mere days of signing the contract. Such decision absolved Respondent from the responsibility of obtaining the permit as Respondent was no longer responsible for the electrical work and did not perform any of the electrical work. Therefore, the Administrative Law Judge concludes that Complainant failed to establish that Respondent violated A.R.S. § 32-1154(A)(2)(b).

The evidence established that Respondent’s work was not in conformity with the Registrar’s standards as evidenced by the condition of the tile and the baseboards. Further, Mr. Dipaolo acknowledged the continued existence of grout and haze on the tile. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108(a).

The evidence established that Respondent did not complete the corrective work following the issuance of the Written Directive and that valid justification did not exist for such failure. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a Written Directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 320948 for a period of three (3) days.

It is further recommended that the Registrar require Respondent to pay the sum of $250.00 as a civil penalty pursuant to A.R.S. § 32-1154(E).

It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty (30) days following the effective date of the Registrar’s final order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(7), unless Respondent tenders payment of any outstanding prior civil penalty.

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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001

-137160-45720000Done this day, January 27, 2023.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically or by mail to:

Jeffrey Fleetham, Director

Registrar of Contractors

[email redacted]

Nancy Chan

[email redacted]

Dipaolo Construction LLC

DBA: Dipaolo Design & Construction

[email redacted]

Daniel Nies, Esq.

[email redacted]

Joseph E. Anthony II, Esq.

[email redacted]

Steven Avila

[email redacted]

By: OAH Staff

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001

-137160-45720000