ALJDEC - Licensing
2022A-06279-CHC-ROC · Registrar of Contractors · 2023-05-01
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Ana Acuna,
COMPLAINANT,
v.
L R Acquisitions, Inc.
DBA: Lyons Roofing
License No. ROC 205554,
RESPONDENT.
No. 2022A-06279-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: January 31, 2023, with further hearing on April 17, 2023
APPEARANCES:
January 31, 2023: Complainant Ana Acuna appeared on her own behalf. Bernadette Rosenberg was present. Gary Smith, Esq. represented Respondent L R Acquisitions, Inc., doing business as Lyons Roofing. Rhonda LaNue, Paul LaNue, Ananda Holman, Shane Ranney, and Art Cargola appeared on behalf of Respondent L R Acquisitions, Inc., doing business as Lyons Roofing. Arizona Registrar of Contractors Investigator Michael Springer appeared as a witness.
April 17, 2023: Complainant Ana Acuna appeared on her own behalf. Gary Smith, Esq. represented Respondent L R Acquisitions, Inc., doing business as Lyons Roofing. Rhonda LaNue, Paul LaNue, and Shane Ranney appeared on behalf of Respondent L R Acquisitions, Inc., doing business as Lyons Roofing.
ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella
FINDINGS OF FACT
L R Acquisitions, Inc., doing business as Lyons Roofing (“Respondent”), is the holder of License No. 205554 issued by the Arizona Registrar of Contractors (“Registrar”). Paul LaNue is Respondent’s Qualifying Party and an Officer, and Rhonda LaNue is an Officer of Respondent.
On or about April 20, 2022, Bernadette Rosenberg contracted with Respondent to remove the existing roof and install a new roof at her sister, Ana Acuna’s (“Complainant”), residence. The contract price was $11,873.00. Ms. Rosenberg paid Respondent $3,562.00 as a down payment, with the contract balance due upon completion.
On or about July 29, 2022, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to the project.
The Registrar assigned the Complaint to Investigator Michael Springer. After an August 17, 2022 Jobsite Inspection, which Respondent did not attend, Investigator Springer issued a Written Directive to Respondent dated September 2, 2022, 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 September 21st, 2022.
You are directed to remedy the following violations by the appropriate means:
Compliance Item: 2 - metal flashing around chimney not connected to shingles & shingles are not adhered to roof;
Investigator’s Observation: When looked at from the attic space, light can be seen penetrating between the chimney and roof. Complainant states
water leaks from this area.
Compliance Item: 3 - loose shingles around exhaust vents from house;
Investigator’s Observation: When looked at through the attic space, light can be seen around the venting. Complainant states water leaks from this area.
Compliance Item: 4 - patio support beams not connected to house;
Investigator’s Observation: Rafters are nailed to existing rafters of the home. They are not bearing on the top plate because the top plate is rotted and missing in areas. Nails used for this are not completely sunk into rafters. Rafter are not bearing on outside beam, they are floating with only nails to attach, no H clips. Respondents license does not allow framing of patio. Respondent holds an R-42 and would require an R-3.
Compliance Item: 5 - did not replace rotted boards, but but put boards over the rotted ones;
Investigator’s Observation: Rafter tails around the entire home are rotted. Respondent added block to these rotted boards instead of replacing them.
Compliance Item: 6 - gap from porch and roof only structural support is paper and shingles and water run off not protecting structural wood;
Investigator’s Observation: There is approx 2 inch gap from where the porch transition to the roof line with no support.
ITEMS NOT REQUIRING CORRECTION
The following complaint items require no action by the Respondent:
Compliance Item: 1 - very top cap shingle is was missing;
Investigator’s Observation: This was corrected at time of JSI
Compliance Item: 7 - placed roofing material over rotted board
Investigator’s Observation: Addressed in items 4,5
All errors in original.
After the expiration of the Written Directive, Investigator Springer determined based on communications from both parties, that no work had been performed. Investigator Springer thereafter forwarded the Complaint 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), A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158, A.R.S. § 32-1154(A)(16), and A.R.S. § 32-1154(A)(22).
Investigator Michael Springer’s Testimony
Investigator Springer testified consistently with the findings contained in his Jobsite Inspection notes and the Written Directive. Investigator Springer testified that the items ordered to be corrected “can be repaired easily.” Investigator Springer referenced the photographs he took during the Jobsite Inspection that illustrate the workmanship deficiencies he verified.
Investigator Springer testified that Respondent had asserted a denial of access, however, he had not received copies of correspondence between the parties. Investigator Springer testified that if Respondent had provided evidence that it offered to perform the required repairs and that Complainant precluded the work from being performed, he would have dismissed the Complaint.
Investigator Springer testified that he was told by Ms. Acuna at the Jobsite Inspection that “the whole patio was replaced” by Respondent. Regarding the patio, Investigator Springer testified that it is not permitted, and therefore, does not meet code requirements. Investigator Springer testified that the issues with the patio can be repaired. However, it was ascertained at hearing that Respondent did not construct the patio and that it was an existing structure.
Investigator Springer testified that he issued a Warning Letter to Respondent because he believed Respondent’s contract failed to contain all nine (9) of the elements required by statute for written contracts. Specifically, Investigator Springer found that Respondent’s contract was lacking a completion date and the advisement to a homeowner regarding how to file a complaint with the Registrar. However, during the course of the hearing, it was determined that Complainant only provided the first two pages of the parties’ thee page contract to Investigator Springer, and the last page of the contract contains both an estimated timeframe for completion and the required advisement to the homeowner.
The Registrar also issued a Warning Letter to Respondent regarding its work on the patio, advising, “[i]t appears that you may have operated beyond the scope of your CR-42 Roofing license. I reviewed evidence which suggested that you bid on, contracted for, or performed work that would require an R-3 license.”
Ana Acuna’s Testimony
Ms. Acuna testified that she never denied Respondent access to perform repairs and that she is “stuck with a free roof that leaks and a porch that floats.” Ms. Acuna asserted that Respondent did not send any workers to perform the repairs. Ms. Acuna testified that she wants a roof that does not leak. Essentially, Ms. Acuna indicated that she wanted the newly installed roof removed and a new roof installed in its place, in lieu of corrective work.
Rhonda LaNue’s Testimony
Ms. LaNue testified that she has been Respondent’s Executive Vice-president for almost twenty years. Ms. LaNue testified that she has been corresponding with Ms. Acuna since July 2022, regarding Ms. Acuna’s complaints. Respondent stipulated at hearing to the workmanship issues set forth in the Witten Directive.
Ms. LaNue testified that Respondent has made numerous efforts to gain access to the property in order to assess all damages and the leak, as well as to perform the necessary repairs. Respondent’s intent was to perform all exterior and interior repairs simultaneously. Ms. LaNue testified that Respondent sent four letters/emails to Ms. Acuna and Ms. Acuna did not respond to any of them, and therefore, Ms. Acuna did not respond to Respondent’s multiple requests to access her home.
Ms. LaNue testified that the roof is structurally sound, “but needs some repairs.” Ms. LaNue testified that Respondent offered to refund the deposit paid and waive the balance due and owing on the contract, however, Ms. Acuna declined the offer.
Ms. LaNue testified that the work concerning the existing patio structure was not included in the parties’ contract and that one of her workers offered to accommodate Ms. Acuna by performing minimal work to the patio. Respondent did not charge Ms. Acuna for any work performed to the patio.
Ms. LaNue testified regarding the timeline of events concerning the project and the filed Complaint.
On July 28, 2022, Respondent sent Ms. Rosenberg an email which stated in pertinent part:
I wanted to recap our conversation with our current plan of action moving forward.
1. No later than 12 PM tomorrow, I will be emailing you a report with photos detailing our suggested plan of action In this report there may be some options for you to choose from on how you would like us to proceed.
2. Once you have agreed to the remedies and returned the signed Corrective Work Order via email, we will schedule our Quality Control Project Manager and a crew from our Phoenix office to go onsite to complete the repairs. We will take pictures of all of the completed repairs and send them to you in a separate report.
3. I will be researching your concerns regarding the Asbestos tear‐off and an itemized invoice and email you that information as well as a credit for that portion of the work.
4. Following the completion of all repairs, we will be contacting the ROC to have them complete an independent inspection of our work through their Building Confidence Program.
5. Once final payment for the project is made, I will also issue you a notarized Unconditional Lien Release for your records.
All errors in original.
On July 29, 2022, Respondent sent Ms. Acuna and Ms. Rosenberg the following proposal for corrective work to be performed:
This report serves as our proposed corrective scope of work in order to remedy the installation issues that occurred during the roofing project at the above-noted address. I have included pictures of both the areas needing correction, as well as options for you to choose from in order to remedy.
Some of the items have already been repaired, so for those, I have included photos showing the remedied work with explanations.
Finally, we have researched the issue regarding the additional charges you incurred for a non-friable asbestos removal of the prior roofing system. As our team did not perform what you were expected, we have decided to credit you that portion of the project. I have included in this report an itemization of our scope with pricing listed to show you how we came to the discount amount.
When you would like us to proceed with the corrective measures, please initial and sign this document and return it to us either via email at [email redacted]; [email redacted] & aholmanlyonsroofing.com. Or by regular mail to our Phoenix offices.
We appreciate the opportunity to correct our workmanship and communication errors. If you have any questions or concerns, please reach out at any time.
All errors in original.
On August 11, 2022, Ms. LaNue emailed Ms. Acuna the following:
Thank you for taking the time to speak with me today. Again, my sincerest apologies for your inconvenience and frustrations. As we discussed, we will be completely tearing off your patio roof, assuring we secure it properly, with pristine wood replacing the existing as well as any rotted wood there may be and reinstalling the roof for you. Thank you for sharing your home is slated to be assigned Historic status, that is exciting and we will assure the completed job speaks to the original historic features you would like. You mentioned the underneath as tongue & groove but we will have to confirm with you what exactly you want as the ceiling on the patio. The term I couldn't remember was T1-11, however I'm not sure that is what you wanted either so we will have to figure this out. In the meantime you agreed to call the ROC to put a 'Hold' on this complaint until we can complete the new patio roof. If you are not satisfied at that point you can have the Inspection rescheduled. I also committed to having an Exec Mgr oversee the job, that could be me or Paul LaNue, President. And our production department will be reaching out to you next week (Monday) to schedule the re-roof. Again, I appreciate your allowing us to opportunity to exceed your expectations, as this is our goal.
All errors in original.
In an August 15, 2022 email to Ms. Rosenberg, Ms. LaNue assured her that Respondent would address all of her concerns.
On September 12, 2022, Respondent sent the following letter to Complainant, through Ms. Rosenberg, as Ms. Rosenberg was the party to the contract:
We have received the corrective order from the Registrar of Contractors.
On August 16, 2022, I had a very nice conversation with Ana Acuna. In that conversation we discussed the fact that Art Cargola, the Project Manager for your job, agreed to correct areas of concern outside the roof. We know this is your childhood home and how important it is to get all areas right for your homes’ upcoming historic designation. In the conversation I expressed to Ana that doing any work outside of your roof, above the decking, was beyond our scope of work and should never have done it, as a gesture of goodwill or for any reason.
In this conversation we also offered a full refund of all monies paid to Lyons Roofing, leaving you with a new roof at no cost, and that those monies could be used to hire the right contractor to do any non-roof related items, as well as another roofing company to repair the roof related items on the Registrars Directive. Bernadette, I left you 3 voice mails regarding this, August 16th, August 25th, and August 31st, with no response. I had also communicated that we would have liked to have known when the ‘city inspector’ that was called was coming out so we can be there as well. No reply to that either.
At this point it is clear you do not have the confidence in us, nor do we have the confidence that we can satisfy you. We would like a response to our offer to take a full refund, have another roofing company come out to do the items on the ‘Amended Written Directive from The Registrar’, dated September 2, 2022, and a remodeling or general contractor to do the other items not able to be done by a roofing company. The figures follow.
Original Contract $11,873.00
Change Order (wood for roof and patio) $ 5,091.40
Total Cost of Project $16,964.40
Deposit (To Be Refunded) $ 3,562.00
Please respond to all to let us know how to proceed.
All errors and emphasis in original.
On September 26, 2022, Respondent sent the following email to Ms. Acuna and Ms. Rosenberg:
We would like to schedule a time where Paul LaNue and I can come down to assess the interior damages you have noted, as well as the current leak you said you have. We will need access to the inside of your home.
Once we assess the damage of the interior we will provide you with options for rectifying the issues on your roof, with your patio and interior damages.
Paul and I will be at a roofing convention Thu the 29th returning Mon the 3rd. We can be available this Wednesday the 28th, or the following week (week of Oct 3) Tuesday thru Friday the 4th thru the 7th. Can you please let us know what can work the best for you. We anticipate approximately 1 hour.
Please let us know your availability.
All errors in original.
On September 26, 2022, Respondent sent the following email to Ms. Acuna:
We are in receipt of your email.
Again, we are willing, capable and ready to complete your roof repairs. The only thing holding us up from doing those is to see the interior damage you have claimed. I say that as I believe you wanted us to be liable for the costs of repair, and we cannot agree on that until we assess the damage. Once we are able to see the interior damage we will make arrangements to proceed with all repairs (roof and interior).
Please let us know when we can do this. We will make ourselves available;
THIS WEEK
Tuesday, the 11th ‐ early afternoon
Wednesday, the 12th ‐ AM
Thursday, the 13th‐ noon on
NEXT WEEK
Monday the 17th‐ Anytime
Tuesday the 18th ‐ noon on
All errors in original.
Ms. LaNue credibly testified that notwithstanding the numerous requests to access the property to perform the necessary repairs, Ms. Acuna and Ms. Rosenberg would not respond to those requests.
Administrative notice is taken of Respondent’s prior License record on April 25, 2023. Such prior License record reflects that Respondent’s License No. 205554 was first issued on March 31, 2005, and is active. Such prior License record also reflects that there is only the instant open complaint, no disciplined complaints, and one resolved/settled complaint against Respondent’s license.
The Registrar’s substantive policy statement 2017.01 sets forth 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.
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.”
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.
The evidence established that Respondent’s work was not in conformity with the Registrar’s standards as workmanship deficiencies admittedly existed. However, the evidence of record established that the items of deficiency could be easily corrected and Complainant would not provide Respondent access to perform the required work. The credible and probative evidence of the record established that Respondent made numerous requests to access the property to assess its work and the interior damage, and that Complainant did not respond to those requests, did not grant access, or schedule a mutually convenient time with Respondent for Respondent to access the property. While Complainant had no obligation to provide access to Respondent after the expiration of the Written Directive, Respondent made attempts during the requisite time period, and the evidence of record further established that the parties were engaged with each other after the expiration of the Written Directive. The evidence of record established that Complainant denied Respondent any meaningful opportunity to cure the defects. Therefore, 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.
The evidence failed to establish that Respondent’s contract was not in conformity with the Registrar’s statute governing written contracts. Complainant only provided a partial contract to Investigator Springer and the full contract contains the required elements. Therefore, Complainant failed to establish that Respondent failed to comply with the Registrar’s statute in violation of A.R.S. § 32-1154(A)(12).
A.R.S. § 32-1101(3) defines "Contractor" as follows:
(a) Is synonymous with the term "builder" and means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that, for compensation, undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others to:
(i) Construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or any other structure or work in connection with the construction.
(ii) Connect such a structure or improvements to utility service lines and metering devices and the sewer line.
(iii) Provide mechanical or structural service for any such structure or improvements.
(b) Includes subcontractors, specialty contractors, floor covering contractors, hardscape contractors and consultants who represent that they are able to supervise or manage a construction project for the property owner's benefit, including hiring and firing specialty contractors, scheduling work on the project and selecting and purchasing construction material.
Emphasis added.
Respondent has been charged with knowingly contracting beyond the scope of its license regarding work done to the patio based upon information provided to Investigator Springer by Complainant. That information led Investigator Springer to believe that Respondent actually constructed the patio. However, the credible evidence of record established that one of Respondent’s workers, without the knowledge or consent of Respondent, performed work on the existing patio as a gesture of goodwill and was not compensated for such work. The work was not contemplated by the parties’ contract and Complainant did not pay Respondent or its employee for such work. Therefore, the Administrative Law Judge concludes that Complainant did not establish that Respondent contracted beyond the scope of its license.
The alleged workmanship deficiencies can be easily corrected in Investigator Springer’s opinion, and Respondent had diligently attempted to comply with the Written Directive and has continuously been willing to make any corrections that the Registrar believed were required. Respondent has been licensed since 2005 with no discipline imposed against its license, which is a factor 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.
Considering the factors set out in the Registrar’s substantive policy statement, it is appropriate to dismiss this matter.
RECOMMENDED ORDER
IT IS ORDERED that Case Number 2022A-06279 is dismissed.
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, May 1, 2023.
/s/ Sondra J. Vanella
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Martín Quezada, Director
Registrar of Contractors
[email redacted]
Ana Acuna
[email redacted]
Gary Smith, Esq.
[email redacted]
L R Acquisitions Inc., dba Lyons Roofing
[email redacted]
Mike Springer
[email redacted]
By: OAH Staff