ALJDEC - Licensing

2023A-11700-CHC-ROC · Registrar of Contractors · 2024-10-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Dennis Canar,

COMPLAINANT,

Abbott Rhoton Investments, LLC

DBA: Capstone Homes

License No. ROC 244985,

RESPONDENT.

No. 2023A-11700-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 11, 2024

APPEARANCES: Complainant Dennis Canar appeared on his own behalf. Chase Halsey, Esq. represented Respondent Abbott Rhoton Investments, LLC, doing business as Capstone Homes. Arizona Registrar of Contractors Investigator Christopher Allison appeared as a witness. Dennis Oliver Canar Yanez and Ciaran Mullins also appeared as witnesses.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

EXHIBITS ADMITTED INTO EVIDENCE: None; Administrative Notice taken of Agency Record

FINDINGS OF FACT

Abbott Rhoton Investments, LLC, doing business as Capstone Homes (“Respondent”), is the holder of License Number 244985 issued by the Arizona Registrar of Contractors (“Registrar”).

Dennis Canar (“Complainant”) purchased a home constructed by Respondent. The home is located in northern Arizona, in Bellemont. The home is not Mr. Canar’s primary residence, as it is used as a vacation rental property.

On or about October 9, 2023, the Registrar received a Complaint against Respondent from Complainant alleging poor work with respect to the construction of the home.

The Registrar assigned the Complaint to Investigator Christopher Allison. On December 6, 2023, Investigator Allison conducted an initial Jobsite Inspection. On December 22, 2023, Investigator Allison issued a Written Directive to Respondent that addressed the sixteen (16) items specified in Complainant’s Complaint. Investigator Allison verified seven (7) of the items of Complaint.

There were several revisions to the Written Directive, all of which were encompassed within the following:

February 23, 2024

*Revised 1/21/2023*

Compliance item 9 revised 2/23/2024

Compliance item 9 revised 04/17/2024

** Extended Due Date 04/17/2024**

*** Extended Due Date 5/15/2024***

License No. ROC 244985

Re: Complaint No. 2023-11700

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 January 31, 2024.

*Due to winter weather conditions, and the product manufacture’s requirements for ambient air temperatures. The due date of this document has been extended. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on March 31, 2024.*

**Due to winter weather conditions, and the product manufacture’s requirements for ambient air temperatures. The due date of this document has been extended. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on May15, 2024.**

*** Due to a conflict in scheduling the Respondent has requested a directive due date extension. You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on May 31, 2024. ***

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

Compliance Item: 1 - Siding on all elevations: After visual inspection, we were able to easily see a significant amount of overdriven, under driven and crooked nails in random areas of front, rear, right, and left elevation siding.

This improper installation of the nails will

Investigator’s Observation: Respondent shall correct in an appropriate manner.

Compliance Item: 6 - Stairway: Repairs have been made where the laminate wood and drywall wall meet. However, those repairs were poorly made, as you can verify on the pictures. Those repairs need to be redone to match the rest of drywall on that wall

Investigator’s Observation: The Drywall repairs are acceptable. However, the paint touch up is not. Painting required as a corollary repair should match a closely a possible. The touch ups a plainly visible.

Respondent shall correct in an appropriate manner.

Compliance Item: 9 - Main roof: Asphalt shingles have been installed with staples. This practice is not allowed by city building codes or manufacturer specifications. Due to the amount of staples used, our advice is to replace the roof and reinstall the material with the prop

Investigator’s Observation: The use of staples the attached asphalt shingle is not allowed by the building department and the manufacture.

Respondent shall correct in an appropriate manner.

Revised: documentation has been provided from the manufacture stating that staples are allowed in areas where the underside of the eaves are exposed. I also spoke to Coconino County Building Official, and he stated that the use of these staples in these areas was acceptable.

At this time there is no correction needed for the use of staples.

REVISED 4/17/2024: While the use of staples is acceptable in exposed soffit areas. There were several areas outside the exposed soffit that had staple fasteners.

Respondent shall correct in an appropriate manner.

Compliance Item: 11 - Upstairs bathroom frame is cracked in the second master bathroom and needs to be fixed.

Investigator’s Observation: The vinyl frame is cracked.

Respondent shall correct in an appropriate manner.

Compliance Item: 13 - Paint sheen on touch up paint – Interior

Investigator’s Observation: There are several areas where corollary touch up paint is visible from normal viewing angles in normal lighting.

Respondent shall correct in an appropriate manner.

Compliance Item: 15 - Underside of eves has staple holes leaving exposed wood.

Investigator’s Observation: Respondent shall correct in an appropriate manner.

Compliance Item: 16 - Foam board on foundation coming loose and has gaps

Investigator’s Observation: Foam should be secure and gaps filled.

Respondent shall correct in an appropriate manner.

ITEMS NOT REQUIRING CORRECTION

Compliance Item: 2 - Exterior: Front patio beam is missing hardware and the beam is bending.

Investigator’s Observation: hardware requirements is part of minimum code and is the jurisdiction of the local building department. At the time of the inspection, there was no plans to review the mechanical connections too. The beam is twisting. Workmanship tolerances allow 1/16" twist per linear foot and/or 1 1/4" total, for a 4x12 beam. The beam installed is a 6x12 and approximately 16 ft long. There appears to me about 3/4" total twist. This is within workmanship tolerances.

Compliance Item: 3 - Windows Exterior: There is water filtration happening though the windows due to improper installation. Most of the time this happens due to exterior sealant no applied accordingly. Repair methods: reseal all perimeters around windows in order to prevent f

Investigator’s Observation: At the time of the inspection there was no definitive evidence that the windows were leaking.

At this time there is insufficient evidence to verify an allegation of poor workmanship.

Compliance Item: 4 - Window Interior: water filtration from improper sealant installation on exterior has caused damage to the drywall surrounding the windows. After repairing the exterior, the drywall, bullnose and components, including paint, will need to be repaired.

Investigator’s Observation: At the time of the inspection there was no definitive evidence that the windows were leaking.

At this time there is insufficient evidence to verify an allegation of poor workmanship.

Compliance Item: 5 - Living room: Drywall had been repaired in the ceiling and it is noticeable. Owner requests the repairs to be fixed to have a uniform appearance throughout the room.

Investigator’s Observation:

Compliance Item: 7 - Second floor: one of the bedrooms has popped nails on the walls. Those need to be addressed and properly installed and the walls need to be re-textured and painted in order to have a uniform appearance.

Investigator’s Observation: Nail pops and normal dry wall crack need to be repaired within the 1st year. Close of escrow was 4/19/2022.

PD Visible conditions such as nail pops, cracks and seam lines due to expansion and contraction of structure.

AT Normal conditions such as hairline cracks where drywall meets a dissimilar material should be considered acceptable and can be readily corrected by homeowner.

CR Contractor should repair nail pops, seam lines and other hairline crack one time within first year of occupancy.

The complaint was filed outside the 1st year. Therefore, this item is outside the Respondents responsibility.

Compliance Item: 8 - Driveway concrete: cracks on concrete can allow water to filter and accelerate life expectancy to decrease

Investigator’s Observation: At this time the cracks and chipping in the driveway are not considered workmanship issues.

Compliance Item: 10 - Cheap assembly of doorknobs throughout the home.

Investigator’s Observation: Knobs were replaced by Complainant. This is modification of work and subject to ARS 32-1155(D)(2).

Compliance Item: 12 - Nails throughout the interior of the house are protruding/popping out. The contractor attempted to fix but did a poor job and is now worse than original work.

Investigator’s Observation: Nail pops and normal dry wall crack need to be repaired within the 1st year. Close of escrow was 4/19/2022.

PD Visible conditions such as nail pops, cracks and seam lines due to expansion and contraction of structure.

AT Normal conditions such as hairline cracks where drywall meets a dissimilar material should be considered acceptable and can be readily corrected by homeowner.

CR Contractor should repair nail pops, seam lines and other hairline cracks one time within first year of occupancy.

The complaint was filed outside the 1st year. Therefore, this item is outside the Respondents responsibility.

Compliance Item: 14 - Paint sheen on touch up paint – exterior

Investigator’s Observation: Often exterior touch ups will be visible due to the effect that outside elements have on the original paint. The touch ups are considered a close match and are within standards.

All errors in original.

On July 9, 2024, Investigator Allison conducted a Compliance Jobsite Inspection. Investigator Allison’s Compliance Jobsite General Notes set forth the following findings:

Investigator’s Observation: Respondent shall correct in an appropriate manner.

COMPLIANCE OBSERVATION: At the time of the compliance inspection there were still several areas that has overdriven and/or under driven nail. This item is not in compliance with the Written Directive.

Investigator’s Observation: The Drywall repairs are acceptable. However, the paint touch up is not. Painting required as a corollary repair should match a closely a possible.

The touch ups a plainly visible.

Respondent shall correct in an appropriate manner.

COMPLIANCE OBSERVATION: The paint was corrected in an appropriate manner.

This item is in compliance with the written directive.

Investigator’s Observation: The use of staples the attached asphalt shingle is not allowed by the building department and the manufacture.

Respondent shall correct in an appropriate manner.

At this time there is no correction needed.

REVISED 4/17/2024: While the use of staples is acceptable in exposed soffit areas. There were several areas outside the exposed soffit that had staple fasteners.

Respondent shall correct in an appropriate manner.

COMPLIANCE OBSERVATION: At the time of the compliance inspection there were still a few areas where staples were used beyond the exposed eve area. This item is not in compliance with the written directive.

Compliance Item: 11 - Upstairs bathroom frame is cracked in the second master bathroom and needs to be fixed.

Investigator’s Observation: The vinyl frame is cracked.

Respondent shall correct in an appropriate manner.

COMPLIANCE OBSERVATION: Per the Complainant at the inspection, this item was corrected. This item is in compliance with the written directive.

Compliance Item: 13 - Paint sheen on touch up paint – Interior

Investigator’s Observation: There are several areas where corollary touch up paint is visible from normal viewing angles in normal lighting.

Respondent shall correct in an appropriate manner.

COMPLIANCE OBSERVATION: At the time of the compliance inspection this item was corrected in an appropriate manner. This item is in compliance with the written directive.

\Compliance Item: 15 - Underside of eves has staple holes leaving exposed wood.

Investigator’s Observation: Respondent shall correct in an appropriate manner.

COMPLIANCE OBSERVATION: At the time of the compliance inspection this item was corrected in an appropriate manner. This item is in compliance with the written directive.

Compliance Item: 16 - Foam board on foundation coming loose and has gaps

Investigator’s Observation: Foam should be secure and gaps filled.

Respondent shall correct in an appropriate manner.

COMPLIANCE OBSERVATION: At the time of the compliance inspection this item was corrected in an appropriate manner. This item is in compliance with the written directive.

ITEMS NOT IN COMPLIANCE ARE 1 AND 9.

All errors in original.

Investigator Allison referred 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)(3), namely A.A.C. R4-9-108(a), and A.R.S. § 32-1154(A)(22).

On September 30, 2024, Investigator Allison conducted a Prehearing Inspection. Investigator Allison’s Pre-hearing Jobsite General Notes state the following in pertinent part:

Both parties were present for the inspection.

The remaining items not in compliance from the compliance inspection were items 1 and 9.

These 2 items were the only items addressed at the pre-hearing inspection.

All other items were verified as being in compliance at the compliance inspection conducted on 7/9/2024 at 10:00 AM.

Pre-hearing Findings:

Investigator’s Observation: Respondent shall correct in an appropriate manner.

PRE-HEARING OBSERVATION: At the time of the pre-hearing inspection the nailing on the siding was corrected per manufactures requirements. The Complainant pointed out a couple of areas where the outline of the caulking was visible. This is not a workmanship issue as the nailing was remedied per manufactures requirement. The Respondent went above and beyond requirements by painting the entire house after corrections were made.

This item is now in compliance with the written directive that was originally issued on 2/23/2024 and all subsequent revisions.

Compliance Item: 9 - Main roof: Asphalt shingles have been installed with staples.

This practice is not allowed by city building codes or manufacturer specifications. Due to the amount of staples used, our advice is to replace the roof and reinstall the material with the prop

Investigator’s Observation: The use of staples the attached asphalt shingle is not allowed by the building department and the manufacture.

Respondent shall correct in an appropriate manner.

At this time there is no correction needed.

REVISED 4/17/2024: While the use of staples is acceptable in exposed soffit areas. There were several areas outside the exposed soffit that had staple fasteners. Respondent shall correct in an appropriate manner.

PRE-HEARING OBSERVATION: At the time of the pre-hearing inspection there was only one shingle that I was able to lift to evaluate the nailing. The Respondent did send a video of the correction prior to the pre-hearing inspection.

The Registrar does not perform destructive measures to verify an allegation or to confirm corrections. The Respondent sent a video showing the corrections prior to this inspection.

Based off the video and my visual inspection this item is now in compliance with the written directive originally issued on 2/23/2024 and all subsequent revisions.

All errors in original.

Investigator Allison testified consistently with the findings contained in all of his various inspection notes and the Written Directive. Investigator Allison testified in detail regarding Complaint Item Numbers 1 and 9. Regarding Complaint Item Number 1, Investigator Allison testified that Respondent “went above and beyond” by re-painting the entire exterior of the home when it was only required to perform touch-up painting.

Investigator Allison testified that initially, the staples did not meet manufacturer specifications. However, the manufacturer of the roofing materials will warranty the roof as long as staples are only used in the exposed eaves, and Investigator Allison revised the Written Directive to reflect this specification. Investigator Allison explained that staples are used in exposed eaves because roofing nails are too long and would penetrate the plywood and “look ugly.” Investigator Allison testified that the house is over two years old and there is no indication of lifting shingles, and it has been weather tested over two winters, with four feet of snow and winds over sixty miles per hour. Investigator Allison explained that the Registrar does not engage in destructive testing and that at the Compliance and Prehearing Inspections, “99.5% of the shingles were adhered” and there were only a few areas he could inspect. However, Respondent submitted a video of the corrective work being performed which depicted more than what Investigator Allison could view at the Prehearing Inspection. Investigator Allison further explained that the Registrar does not address “what ifs” and does not speculate as to whether there could potentially be an issue in the future.

Investigator Allison also testified about why he did not verify certain items of the Complaint, and specifically explained that regarding the complaint items concerning leaks, these items were addressed in another complaint, number 2024-02240, that had been filed by Complainant, went through the investigative process, and was closed due to “ice damming,” which is not a workmanship issue. Investigator Allison explained that Complainant did not utilize heat strips on the roof, and that it is not a contractor’s responsibility to do so, but rather a homeowner maintenance issue. Investigator Allison could not verify any leaking. In the previous Complaint process, Respondent was able to demonstrate that the windows were properly installed and that icicles and ice damming were responsible for any leaking. Heat strips should have been installed by Complainant.

Investigator Allison testified that Respondent is in compliance with the Written Directive and there are no outstanding items of corrective work. Investigator Allison testified that had the corrective work as it stands now, been completed by the Compliance Inspection, he would have closed the Complaint.

Dennis Oliver Canar Yanez, Complainant’s father, testified that he disagrees with the vast majority of Investigator Allison’s findings and referenced a report and videos that were not submitted into evidence. Mr. Canar Yanez explained why he believes the Complaint items have not been rectified, and also why he disagrees with Investigator Allison’s findings concerning the Complaint items that were not verified, specifically Complaint item numbers 9, 6, 15, 16, 2, 3, 4, 5, 7, 8, 10. Mr. Canar Yanez provided his opinion as to why the Complaint items have not been remedied. However, Mr. Canar Yanez did not provide any evidence establishing his assertions or to contradict the testimony of Investigator Allison.

Mr. Canar Yanez acknowledged that the home is not a primary residence and is a short term rental property.

Ciaran Mullins, Respondent’s Customer Care Director for Flagstaff, Prescott and Prescott Valley, testified that he instructed Respondent’s employees to act quickly and diligently to comply with the Written Directive and that Respondent offered to install heat strips for Complainant to help with the snow and ice removal, and further offered to install gutters and downspouts, as well as extend the warranty of the home. However, Complainant did not accept the offer. Mr. Mullins testified that it is important to remove snow and ice from the roof line, and that leaks could be a direct result of not removing the ice dams.

Notwithstanding having been found to be in full compliance with the Written Directive, Mr. Mullins testified that Respondent remained willing to perform additional work to the drywall and stairs, and made such offers in order to ensure Complainant’s satisfaction.

Administrative notice is taken of Respondent’s prior License record on October 18, 2024. Such prior License record reflects that Respondent’s License Number 244985 was first issued on May 9, 2008, and is active. Such prior License record also reflects that there are two (2) opens complaint, including the instant Complaint, nine (9) resolved/settled complaints, and no complaints resulting in 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 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. “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.”

A.R.S. § 32-1154(A) provides:

The holder of a license or any person named on a license pursuant to this chapter may not commit any of the following acts or omissions:

. . . .

3. Violation of any rule adopted by the registrar.

. . . .

22. Failure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. . . .

A.A.C. R49108(A) provides that “[a] contractor shall perform all work in a professional and workmanlike manner.”

“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.

Regarding the Registrar’s charge of poor workmanship, the credible evidence of record established that while initially, there were instances of work that required correction, Respondent made those required corrections, and in fact, has gone above and beyond what the Registrar required. The credible and probative evidence of record established that the initial workmanship deficiencies have been corrected and meet or exceed the Registrar’s standards. Furthermore, Respondent has been ready, willing, and able to perform additional work as a courtesy and gesture of goodwill to Complainant, however, Complainant has refused those offers.

Regarding Respondent’s alleged failure to comply with the Written Directive, the Administrative Law Judge concludes based on the credible, probative, and substantial evidence presented at hearing that Respondent is in compliance with the Written Directive and there are no outstanding items of corrective work.

Upon consideration of the facts presented herein, and that there was no evidence adduced showing that Respondent was unscrupulous, unqualified, or financially irresponsible, it would not be fair or just to impose discipline against Respondent’s license.

RECOMMENDED ORDER

It is recommended that the Registrar dismiss Complaint Number 2023-11700 against Respondent.

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, October 21, 2024.

/s/ Sondra J. Vanella

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

c/o Legal Department

[email redacted]

Abbott Rhoton Investments, LLC

DBA: Capstone Homes

[email redacted]

Chase E. Halsey

MURPHY CORDIER CASALE AXEL PLC

[email redacted]

Dennis Canar

[email redacted]

Chris Allison

[email redacted]

By: OAH Staff