ALJDEC - Licensing
2024A-07362-CHC-ROC · Registrar of Contractors · 2024-12-12
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Janet Bonker,
COMPLAINANT
v.
Kylaco Inc.
License No. ROC 129114,
RESPONDENT
No. 2024A-07362-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: November 22, 2024 at 1:00PM
APPEARANCES: Janet Bonker, Complainant; Neal Eckel, Respondent Attorney, Robert L. Narum, Respondent President and Owner; John Smith, Registrar of Contractors Investigator
ADMINISTRATIVE LAW JUDGE: Nicole Robinson
EXHIBITS ADMITTED INTO EVIDENCE: Registrar of Contractor Notice of Hearing Packet (Packet), Respondent Exhibit #1
FINDINGS OF FACT
Kylaco, Inc. (Respondent) is the holder of License No. ROC 129114 issued by the Arizona Registrar of Contractors (Registrar).
On August 31, 2023, Janet Bonker’s (Complainant) residential home was hit by a tornado and suffered storm damage in Marana, Arizona. The roof was torn off her home, which led to water and property damage, the carport flew off and landed down the street, and eight of the ten rooms were damaged.
On or about September 25, 2023, Complainant entered into a contract with Respondent for, among other things, rehabbing her existing residential home after the tornado damage. The contract was in the amount of $42,350.00 with work beginning on September 5, 2023, prior to the contract signing, and work on the project stopped on November 21, 2023.
On June 28, 2024, the Registrar received a Complaint against Respondent from Complainant alleging poor work and job abandonment with respect to the project.
The Registrar assigned the complaint to Investigator John Smith. On August 21, 2024, Investigator Smith led a jobsite inspection with Complainant and Respondent present. On August 22, 2024, Investigator Smith issued a written directive to Respondent that provided as follows:
NOTE:
THE RESPONDENT CONTRACTED THIS PROJECT OUTSIDE THE SCOPE OF THE RESPONDENT’S LICENSE.
RESTRICTIONS
You may not perform or hire other contractors to perform work that is outside the scope of your license.
. . . .
DIRECTIVE REQUIREMENTS
You are directed to:
Obtain all required permits from the local building official
Remedy the following violations by the appropriate means:
Complaint Item 2: “Work is not completed”
Investigator’s Observations: Verified. The signed contract includes:
Inclusions: Removal of additional ceiling, wet insulation, carpet and associated trim from additional areas of water damage exposed as work was in progress. This includes Dump trailer and offsite disposal. Identification of need for additional plywood at roof damage. Installation of R- 30 insulation and sheetrock additional damaged ceilings. Repair of furnace damage as reported by Southwest Gas. Additional flooring and installation beyond abstract.
The work to be performed under this Contract shall be commenced on or before September 5 2023. Work shall be substantially completed as conditions allow.
As further described in subsequent complaint items, the project is not complete. Additionally, several aspects of this project required a building permit to be obtained prior to commencement of the work; however, all work was performed without a permit being obtained.
. . . .
Complaint Item 3: “and roof is leaking after rain in certain area.”
Investigator’s Observations: Verified.
Metal roof edge metal is installed on top of the underlayment.
Metal roof edge metal not installed correctly at transition to low slope roofs.
Evidence of leaking as a result of incorrect installation of roof edge metal.
Poor/incorrect flashing at several roof penetrations/protrusions.
Evidence of leaking as a result of poor/incorrect flashing at several roof penetrations/protrusions.
. . . .
Complaint Item 4: “Roof Stove pipe is not installed correctly, it has bent 5 degrees to the north, not secure; Front Porch ceiling plywood;”
Investigator’s Observations: Verified.
The respondent acknowledged the stove pipe is leaking, further stating the incorrect cap is installed.
Continued leaking has caused additional damage to the chimney sections.
Continued leaking has caused damage to the surround interior ceiling.
The chimney is loose and leaning. The respondent pushed the chimney demonstrating how loose the connections are.
. . . .
Complaint Item 6: “Kitchen and Bedroom ceiling register removed by Contractor and not replaced”
Investigator’s Observations: Verified. The complainant stated she has already replaced one of the missing registers herself. The front bedroom register (air diffuser) is still uninstalled.
This air diffuser was removed for the drywall work that was performed in this room.
. . . .
Complaint Item 7: “Closet doors was removed and not replaced in hallway and bedroom”
Investigator’s Observations: Verified. Closet doors in the front bedroom, and hallway closet, have been removed and not reinstalled.
. . . .
Complaint Item 8: “Spaces in the installation of the flooring in areas Gaps between walls and flooring unfinished”
Investigator’s Observation: Verified.
Areas of jambs and casing over-cut, as much as 1/4 inch above the surface of the flooring.
Several areas without required expansion space at perimeters of the flooring.
Several areas of exposed edges and cut ends of the flooring.
. . . .
Complaint Item 9: “Flooring at Step in hallway near bedroom and pantry not secured before move in, no stair nose”
Investigator’s Observations. Verified. There is no stair nose material installed at the step, causing the flooring to be loose/unsecured.
. . . .
Complaint Item 10: “Step into Den, stair nose edging not installed as required.”
Investigator’s Observations. Verified. There is no stair nose material installed at the step, causing the flooring to be loose/unsecured.
. . . .
Complaint Item 11: “1/2" - 1 3/4" gap with airflow at top of Den's 2 windows 1/2"-3/4" Gap at pantry window along with messy plaster on window frame and walls”
Investigator’s Observations: Verified. Spacing around west facing windows is not even or consistent. Some areas the drywall overlaps the windows frames by approximately 1/2 inch. Other areas the drywall is approximately 3/4 inch away from the window frames.
. . . .
Complaint Item 12: “Molding around wood stove flooring area was not installed securely with glue, loose molding”
Investigator’s Observations: Verified. Transition molding between the tiled hearth area, and the laminate flooring:
Loose / unsecured
Excessive gaps at miters
Incorrect size to completely cover edges/ends of the laminate flooring
Incorrect size to allow for required expansion space
. . . .
Complaint Item 14: “Caulking not cleaned up on flooring installation”
Investigator’s Observations: Verified. There are areas of caulking and glue residue on the surface of the flooring, primarily noticeable at doorways.
. . . .
Complaint Item 16: “Indoor Stove pipe leakage after a rain at ceiling attachment Indoor Stove pipe not reviewed for safety after storm/water damage creating tiny holes Wood stove not tested after new stove pipe outside installed on roof, Roof leaking in that area Roof Stove pipe is not installed correctly, it has bent 5 degrees to the north, not secure”
Investigator’s Observations: Verified.
The respondent acknowledged the stove pipe is leaking, further stating the incorrect cap is installed.
Continued leaking has caused additional damage to the chimney sections.
Continued leaking has caused damage to the surround interior ceiling.
The chimney is loose and leaning. The respondent pushed the chimney demonstrating how loose the connections are.
. . . .
Complaint Item 18: “Some area of the floor area are floating not stable”
Investigator’s Observations: Verified.
The area pointed out by the complainant is in the hallway area.
The area was checked using a four foot level.
Within a 36 inch span, there is a low spot of approximately 7/32 inch.
Within a 77 inch span, there is a high spot of approximately 7/32 inch.
This amount of waviness/variation is considered to be excessive.
This amount of waviness/variation is not acceptable for this type of flooring.
. . . .
Complaint Item 19: “Roof eaves have 1 1/2" to 2" nails through the plywood exposed,”
Investigator’s Observations: Verified. Shingled roof areas:
Numerous shingle nails have penetrated the bottom side of the roof sheathing, causing splintering at the roof overhangs.
Some nails have been ground off causing burns marks on the bottom side of the roof sheathing at the roof overhangs.
Applicable building codes and manufacturer requirements both require shingle nails to penetrate through the roof sheathing; however, splintering and burn marks are the responsibility of the respondent.
Low slope areas:
Several roofing material screws are penetrating through the roof sheathing, approximately 1-1/2 to 2 inches.
The respondent acknowledged these screws should be cut.
. . . .
Complaint Item 20: “bad plywood...”
Investigator’s Observations: Verified.
Some areas of the roof sheathing are not securely fastened down to the rafters, with visible gaps between the rafters and the bottom side of the sheathing.
There are areas of deflection at seams due to inadequate or improper edge support.
There is inadequate expansion space between sheets of sheathing. There are several areas of no spacing between sheets.
Replacing roof sheathing is permit required work. This work was performed without a permit being obtained.
. . . .
Complaint Item 21: “bad plywood not replaced in areas”
Investigator’s Observations: Verified.
At least one are along the west side of the house, with what appears to be, roof sheathing replaced with used materials.
At least one area along the west side of the house, with damaged broken sheathing.
. . . .
Complaint Item 22: “Roof is leaking in rear of house into 2 bedrooms...”
Investigator’s Observations: Verified.
The complainant pointed out several locations of water stains inside the house.
There is poor/incorrect flashing at several roof penetrations/protrusions.
Additionally, the signed contract includes:
Inclusions: Removal of additional ceiling, wet insulation, carpet and associated trim from additional areas of water damage exposed as work was in progress.
. . . .
Complaint Item 23: “Roof is leaking...in Arizona Room space after rain”
Investigator’s Observations: Verified.
Metal roof edge metal is installed on top of the underlayment.
Metal roof edge metal not installed correctly at transition to low slope roofs.
Evidence of leaking as a result of incorrect installation of roof edge metal.
Poor/incorrect flashing at several roof penetrations/protrusions.
. . . .
ADDITIONAL VIOLATIONS
In addition to the allegations in the complaint, the following violations were verified:
Elements of a Contract
Investigator’s Observations: The respondent’s contract is missing the following information:
An estimated date of completion.
The signed contract includes:
The work to be performed under this Contract shall be commenced on or before September 5 2023. Work shall be substantially completed as conditions allow.
Information about the customer’s right to file a complaint with the registrar.
Contact information for the registrar.
. . . .
REQUIRED CORRECTIVE ACTION: The respondent is to submit a contract form (for use on future projects) that complies with A.R.S. § 32-1158
. . . .
Performing permit required work without a permit being obtained.
Investigator’s Observations:
Work performed by the respondent includes:
Replacing roof sheathing
Installing a new gas line
Adding structural posts to the carport, altering the original load bearing points, and hold down points, of the structure
Adding a wood framed wall inside the west facing block wall, altering the original load bearing points, and hold down points, of the structure
This is all permit required work that was performed without a permit being obtained.
. . . .
REQUIRED CORRECTIVE ACTION:
The Respondent is to obtain any and all required building permits from the Local Building Authorities prior to making corrections listed in this Directive.
If the local jurisdiction finds corrective issues relating to the respondent’s work, the respondent will be required to correct those issues by appropriate means. The respondent is required to satisfy all requirements of the local building official, and to submit a copy of the approved inspection results to the ROC Investigator.
Working beyond scope of License
Investigator’s Observations:
The respondent has a B-2 Small General Commercial Contractor license.
This is a residential project.
The respondent does not have a residential contractor license.
The respondent does not have a license that allows any work on a residential project.
Following the issuance of the written directive, a deadline of Friday, September 6, 2024 was provided to Respondent to take appropriate action and comply with the directive. After the deadline in the directive expired, Investigator Smith was notified no corrective work had been performed.
On September 13, 2024, the Registrar issued a Citation against Respondent, charging possible violations of Ariz. Rev. Stat. § 32-1154(A)(2)(b); Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A) and (B); Ariz. Rev. Stat. § 32-1154(A)(12), namely Ariz. Rev. Stat. § 32-1158; Ariz. Rev. Stat. § 32-1154(A)(16); and Ariz. Rev. Stat. § 32-1154(A)(22).
Hearing Evidence
Investigator Smith testified that for Respondent to remedy Complaint items #11 and #20 would have required a permit which was never obtained. In addition, the project work needed to be performed under a residential license which Respondent did not hold or acquire. Respondent admitted to no longer having a residential license and performing the work on this project under his commercial license.
Investigator Smith testified that there were elements missing from the contract that included (1) the estimated day of completion, (2) information regarding the right to file a complaint with the Registrar, and (3) Registrar’s contact information.
Respondent admitted that the contract needed to be amended to include the necessary items and that it did not dispute this item in the written directive.
Administrative notice is taken of Respondent’s prior License record on November 22, 2024. Such prior License record reflects that Respondent’s License No. ROC 129114 was first issued on January 20, 1998, and is an Active Commercial license. Such prior License record also reflects that there is one open complaint (this current matter) 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.”
In this case, whether permits were to be pulled by Complainant or Respondent, these permits did not exist prior to Respondent performing work on loadbearing walls, structural support for the carport, roof sheathing replacement or the gas line. As such, the evidence established that Respondent did not complete the project in accordance with the applicable building code in a manner that was prejudicial to Complainant. Therefore, Complainant established that Respondent departed from or disregarded the applicable building code in violation of Ariz. Rev. Stat. § 32-1154(A)(2)(b).
The work that Complainant contracted to be done by Respondent was not completed and more than 15 allegations of poor work were never remedied. The lack of due diligence on behalf of Respondent to complete this project established that Respondent’s work was not in conformity with the Registrar’s standards. Therefore, Complainant established that Respondent did not complete the project in a workmanlike manner in violation of Ariz. Rev. Stat. § 32-1154(A)(3), namely Ariz. Admin. Code R4-9-108(A) and (B).
Respondent admitted that the contract was missing statutory elements and that they would cure this defect. As such, the evidence established that Respondent’s contract failed to include the required elements of a contract set forth in Ariz. Rev. Stat. § 32-1158(A). Therefore, Complainant established that Respondent failed to comply with the Registrar’s statute in violation of Ariz. Rev. Stat. § 32-1154(A)(12).
The evidence established that Respondent entered into a contract for a residential project, which is not permitted work under a commercial license. Therefore, Complainant established that Respondent knowingly contracted beyond the scope of its license in violation of Ariz. Rev. Stat. § 32-1154(A)(16).
The evidence established that Respondent did not attempt to complete the corrective work following the Directive being issued. Therefore, Complainant established that Respondent failed to take appropriate corrective action following a written directive from the Registrar in violation of Ariz. Rev. Stat. § 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. ROC 129114 for a period of two days.
It is further recommended that, on or before thirty (30) days after the effective date of the final order, Respondent shall provide a sample contract to the Registrar to demonstrate that it has amended its contracts to include the nine terms required by Ariz. Rev. Stat. § 32-1158(A). If Respondent fails to establish to the Registrar that it has brought its contracts into compliance with Ariz. Rev. Stat. § 32-1158(A) within thirty days, its contractor’s license shall be suspended until it demonstrates that it has done so.
It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to Ariz. Rev. Stat. § 32-1154(E).
It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty 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 Ariz. Rev. Stat. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty.
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, December 12, 2024.
/s/ Nicole Robinson
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
c/o Legal Department
1700 W. Washington Street, Suite 105
Phoenix, AZ 85007
[email redacted]
John Smith
[email redacted]
Kylaco Inc.
10241 N McGinnis Rd
Marana, AZ 85653
[email redacted]
Janet Bonker
12121 N Puma Road
Marana, AZ 85653
[email redacted]
By: OAH Staff