ALJDEC

99F-1816-ROC · Registrar of Contractors · 1999-05-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 4, 1999. APPEARANCES: COMPLAINANT: Mariette de Giaxa, on her own behalf; RESPONDENT: Bob and Lynn Katsaris, sole proprietors.

ADMINISTRATIVE LAW JUDGE: Anthony Halas _____________________________________________________________________ This matter proceeded to hearing on May 4, 1999, to determine whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors (Registrar). Based on the testimony and evidence presented at that time, as well as administrative notice of certain events and documents relative to the procedural history of the case, the following Findings of Fact, Conclusions of Law, and Recommended Decision are made and submitted to the Registrar of Contractors:

FINDINGS OF FACT 1. Complainant Mariette deGiaxa-Salvi (deGiaxa-Salvi) is a homeowner residing at 8143 East Appaloosa Trail, in Scotttsdale, Arizona. 2. Respondent Lynn Katsaris (Katsaris), together with her husband Robert Katsaris, does business as Lynn Katsaris General Contractor, and is holder of license no. 106929, Class B.

3. On December 14, 1998, Complainant deGiaxa-Salvi filed a complaint against Respondent Katsaris with the Registrar of Contractors, alleging that remodeling to the master bathroom, and particularly the shower drain, done almost two years earlier by Respondent's company had been poorly done, and required repair of both the leaking drain and related damage such as the adjacent drywall, which repairs she had arranged to be done, beginning that same date, by another plumber and general contractor. She stated that she had attempted to contact Respondent's plumbing sub-contractor, Jacobson Plumbing, but with a disconnected phone number, they were impossible to talk to. She asserted Respondent should reimburse the $1000.00 dollar deductible her homeowner’s insurance would not pay, and an additional $500.00 for the premium increase in that insurance and other out of pocket expenses. 4. On December 29, 1998, Respondents filed correspondence with the Registrar asserting: that the complaint was more than two years after the remodeling had been completed (based on the city inspector’s final inspection); that Complainant still owed them money under the contract; that their plumbing subcontractor (Jacobson Plumbing) was not out of business; and that they had never been notified of, or had the opportunity to correct any problems. 5. On January 19, 1999, Mr. Katsaris further responded to request that the complaint be dismissed, asserting that the remodeling in the bathroom had been completed over two years previously, with no repairs since (other than minor repair to other areas of the remodeling having nothing to do with the bathroom). 6. The administrative record reflects, as confirmed by the parties, that the Registrar did not conduct a jobsite inspection of the defects alleged by Complainant. Presumably, and so found by the undersigned, this was for the reason that in her complaint, deGiaxa-Salvi asserted that she had made arrangements for other contractors to repair. 7. On January 29, 1999, the Registrar then issued CITATION AND COMPLAINT in Case No. 99-1816, charging Respondent with possible violation of Arizona’s contracting laws, specifically A.R.S. § 32-1154.A.7. 8. Respondents timely filed their answer to the CITATION AND COMPLAINT on February 8, 1999, again asserting that their plumbing work had passed inspection and had been done by a licensed contractor (Jacobson Plumbing), that they would have been glad to fix any problem if given a chance, and that the work had been done over two years before the complaint. 9. With the issues thus joined, hearing was scheduled and convened on May 4, 1999, at which time Complainant Mariette deGiaxa-Salvi testified on her own behalf, and offered 5 exhibits: Documentation of repair work by Keith Riggs Plumbing, Inc., with invoice and work order dates of December 14, 1998, for the charge of $1396.03, and insurance reimbursement in the amount of $1393.03 (Exhibit A); 18 photographs demonstrating apparent defects in the master bathroom shower drain, wall, bathtub, and floor (Exhibit B); Documentation of repair work by S-O-S Restoration, Inc., a general contractor, indicating a date of loss of December 9, 1998, and a date of estimate as December 23, 1998, itemizing charges in the amounts of $3563.03 and 917.03 (Exhibit C); Itemization by S-O-S Restoration, Inc., of a shower enclosure in the amount of $917.03, and insurance reimbursement in that amount (Exhibit D); and Statement of Work Completion dated March 30, 1999, by S-O-S Restoration, Inc. and deGiaxa-Salvi (Exhibit E). The exhibits were marked and admitted, with the undersigned ruling that Respondents' objections to certain of the evidence went to the weight to be given the documents and pictures, rather than admissability. 10. Respondents Lynn and Robert Katsaris also appeared, providing testimony and offering Exhibit 1: Correspondence dated April 25, 1999, form Harry Jacobson, of Jacobson Plumbing. The exhibit was marked and admitted without objection. 11. In her testimony, Ms. deGiaxa-Salvi described the original contract she and her husband had entered into with Respondent: the remodeling to be done included work in the kitchen, living room, master bathroom, and to skylights, and was for about the approximate total of $65,000.00. 12. She did not recall the exact date of either the contract, or the completion of the work done under it, but agreed, or did not dispute, that work began in about September, 1996, and ended by December, 1996, after the city inspector had signed off on final inspection, with a subsequent complaint to the Registrar of Contractors, not involving the master bathroom, addressed by relatively minor work done by Respondent. 13. DeGiaxa-Salvi then described the chronology of circumstances resulting in her complaint to the Registrar on December 14, 1998: by about the middle of 1997, or approximately 6 months after the bathroom (and other) remodeling had been completed, she noted discoloration of the baseboards in the bathroom, which over a period of time she repainted two or three times. She also noticed that the exterior wall of the bathroom near the pool filter equipment often seemed wet, such that some of the equipment was replaced, without effect on the wetness. 14. Finally, she had a plumber from Keith Riggs Plumbing, Inc., (the company she had used over the years for routine plumbing repairs) troubleshoot the problem on December 9, 1998, and then bid and begin repair on December 14, 1998 of the improperly built and angled shower drain he had found, and of which she had been unaware until then. She recalled that the plumber completed that specific repair by the end of that month. 15. She explained that she had hired Keith Riggs Plumbing because of several unpleasant experiences she had with Jacobson Plumbing, most recently in about mid-1997, when he had repaired a leaking toilet water line, and billed her for it, a charge she thought should be either part of the remodeling warranty work, or the responsibility of Respondent as the general contractor subbing the remodeling plumbing work to Jacobson. 16. In that regard, her description of that event appears to be consistent with that described by Harry Jacobson in Respondents' Exhibit 1. However, her testimony, consistent with her addendum to the complaint at issue, indicated that she had been unable to call Jacobson Plumbing since his phone had been disconnected. That is in contrast to Exhibit 1, in which Jacobson indicates his long-term and unchanged address and phone number. 17. Then, for the water damage she understood had resulted from the shower drain leak, she retained the general contractor, S-O-S Restoration, Inc., which repaired the walls, floors, bathtub and shower, beginning work early in 1999, and completing it by the end of March, several months later. 18. Ms. deGiaxa-Salvi conceded that she made no attempt to contact Respondent directly about the masterbath problems at any time before filing the complaint with the Registrar of Contractors on December 14, 1998, or before having Keith Riggs Plumbing and then S-O-S Restoration begin their respective repair work. 19. She explained that she chose to make other arrangements to have the repair work done, since her prior dealings with Respondent, particularly Robert Katsaris, had been difficult, frustrating, and without much good result, such that she sought only reimbursement from Respondent for her insurance deductible and out-of-pocket expenses rather than actual completion of the repair work. 20. She did not have any date certain in mind for when anyone on behalf of Respondent had last been on site for any aspect of the original remodeling, but thought, based on her telephone records documenting a December 13, 1996 long-distance phone call to Humbolt, Arizona – where she understood one of Respondent's suppliers was located – that Mr. Katsaris could have been present to make that phone call. 21. Lynn and Robert Katsaris both testified, although primarily Mr. Katsaris spoke. Both denied being made aware in any way by Complainant of any problems with the master bathroom at any time after the remodeling had been completed until the day they received a copy from the Registrar of the complaint filed by deGiaxa-Salvi on December 14, 1998. Both stated, in essence, that if they had been given the chance to address any such problems before someone else had already determined and fixed them, they would have been willing to correct any defects in their original remodeling work, or caused by that work, but that absent that opportunity, they were not willing to reimburse for what might not be their problem, and for which the Registrar of Contractors had never directed their company to repair. 22. Mr. Katsaris also testified to argue that the two-year statute of limitations on the filing of a complaint meant that this complaint was untimely, since the Scottsdale city inspector had completed a final inspection of the plumbing remodeling on December 9, 1996, and that there had been no subsequent repair work or complaints raised to him or the Registrar about the master bath until the complaint had been filed on December 14, 1998, more than two years later. 23. Administrative notice is taken of the copy of the City of Scottsdale “Inspection Record” contained within the file, not for any substantive verification of the completeness of its final inspection of the plumbing, but rather for the uncontroverted accuracy of the date of that inspection as being on December 9, 1996, as verified by reference to the original held by Respondent.

APPLICABLE LAW A.R.S. § 32-1154.A provides, in pertinent part, as follows: A. The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: . . . . .

7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

A.R.S. § 32-1155.A provides that: A. Upon the filing of a written complaint with the registrar charging a licensee with the commission, within two years prior to the date of filing the complaint, of an act which is cause for suspension or revocation of a license, the registrar after investigation may issue a citation or upon written request of the complainant may issue a citation directing the licensee, within ten days after service of the citation upon him, to appear by filing with the registrar his written answer to the complaint showing cause, if any, why his license should not be suspended or revoked. (Emphasis added.) . . . . .

CONCLUSIONS OF LAW 1. To warrant action by the Registrar of Contractors pursuant to the statutes above, Complainant must timely file a complaint with the Registrar within two years of the act complained of, pursuant to A.R.S. § 32-1155.A and subject to the affirmative jurisdictional defense timely raised by Respondent herein, and then demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited, A.R.S. § 32-1154.A.7. Culpepper v. State of Arizona, 187 Ariz. 431, 437-38, 930 P.2d 508 (Ariz. App. 1996). A “preponderance of the evidence” means that the evidence is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). It “is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (rev. 6th ed. 1990). 2. In this matter, the evidence is such that the undersigned must conclude that despite Complainant's awareness of apparent defects in the plumbing done in the master bedroom remodel well within the two-year statute of limitations, she did not file her complaint with the Registrar until after those two years had passed. 3. Then, even absent such a determination, which would otherwise bar consideration of the merits of the Registrar’s Citation based on the untimeliness of that complaint, it must be further concluded that by essentially rendering the repair work to be a fait accompli before the complaint notified Respondent of its potential responsibility for such repair, Ms. deGiaxa-Salvi prevented Respondent from reasonably attempting to remedy its original work, which opportunity is the sine qua non of any disciplinary action to be imposed by the Registrar against Respondent's contractors license in circumstances such as this. 4. Such a conclusion is not meant to be casually dismissive of Complainant's reasons or rationale in bypassing Respondent in pursuing what would seem to be necessary and appropriate repair. Those reasons may very well be convincing to her, and persuasive to any neutral observer. Rather, however, without notice to Respondent and reasonable opportunity for it to measure and remedy its work, it would be improper to bring the weight of the Registrar’s office to bear against its license. 5. Therefore, with respect to Respondent’s alleged wrongful or fraudulent conduct, Complainant has not sustained her burden of demonstrating a violation of A.R.S. § 32-1154.A.7 subject to disciplinary action by the Registrar.

RECOMMENDED DECISION In light of the foregoing, IT IS RECOMMENDED that the CITATION AND COMPLAINT in Case No. 99-1816 be dismissed. Done this day, May 17, 1999.

______________________________________ Anthony Halas Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1999, to:

Michael Goldwater, Director Registrar of Contractors 800 West Washington, 6th Floor Phoenix, AZ 85007 ATTN: Joyce Armijo

By: _________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826