ALJDEC

99F-2290-ROC · Registrar of Contractors · 1999-11-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 29, 1999 APPEARANCES: Richard C. Gramlich, Esq. (of Carmichael & Powell, P.C.) appeared on behalf of Complainants Byron and Julie Bargas. Juan Delgado appeared on behalf of Respondent J P D Plumbing, Inc. ADMINISTRATIVE LAW JUDGE: Daniel G. Martin _____________________________________________________________________ The issue presented by this matter is whether Respondent J P D Plumbing, Inc. (“JPD”) substantially complied with the terms and conditions of a June 16, 1999 Decision and Order of the Registrar of Contractors, and whether the discipline imposed on JPD pursuant to that Decision and Order should be reconsidered. Based on the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT JPD is the holder of a class C-37R commercial plumbing license (No. 136353) issued by the Registrar of Contractors (“ROC”). Juan P. Delgado is JPD’s qualifying party.

On February 9, 1999, Complainants Byron and Julie Bargas filed a complaint against JPD with the ROC in which the Bargas’ alleged, in sum, that JPD had breached a written contract to perform plumbing work at their custom home under construction at 35808 North 3rd Street in Phoenix, Arizona. Specifically, the Bargas’ alleged: “1. Abandoned Job. 2. Not responding/returning phone calls, etc. 3. Failure to make corrective work in a timely manner.” ROC Inspector Phil Coscia investigated the Bargas’ complaint. On March 11, 1999, Inspector Coscia conducted a jobsite inspection at the Bargas’ residence. Both Mr. Delgado and Mr. and Mrs. Bargas were present for that inspection. On March 12, 1999, Inspector Coscia issued a Corrective Work Order (the “CWO”) under which JPD was given 15 days to correct the following deficiencies: “1) Contractor shall complete installation of shower pan and related components as per terms of contract. This is to include shower control valve and trim. 6) Contractor is to expose and complete installation of floor drain for washer and dryer in laundry room. 7) Properly relocate operating valve for gas fireplace appliance “not more than four (4) feet from outlet”. (per U.P.C. 1211.14). 8) Complete pipe and drain relocation for spa tub in master bath. Requires floor to be sealed with concrete.”

In the CWO, Inspector Coscia also noted the following: “5) Drain location for enclosed shower was found to be in accordance with plan. No action is required on relocation, unless the parties agree to a change order. 10) This inspector is of the opinion that the contract would not include trenching, sleeving or running gas-main piping from future meter to utility piping. It would be more appropriate to have a specific contract provision for a plumber to have a part in installing utility company’s connection up to the meter.”

JPD failed to comply with the CWO. On May 19, 1999, the ROC issued a Citation and Complaint against JPD, charging JPD with violations of A.R.S. § 32-1154(A)(1) (abandonment of a contract), (A)(2) (departure from or disregard of plans and specifications), (A)(7) (wrongful act resulting in substantial injury), (A)(23) (failure to take appropriate corrective action), and (A)(3) (violation of any rule adopted by the ROC, in this case, A.A.C. Rule R4-9-108 covering workmanship standards). The Citation and Complaint issued to JPD contained the following directives: “In accordance with the provisions of A.R.S. § 32-1155, YOU, THE RESPONDENT, ARE DIRECTED TO FILE YOUR WRITTEN ANSWER to the attached complaint with the Registrar of Contractors NO LATER THAN TEN (10) DAYS after the date this Citation was mailed.

IMPORTANT: REGARDLESS OF ANY PRIOR ORAL OR WRITTEN RESPONSES YOU, THE RESPONDENT, MAY HAVE MADE TO THE MATTERS COVERED BY THE COMPLAINT OR ANY LEGAL EXCUSE YOU MAY HAVE TO THE FACTS ALLEGED, A TIMELY ANSWER MUST NEVERTHELESS BE FILED IN WRITING FOLLOWING RECEIPT OF THIS CITATION AND COMPLAINT.

RESPONDENT IS ADVISED AND NOTIFIED THAT FAILURE TO ANSWER WITHIN DAYS SHALL BE DEEMED AN ADMISSION BY YOU OF THE CHARGES MADE BY THE COMPLAINANT, AND THE REGISTRAR OF CONTRACTORS MAY REVOKE OR SUSPEND YOUR LICENSE . . .” (Emphasis in original.)

Notwithstanding the foregoing directives, JPD failed to file a written answer to the Citation and Complaint. At the hearing, Mr. Delgado could not provide a satisfactory explanation for JPD’s failure to respond to the Citation and Complaint, stating only that JPD’s failure was due to “ignorance.” On June 16, 1999, as a consequence of JPD’s failure to file a written answer to the Citation and Complaint, the ROC issued a Decision and Order provisionally suspending JPD’s license effective July 21, 1999. The ROC’s Decision and Order effectively provided that JPD could avoid suspension by submitting proof to the ROC on or before July 21, 1999 that JPD had “appropriately rectified the items involved and detailed in the complaint and the [CWO].”[1] On July 21, 1999, the last day allowed by the Registrar of Contractors for compliance and without prior notice to the Bargas’, a JPD crew (including Mr. Delgado) went to the Bargas’ residence. Mr. Delgado testified that the primary purpose of this visit was to ascertain what items remained to be corrected. Mr. Delgado was unable to communicate with either Mr. or Mrs. Bargas during this visit, and left after placing a tag on the door indicating that JPD had been to the residence. On July 23, 1999, the ROC issued an order granting JPD an extension of time, to July 27, 1999, to comply with the Registrar’s June 16, 1999 Decision and Order. JPD made no further efforts to contact the Bargas’ between July 23, 1999 and July 27, 1999. As of the hearing date, the Bargas’ had corrected items 1 and 4 through a different subcontractor, but CWO items 2 (the laundry room floor drain) and 3 (the fireplace shut-off valve) remained uncorrected.[2] Mr. Delgado testified that JPD did not complete CWO item 2 (the laundry room floor drain) because Mr. Bargas orally agreed with JPD on March 11, 1999 to “trade” CWO item 2 for CWO item 5 (relocation of the shower drain which Inspector Coscia found to be in accordance with the plans). Mr. Bargas denied making that agreement. However, Mr. Bargas admitted at the hearing that JPD had completed CWO item 5. On this evidence, the Administrative Law Judge concludes that JPD’s completion of the work in item 5 -- work which it was not obligated to complete under the CWO -- is consistent with Mr. Delgado’s testimony that JPD and Mr. Bargas agreed to “trade” items 2 and 5. Mr. Delgado testified that JPD did not complete CWO item 3 (the fireplace shut-off valve) because Mr. Bargas instructed Mr. Delgado to “leave it alone,” and Mr. Delgado did not believe he could violate Mr. Bargas’ wishes. Mr. Bargas denied making this statement, and pointed out that he could not and would not agree to having a safety hazard in his home which also constituted a violation of the plumbing code. The Administrative Law Judge need not resolve this factual dispute because regardless of which party is telling the truth, there exists a plumbing code violation which must be rectified, and the responsibility for that correction falls squarely on JPD as the installing plumber. As to the items which the Bargas’ had corrected themselves (CWO items (shower) and 4 (pipe and drain relocation for spa tub)), Mr. Bargas testified to having incurred the following costs (the entries are taken from the first page of Hearing Exhibit 1 entitled “Cost Summary”): u. $ 250.00 Labor cost for concrete at master tub (CWO item 4)

v. $ 520.00 Westward Custom - cost to set master tub/drain/faucets (CWO item 4)

w. $6,824.13 Tile material for guest shower purchased at Cactus Tile (CWO item 1)

x. $ 270.88 Materials - rebar/concrete for master tub, and shower valve/faucet (CWO item 4)

The Bargas’ requested restitution for the foregoing costs. Mr. Delgado stated he did not believe JPD should be held accountable for these items because the Bargas’ brought in another contractor to correct them without notice to JPD. The documentation submitted by the Bargas’ in support of these costs (and the Bargas’ restitution claim) consists of the following: ab. Labor cost for concrete at master tub

A May 3, 1999 invoice for $250.00 from ACI Consulting & Management, L.L.C. for “labor cost for Concrete Work at Master Tub.”

ac. Westward Custom - cost to set master tub/drain/faucets

A May 2, 1999 invoice for $520.00 from Westward Custom Incorporated for labor and materials to “install[] owners Jetta Bath tub in master bath.”

ad. Tile material for guest shower purchased at Cactus Tile

An April 14, 1999 invoice for $625.00 from Cave Creek Creations for shower “material & labor” ($500.00) and “Fireplace” ($225.00) (with what appears to be a $100.00 deduction for “clean-up”); an April 8, 1999 invoice for $58.72 from Cactus Enterprises for tile material; a March 26, 1999 invoice for $687.33 from Cactus Enterprises consisting of $87.33 for tile and tile material, and $600.00 for two mirrors; and a March 15, 1999 invoice for $264.80 from Cactus Enterprises for tile.

[TOTAL: $1,635.85]

ae. Rebar/concrete for master tub, and shower valve/faucet

A January 24, 1999 invoice from The Home Depot for a $109.00 shower valve; a January 24, 1999 invoice from The Home Depot for a $129.00 lavatory faucet; a March 20, 1999 invoice from The Home Depot for $8.50 in rebar; a March 20, 1999 invoice from The Home Depot for $11.91 in concrete; and a March 21, 1999 invoice from The Home Depot for $19.97 in concrete and a finish trowel.

[TOTAL: $278.38][3]

The Bargas’ also submitted documentation in support of a claim for $12,279.77 as the amount it would cost them to (i) add the laundry room floor drain (CWO item 2), (ii) relocate the fireplace shut-off valve (CWO item 3), and (iii) replace the electric water heater with a gas water heater. This documentation (the last page of Hearing Exhibit 1), however, consists solely of a one-page cost estimate, and includes not only the cost for plumbing but also the cost for items such as termite treatment ($75.00), concrete ($2,250.00), roofing ($250.00), drywall ($850.00), ceramic tile ($960.00), painting ($650.00) and electrical ($550.00). The plumbing component -- $3,500.00 – is not itemized, and it is not possible to determine which portion of this amount is allocated to the floor drain, which to the fireplace shut-off valve, and which to the water heater. The Bargas’ submitted additional documentation in support of a claim for restitution (all contained in Hearing Exhibit 1), none of which pertained to items covered by the CWO. CONCLUSIONS OF LAW The evidence is undisputed that JPD failed to respond to the ROC’s March 12, 1999 corrective work order within the fifteen days provided. The evidence is undisputed that JPD failed to file a written response to the ROC’s May 19, 1999 Citation and Complaint. The allegations of the ROC’s May 19, 1999 Citation and Complaint are deemed admitted, including the allegation that JPD violated A.R.S. § 32- 1154(A)(23). In accordance with A.R.S. § 32-1154(D), the ROC may impose a civil penalty on JPD not to exceed $500.00 for its violation of A.R.S. § 32- 1154(A)(23). The evidence is undisputed that after JPD received the ROC’s June 16, 1999 Decision and Order, it waited until the last day possible to take action to protect its license, and that action was to appear at the Bargas’ residence without prior notice to the Bargas’. The evidence is undisputed that even after JPD obtained an extension of time to comply with the ROC’s Decision and Order, it failed to take any further action. The foregoing conduct evidences flagrant disregard by JPD both for the ROC’s regulatory authority and for JPD’s license. The Bargas’ established that CWO items 2 and 3 remain uncorrected. As to CWO item 2, the Administrative Law Judge concludes that Mr. Bargas and JPD agreed to “trade” that correction for the correction described in CWO item 5. However, because the allegations of the ROC’s Citation and Complaint are deemed admitted, the fact of this trade is not available to JPD as a defense to its obligations under the CWO, and JPD therefore remains obligated to add the laundry room floor drain. As to CWO item 3, the Administrative Law Judge concludes that JPD must promptly remedy the plumbing code violation which it allowed to occur. The Bargas’ requested restitution. Under the authority of Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 803 P.2nd 430 (App. 1990), the ROC may, in appropriate cases, order a “restitutionary remedy . . . as part of the Registrar’s regulatory authority to take appropriate disciplinary action against those who violate [the licensing laws set forth in A.R.S. § 32-1154A].” However, an award of restitution, total or partial, is a matter of discretion, and should be imposed only when warranted as an appropriate disciplinary sanction. On the facts of this case, the Administrative Law Judge concludes that limited restitution is warranted as a disciplinary sanction. The evidence demonstrates that after JPD failed to comply with the CWO, the Bargas’ engaged a separate contractor to complete CWO items 1 and 4. The Bargas’ claimed they incurred $7,865.01 in costs to correct these items (see Finding of Fact No. 16, supra). Of this, the Administrative Law Judge finds $770.00 (the sum of Finding of Fact No. 16 items (a) and (b)) to be properly assessable against JPD as a disciplinary sanction.[4] The Administrative Law Judge declines to recommend restitution with respect to the Bargas’ claim for $6,824.13 (Finding of Fact No. 16 item (c)) because the supporting documentation is vague (among other things, it includes invoices for items such as a fireplace and two mirrors), and because the invoices submitted in support of this claim only add up to $1,635.85, thus casting doubt on the integrity of this claim in the first instance. The Administrative Law Judge also declines to recommend restitution with respect to the Bargas’ claim for $270.88 (Finding of Fact No. 16 item (d)) because the supporting documentation reveals that all of these expenses were incurred prior to March 27, 1999, the last day upon which JPD could have complied with the CWO. As to the Bargas’ request for $12,279.77 in restitution for costs they claim they will incur to correct CWO items 2 and 3 (as well as to install the gas water heater), the Administrative Law Judge declines to recommend restitution of this amount in whole or in part because the supporting documentation is insufficiently detailed to allow for such an assessment. Putting aside the fact that the $12,279.77 encompasses many costs outside of the Bargas’ claim for plumbing costs, the $3,500.00 plumbing component is itself not sufficiently itemized to allow for an award of restitution (see Finding of Fact No. 19, supra). As to the Bargas’ remaining restitution requests, the Administrative Law Judge declines to recommend restitution of any of these amounts because the claimed costs are for items not covered by the CWO. As set forth in the Notice of Hearing, JPD was advised that part of this compliance hearing would comprise of reconsideration of the appropriateness of the disciplinary penalty imposed by the ROC’s June 16, 1999 Decision and Order. The Administrative Law Judge finds on the facts of this case that such reconsideration is warranted. As set forth in the Citation and Complaint issued by the ROC, JPD was advised that in the event of a finding of a violation against it, JPD’s prior disciplinary record of final ROC orders could be considered in mitigation or aggravation. Accordingly, subsequent to conclusion of the instant hearing, notice was taken of official ROC records regarding any prior final disciplinary orders against JPD and said notice revealed that the instant complaint was the only complaint on the ROC’s current record regarding JPD. Therefore, JPD’s prior record is deemed to be excellent. The Administrative Law Judge considered this mitigating factor when determining the appropriate recommended discipline for this matter, and weighed it against the significant aggravating factors which exist based on JPD’s demonstration of a consistent disregard for ROC orders. RECOMMENDED ORDER In view of the foregoing, it is recommended, commencing on the effective date of the Order entered in this matter, that JPD’s Class C-37R license be suspended until such time as both of the following conditions are met: (1) the Registrar of Contractors receives written proof that JPD has properly relocated the operating valve for the Bargas’ gas fireplace not more than four feet from the outlet in accordance with U.P.C. 1211.14; (2) the Registrar of Contractors receives written proof that JPD has completed installation of the floor drain for the washer and dryer in the Bargas’ laundry room; and (3) the Registrar of Contractors receives written proof that JPD has made restitution to the Bargas’ in the amount of $770.00. It is further recommended that upon JPD’s completion of the aforementioned corrective work and payment of restitution, JPD’s Class C- 37R license be placed on disciplinary probation for a period of 90 days. It is further recommended, on reconsideration, that a civil penalty of $250.00 be assessed against JPD pursuant to the authority of A.R.S. § 32- 1154(D) for JPD’s failure to have completed corrective work as directed by the ROC. This civil penalty shall be paid to the ROC on or before 30 days subsequent to the effective date of the Order entered in this matter.

Done this day, December ___, 1999.

______________________________________ Daniel G. Martin Administrative Law Judge

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

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

By ___________________________ ----------------------- [1] Because the Bargas’ February 9, 1999 complaint did not detail any specific items to be corrected (see Finding of Fact No. 2, supra), the Administrative Law Judge finds that JPD’s compliance obligations under the ROC’s Decision and Order are limited to the items set forth in the CWO.

[2] In addition to the CWO items, the Bargas’ submitted evidence that due to JPD’s failure to have installed a roof vent, the Bargas’ were forced to install an electric water heater as opposed to a gas water heater, and on this basis requested that JPD be held liable for the costs to replace the existing electric water heater with a gas water heater. As this item does not appear in either the Bargas’ complaint or the CWO, the Administrative Law Judge declines to consider it in the context of this compliance hearing. [3] This sum differs slightly from the $270.88 claimed by the Bargas’. [4] JPD’s argument that it should not held accountable for these items because the Bargas’ brought in another contractor to correct them without notice to JPD is rejected. Once JPD failed to comply with the corrective work order, the Bargas’ were free to engage a new contractor to make the necessary corrections and were under no obligation to give JPD notice of that fact.

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