ALJDEC

99F-2291-ROC-COM · Registrar of Contractors · 2000-07-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 2, 2000, adjourned and reconvened April 5, 2000, adjourned and reconvened May 11, 2000. APPEARANCES: Complainant : J. Randall Jeffries, Esq., Fennemore Craig, P.C., Attorneys at Law; Thomas Listing; Beverly Listing; Expert Witness Harvey J. Lawrence, Harvey J. Lawrence & Associates, Inc.; Edward Elnicky, Western Technologies, Inc.; Bert Rowe, HMRA, Inc.; Subpoenaed Witness Robert Kennedy; Subpoenaed Witness Paul Hill; Subpoenaed Witness Robert Kotschi, Painting Contractors, Inc. Respondent : Robert L. Stewart, Jr., Esq., Stewart & Bourque, P.C.; Chris Cataldo, Owner, Monument Homes, Inc.; Expert Witness Bill Furman, WRF Management, Inc.; Witness Clyde Bridgewater, Superintendent. Registrar of Contractors Inspector : Phil Coscia. ADMINISTRATIVE LAW JUDGE: Gary B. Strickland _____________________________________________________________________

Evidence and testimony having been received at the hearing and based upon the entire record, the undersigned Administrative Law Judge issues the following Findings of Fact, Conclusions of Law and Recommended Order.

PROCEDURAL HISTORY 1. Complainant filed a formal request for hearing on June 25, 1999, alleging Respondent’s noncompliance with the Registrar’s “Corrective Work Order” of May 7, 1999. 2. The Registrar of Contractors issued a “Citation and Complaint” on June 29, 1999, citing Respondent for violations of the statutory provisions set forth at A.R.S. ( 32-1154 (A)(3), (7), and (23), respectively. 3. A hearing convened at the Office of Administrative Hearings on October 13, 1999, whereat, as a result of settlement discussions, the issues were ostensibly resolved and the parties stipulated on the record their intent to assume the agreed upon obligations. 4. The Registrar issued an Order on October 27, 1999, adopting the Administrative Law Judge’s Recommended Decision and directing the parties to comply with the provisions stated therein. 5. Mr. Listing requested a “Compliance Hearing” on December 16, 1999, complaining of Monument Homes’ refusal or failure to fulfill its obligations under the stipulated agreement and pursuant to the Registrar’s Order. 6. A hearing was first scheduled for March 17, 2000, but was thereafter expedited to February 2, 2000, based upon assertions made by Complainant that induced health and safety concerns in accordance with A.R.S. ( 41-1092.05 (e). The hearing convened on February 2, 2000, adjourned after receiving testimony and reconvened on April 5, 2000, adjourned subsequent to the testimony of witnesses and reconvened on May 11, 2000, upon which date the hearing concluded. The record was left open to June 12, 2000 to allow the parties the opportunity to submit Proposed Findings of Fact and Conclusions of Law. Upon motion, leave was granted to extend the deadline to July 12, 2000. Both parties filed their offerings on the deadline and the respective briefs are made a part of this record.

FINDINGS OF FACT 1. Respondent is in the business of constructing homes, doing business in the state of Arizona as Monument Homes, Inc., holding a Class B license (Residential) issued by the Registrar of Contractors. 2. Complainant and Respondent entered into a Stipulation and Settlement (the Agreement) on October 13, 1999 whereby the Respondent contractor agreed to complete the items specified in the “Corrective Work Order”, with the addition of five items concerning which the parties manifested agreement that needed to be addressed. The Recommended Decision of the Administrative Law Judge afforded Respondent sixty (60) days within which to complete the repairs and cure the deficiencies. The parties are in agreement that the work, in its entirety, was not completed within sixty (60) days of “the incipient date of the scheduled repair, October 18, 1999.” (October 13, 1999 Recommended Decision). The Order further directed that Complainant provide Respondent “unfettered” and “unlimited” access to the premises during the agreed upon hours. Respondent’s defense to this noncompliance inquiry is that Respondent was inhibited from its ability to proceed in timely fashion, and pursuant to the agreement and directive, because of the actions of Complainant. [1] 3. The question presented concerns whether Respondent has, in fact, substantially complied with the terms and conditions of the Decision and Order of October 27, 1999. 4. On October 18, 1999, Respondent’s representatives appeared at Complainant’s residence to resume work on the project as agreed and pursuant to the Registrar’s Order. The homeowner met the workers with a camcorder and videotaped the men as they attempted to commence work. This was done while Complainant read a speech from a prepared text and Complainant’s wife accompanied Complainant by making audio recordings of the contractors’ discussions. Complainant continued to videotape, threaten, bully and challenge Respondent’s workers and subcontractors over the succeeding weeks. It is apparent that the homeowner had no intention of complying with the terms of the stipulated settlement and the Registrar’s directive. 5. At no time has Respondent offered the testimony of a Qualifying Party or owner of the company. During this process, Respondent’s Qualifying Party resigned. The company failed to secure the services of another Qualifying Party until beyond the sixty (60) day period mandated by A.R.S. ( 32-1167 (B). Respondent’s workers did attempt to perform work on the home or otherwise communicated with Complainant in October, November and December 1999. 6. After the expiration of the sixty (60) day corrective work period, the Registrar’s Inspector conducted a prehearing job site inspection. At the February 2, 2000 hearing, the assigned Inspector gave his opinion that all of the items in the Order had been cured with the following exceptions: (1) a light foam strip needs to be placed at the base of the garage door; (2) the front door needs to be “buffed out”; (3) the stucco on the exterior of the living room window needs paint; (4) drywall mud on the living room floor needs to be cleaned up; (5) “some paint touchups around the walls and ceilings” were required in the dining room; (6) carpet in the third bedroom needs to be restretched; (7) a gap between the tile and carpet in bedroom number one should be addressed; (8) the grading problem requires adjustment and repair; and (9) the stucco was not properly prepared. 7. Complainant’s expert estimated that the cost of the necessary repairs would amount to approximately $5,600. Respondent’s expert estimated the cost at $2,375., the difference accounted for by the cost of latex paint as opposed to the cost of elastomeric paint. 8. The October 13, 1999 settlement agreement required Respondent to provide Complainant a written schedule of dates whereon Respondent intended to have its subcontractors on site to perform the necessary repairs. At no time did Respondent provide the schedule. 9. One of Respondent’s defenses is that it was prevented from completing the necessary repairs because of acts of interference on the part of Complainant. Complainant acknowledges that Respondent’s General Manager and Consultant were banned from the property during the corrective work period, December 14, 2000. Thereafter, Respondent attempted to address several of the issues through subcontractors sent to the property. Complainant has repeatedly denied access. Complainant gave notice to Respondent’s General Manager and Consultant that they were not welcome on the property and that, if they should attempt ingress, they would be subject to a law enforcement call. Further, Complainant expressed his intent to deny access in a letter written to the Registrar’s Inspector. 10. There is no question that the relationship between this homeowner and this contractor has been fraught with great tension, rhetoric lacking credibility and respect and significant emotional volatility. The parties have been afforded more than adequate time and opportunity to resolve their differences and, in reality, several issues have been obviated through the process. For example, the parties have been able to resolve the life and safety issues concerning the gas and electric line placement. 11. Respondent’s obligation is to perform its contractual duties clothed in the licensure granted to it by the Registrar of Contractors, with all of the rights, privileges and responsibilities appertaining thereto, in a workmanlike manner. If directed by the Registrar’s agent (the Inspector) to make corrections or repairs in a timely manner and pursuant to workmanship standards, a contractor’s burden is to make the necessary corrections or repairs in a timely manner and in accordance with workmanship standards or explicate a legally cognizable reason for not doing so. Refusal of the homeowner to grant access, explicitly or implicitly, may relieve Respondent of some responsibility for nonconpliance, but will not relieve the contractor altogether. Respondent has not demonstrated legally cognizable excuse for its not having made the requisite corrections in accordance with the Registrar’s October 1999 Order. 12. The weight of the evidence demonstrates that Respondent’s work on this project was shoddy and the result was less, in some areas, than required by workmanship standards. 13. The weight of the evidence has shown that each of the nine items denoted in paragraph 6 above manifests a deficiency in Respondent’s workmanship and that Respondent is incapable of making the necessary corrections given the bad faith exhibited by both parties. 14. All other enumerated items raised at the hearing were found either to have been corrected, not found to constitute a prejudicial deviation from plans and specifications, not adequately shown to be workmanship deficiencies, or matters upon which Complainant failed to sustain the requisite burden of proof.

CONCLUSIONS OF LAW 1. The weight of the evidence of record has sufficiently established that Respondent has failed to comply substantially with the terms and conditions of the Registrar’s Decision and Order of October 27, 1999. While Complainant has refused to grant reasonable access to the property concerning which the repairs were required, Complainant’s refusal has been generally reasonably justified. Recognizing that this endeavor is not a perfect science and that plenty of fault can be attributed to both parties based upon this record, the nod is given to the party for whose protection the Registrar exercises agency jurisdiction. 2. The burden of proof generally at an administrative hearing falls to the party asserting a claim, right or entitlement or seeking to impose a penalty. Culpepper v. Arizona Board of Nursing, 187 Ariz. 431, 930 P.2d 508 (App. 1997); See also Ariz. Admin. Code R2-19-119 (B). Further, the standard of proof is that of the “preponderance of the evidence”. Smith v. Arizona Department of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985); See also Ariz. Admin. Code R2-19-119 (A). Proof by a preponderance 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). The evidence taken as a whole must convince the decision maker that the party who bears the burden, in this case the Complainant, is more probably correct on the issue(s) in dispute. 3. By a preponderance of all of the evidence, Complainant has established that, although unfettered access was not provided the Respondent to the property during the compliance period, it was not unreasonable for the Complainant to limit the access afforded the Respondent contractor, in view of all of the circumstances. Therefore, Respondent’s defense fails. Or, in another sense, Respondent’s defense works a mitigation of the penalty to which Respondent is liable. The evidence has shown that Respondent, without valid justification, failed to perform its contractual obligations in timely fashion and to take appropriate corrective action in compliance with the Registrar’s directive, within a reasonable period of time after receiving the Registrar’s Decision and Order. 4. Respondent’s failure to comply with the provisions of the Registrar’s October 13, 1999 Decision and Order and its failure to effect a repair of the deficiencies of which it had been given notice, in a workmanlike manner, timely performed, constitutes a statutory violation for which a fair and just disciplinary penalty ought to be imposed. 5. The preponderance of the evidence weighs in favor of Complainant’s expert’s opinion that the cost of correcting the work in all areas, save that of the grading, would reasonably run $5,600. The evidence further preponderates that Respondent is responsible for deficiencies in the grading. While an opinion was not offered on the issue, it would appear reasonable that an additional $2,500. would enable Complainant to obtain the services of a licensed contractor to address the grading issues that pertain.

RECOMMENDED ORDER IT IS RECOMMENDED that Respondent’s Class B license be suspended on the effective date of the Order entered in this matter for a period of sixty (60) days. IT IS FURTHER RECOMMENDED that if Respondent pays to Complainant the sum of $8,100. prior to the effective date of the Order, the period of active suspension shall be reduced to fifteen (15) days commencing upon the effective date of the Registrar’s Order.

Set forth this 26th day of July in the year 2000.

______________________________________ Gary B. Strickland Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2000, to:

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

By ___________________________

----------------------- [1] Throughout the proceedings, both parties have manifested ill-will toward the other party, not atypical in matters such as this where emotions run high. Further, the credibility of both parties is highly suspect. The attorneys representing these litigants are to be commended for their professional manner of conduct in the midst of an aura of such acerbity and vitriol.

-----------------------

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