ALJDEC

99F-2459-ROC · Registrar of Contractors · 1999-10-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 15, 1999 at 9:00 a.m. APPEARANCES: Complainant appeared through her attorney, Thomas N. Smith, Esq.; Respondent did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

Complainant presented evidence and testimony with respect to Respondent’s failure to perform or deficient performance of his contract for certain remodeling at Complainant’s residence. Based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order. FINDINGS OF FACT The Registrar of Contractors issued License No. 115793, Class B, to Respondent, a corporation, on October 1, 1996. On April 25, 1998, Respondent’s qualifying party and president, Steve Holub, submitted a proposal to Complainant to perform the following remodeling of her residence at a price of $15,300.00: Close in front of garage w/ new French Door dbl. Operative sidelites

2x6 stud framing insulation drywall and stucco pain to match as close as possible

Install new Anderson window to match existing window

Remove old base and wall cabinets on north wall and replace with cabinets kitchen style w/ sink, cooktop, wall unit micro- vent combination

Install new melamine wall cabinets along east and provide shelving for T.V. stand. Install electrical as needed.

Build in new closet for bedroom w/ new door rod and shelf

Pour slab at front and install canopy cover for shade app. 6’ x 16’

The proposal provided that “no permits to be pulled for this project.” Complainant accepted Respondent’s proposal on April 28, 1998. Although the parties’ written contract did not provide for a completion date, at the time they entered the contract, Complainant stressed that she wished the project to be completed within a two- or three-month period and Respondent’s qualifying party assured her the project would be completed in that time. At some point shortly after Complainant accepted Respondent’s proposal, the parties orally amended the contract to change the canopy over the slab to a deck with wooden stairs leading up to it and Respondent’s qualifying party drew up plans. Although Complainant expected and had agreed to pay more for the deck than she would have paid for the canopy, because Respondent’s qualifying party never informed Complainant of the cost of the deck, the amount in the parties’ contract was never increased. Shortly thereafter, Respondent started construction of the garage conversion and of the elevated deck. On May 7, 1998, Complainant paid Respondent $7,800.00, the amount he required for “materials for windows, doors, framing, drywall, electrical, [and] bedroom closet materials.” By June 1998, the only portion of the construction contemplated by the contract that Respondent had completed was to have its subcontractor pour the slab for the porch over which the deck would be constructed. On August 20, 1998, Complainant paid Respondent the amount remaining due under the contract, $7,760.00, because Respondent’s qualifying party told her he needed additional money to complete the job. Respondent subsequently resumed work on the project, which proceeded sporadically. With the exception of pouring the slab and applying stucco, which work subcontractors performed, Respondent’s qualifying party Steve Holub performed all the work on the project. Because the work was proceeding so slowly, Complainant’s son, David Thomas, who had worked as a framer, took time off from his job to help Respondent complete the project. Neither Complainant nor Mr. Thomas ever interfered with Respondent’s control of the project or prevented him from working on it. On October 26, 1998, Complainant wrote a letter to Respondent’s qualifying party, complaining that he had not worked on the project in more than three weeks and that he still had not accounted for the $15,560.00 that she had paid him to date. In that letter, Complainant estimated that Respondent’s qualifying party had spent only 130 hours on the project. On November 8, 1998, Complainant wrote another letter to Respondent’s qualifying party, again requesting an accounting and that he provide an estimate of the time and cost to complete the project. On December 23, 1998, Complainant wrote another letter to Respondent’s qualifying party, which she sent via facsimile, as follows: You told me on Thursday, Dec. 17th, the last day you “worked”, that the stucco crew would be here to finish the first part of the week. Today is the Dec. 23rd and no one has been here. They better be here next week, and they will not dump their trash any where on this property. I expect you to see to that. I also want the name and number of the company that is making the wrought iron railing. I want to know what they will look like and I want to know how they will attach to the deck walls. I want this information immediately and I want [it] by the end of the day, Thursday, De. 24th. I should have been shown at least a sketch of the railing design before anything was made. I now will have to approve them before installation. You also need to finish painting. There are several locations where the white primer is not covered. Two months ago you stated that you would be here every day until you finished this project and you have yet to put in a full day let alone a full week.

Despite the above letter, Respondent did not perform any more work on the project after December 17, 1998 or supply Complainant with an accounting or any additional information concerning the project. Although the deck was substantially complete, except for the railing, and the garage was enclosed, Respondent had performed no interior work on the garage conversion. Finally, Complainant offered to release Respondent from any further contractual obligations to complete the project or to remedy any deficiencies in the work it had performed to date if it would pay her $6,000.00. This amount was based on the cost of materials Respondent had been paid for, but not installed, Mr. Thomas’ lost salary for the time he took off work to help Respondent, $257.00 for trash container and pick up, and the costs of completing the work Respondent had started and of remedying various workmanship deficiencies in the work performed. The $6,000.00 did not include any amount for completing the interior of the garage conversion. On January 22, 1999, Respondent’s qualifying party accepted Complainant’s settlement offer and promised that he would pay her a check in the amount of $6,000.00 within a week. Respondent never paid the amount promised. On February 23, 1999, Complainant made a complaint to the Registrar, alleging 30 specific incidences deficient or incomplete workmanship in Respondent’s performance of the contract. On April 20, 1999, the Registrar’s Inspector Lewis King performed a jobsite inspection, which Complainant, Mr. Thomas, and Respondent’s qualifying party attended. Inspector King testified that, at the jobsite inspection, Respondent’s qualifying party did not allege that Complainant or her son had prevented Respondent from performing its contract. Respondent’s qualifying party instead agreed to pay Complainant one-half the cost of the $257.00 dumpster fee and again agreed to pay her $6,000.00 in lieu of completing the project and correcting workmanship deficiencies. On May 5, 1999, Inspector King on behalf of the Registrar directed Respondent to correct by appropriate means the following workmanship deficiencies: 19. DECK JOIST IMPROPERLY INSTALLED REQUIRING 3 INCH RIPPERS TO PLANE OUT. 20. WALLS, DOORS, AND WINDOWS ALL FRAMED OUT OF PLUMB. 21. ADDITIONAL STUCCO PATCHING REQUIRED ON LOWER PART OF STORAGE ROOM WALL TO CONCEAL OUT OF PLUMB WALL AND DOOR. 22. GLUELAM BEAM STICKING OUT OF WALL NEVER CUT BACK. 23. GARAGE/FAMILY ROOM WALL NOT ANCHORED TO FLOOR. . . . .

10. DECK AND STAIR LANDINGS NOT PROPERLY PITCHED RESULTING IN POINDING. 11. SEVERAL UNWANTED FLOOR DRAINS INSTALLED AND STILL HAVE PINDING CONDITION. . . . .

12. IMPROPER PAINT APPLICATION UNDERCOATING SHOWING THROUGH. . . . .

18.ELECTRICAL WIRING AND TRIM NEVER COMPLETED. A. ELECTRICAL PANEL LEFT OPEN. B. STORAGE ROOM CEILING LIGHT HAS NO ELECTRICAL BAOX INSTALLED. C. OUTSIDE FAMILY ROOM DOOR LIGHT HAS NO ELECTRICAL BOX INSTALLED. D. ELECTRICAL SWITCH AND OUTLET COVERS NOT INSTALLED. E. ALL OUTLETS NOT INSTALLED. F. NO ELECTRICAL PERMIT PULLED. CONTRACTOR TO CORRECT CONDITION USING PROPERLY LICENSED CONTRACTOR’S AND TO PULL ELECTRICAL PERMIT, HAVE ANY AND ALL INSPECTIONS DONE AND COMPLY WITH LOCAL BUILDING DEPARTMENT REQUIREMENTS. 19.DRYWALL, TEXTURE, TRIIM AND PAINT NOT COMPLETED. 20.WROUGHT IRON GUARD NOT INSTALLED TO DECK AREA. 21.STAIR NON SLIP SURFACE NOT INSTALLED. 22.SECURITY SYSTEM INOPERABLE DUE TO INCOMPLETE DOOR AND WINDOW INSTALLATION. 23.DRAIN DOWN SPOUTS WRONG COLOR. 24.STORAGE ROOM DOOR STRIKE PLATE IMPROPERLY INSTALLED. 25.STORAGE ROOM CEILING LIGHT IMPROPERLY INSTALLED. 26.CONTRACTOR HAS NOT PROVIDED DOCUMENTATION AND JUSTIFICATION OF $15,560.00 FOR INTERIOR REMODELING THAT WAS NEVER STARTED. 27.HANDLES TO OPEN WINDOW ARE MISSING. . . . .

31.NO BUILDING PERMIT PULLED. CONTRACTOR TO PULL LOCAL BUILDING PERMIT, HAVE ANY AND ALL BUILDING INSPECTIONS AND COMPLY WITH ALL LOCAL BUILDING DEPARTMENT REQUIREMENTS.

The Registrar’s directive also noted Respondent’s jobsite agreements to pay Complainant one-half of the $257.00 dumpster fee and, if it did not complete the corrective work, to pay Complainant $6,000.00. On May 24, 1999, Complainant informed Inspector King that Respondent had not complied with the Registrar’s directive and requested an administrative hearing, which was scheduled in due course. On June 18, 1999, the Registrar issued a Citation and Complaint against Respondent, charging it with violations of A.R.S. § 32-1154.A.1, .2, .7, .12, .23 and .3. Respondent’s answer alleged that “homeowner’s changes and taking over control of job construction made it [too] difficult to deal with the project. All monies were put into the job.” Although the beginning of the duly noticed hearing was delayed ten minutes to allow Respondent additional travel time and the hearing did not conclude until 10:15 a.m., Respondent neither appeared through a duly authorized representative or attorney, contacted the Office of Administrative Hearings to request a continuance or that the time for the hearing be delayed further, nor presented any evidence at the hearing to dispute Complainant’s complaint allegations. Complainant testified that Respondent had not returned to her residence, performed any corrective work, or tendered the agreed settlement of $6,000.00. The Citation and Complaint issued by the Registrar advised Respondent that, if he were found in violation of any contracting law, his prior disciplinary record of final Registrar of Contractors’ orders might be considered in mitigation or aggravation. Accordingly, notice is taken of official records of the Registrar of Contractors, which reveal that, if the Registrar accepts this recommended decision, it will be the only final agency order against Respondent on the Registrar’s current record. However, the record in this matter also demonstrates that Respondent repeatedly has promised to correct workmanship deficiencies or pay the agreed settlement to Complainant. CONCLUSIONS OF LAW In this administrative proceeding, Complainant bears the burden of proof and must establish statutory violations by a preponderance of the evidence. See A.A.C. R2-19-119; see also Culpepper v. State, 187 Ariz. 431, 438, 930 P.2d 508, 515 (App. 1996). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). A preponderance of the evidence is “evidence which is of greater weight or more convincing than 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 at page 1064 (6th ed. 1990). A.A.C. R4-9-103 authorizes a general residential contractor like Respondent to perform “[c]onstruction of all or any part of a residential structure or appurtenance, except for electrical . . . systems . . . .” Respondent performed the electrical work that Inspector King ordered to be corrected in Item No. 18 at Finding of Fact No. 18, supra. No evidence indicates that any licensed electrician was ever involved in this project. The record therefore establishes that Respondent performed work beyond the scope of its general contractor’s license, in violation of A.R.S. § 32-1154.A.17[1] and .23.[2] Complainant also established that Respondent violated A.R.S. § 32- 1154.A.3,[3] .12,[4] and .23 with respect to its failure to obtain permits or to arrange inspections for electrical and other work. The Registrar’s regulations require that licensed contractors comply with applicable local codes and ordinances, even if their customers balk at paying the cost of compliance. If prospective customers refuse to agree to pay the cost of complying with applicable ordinances, Arizona law as well as good business practice requires licensed contractors to refuse to contract with them. Complainant also established that Respondent violated A.R.S. § 32- 1154.A.1[5] with respect to its failure to complete the job by installing a railing on the deck, interior cabinets in the enclosed garage, and otherwise finishing the interior of the former garage. Complainant also has established that Respondent violated A.R.S. § 32- 1154.A.3, .7, and .23 in failing to correct the other workmanship deficiencies noted in the Registrar’s May 5, 1999 directive, quoted at Finding of Fact 18. RECOMMENDED ORDER In view of the foregoing, it is recommended that the Registrar suspend Respondent’s contractor’s license, License No. 115793, Class B, on the effective date of the Registrar’s order, thirty-five days after service. It is further recommended that, if Respondent furnishes confirmation in writing that it has taken appropriate action to correct the workmanship deficiencies noted at Finding of Fact No. 18 or otherwise satisfied Complainant’s claims, no license suspension should take place and the Registrar may close Case No. 99-2459. Done this day, October 15, 1999.

______________________________________ Diane Mihalsky Administrative Law Judge

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

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

By ___________________________

----------------------- [1] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.”

[2] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure 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 written directive from the registrar.”

[3] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[v]iolation of any rule adopted by the registrar.” The rule violated here was A.A.C. R4-9-108, which requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.”

[4] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure of a contractor to comply with any safety or labor laws or codes of the federal government, state or political subdivisions of the state.”

[5] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”

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