ALJDEC

99F-F0107-ROC · Registrar of Contractors · 1999-03-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 23, 1999, at 8:30 a.m. APPEARANCES: Complainant appeared through its qualifying party H.M. Binder; Respondent appeared through its attorney, Gary Kazragis, Esq. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

The sole issue in this administrative proceeding is whether the Registrar of Contractors should impose penalties against Respondent’s license because he failed to pay Complainant for laying tile in the residence that Respondent’s qualifying party constructed for himself and his family. The parties presented evidence and testimony and, based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order. FINDINGS OF FACT The Registrar issued License No. 129736, Class B to Respondent, a limited liability company, on December 9, 1997. The only person listed on Respondent’s license is its qualifying party, Philippe Gerard Buillet. Respondent acted as general contractor on construction of a residence for Mr. Buillet, his wife, and their three children. Although Respondent received no compensation for construction of the residence, the permits were issued to Respondent and subcontractors’ contracts were with Respondent. Because Mr. Buillet’s lease on the rental where his family had been living would not be renewed, he needed to finish construction of the residence by October 1, 1998. Mr. Buillet planned to do much of the construction work himself. On or about September 19, 1998, Complainant submitted a bid to Respondent to lay 3,800 square feet[1] of saltillo tile in the residence Respondent was constructing for himself and his family at a cost of $2 per square foot, or $7,600, plus $570 to apply two coats of sealer. Complainant has been licensed to lay tile in Arizona since May 1994 and has been laying tile for 12 years. Normally, Complainant charged $3.75 per square foot to lay saltillo tile, but he needed the work and submitted a lower bid to keep his crew working. Respondent’s house also involved some granite work, which Complainant hoped to obtain a contract to perform. To obtain the contract to lay the saltillo tile, Complainant also arranged for Respondent to purchase the tile from Monterey Tile in Phoenix, Complainant’s supplier, at a price $600- $700 below retail. Because Mr. Buillet was very concerned about money, Complainant’s qualifying party H.M. Binder also loaned his personal truck to Mr. Buillet to pick up the first load of tile from Phoenix and to deliver it to the jobsite in Sedona. Complainant also arranged for and paid employees of Lumbermen’s Building Supply to provide a forklift to unload the tile. Although Mr. Buillet never signed Complainant’s bid, after he returned from Phoenix with the first load of tile, he asked Complainant and his crew to begin laying tile on Monday, September 21, 1998. When Complainant’s crew arrived at the jobsite, however, they spent half the day cleaning the floors and preparing them for tile installation because the floors had not been cleaned, even though this work was not included in the bid. Complainant’s crew then started laying out a course of tile. Because saltillo tiles can be irregularly sized and somewhat humped, Complainant’s crew “back-butted” the tiles to prevent them from cracking. This means the cavity on the backside of the tile was filled with thinset to make it flush and then thinset is applied to the floor, to make a double bond. Excess thinset comes out the edges and must be cleaned up. Back-butting also can be used to make a saltillo tile floor level. In this process, thinset can be applied in a thickness of no more than 3/8”.[2] In the morning of the second day, Tuesday, September 22, 1998, Mr. Binder spoke to Mr. Buillet’s wife Janet about installation of the tile in the hallway of the residence, where one of the walls was out of square. Mrs. Buillet had designed the house and was very involved in its construction. Three 16" by 16" tiles could be installed across the width of the hallway. A grout joint the same width as the other grout joints against the length of the wall would emphasize that the wall was bowed. Mr. Binder suggested and Mrs. Buillet agreed that the hall would look better if the width of the grout joint against the wall were reduced to 3/16", rather than the 3/8" to 1/2" used elsewhere. This mode of installation required Complainant’s crew to cut the tiles installed against the length of the out-of-square hallway to maintain a uniform grout width. Complainant’s crew proceeded to lay tile in the hallway and in two adjacent large rooms. At 5:00 or 5:30 p.m. on September 22, 1998, Mrs. Buillet came by the residence to inform Mr. Binder that Mr. Buillet was upset with Complainant. When Mr. Binder went by the rental house where Mr. Buillet and his family were living at the time, Mr. Buillet told him that he was not happy with the way the tile was being laid, that Complainant’s crew was disrespectful, that Mr. Buillet could not communicate with Complainant’s crew because no members of the crew spoke English, and that he did not want Complainant’s crew on the jobsite any longer. The next morning, Wednesday, September 23, 1998, Mr. Binder went to the jobsite to examine and photograph the work his crew had performed. Mr. Buillet told him he did not like his crew or his crew’s work and complained about the narrow grout joint in the hallway. Mr. Binder told Mr. Buillet that the grout joint in the hallway could be changed, but that Mr. Buillet would have to pay extra. Mr. Buillet then became angry and said the remainder of the job was unacceptable because tiles were uneven and had humps. Mr. Binder asked Mr. Buillet to look at the job with him, using levels and rulers, or to contact the Registrar to obtain a second opinion on the quality of the job. Mr. Binder told Mr. Buillet that, if the evidence showed workmanship deficiencies, he would repair the deficiencies at his own expense. Mr. Buillet could not be placated, however; when Complainant’s crew returned to the jobsite that morning, Mr. Buillet ordered them to pick up their tools and leave. Complainant later submitted an invoice to Respondent for $1,029.25, which included $796.25 for installation of saltillo tile over 455 feet, including cuts, at $1.75 per square foot,[3] $168.00 for a combined total of 7 hours’ cleanup at $12 per hour, and $65.00 for “forklift service.” After Respondent refused to pay Complainant anything at all, Complainant made a complaint to the Registrar. Subsequently, Respondent removed some of the tile Complainant’s crew had installed and hired Gardiner’s Old Tyme Floor Installation to “re-install Saltillo where tore out,” “finish tile started,” and “cut edges with Makita for grout joint,” at a total cost of $7,886.00. According to the October 19, 1998 invoice Respondent submitted into evidence, Gardiner’s newly installed 3300 square feet of saltillo tile at a cost of $2.25 per square foot, “finish[ed] tile started” in 400 square feet at a cost of $1.12 per square foot, and charged $13.00 for “extra material.” The invoice shows that it was “paid in full” on January 3, 1999. The parties offered into evidence numerous photographs of Complainant’s tile work and offered divergent opinions regarding its quality. At the undersigned’s suggestion, the Registrar’s inspector Mark Schweiger was called as a witness to render an opinion on the quality of the tile work shown in the photographs. Inspector Schweiger testified that applicable industry standards require most tiles to be installed with uniform grout joints, which Complainant did not do with the grout joint against the bowed wall in the hallway. Because saltillo tile is an imported, uncontrolled, irregular tile, however, the standards applicable to domestically manufactured glazed tile do not strictly apply. In Inspector Schweiger’s opinion, the photographs show fairly uniform tile installation and that the wall in the hallway does not appear true. Inspector Schweiger questioned three or four of Complainant’s cuts of tiles against the wall, which looked like they were installed cockeyed, but noted that the deficiencies were marginal. Inspector Schweiger also questioned a hump in one of the rooms where the floor did not appear to be level, he felt should have been corrected.[4] Inspector Schweiger also agreed with Complainant that thinset could not be used to raise a surface more than 3/8”. The Citation and Complaint issued by the Registrar advised Respondent that, if it were found in violation of any contracting law, its 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. Therefore, Respondent’s prior record is deemed to be excellent and, thus, is viewed as a matter in mitigation for any disciplinary penalties to be imposed as a direct result of this case. The Registrar’s records also show, however, that Respondent’s license was suspended on February 12, 1999 due to a lack of bond. CONCLUSIONS OF LAW At the beginning of the hearing, the administrative law judge took under advisement Respondent‘s motion to dismiss based on the argument that Arizona’s contracting statutes did not apply because Respondent’s qualifying party was building a residence for his own family, rather than contracting for compensation. Compare A.R.S. § 32-1101(A)(3) with A.R.S. § 32-1121(A)(5). Owner-builders cannot refuse to pay tradesmen they hire to build their own homes, however, and still obtain or renew a license to work as a contractor for compensation. See A.R.S. § 32-1122(D) (“Lack of good character and reputation may be established by showing that a person has committed any act which, if committed or done by a licensed contractor, would be grounds for suspension or revocation of a contractor’s license . . .” (emphasis added).). The undersigned therefore recommends that the Registrar deny Respondent’s motion to dismiss and decide Complainant’s complaint on the merits. In this administrative proceeding, Complainant bears the burden of proof and must establish a statutory violation 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). The suspended status of Respondent’s license must be considered in imposing disciplinary sanctions, since little or no motivation otherwise would exist for any contractor to undertake remedial measures to avoid suspension of an already-suspended license. The suspended license status of Respondent does not preclude Complainant from pursuing his administrative remedies nor preclude the Registrar from conducting these disciplinary proceedings, which are authorized by A.R.S. § 32-1154(C). Respondent’s non-compliance with any condition deemed proper for inclusion in any Order entered in this proceeding should result in revocation of Respondent’s suspended license, which, in turn and in due course, will lead to the initiation of appropriate disciplinary action pursuant to A.R.S. § 32-1154(A)(21) against any newly issued separate license on which Mr. Buillet may be listed as a “person” as defined in A.R.S. § 32-1101(A)(5). Construction work, such as the tile Complainant laid, is not a perfect science. Before or after completion of a construction project, contractors frequently must correct, repair, or replace work previously performed to make it professional and workmanlike. Arizona law does not require a contractor’s work to be perfect when first performed and contemplates that a contractor will be afforded a reasonable opportunity to remedy deficient workmanship. Cf. A.R.S. § 32-1154(A)(23). Respondent is an experienced, licensed general contractor who may be charged with constructive, if not actual, knowledge of the nature of construction work; therefore, it should not be allowed to evade statutory requirements because it chose to attempt to complete its qualifying party’s residence on a schedule that was too short to allow time for Complainant to perform remedial work. Moreover, the Gardiner’s invoice that Respondent submitted into evidence seems to show that, in fact, it left undisturbed 400 of the 455 square feet of tile that Complainant laid. The evidence establishes that, at least as of January 1999, Respondent had the capacity to pay Complainant for the reasonable value of the tile work performed and its refusal to do so constitutes a violation of A.R.S. § 32- 1154(A)(7)[5] and (11).[6] RECOMMENDED ORDER Based on the foregoing, it is recommended that Respondent’s License No. 129736, Class B be revoked on the effective date of the Registrar’s order, thirty-five days after the date of mailing by the Registrar. It is further recommended that, if Respondent provides written proof that it has paid Complainant $1,029.25 for the tile work laid in Respondent’s qualifying party’s home pursuant to Complainant’s contract with Respondent on or before the effective date of the Registrar’s order, Respondent’s license shall not be revoked and the entire Citation and Complaint in case no. F99-0107 shall be closed. Done this day, March 12, 1999.

______________________________________ Diane Mihalsky Administrative Law Judge

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

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

By _______________________________

----------------------- [1] Mr. Buillet alleged that the true size of the floor was 3,600 square feet and Complainant had padded his bid. The contractor that Respondent later hired apparently laid or completed 3,700 square feet of tile. See Statement of Fact No. 14, infra. The size of the area to be tiled in Mr. Buillet’s residence is immaterial to this recommended decision.

[2] Respondent called Ned Jovanovic, a stucco contractor on the project, who testified he saw Complainant’s crew applying thinset by the bucketful and used 3/4 bucket of thinset to install 2 tiles. According to Mr. Jovanovic, the thinset was 2" thick in places. Although Mr. Jovanovic did not appear to have any interest in the outcome of this dispute, his testimony was not credible because it was contradicted by the weight of the evidence presented at hearing. Not only did the Registrar’s inspector Mark Schweiger testify that thinset could not be applied to a thickness greater than 3/8”, see Statement of Fact No. 15, infra, but Mr. Buillet himself testified that Complainant used only 80 bags of thinset, which Mr. Buillet did not think was excessive.

[3]Apparently, Complainant’s invoice deducted from the contract price $0.25 per square foot for grouting, which had not been performed when Mr. Buillet ordered Complainant’s crew from the jobsite.

[4] The parties disputed whether the underlying floor was level and whether Respondent had asked Complainant to lay the tile as flat as possible, rather than taking the time at increased expense to level the floor. The record does not contain any evidence regarding where the approximately 55 square feet of tile Respondent apparently removed were located. [5] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.”

[6] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure by a licensee or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.”

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

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