ALJDEC

99F-M0131-ROC · Registrar of Contractors · 1999-02-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 9, 1999.

APPEARANCES: Complainant was represented by her attorney, Nedra J. Bates, Esq.

Respondent was represented by his attorney, Eric C. Anderson, Esq.

ADMINISTRATIVE LAW JUDGE: Robert. I. Worth _____________________________________________________________________

Evidence and testimony were presented, and based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made.

FINDINGS OF FACT

1. Notice is taken of the licensing records of the Registrar of Contractors which reveal that Respondent is a sole proprietorship entity, owned and operated by Carl Wade Harward doing business as C. W. Harward Tile Installations. Mr. Harward serves as qualifying party under a Class C- specialty license Number 125797 issued to the proprietorship by the Registrar of Contractors on July 28, 1997.

2. Complainant was and is the owner of an upper level condominium unit and was a former friend of Respondent’s owner prior to their making arrangements relating to the delivery and installation of saltillo tile in several portions of the residence. The testimony was sharply conflicting regarding the contents of conversations between the parties with respect to the details of their overall understanding as well as to the specific terms and the actual amounts of monetary payments agreed upon or actually tendered and accepted. The conflicting evidence also extended to the nature, scope and responsibilities of the parties’ respective roles in the work performances.

3. A contractual relationship is not, in any way, dependent upon the inclusion of a profit element for the contractor or even upon the recouping of all direct material expenses incurred for the jobsite work so as to avoid any losses. In this case, the parties’ understanding appeared at the very minimum to encompass an arrangement under which all costs for material supplies would be advanced by Respondent and reimbursed by Complainant, either as part of an overall bid price or as a separate charge. It further appeared that all newly purchased materials were duly entered upon Respondent’s business books, ledgers and tax records. Some portion of the tile materials purportedly left over from prior jobs performed by Respondent’s owner were to be furnished to Complainant without additional charge for use on her project.

4. It is found and determined, based upon an evaluation of all credible evidence and testimony presented at the hearing, that a verbal contractual arrangement existed between the parties pursuant to which Respondent was to the furnish and install tile, grout and sealant or glazing materials on the floors of Complainant’s kitchen, dining area, hallway and bathroom. It is further found that the parties’ arrangements constituted a form or manner of compensation to Respondent, irrespective of whether the amount of claimed charges included elements of profit, overhead or even a loss on the project.

5. The credible evidence and testimony sufficiently supported findings that the total proposed cost for the entire project, shown to have been expanded from an initial phase confined only to the kitchen and dining areas, was $1,250.00, all of which was paid by Complainant to Respondent, partly by cash and partly by check. Consequently, the quoted and paid contractual price far exceeded the total of new expenditures or outlays shown to have been directly made by Respondent in purchasing materials for this project.

6. The testimonial and photographic evidence adequately demonstrated that various aspects of the tile and grout work by Respondent were substandard and unacceptable, reflecting adversely upon his workmanship. These deficiencies included the following areas or items:

(a) Grout or adhesive materials had been splattered upon adjacent wall surfaces and were allowed to remain for a prolonged time period without having been properly cleaned off. An effective cleaning effort by Respondent is required, regardless of whether or not an interior house painting is contemplated by Complainant in the near future.

(b) The grout in several locations was shown to be of inconsistent or lumpy texture, necessitating an appropriate removal and replacement in all visible areas where the grouting is uneven and unsightly.

(c) Tile was missing along a portion of the baseboard area in the bathroom and must be furnished and properly installed by Respondent.

(d) The sealing or glazing over the tile surfaces was performed by Respondent without adequately cleaning or removing dirt and debris, thereby

rendering the sealing or glazing work inappropriate, ineffective and unsightly. By proceeding with such finishing work, Respondent had effectively accepted the tile and grout surfaces as being adequate to receive the sealing or glazing materials. The workmanship obligations of Respondent are not lessened or eliminated irrespective of any insistence or instructions to proceed purportedly given by the property owner, a fact that was emphatically disputed. The sealing or glazing coating must be completely removed and re-applied by Respondent over all cleaned tile and grout surfaces.

7. No merit is found to Respondent’s contention that any or all of the presently existing deficiencies, as enumerated above, were attributable to any acts or omissions of Complainant so as to effectively estop or preclude her from pursuing the within complaints seeking remedial action.

8. Notwithstanding the foregoing, the evidence did not sufficiently establish a valid basis for requiring Respondent to undertake and accomplish any realignment of the hallway tile pieces, nor were some allegedly uneven tile cuts or some extent of variations in color of the grout used in the two phases of the overall work shown to be excessive or beyond acceptable industry tolerances. Additionally, although the credible evidence tended to indicate that Respondent improperly re-connected the washing machine after disconnecting and moving the unit to allow the tile to be installed, resulting in extensive flooding of another individual’s first-floor residence directly below that of Complainant, any claim for reimbursement of the insurance deductible which Complainant was required to pay must be sought and obtained, if at all, by pursuing available civil court remedies.

9. By way of a matter in aggravation, it was shown that for certain elements of the grout and tile installation work, excluding the actual setting of tile pieces,

Respondent had utilized the services of an individual not shown to have possessed any contractor’s license. That individual was compensated by Respondent but was not treated as an employee on this project, the performance of which, under either party’s version of events, conversations and aggregate monetary amounts payable and/or paid, would have required a contractor’s license.

10. The Registrar’s assigned inspector, following his jobsite visit, issued a written directive to Respondent requiring the performance of all of the items of complaint set forth above as deficiencies for which Respondent was deemed by the Inspector to be responsible to correct. However, no remedial action was accomplished or even commenced by Respondent.

11. The prolonged failure to undertake and accomplish necessary corrective work is further found to have constituted a breach by Respondent of the parties’ oral agreement, thereby constituting a wrongful act to the detriment of Complainant within the meaning of another charged code violation hereunder.

12. The Department’s records further indicate that Respondent’s contracting license has been suspended by operation of law since August 15, 1998 for lack of a bond. The currently suspended license status of Respondent does not preclude the pursuit by Complainant of her administrative remedies nor the conducting by or on behalf of the Registrar of these administrative disciplinary proceedings which are expressly authorized pursuant to A.R.S. §32-1154(C). Moreover, such suspended status of the license must be considered when formulating an appropriate Order in this action. Since little or no motivation would exist for any contractor to undertake and complete any remedial measures to avoid the imposition of a suspension of an already-suspended license, the Order to be entered hereunder should result in the provisional

revocation of Respondent’s license, conditioned upon the successful and timely accomplishment of all required remedial work. Proof of proper compliance by Respondent with specified corrective work conditions deemed proper for inclusion in the Order would warrant the imposition of an alternative reduced disciplinary penalty short of a license revocation under all the facts and circumstances of this case.

CONCLUSIONS OF LAW

1. Any claims by a licensed contractor that an identified construction project is being undertaken personally and not under the issued license must always be closely and carefully scrutinized, especially where the project is of a nature or magnitude that a contracting license is required. Under all the facts and circumstances of the instant case, no merit is found to Respondent’s contentions either that his Class C-48 license was not involved or that no contract existed.

2. The totality of the evidence of record adequately established that Respondent has violated the provisions of A.R.S. §32-1154A (7), (23) and (3), namely, Rule R4-9-108.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that Respondent’s Class B license shall be revoked on the effective date of the Order entered in this matter (thirty-five [35] days after the date of mailing by the Registrar).

It is further recommended that if notice if filed with the Registrar that Respondent has accomplished all necessary corrective work on the tile and grout in Complainant’s residence, as set forth in Findings of Fact Number 6(a) through 6(d), inclusive, in a

proper, workmanlike manner on or before this Order’s effective date, then no license revocation shall be imposed, but instead that Respondent’s Class C-48B license shall be placed on disciplinary probation for a period of sixty (60) days. This alternative penalty shall commence, if at all, on the effective date of this Order.

It is further recommended, if the alternative penalty is applicable and in addition to the above-provided alternative penalty, that Respondent pay the sum of $150.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32-1154(D). The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. §32-1101A(5), unless payment of any outstanding prior civil penalty is tendered.

Dated: February 22 , 1999.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert. I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

Michael P. Goldwater, Director Registrar of Contractors 800 West Washington Street (6th Floor) Phoenix, AZ 85007

ATTN: Joyce Armijo -----------------------

Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 (602) 542-9826