PAGE 9 OF 9 MARISOL VENTRICE AND THE DEPARTMENT

Page 9 of 9

Marisol Ventrice and the Department of Consumer Affairs v. Home Improvement NY Inc. and Barahona, Karlos

CITY OF NEW YORK

DEPARTMENT OF CONSUMER AFFAIRS

MARISOL VENTRICE -and- THE DEPARTMENT OF CONSUMER AFFAIRS, Complainants, -against- HOME IMPROVEMENT NY INC. -and- BARAHONA, KARLOS Respondents.

DECISION AND ORDER Violation No(s).: CD500114134 DD500114134 License No(s).: 1261590 (HIC) 1193545 (HIS) Date: October 9, 2009

A hearing on the above captioned matter was held on May 5, 2009 and continued on August 19, 2009.

Appearances: For the Complainants: Marisol and Anthony Ventrice, consumer complainant. For the respondents: Karlos Barahona, President.

The Notice of Hearing charged the Respondents with violating the following:

1. Title 20 of the Administrative Code of the City of New York (“Administrative Code”), Chapter 5, Subchapter 1, §20-700 and Title 6 of the Rules of the City of New York (“6 RCNY”) §1-12 by engaging in a deceptive trade practice in that negotiation and performance of a Home Improvement Contract, in that Respondent received payment for services not performed.

2. Administrative Code, Chapter 2, Subchapter 22, §20-393(6) of the Code by willfully or deliberately disregarding and violating the building, sanitary, fire and health laws of this city.

3. Administrative Code §20-393(11) by failing to perform work under a home improvement contract in a skillful and competent manner.

4. 6 RCNY §2-221(a)(1) by failing to include in the contract the date of the transaction, the contractor’s name, office address, telephone number and license number; and the salesperson’s name and license number.

5. 6 RCNY §2-221(a)(2) by failing to include in the contract the approximate dates, or estimated dates, when the work will begin and be substantially completed, including a statement of any contingencies that would materially change the approximate or estimated completion date, and a specification whether or not the contractor and the owner have determined a definite completion date to be of the essence.

6. 6 RCNY §2-221(a)(4) by failing to include in the two contracts a notice to the owner that the contractor or subcontractor who performs on the contract and is not paid may have a claim against the owner which may be enforced against the property in accordance with the applicable lien laws.

7. 6 RCNY §2-221(a)(5) by failing to include in the two contracts a notice to the owner that the home improvement contractor is legally required to deposit all payments received prior to completion in accordance with subdivision four of §71-a of the New York State Lien Law and that, in lieu of such deposit, the home improvement contractor may post a bond or contract of indemnity with the owner guaranteeing the return or proper application of such payments to the purposes of the Contract.

8. 6 RCNY §2-221(a)(8) by failing to include in the two contracts a clause wherein the contractor agrees to furnish the buyer with a Certificate of Workers’ Compensation Insurance prior to commencement of work pursuant to the contract.

9. 6 RCNY §2-221(a)(9) by failing to include in the two contracts a clause wherein the contractor agrees to procure all permits required by local law.

10. 6 RCNY §2-221(a)(10) by failing to include in the two Contracts, in immediate proximity to the space reserved for the signature of the buyer and in bold face type of a minimum size of 10 points, a statement that the buyer has the right to cancel the transaction at any time prior to midnight of the third business day after the date of the transaction.

11. 6 RCNY §2-221(b) by failing to provide a Separate Notice of Cancellation to the owner.

12. 6 RCNY §2-223(a) the failure to secure or see to the securing of certificate of occupancy in accordance with applicable state or local building laws. [Charge against Home Improvement NY Inc. only]

13. 6 RCNY §1-13 by failing to respond to a complaint sent by the Department with a request for a response to the complaint within twenty days of the date that the complaint was mailed out.

14. Administrative Code, Chapter 1, §20-101 for failing to maintain the standards of integrity, honesty, and fair dealing required of licensees in that Respondent failed to complete work required by the contract.

Based on the evidence in the record, the following is RECOMMENDED:

Findings of Fact

  On April 2, 2008, the consumer complainant and the respondents entered into an agreement whereby the consumer agreed to pay $3000.00 to the respondents to remove a small balcony and to construct a new deck in the consumer’s backyard. Respondent – Karlos Barahona (President of Home Improvement NY Inc. and its licensed salesman) admitted that he knew that the work done properly would require certain permits but that he wanted to do a favor for the consumer because the consumer told him money was “tight.”  Mr. Barahona admitted that he “took it upon himself” to work up a price that the consumer could afford. The respondents built the deck and the consumer paid the respondents $3000.00. Mr. Barahona admitted that the Department of Buildings (“DOB”) does not allow all wood decks in a house like the consumer’s which is attached on both sides to other houses. The DOB instead requires steel beams and fireproofing.

The consumer later received a DOB violation because the deck was non-conforming to the Building Code and paid a $130.00 fine. The consumer also had to secure an architect for $3500.00 to file plans with the DOB and the consumer paid $465.00 in filing fees. The consumer also obtained an estimate from a licensed contractor to do the remedial work. It will cost the consumer $4000.00 to dismantle the new deck and to reinstall the original balcony, and, an additional $400.00 to repaint it. Additionally, the respondents damaged the existing awning and it will cost $300.00 to replace it.

         The respondents’ contract did not contain the required information charged in the Notice of Hearing.   

          The respondents replied to the consumer complaint within twenty days by faxing the response to the Department of Consumer Affairs.

Opinion

          The credible evidence establishes that the respondents engaged in a deceptive trade practice, failed to do work in a skillful manner and willfully or deliberately disregarded DOB laws/requirements, thereby violating Administrative Code Sections 20-700, 20-393(11), and 20-393(6), respectively.

The respondents’ acceptance of payment for a home improvement that is not in compliance with the DOB regulations makes them guilty of engaging in a deceptive trade practice.  Mr. Barahona, by his own admission, deliberately ignored the DOB requirements, which would have required an architect’s plans and filings with the DOB. Respondents’ construction of the deck without steel steps and fireproofing, which was required for attached houses, demonstrates shoddy workmanship and a willful disregard for the Building Codes.

While Mr. Barahona testified that he told the consumer’s husband that the deck, as he was going to build it, “could be a problem with the DOB,” he did not explain the specific deficiencies or the consequences. In any event, the consumer lacked the expertise to know what was required to build a proper deck, what DOB steps had to be followed and what the consequences would be for non-compliance.

In addition, Ms. Ventrice credibly testified that Mr. Barahona never informed her that building the deck would require architectural plans, DOB permits, steel steps and fireproofing, or that the deck would have to be removed if it failed to comply with the Building Code.

The respondents should be held responsible for the DOB fine ($130.00), the cost of removing and rebuilding the deck ($4000.00 + $400.00 paint) and the cost of replacing the awning which was damaged while constructing the deck ($300.00).

However, the respondents are not required to pay restitution for the architect’s fee ($3500.00) or the DOB filing fees ($465.00) since, had the job been done correctly the first time, the consumer would have had to pay these fees.

The contract failed to include the necessary information and disclosures required by 6 RCNY §2-221(a)(1), 6 RCNY §2-221(a)(2), 6 RCNY §2-221(a)(4), 6 RCNY §2-221(a)(5), 6 RCNY §2-221(a)(8), 6 RCNY §2-221(a)(9), 6 RCNY §2-221(a)(10), and 6 RCNY §2-221(b).

Respondent-Home Improvement NY, Inc. is found in violation of 6 RCNY §2-223(a) for intentionally failing to secure the Certificate of Occupancy for the new deck construction.

The respondents rebutted 6 RCNY §1-13 since Mr. Barahona credibly testified that he replied by fax within 20 days to the Department of Consumer Affairs complaint.

Respondent Karlos Barahona is not charged with violating 6 RCNY §2-223(a).

The respondents’ licenses shall be suspended since the respondents are found to have committed the violations above.

ORDER

CD500114134

Respondent Home Improvement NY, Inc. is found guilty of charges numbered 1 through 12, and 14 and is hereby

Ordered to pay to the Department of Consumer Affairs a TOTAL FINE of $ 3,900.00 as follows:

Charge Fine

	1	Administrative Code §20-700 & 6 RCNY §1-12	$ 350.00
		Administrative Code §20-393(6)	$ 750.00
		Administrative Code §20-393(11)	$ 500.00
		6 RCNY §2-221(a)(1)	$ 200.00
		6 RCNY §2-221(a)(2)	$ 200.00
		6 RCNY §2-221(a)(4)	$ 200.00
		6 RCNY §2-221(a)(5)	$ 200.00
		6 RCNY §2-221(a)(8)	$ 200.00
		6 RCNY §2-221(a)(9)	$ 200.00
		6 RCNY §2-221(a)(10)	$ 250.00
		6 RCNY §2-221(b)	$ 350.00
		6 RCNY §2-223(a)	$ 500.00
		TOTAL FINE	$3,900.00

Respondent Home Improvement NY, Inc. is not found guilty of charge 13 and this charge is DISMISSED.

DD500114134

Respondent Karlos Barahona is found guilty of charges numbered 1 through 11, and 14 and is hereby

Ordered to pay to the Department of Consumer Affairs a TOTAL FINE of $3,400.00 as follows:

Charge Fine

	1.	Administrative Code §20-700 & 6 RCNY §1-12	$ 350.00
	2.	Administrative Code §20-393(6)	$ 750.00
	3.	Administrative Code §20-393(11)	$ 500.00
	4.	6 RCNY §2-221(a)(1)	$ 200.00
	5.	6 RCNY §2-221(a)(2)	$ 200.00
	6.	6 RCNY §2-221(a)(4)	$ 200.00
	7.	6 RCNY §2-221(a)(5)	$ 200.00
	8.	6 RCNY §2-221(a)(8)	$ 200.00
	9.	6 RCNY §2-221(a)(9)	$ 200.00
	10.	6 RCNY §2-221(a)(10)	$ 250.00
	11.	6 RCNY §2-221(b)	$ 350.00
		TOTAL FINE	$3,400.00

CD500114134 and DD500114134

Respondents Home Improvement NY, Inc. and Karlos Barahona are hereby ORDERED to pay RESTITUTION to the Consumer in the amount of $4,830.00, for which they are each jointly and severally liable.

In addition, the Home Improvement Contractor License (“HIC”) and the Home Improvement Salesperson License (“HIS”) are suspended for 14 days. The suspension shall be effective five business days from the date of this Decision. The respondents are directed to surrender their license documents to the Licensing Division. Once the suspension period expires, the respondents may, if all fines are paid and administrative requirements met, retrieve their license documents from the Licensing Center.

Failure to surrender the license documents shall constitute grounds for additional suspension or revocation of the licenses. If the respondents continue to operate during the period of suspension, they are subject to CRIMINAL PROSECUTION and/or civil penalties of $100 per day for each day of unlicensed activity, as well as the closing of their businesses and/or the removal of items sold, offered for sale, or utilized in the operation of the businesses, pursuant to the Administrative Code of the City of New York Sections 20-105 and 20-106 (the “Padlock Law”).

Failure to comply with this order within thirty (30) days shall result in the additional suspension and / or revocation of the licenses at issue, and may result in the suspension of any other Department of Consumer Affairs license(s) held by the respondent(s).

This constitutes the rec­ommendation of the Administra­tive Law Judge.

_______________________________

M. Mirro

Administrative Law Judge

DECISION AND ORDER

The recommendation of the Administra­tive Law Judge is approved.

This constitutes the Decision and Order of the Department of Consumer Affairs.

_____________________________

Bruce M. Dennis

Deputy Director of Adjudication

NOTICE TO RESPONDENT(S): If you wish to file a MOTION TO VACATE this decision, you must submit the motion to the Director of Adjudication, Department of Consumer Affairs, 66 John Street, New York, NY 10038, within 15 days from the date you knew or should have known of this decision. The motion must include: A check or money order for the sum of $25 payable to the Department of Consumer Affairs; and a check or money order payable to the Department of Consumer Affairs for the entire restitution amount ordered by the decision; and a sworn statement outlining a meritorious defense to the charges alleged in the Notice of Hearing; and a statement offering an excuse for its failure to appear on the designated hearing date. In addition, you must serve a copy of the motion to vacate on both the Consumer complainant and the LEGAL COMPLIANCE AND FITNESS DIVISION at 42 Broadway, 9^th Floor, New York, NY 10004.

NOTICE TO CONSUMER COMPLAINANT(S): If you wish to APPEAL this decision, or file a MOTION FOR REHEARING, you must file the appeal or motion with the Director of Adjudication, Department of Consumer Affairs, 66 John Street, New York, NY 10038 within 30 days from the date of this decision. You must include with your appeal or motion a check or money order for the sum of $25 payable to the Department of Consumer Affairs. In addition, you must serve a copy of your appeal or motion on the respondent(s).

Mail payment in the enclosed envelope addressed to: NYC Department of Consumer Affairs Collections Division 42 Broadway, 9th Floor New York, NY  10004

N.Y.C. Department of Consumer Affairs  66 john street  New York, N.Y.  10038  (212) 361-7770

www.nyc.gov/Consumers