ALJDEC

00F-0527-ROC · Registrar of Contractors · 2000-02-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 2, 2000. APPEARANCES: Jack Klausner, Complainant’s attorney; Michael Ramsey, Complainant; and Sid Abed, Complainant’s witness. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________ Having heard the testimony of the witnesses and having read and considered the entire record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Decision to the Director of the Registrar of Contractors. FINDINGS OF FACT 1. On or about April 6, 1999, Complainant contracted with the Respondent, WRW Company, a licensed contractor in the state of Arizona, for the remodeling of his kitchen. The contract was later amended to include the remodeling of a bedroom as well. In May 1999, Respondent began work on the bedroom by demolishing the existing room and a wall of the home for purposes of expansion. He also walled in a door and poured a small concrete slab outside the home for the relocation of an air conditioning unit. 2. Shortly after the work began, Complainant observed that some of the work appeared disorganized and sloppy. He had his neighbor, a residential developer, come and look at the work. The neighbor also believed something was wrong with the work. When Respondent poured the concrete slab, Complainant’s sister noted that he had poured it over a sprinkler valve for the yard. At this point, Complainant had enough concerns about the construction on his home that he contacted Respondent and instructed him to stop work until further notice. He then obtained an inspection and report from Sid Abed of the Normandy Corporation. Mr. Abed had done work for Complainant in business matters previously and holds licenses for commercial as well as residential construction. Mr. Abed’s report on June 12, 1999 alarmed Complainant. 3. Mr. Abed’s report stated that the work being done on Complainant’s home was inferior and dangerous. Mr. Abed was particularly concerned with the shoring of the ceiling during construction and a slump block column which was not adequately reinforced or grouted. It was Mr. Abed’s opinion that the placement of the shoring was too far interior from the overhang and put the roof at risk of being lifted and damaged in the event of a high wind moving up the side of the hill and catching the large overhang of the home. (Complainant’s home is perched at the edge of a steep hill and the construction was being done just a few weeks before monsoon season.) The insufficient shoring also put the roof at risk of sagging, according to Mr. Abed. The slump block column was to be one of only three supports for a twenty-three foot expanse of large windows. The three supports were to hold the lintels for this broad expanse of windows and, in this witness’s opinion, the one constructed by Respondent did not meet a minimum standard of strength for sufficient support. A report by Rood Engineering, Inc. on June 16, 1999, which was requested by Complainant, concurred with Mr. Abed’s report and made additional comments regarding the workmanship on the home. 4. Complainant requested a meeting with Respondent, but Respondent delayed it several times. In the meantime, Complainant hired Mr. Abed to make some emergency repairs in order to protect the structural integrity of his home. When Complainant was able to meet Wayne Harris, Respondent’s representative in all of Complainant’s dealings with Respondent, Mr. Harris disagreed with Mr. Abed’s assessment and declined to change the course of construction. Complainant then stated that he wished to discontinue the contract, a proposition Mr. Harris also declined. 5. Complainant had paid Respondent $55,000 at the beginning of the contract in order to cover the cost of purchasing some materials and advance some sums for work. When he told Respondent to discontinue the job, Complainant asked for the rest of his money back, less the amount to which Respondent was entitled for work already done. (Complainant calculates that Respondent is entitled to keep $10,250 and owes him a refund of $44,750 though he now claims interest, costs and attorneys fees. Complainant has filed suit in civil court; however, no hearing on the merits has yet been had on that action.) Mr. Harris has consistently refused to return any money to Complainant and has filed a Notice and Claim of Lien on Complainant’s property as well. 6. Once Complainant’s negotiation with Mr. Harris failed, he hired Mr. Abed to complete the remodeling of his home. He now only wishes to receive the rest of his money back, as well as some money for the corrective work done by Mr. Abed ($6,000) and to have the lien removed from his title. 7. On August 17, 1999, Complainant filed a complaint with the Registrar of Contractors regarding the above concerns. On September 7, 1999, Respondent’s attorney submitted a letter stating, in relevant part, as follows:

On or about June 10, 1999, our client received faxed instruction from Mr. Ramsey that is was not to return to the job site until further notice. The following Wednesday, June 16, 1999, our client met with Mr. Ramsey and was informed that he had terminated the contract and hired another contractor to repair our client’s alleged improper work and complete the remaining work under the contract. Before June 16, 1999, Mr. Ramsey never advised our client that he believed any of the work to be improper, not did he ever allow our client an opportunity to inspect or repair the alleged improper work. Instead, Mr. Ramsey simply banned WRW off the job site and denied it the ability to repair and complete the contracted work. Now Mr. Ramsey has requested that the Registrar of Contractors cite our client for its alleged failure to perform, however, he has left no evidence of any improper workmanship and has eliminated the possibility of our client correcting any of the alleged defects.

8. On October 21, 1999, the Registrar of Contractors issued a Citation and Complaint against Respondent. On October 28, 1999, Respondent submitted an Answer to the Registrar of Contractors stating the same text as set forth in its letter of September 7, 1999. The matter was set for hearing on February 2, 2000 at 9:00 a.m. Though the start of the hearing was delayed for approximately 15 minutes to afford all parties an opportunity to appear, Respondent was not represented at hearing either by the appearance of a qualifying party or any proper legal representative. Complainant, his attorney and a witness appeared. Therefore, the Administrative Law Judge opened the hearing and accepted testimony and the exhibits offered by Complainant into evidence. 9. Registrar of Contractors records reflect that Respondent received its license in March 1999, one month prior to making the contract with Complainant. No other complaints are reflected in the computer record. REASONING AND CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§32-1104(A)(4), 32-1154(B) and 32-1156. 2. The Citation and Complaint issued by the Registrar of Contractors in this matter alleged potential violations of A.R.S. §32-1154(A)(3) and (7) and A.A.C. R4-9-108. 3. The Arizona Revised Statutes at §32-1154(A)(3) provide grounds for suspension or revocation of a contractor’s license for “[v]iolation of any rule adopted by the registrar”. The only applicable rule in the Arizona Administrative Code in this case refers to workmanship standards. A.A.C. R4-9-108. It states that all work shall be performed in a professional and workmanlike manner. A.A.C. R4-9-108(A). 4. The Arizona Revised Statutes at §32-1154(A)(7) provide for suspension or revocation of a contractor’s license for the “doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured”. 5. The burden of proof at an administrative hearing is generally upon the Complainant. Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). Further, the standard of proof at hearing is a “preponderance of the evidence”. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). 6. In this case, the weight of the evidence has established that Respondent’s work did not meet minimum standards of workmanship as attested to by Complainant’s witness. The shoring during construction posed a hazard to the structural integrity of the home necessitating immediate action by the homeowner to protect it. Nevertheless, the homeowner did not terminate the contract until after he attempted to have Respondent correct the work. Additionally, Respondent refused to return any of the money paid to him in advance regardless of the fact that he was not going to do the work. The contract between the parties does not allow Respondent to retain advances made on the contract in the event of breach or discontinuation of the contract. Therefore, the evidence has established that Respondent has done a wrongful or fraudulent act which substantially injured Complainant. 7. The Registrar should consider that, although there are no other complaints against Respondent, this incident resulted from what was possibly his first contract. Respondent has made no attempt to justify his actions in his correspondence with the Registrar of Contractors. Further, he did not appear at hearing to offer any justification for his actions. Considering the substantial sums of money involved, the potential of harm to the community if Respondent is allowed to continue conducting business in this fashion is great.

RECOMMENDED DECISION 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.

Done this day, February 4, 2000.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang 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 ___________________________

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