ALJDEC

00F-1181-ROC · Registrar of Contractors · 2000-02-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 8, 2000 APPEARANCES: Complainant Michael Cairns appeared on his own behalf. Respondent was represented by R. Paul Young, its principal. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________ In this complaint, Complainant contends that Respondent abandoned the contract to complete roofing work on Complainant’s residence. Based on the evidence adduced at the hearing held in this matter, it is clear that Respondent did abandon the contract and thereby violated A.R.S. 32-1154(A) subparts (1) and (7). FINDINGS OF FACT 1. Complainant’s residence sustained considerable damage to the roof as a result of a fire. 2. On July 27, 1999, Complainant entered into a contract with Respondent to complete repairs to the roof of the residence necessary to repair the fire damage. The contract provided that Respondent would provide materials and labor for a total price of $11, 800.00 3. The parties subsequently modified the contract on July 30, 1999, by providing that for an additional $5, 165.00, Respondent would complete additional changes to the trusses and roofing in the master bedroom of the residence. 4. In furtherance of his performance of the contract, Complainant made three separate payments to Respondent. The first, in the amount of $5,800, was made at the time the contract was entered into on July 26, 1999. The second, in the amount of $6,615.00, was paid to Respondent at the time the contract was modified on July 30, 1999. A third payment to Respondent, in the amount of $1, 748.00 was made on August 5, 1999. The three payments totaled to the amount of $14, 163.00. 5. Respondent purchased some of the replacement trusses for the repair work from Miller Structural and delivered those trusses to Complainant’s residence. Respondent paid Miller Structural $4,450.00 for the trusses. 6. Beyond delivering the trusses, Respondent completed no further work on the residence. Because of Respondent’s failure to complete any work, Complainant was forced to contract with a different entity to complete the roof repairs. 8. At the hearing, Respondent testified that it was Complainant who breached the contract between the parties. Respondent testified that on October 9, 1999, he contacted Complainant’s construction foreman, Bob Teske, and was told by Mr. Teske that Respondent had been fired. This hearing officer finds this testimony to be inherently incredible in light of Respondent’s October 15, 1999 letter to Complainant. In that letter, Respondent refused to do any further work, asserting that too much time had elapsed since the contract had been signed and ‘[t]o go further with this, a new contract would have to be negotiated.” In fact, from all of the testimony and evidence adduced at the hearing, it is patently obvious that Respondent had a change of heart regarding the contract and that he simply abandoned his obligations under it, despite having been paid almost the entirety of the contract price. 8. Complainant asked Respondent to return $9, 713.00. This amount represents the entire amount paid by Complainant to Respondent, $14, 163.00, less the cost of the trusses, $4,450.00, which Respondent paid for and delivered to Complainant’s jobsite. Respondent has refused to do so. Complainant has requested that Respondent be ordered to return the $9,713.00 amount. 9. This hearing officer has considered the disciplinary record of Respondent in submitting the recommended disposition in this matter. CONCLUSIONS OF LAW 1. Arizona Revised Statute § 32-1154(A)(1) provides: The holder of a license shall not commit any of the following acts: * * * (1) Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal. * * * (7) The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

2. The evidence adduced at the hearing shows that Respondent had no legal excuse for failing to perform on the contract. Complainant had performed nearly the entirety of his obligation under the contract. Furthermore, Respondent’s inexcusable failure to perform and further failure to return the $9,713 amount has resulted in substantial injury to Complainant. Respondent, therefore, has violated A.R.S. § 32- 1154(A)(1) and A.R.S. § 32-1154(A)(7). 3. The Registrar of Contractors is empowered by statute to impose reasonable conditions which may serve to reduce or eliminate any otherwise appropriate disciplinary penalties for proven violations of the State’ contracting laws. Whenever the performance of corrective or remedial measures on a jobsite is no longer possible, the inclusion of a condition in the nature of restitution, total or partial, is fully appropriate and justified. Sun Power of Arizona v. Registrar of Contractors, 166 Ariz. 437, 803 P.2d 430 (App. 1990). RECOMMENDED ORDER In view of the foregoing, it is recommended that commencing on the effective date of the Registrar’s order, the Class C-07 license of Respondent be suspended until the Registrar receives proof that Respondent has paid or tendered to Complainant the amount of $9,713.00. It is further recommended that if Respondent pays or tenders to Complainant the aforementioned sum on or before the effective date of the Registrar’s order, then no license suspension shall be imposed and the complaint in Case Number 00-1187 against Diversified Carpentry’s license in Case Number shall be closed. Done this day, February 28, 2000

______________________________________ Gregory L. Hanchett 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