ALJDEC

00F-1278-ROC · Registrar of Contractors · 2000-03-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 30, 2000

APPEARANCES: Complainant was represented by Luigi Ciulla, President and Qualifying Party, and Rob Ciulla; Respondent was represented by partners Floyd Martin (Qualifying Party) and Wren Martin (Superintendent).

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant Ciulla Plumbing, Inc. brings this action to force Respondent Agave Concrete to pay for verbally subcontracted plumbing work. The parties presented evidence and testimony at the hearing and, based upon the entire record, the Administrative Law Judge makes following Findings of Fact, Conclusions of Law, and Recommended Order finding Respondent in violation of the statutes and recommending provisional suspension. FINDINGS OF FACT 1. In October 1998, Respondent began a residential remodeling job (hereinafter “the Duran project”). Wren Martin, one of Respondent’s partners, was in charge of the project (hereinafter, “Respondent” includes both the partnership and Wren Martin acting on behalf of the partnership). Respondent hired an old friend to do the plumbing work, Moe Beck. Lloyd Martin, Respondent’s other partner, knew Beck as a long-time acquaintance. According to Lloyd Martin, Beck had been a licensed contractor for many years. Respondent assumed that Beck still had a license. Beck was hired to do the plumbing work for $1975.00. Before any plumbing work was done, Respondent learned that Beck no longer had a license. Respondent then hired Beck to work under Respondent’s license as an onsite supervisor for the job and to find a licensed plumber. Beck hired Complainant as a subcontractor to do the plumbing work. 2. According to Complainant’s Qualifying Party and President, Luigi Ciulla (hereinafter “Complainant”), the price for the plumbing work that he and Beck agreed upon was $2400.00. This tribunal finds Complainant’s testimony credible, finding that Beck agreed to $2400.00, but left Respondent with the impression that the plumbing work was being done for $1975.00. 3. Complainant performed the work as directed by Beck. This included laying pipe in the attic, across a space that would later be meant for attic storage access by pull-down stairs. This later became a complaint of the homeowner. The evidence is clear that Complainant had no way of knowing that the pipe was being laid in the wrong area (there was no blueprint). Complainant would not have knowingly mislaid the pipe. Instead, Beck was responsible to make sure that the layout of the pipe was correct, since he was the onsite supervisor. Thus, the problem with the pipe across the attic access opening was Respondent’s responsibility. 4. Likewise, the homeowner had a complaint about gas pipe that Complainant installed above the stove. Again, the evidence shows that the pipe was installed in the manner that Beck told Complainant and any problem with it was Respondent’s responsibility. Respondent essentially conceded this point at the hearing. 5. At the end of November 1998, Respondent paid Complainant $1000.00, but withheld the remainder. When the homeowner expressed the complaints mentioned above, Respondent told Beck to get Complainant to fix the items. Beck first told Respondent that Complainant’s were going to correct the work, then later said that Complainant’s refused. In reality, Beck never contacted Complainant about the homeowner’s complaints. 6. Because Respondent believed Complainant was refusing to fix the pipes, Respondent hired another plumber to do some of the work and Wren Martin did some of the plumbing work himself. This involved re-routing the attic pipe around the access opening and reconfiguring the pipe above the stove. At the hearing, Wren Martin stated that at the time he thought he was authorized to do that minor repair work, but that he now realizes that it was beyond the scope of his license. It should be noted that he did have a licensed plumber on site while he performed the repair work. 7. Because Respondent believed that Complainant’s price was $1975.00 and because Respondent had expenditures to repair Complainant’s work, Respondent refused to pay the remainder of Complainant’s bill. Respondent submitted an itemization of his repair expenses as Exhibit A. This itemization is based on the price of $1975.00, but still concludes that Respondent owed Complainant just under $200.00. Yet, Respondent has not paid Complainant anything but the $1000.00. 8. Shortly after the work on the Duran project, Beck contacted Complainant about doing some work at another house in that area (“the Ashton project”). Respondent testified at the hearing that Beck did not have authority to represent Respondent on any other project. Complainant, however, had no way of knowing that. Complainant agreed to do the small job for $275.00 and when Complainant did the work, Respondent’s representatives were on the site, so Complainant’s belief that Beck was acting for Respondent on the Ashton project was reasonable. 9. The parties had no more contact after that. In February 1999, Complainant sent Respondent an invoice for $1675.00, which included $1400.00 remaining for the Duran project and $275.00 for the Ashton job. Even though Respondent apparently agreed that it still owed Complainant about $200.00, see Exhibit A, Respondent paid nothing. Complainant filed its complaint with the Registrar of Contractors in October 1999. 10. In November 1999, based on Respondent’s response to the complaint, the ROC issued a letter warning Respondent that it had operated outside the scope of its license by doing the plumbing repair work itself. CONCLUSIONS OF LAW 1. Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint. Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). Complainant has met that burden. 2. The evidence is sufficient to find a violation of A.R.S. § 36- 1154(A)(7), a wrongful act, because Respondent refused to pay Complainant without any reasonable excuse. Since Respondent did not dispute that Complainant was owed at least $200.00, it was wrongful for Respondent to withhold that sum from Complainant. 4. The evidence is also sufficient to show that Respondent has violated A.R.S. § 36-1154(A)(11), failure to pay an amount greater than $750.00 when due for services in connection with a licensee’s operation as a contractor. Beck was representing Respondent when he contracted Complainant for $2400.00 on the Duran project. Furthermore, Beck supervised the placement of the pipes. Thus, the problems were Respondent’s responsibility and did not entitle Respondent to withhold payment. In addition, Complainant had no way of knowing that Beck was not authorized to hire subcontractors for the Ashton project. As an employee of Respondent’s, Beck had apparent authority to act on behalf of Respondent and could bind Respondent. If Beck was acting beyond the scope of his employment, Respondent can seek remedy from him. Complainant, however, is entitled to payment for its work, performed in good faith. 5. Finally, the evidence shows that Respondent has violated A.R.S. § 36-1154(A)(17), contracting beyond the scope of a license, because Respondent’s license excludes plumbing and Respondent performed some of the plumbing repair work itself. 6. There is some mitigating evidence in the record. First, official ROC records show that Respondent has had its license since 1998 and has not had any other complaints filed against it. Second, although Respondent went beyond the scope of its license, it hired a plumber to do some of the work and Wren Martin now clearly understands the law in this area. 7. Appropriate discipline in this case is to require Respondent to pay Complainant $1675.00 or face suspension of its license.

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. . . RECOMMENDED ORDER IT IS RECOMMENDED that Respondent’s Class KB-01 license 136416 be suspended beginning on the effective date of the Registrar’s Order in this matter until Respondent has paid Complainant $1675.00. IT IS FURTHER RECOMMENDED that if Respondent pays Complainant $1675.00 before the effective date of the Registrar’s Order, the license suspension shall not take place and Citation and Complaint 00-1278 shall be closed.

Done this 6th day of April 2000

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Eric A. Bryant Administrative Law Judge

Original mailed this ___ day of April 2000, to:

Michael P. Goldwater, Director Attn: Joyce Armijo Registrar of Contractors 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