ALJDEC

00F-1829-ROC · Registrar of Contractors · 2000-05-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 22, 2000 APPEARANCES: Complainant appeared through its construction manager, Thomas DeFeo and Respondent failed to appear. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

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

FINDINGS OF FACT

1. Pursuant to contract, Respondent was retained by Complainant, acting in the capacity of a general contractor, to perform specified electrical and security system conduit work on an addition to a jail. Complainant alleges certain deficiencies in the work performed by Respondent and same are discussed in the findings below.

2. The applicable contract between the parties was entered into on December 14, 1998 and shortly thereafter Respondent commenced working on the project. Uncontroverted evidence of record established that although Respondent basically completed, albeit belatedly, the scope of work set forth in the contract, independent engineers, retained by the architect on the project, discovered numerous electrical code violations at the conclusion of Respondent’s work on the project.

3. Performing work that fails to meet applicable electrical code requirements constitutes violations of the applicable charged sections of the State’s contracting laws, regarding the requirement to perform work in accordance with applicable building codes and in accordance with appropriate standards for good and proper workmanship. In addition, said electrical code violations are deemed to be indicative of a wrongful act, within the meaning of the applicable charged section of the State’s Contracting laws.

3. Notwithstanding Complainant’s attempts to contact Respondent, in regard to correcting the aforementioned code violations, Respondent failed to return to the project to accomplish the required corrective work. Due to Respondent’s failure to respond to the notice regarding the code violations, Complainant ultimately hired another contractor (WMS Electric) to accomplish the necessary corrective work.

4. Further undisputed evidence of record established the following salient facts regarding Complainant’s claim of a monetary loss due to Respondent’s actions or lack thereof:

a. The original contract price between Complainant and Respondent was for $79,300.00. Approved change orders brought the contracted price up to $84,283.00. b. Respondent received payment on the revised contract, totaling $81, 379.00, thereby leaving an unpaid revised contract balance of $2,904.00. c. Complainant paid $11,000.00 to Edson Electric, one of Respondent’s suppliers, due to Respondent’s failure to pay for materials ordered for the project. d. Complainant paid the subsequent contractor, retained to correct the above-mentioned electrical code violations, the sum of $6,355.00. e. Respondent failed to pay one of its subcontractors (Simplex) on the project. In this regard, Complainant paid the sum of $2,155.00.

5. Based on the foregoing, it is adjudicated and determined that Complainant expended the total sum of $16,606.00, over and above the revised contract price that it was to pay Respondent for properly completing the project.

7. By its failure to appear for the scheduled hearing, Respondent failed to present any matters in defense or mitigation.

8. Notice is hereby taken of official Registrar of Contractors public records, which reveal that Respondent’s contracting license has been canceled since April 11, 2000. Such canceled license status does not preclude this tribunal from conducting these administrative proceedings nor does it preclude the Registrar from issuing separate disciplinary orders. Moreover, Respondent’s existing canceled license status must be considered when determining appropriate penalties in this case. Little, if any, motivation would exist for any Respondent contractor to comply with an Order of the Registrar in order to avoid a suspension of a canceled license.

CONCLUSIONS OF LAW

1. The undisputed evidence of record established that Respondent violated the provisions of A.R.S. § 32-1154A (7), (2) and (3); namely Rule R 4-9-108.

2. The Registrar of Contractors’ authority in matters such as presented herein, includes the ability to impose restitution, in whole or in part, as a reasonable condition to reduce any possible disciplinary action against contractors. The exercise of such authority is deemed appropriate in the instant case. Therefore, based upon all the evidence, a reasonable condition in this case would consist of the payment by Respondent to Complainant of $16,606.00 as partial or full restitution for the costs Complainant sustained in order to have the project properly completed by others and to pay all of Respondent’s unpaid bills incurred on the project. Imposing such a condition is more preferable than merely imposing a disciplinary action against Respondent’s license without providing a condition to reduce or eliminate same. 3. The Registrar may order a “restitutionary remedy...as part of the Registrar’s regulatory authority to take appropriate disciplinary action against those who violate the licensing”...laws set forth in A.R.S. § 32- 1154A (1) through (24), inclusive. An administrative award of damages is not an unconstitutional exercise of administrative authority where due process procedural rights are protected, where the authority to prohibit conduct has been well defined as in A.R.S. § 32-1154, and where judicial review is available as provided in A.R.S. § 12-901, et seq. Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 803 P.2nd 430 (App. 1990).

RECOMMENDED ORDER

In view of the foregoing, it is recommended that Respondent’s Class L- license shall be revoked on the effective date of the Order entered in this matter. It is further recommended that if Respondent pay or tenders to Complainant the sum of $16,606.00, on or before the effective date of the Order entered in this matter, then the above-provided license revocation shall not take place but instead Respondent’s Class L-11 license shall be placed on active suspension for a period of l4 days followed immediately by a period of disciplinary probation for one year. This alternative penalty shall commence, if at all, on the effective date of the Order entered in this matter. It is further recommended, if the alternative penalty is applicable and in addition to the above-provided alternative disciplinary penalties, that any restoration of Respondent’s contracting rights, whether or not probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of twenty-four (24) months, including future renewal periods, in the amount of $1,500.00, such bond or deposit to be in addition to the required surety bond or cash deposit set forth in A.R.S. § 32-1152(D). Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above-provided twenty-four (24) month period and only if no claims are then pending. Done this day, May 24, 2000

______________________________________ Mark A. Silver 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 ___________________________

-----------------------

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