ALJDEC

00F-A0119-ROC · Registrar of Contractors · 2000-08-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 3, 2000. APPEARANCES: Mr. Joseph Witck appeared on his own behalf. Mr. Rich Adams, president of Pacific States Construction, appeared on behalf or Respondent. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________

The issues presented in this complaint are whether Respondent Pacific States Construction (hereinafter Respondent) violated A.R.S. §32-1154(A)(1) (abandonment of contract), A.R.S. §32-1154(A)(7) (doing a wrongful or fraudulent act resulting in substantial injury to another person), and A.R.S. §32-1154(A)(23) (failure to comply without legal excuse with corrective work order). Complainant has established by a preponderance of the evidence that Respondent violated each of these provisions. FINDINGS OF FACT 1. On February 24, 1999, Complainant and Respondent entered into a contract wherein Respondent was to stucco Complainant’s home for the amount of $22,884.00. 2. The parties do not dispute that Complainant complied with his end of the agreement in a timely manner, paying Respondent $21,153.00 of the total contract price. 3. Respondent apparently had difficulty in hiring and maintaining crews to complete the stucco job. After the job was 50% complete, Respondent no longer worked on the job, despite Complainant’s several requests that he either complete the job or hire someone else to complete the job. 5. After waiting months for Respondent to complete the job without success, Complainant filed the instant complaint with the Registrar of Contractors on September 15, 1999. The delay in completing the stucco work caused other contractors’ work on the house to be delayed. 6. Mr. Cliff Frandsen, an inspector with the Registrar of Contractor’s office, was assigned to investigate the complaint. On October 7, 1999, he made a job site inspection in the presence of the Complainant and the Respondent. Mr. Frandsen noted that the Respondent had “basically abandoned the job at approximately 50% completion of the job.” As a result, on October 12, 1999, Mr. Frandsen issued a corrective work order directing Respondent to complete the work in 15 days. 7. Respondent did not comport with the corrective work order. 8. In order to resolve his failure to complete the stucco work, Respondent executed a promissory note on November 8, 1999 for the benefit of the Complainant. The promissory note required Respondent to repay Complainant the amount of $7,270.00 plus interest at 5% per annum. This amount represented the additional amount Complainant paid out to have a different contractor complete the job, minus $1,731.00, the amount which Complainant still owed to Respondent at the time Respondent abandoned the job. The promissory note stated very specifically that Respondent would repay the total amount due in monthly installments beginning on November 30, 1999 with the last installment being due on September 30, 2000. Respondent concedes that as of the date of this hearing, he has not paid any money on the promissory note. 9. At the time the promissory note was executed, and in reliance on Respondent’s written agreement to pay on the note in accord with the terms of the note, the parties asked the Registrar’s office to close the instant case. When Respondent failed to abide by the terms of the promissory note, Complainant justifiably requested that the case be re-opened. CONCLUSIONS OF LAW 1. A.R.S. §32-1154(A) provides in pertinent part:

A. The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: * * * (1). Abandonment of a contract or refusal to perform after submitting a bid 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. * * * (11). Failure to take appropriate corrective action to comply with this chapter of with rules adopted pursuant to this chapter within a reasonable period of time after receiving written directive form the Registrar.

2. The Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). A "preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not." Morris K. Udall, Arizona Law of Evidence, §5 (1960). It "is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not." Black's Law Dictionary, 1182 (6th ed. 1990). 3. Complainant has demonstrated by a preponderance of the evidence that Respondent violated A.R.S. §32-1154(A)(1). As much is demonstrated by the findings of the inspector on the day of the job site inspection as noted in Finding of Fact Paragraph 6 above. 4. Complainant has established that Respondent violated A.R.S. §32- 1154(7). This is shown by Respondent’s failure to comport with the terms of the promissory note or in any manner attempt to renegotiate the note if he could not pay. Complainant has been substantially harmed by this conduct in that he has not been repaid any amount of . . . . . . the $7,270.00 due to him from Respondent. Respondent’s failure to complete the job necessitated Complainant’s action of hiring another contractor to complete the job. Complainant has paid the second contractor to complete the work and thus is out at least an additional $7,270.00 over the amount of his original contract with Respondent. 5. Complainant has also demonstrated that Respondent failed without justification to comply with the corrective work order. Respondent was ordered to complete the stucco job and failed to do so. Respondent’s failure to comport with the corrective work order has directly resulted in the aforementioned financial injury to Complainant in the amount of $7,270.00. 6. Respondent’s failure to complete the job, compounded with the failure to repay any amount owing to Complainant as a result of the failure to complete the job, justifies the imposition of the recommended decision in this case. RECOMMENDED DECISION Based on the foregoing, it is recommended that the Director revoke Respondent’s license unless, prior to the effective date of the Director’s order in this case, Respondent submits written proof that he has paid or tendered to Complainant the amount of $7,270.00 plus interest in the amount of 5% per annum from December 1, 1999. If, prior to the date of the Director’s final order in this matter, written proof is submitted that Respondent has paid or tendered to Complainant the above stated amount, then it is recommended that the citation and complaint be closed. Done this day, August 22, 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