ALJDEC

00F-H0279-ROC · Registrar of Contractors · 2000-12-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 8, 2000 APPEARANCES: Complainant Marvin D. Smith appeared representing himself. Richard D. Cossette, owner, appeared representing Respondent.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn _____________________________________________________________________ The hearing in this above captioned matter was held for the purpose of determining whether Respondent was in violation of statute as alleged by the Complainant and as Cited by the Registrar of Contractors (Registrar). Evidence and testimony were presented, and based upon review of the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. Respondent is the holder of a Class K-05 license issued by the Registrar. 2. Complainant contacted Respondent for an estimate on new roofing for his home. The new roofing was intended to cover different types of existing roofing material [metal, rolled and shakes], according to Complainant. 3. In February, 2000, a proposal contract was given to Complainant, setting forth a proposal for white Durashield Foam and Coat on the center valley of the home and rear porch. The amount of the proposal was for $2620.00, with an indicated deposit of $504.00. The proposal, dated February 21, 2000 and signed by Brian Bradner, indicates that the proposal price is “valid for 30 days from the above date.” 4. The proposal also has a provision for an owner’s right to cancel, which states “Cancellation of this agreement must be within 72 hours (excluding Sunday). If you should cancel, all monies will be refunded to you. Cancellation may be by mail. “ 5. The parties agreed that Complainant understood that the roofing job could not be done if the weather was rainy or windy. 6. Complainant did not contact Respondent again on the matter until sometime in the spring. Respondent was apparently agreeable to the same proposed contract price despite the timing being apparently more than thirty days since the proposal date. As a result, on April 5, 2000, Complainant signed the proposal and gave a $500.00 deposit to Respondent - to Brian Bradner. However, hereafter, the parties disagree on the matter.

7. On June 6, 2000, Complainant filed a formal complaint with the Registrar against Respondent. Complainant attached a copy of the proposal and a two page letter indicating his complaints against Respondent. Complainant states therein that he never heard from Respondent since giving the Deposit, and that he “selected to exercise my rights as a Customer” and called and spoke to Brian, on May 25, 2000, to cancel the contract. Complainant indicates that Brian stated “No problem, I will pull your contract”. The filed complaint goes on to state that “Sandy” called him on May 30, 2000, leaving a message that most of the money had been used to purchase supplies, that he had to pay employees to go to Phoenix to purchase items, to unload the equipment, and that they had sent two men out twice to complete the job but the wind had been too high. The filed complaint goes on to state that Complainant had then returned the phone call, wherein Sandy also told him that he would hold the money for one year if Complainant decided that he wanted to have the roof done. The filed complaint indicates that there were also words exchanged regarding a refund and the 72 hour period. 8. As a result of receiving the complaint, the Registrar’s Inspector sent several letters to the parties regarding the complaint. The parties were not able to resolve the matter, and Complainant requested a hearing. 9. On July 26, 2000, the Registrar issued its Citation and Complaint against Respondent alleging violations of Arizona Revised Statutes (A.R.S.) §§32-1154.A. and 32-1154.A.7. 10. The case at hand involves Complainant paying $500.00 as a Deposit for the roof project. Construction of the project has never commenced and Complainant canceled the roof project. Complainant seeks a refund of the $500.00 and Respondent contends that Complainant should not receive a refund because he canceled too late, because Respondent has spent the monies on supplies for the job and because he has sent men out two times who could not complete the work due to the weather (wind). 11. The testimony at the hearing produced no specific evidence of any attempts to begin the roof project, other than an undated invoice for materials purchased by the business. There is no proof that these materials were purchased between April 5, 2000 and May 25, 2000 for this job. Respondent testified, under oath, that his men had made the trip twice but turned around due to high winds. However, Respondent was unable to testify to or produce work records of dates of actual trips of his two or three workmen as to loading up supplies for the job and making the trip from the business location to Complainant’s home and returning due to wind. Respondent’s wife (whom Respondent claimed was the office manager) was unable to testify as to dates she had called Complainant either to set up dates or times they had intended to do the work or to then cancel the work due to weather (wind). Respondent testified that they never call anyone to set up the work so that the customer does not have to change their plans and then be mad because the work could not be done due to wind. Respondent’s wife testified that she calls everyone. 12. Had Complainant canceled the roofing project within 72 hours of his agreeing to the contract (April 5, 2000), there is no question that the contract calls for the return of his monies. However, although the contract does contain cancellation provisions, it does not state that a Deposit is non-refundable. 13. It is determined and held that the weight of the evidence of record was sufficient to support a finding that the $500.00 paid by Complainant was not a non-refundable deposit but merely a deposit toward the full contract price in the event the project was completed. 14. The record does not support a conclusion that construction for the project was ever commenced, and Complainant has received no benefit of the bargain for his deposit. Moreover, Complainant cannot reasonably be held responsible for Respondent’s costs incurred as a general cost of doing business - the possibility that his workers may take trips to an agreed job site approximately an hour away and then be unable to do the work due to weather. The record does not support a conclusion that the materials were, in fact, purchased for this job. 15. Under all of the facts and circumstances presented herein, it is determined that Respondent’s failure to return Complainant’s deposit is unconscionable and, as such, constitutes a wrongful act within the spirit and intent of the charged section of the State’s Contracting Laws. APPLICABLE LAW A.R.S. §32-1154.A. provides that a holder of a license or a person listed on a license shall not commit the following: … 1. Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal. xxx 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. …

/// /// CONCLUSIONS OF LAW 1. Evidence of record established that Respondent has not performed on the contract. Despite statements of attempts to perform, no typical business documents or records were presented to show any attempts to perform, and testimony presented was inconsistent as to business practices for support of job performance (the telephonic practices). The invoice for Respondent’s purchase of materials does not document any specific or particular job’s materials. This non performance of the contract is construed to be abandonment of this contract in violation of A.R.S. §32- 1154.A.1. 2. Evidence of record established that Respondent violated the provisions of A.R.S. §32-1154A.7. 3. 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 $500.00. 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. 4. 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, commencing on the effective date of the Order entered in this matter, that the Class K-05 license of Respondent shall be suspended until the Registrar of Contractors receives written proof that Respondent has paid or tendered the sum of no less than $500.00 to Complainant. IT IS FURTHER RECOMMENDED that if Respondent pays or tenders the above-described sum of money on or before the effective date of the Order entered in this matter, then the aforementioned license suspension shall not take place and in that event this Citation, together with the Complaint upon which it is based, shall be closed. RECOMMENDED this day, December 27, 2000

______________________________________ Kay A. Abramsohn Administrative Law Judge

Copy transmitted by mail this _____ day of December, 2000 to:

Registrar of Contractors Mr. 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 PH(602) 542-9826/ FAX 542-9827