ALJDEC

00F-T0926-ROC · Registrar of Contractors · 2001-02-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: Tuesday, February 13th, 2001; 9:00 a.m. APPEARANCES: The complainant, Abbey Carpets, was represented by Mr. David Abedian, president. The respondent, The Toumey Companies, Inc., was represented by Mr. Merle Toumey, chief executive officer. ADMINISTRATIVE LAW JUDGE: Grant Winston. _____________________________________________________________________ The administrative hearing of this matter was held in the Office of Administrative Hearings, Tucson. Testimony was heard and other evidence admitted to record and, based on the entire record the following Findings of Fact, Conclusions of Law and Recommended Order are made. FINDINGS OF FACT 1. The respondent herein is, and during all times material hereto was, a contractor licensed by a doing business in the State of Arizona, holding Class B License number 116421. 2. Respondent contracted with a married couple, John and Gina Brodie, in late 1997 for the construction of their new home in Tucson, Arizona. Construction continued into 1998, and was completed sometime in that year. 3. Pursuant to the contract, the respondent subcontracted with various other contractors for some aspects of the construction of the Brodie house. 4. As to other areas of the construction, the respondent’s contract with the Brodies stated that there would be X dollars as an allowance for that particular work, and the Brodies were free themselves to contract with whichever among several contractors they might choose. Payment for this work would be homeowners’ responsibility. If eventually the work for that facet of the construction contracted for between the Brodies and whichever third party they selected cost less than the allowance, the Brodies would have to pay only that amount; if the same cost more than the allowance, the Brodies would be responsible for payment of the allowance plus the overage. 5. Payment from the Brodies to the third-party contractor would be effected, pursuant to the respondent’s contract with them, by the Brodies giving the remittance to the respondent who would in turn hand over the money to the third-party contractor. Respondent, then, was in effect only a conduit through which Brodie money passed to the other contractor. 6. The evidence shows that it was this sort of arrangement that occurred between the respondent, the Brodies and the complainant in this case. The Respondent/Brodie contract clearly shows that the Brodies elected to be responsible for procuring the carpet/floor coverings for their home, with an allowance therefor of $8,300.00. The respondent provided the Brodies with a list of several contractors who could provide the carpet/floor covering, and the Brodies chose the complainant. 7. Complainant throughout has mistaken its contract with the Brodies as one with the respondent. The complainant’s own evidence is part of the record evidence proving that such is not so. 8. The complainant had admitted into evidence what it offered as a copy of the contract between itself and the respondent. However, the document states that the carpet and floor covering was “Sold To: Brodie c/o Toumey Companies, 650 E. Rancho Catalina Pl., Tucson, AZ. 85704-7224”. That address is the Brodies’ home address, and the job-site. No individual signed this contract in behalf of the respondent. 9. Respondent had admitted into evidence copies of subcontracts it had with other contractors for other aspects of the construction, and testified that one such did not exist as between the respondent and complainant. Respondent subpoenaed documents from the complainant in preparation for this hearing, which subpoena called for complainant to produce documents that would include any such sub-contract, but complainant failed to produce one. 10. The documentary evidence of record proves that the Brodies had ordered from complainant, and complainant had installed in the Brodie house, carpet and floor covering at a cost to them of $7,635.00. Additional documentary evidence proves that the Brodies had given the respondent only $4,000.00 toward payment of the complainant’s bill. Respondent has given the complainant this $4,000.00. 11. The evidence shows that the Brodies have failed to fully pay other contractors for their work in constructing the house, including the respondent. When the Brodies began to balk in paying the complainant, the complainant looked to the respondent for payment. When respondent naturally refused to pay the Brodies’ bill for them, the complainant eventually filed this complaint with the Registrar of Contractors. 12. A Citation and Complaint was issued from the registrar’s office on August 8th, 2000, citing the respondent with possible violations of A.R.S. §32-1154.A.7., and 11. Respondent filed its written answer to the Citation and Complaint on August 14th, 2000. This hearing ensued.

CONCLUSIONS OF LAW 1. This hearing was held under authority of and pursuant to A.R.S. §32- 1156, and A.R.S. §41-1092. 2. The respondent herein is charged in the Citation and Complaint with possible violations of A.R.S. §32-1154.A.7., and 11. Subsection 7. prohibits a licensed contractor from engaging in any wrongful or fraudulent act as a contractor which results in another person being substantially injured. Subsection 11. prohibits a licensed contractor from failing to pay its subcontractors in connection with its operations as a contractor when the contractor has the ability to pay or has been paid for the project in question. 3. The facts of this case disprove any violation by this respondent in this case of the laws cited. RECOMMENDED ORDER In view of the foregoing, it is hereby recommended that Citation and Complaint number T00-0926, together with the complaint on which it is based, be dismissed. Done this day, February 22nd, 2001.

________________________________ GRANT WINSTON Administrative Law Judge

Original transmitted by mail this ____ day of February, 2001, to:

Michael P. Goldwater, Director Registrar of Contractors ATTN: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By _______________________________ -----------------------

Office of Administrative Hearings 100 N. Stone Ave., Suite 704 Tucson, Arizona 85701 (520) 628-5488