ALJDEC

01F-1947-ROC · Registrar of Contractors · 2002-03-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 13, 2002. APPEARANCES: Complainants were represented by Jay MacKinley, Esq. Respondent failed to appear. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________ The issues in this case concern Respondent’s failure to complete work in a workmanlike manner, Respondent’s doing of a wrongful act resulting in substantial injury to Complainants, Respondent’s failure to take appropriate corrective remedial action after being instructed to do so through the Registrar’s corrective work order, Respondent’s failure to pay subcontractors as required, Respondent’s failure to be properly licensed, Respondent’s failure to build according to plans and Respondent’s abandonment of the job. Based on the evidence adduced at the hearing, the following findings of fact, conclusions of law, and recommended decision are made. FINDINGS OF FACT 1. On September 12, 2000, Complainants entered into a contract with Respondent to complete the addition of a very large covered patio area at Complainants’ residence. The contract called for Respondent to receive a total of $62,256.65 for the construction. Complainants paid Respondent $30,000.00 on September 21, 2000 in order to get Respondent started on the work. Respondent represented that all work would be completed by the middle of November, 2000. 2. In securing the work, Respondent represented himself as being capable of acting in the capacity of a general contractor and held himself out to Complainants as a general contractor. In fact, he held only two licenses, a C-39R and an L-39R. Respondent’s license application submitted to the Registrar shows only an application for the C-39R license. According to the testimony of the Registrar’s inspector who testified at the hearing, in order to perform work undertaken for Complainants, Respondent would have had to possess at least a B-3 license. Respondent also represented to Complainants that he would ensure that all subcontractors were properly paid so that Complainants would not be liable for any additional payments other than the $62,256.65 sum listed in the contract. 3. Respondent began work on the project on or about September 21, 2000. Almost immediately, deviations from the plan were noticed by Complainants. For example, the construction plans called for Respondent and all subcontractors to use very specific routes across the existing grass yard so as to minimize damage to the yard. These routes were all but ignored and severe damage resulted to the yard. As a further example, the construction plans called for Respondent to construct masonry pillars around the patio to a height in excess of ten feet. Instead, Respondent constructed the pillars of masonry only to a height of three feet. Respondent intended to then construct the balance of the pillar to its completed height using wood. 4. Examples of poor workmanship abound in this project. As much is evident from simply reviewing the corrective work order issued in this matter. The letter notes deficiencies in the sump sink, the height of the pillars, the failure to treat the foundation with termiticide, extensive damage to the irrigation system on the property which resulted in the loss of several plants, failure to construct the fireplace as per plans, and other deficiencies. 5. Respondent began having difficulty showing up to the site and scheduling in subcontractors to complete work. By late November or early December, Respondent was doing no further work on the job nor was he scheduling subcontractors to come out and complete work. Respondent was also ignoring the calls of Complainants as well as the architect who had prepared the plans for the project. The architect, frustrated by Respondent’s repeated failure to show up for the job, finally secured from Respondent a written outline, contained in a letter prepared by Respondent on December 8, 2000, of dates for finishing the project. Respondent, despite having made the additional promises in the letter, thereafter abandoned the job. 6. When Respondent left the job, the sprinkler system that had been disengaged was not fixed, tens of thousands of dollars of work remained to be completed on the job, and open trenches were left in the backyard, posing a danger to Complainants’ children. 7. Complainants filed their complaint with the Registrar in December, 2000. The Registrar assigned Inspector Dan LaFond to investigate. As a result of a job site inspection conducted in February, 2001, the inspector issued the corrective work order noted above in Paragraph 4 on February 28, 2001. The inspector testified at the hearing in this matter that as of the prehearing job site inspection conducted on March 12, 2002—more than one year after the issuance of the corrective work order-- Respondent never returned to complete any of the corrections. 8. Complainants were forced to hire another general contractor to complete the work that Respondent had agreed to complete but had failed to do. The cost of rectifying the Respondent’s poor work and then correctly constructing the covered patio addition exceeded $100,000. Thus, as a result of Respondent’s conduct, Complainants have paid out over $130,000 for a job that Respondent agreed to complete for $62,256.65. Complainants have in the truest sense of the phrase been “substantially harmed” by Respondent’s conduct. 9. It is clear to the undersigned that Respondent’s work was far below that required by administrative regulation. Respondent’s seeming indifference to the poor workmanship is disturbing. The amount of time that has elapsed since the problems were brought to Respondent’s attention and Respondent’s lack of any effort to comport with the Registrar’s corrective work order is unacceptable. Based on Respondent’s abandonment of this project without any excuse, it is appropriate, in order to vindicate the purposes of Title 32, to order Respondent to pay restitution to Complainants in the amount of $30,000.00. This is the amount that Complainants paid out to Respondent for work that was, in reality, never undertaken. 13. The undersigned has reviewed and considered Respondent’s two year complaint history in fashioning the recommended order in this case. 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 . . ..

(2). Departure from or disregard of plans or specifications . . . in any material respect which is prejudicial to another without consent of the owner . . .

* * * (3). Violation of any rule adopted by the registrar. * * * (7). The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. * * * (10). Aiding or abetting an unlicensed person to evade the provisions of this chapter . . . . * * * (11). Failure by a licensee . . . to pay monies in excess of seven hundred fifty dollars when due and owing for services or materials rendered in connection with his operations as a contractor . . .. * * * (17). Knowingly contracting beyond the scope of the license or licenses of the licensee. * * * (23). Failure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.

AAC R4-9-108 specifically states that “[a]ll work shall be done in a workmanlike manner.” 2. The complainants have 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. As demonstrated in Findings of Fact Paragraph Five above, the evidence establishes that Respondent violated A.R.S. §32-1154(A)(1) by abandoning the job. 4. As demonstrated in Findings of Fact Paragraph Three above, the evidence establishes that Respondent violated A.R.S. §32-1154(A)(2) by failing to follow the plans of the job. 5. As demonstrated in Findings of Fact Paragraph Four above, the evidence establishes that Respondent violated A.R.S. §32-1154(A)(3) by failing to comply with the administrative requirement that work be performed in a workmanlike manner. Respondent’s work fell below the minimal standards required by A.A.C. R4-9-108. 6. The evidence establishes that Respondent engaged in a wrongful act as prohibited by A.R.S. §32-1154(A)(7). Complainants have suffered substantial harm as a result of Respondent’s conduct. Furthermore, abandoning the contract and misrepresenting his status as a general contractor were wrongful acts. 7. As demonstrated in Findings of Fact Paragraph Two above, the evidence establishes that Respondent violated A.R.S. §32-1154(A)(17) by knowingly contracting outside the scope of his license. Respondent represented himself to Complainants as being a general contractor and induced Complainants to act based on the representation at a time when he did not have a general contractor’s license and had no reason to believe he possessed a general contractor’s license. 8. The evidence further establishes that Respondent violated A.R.S. § 32-1154(A)(23) by both failing to comply with the corrective order issued by the Registrar and failing to do so within a reasonable period of time. During the five months between the corrective work order and the hearing, there was no attempt to remedy most of the problems. Of those problems where some remedial effort was undertaken, the work was substandard. 9. The evidence does not establish by a preponderance of the evidence that Respondent failed to pay monies in excess of seven hundred fifty dollars when due and owing. Furthermore, the evidence is not sufficient to establish a violation of A.R.S. § 32-1154(A)(10). 10. The extent of Respondent’s poor workmanship, misrepresentations, and conduct in this case merit a provisional sanction of revocation of the existing licenses. RECOMMENDED DECISION Based upon the foregoing, it is recommended that commencing on the effective date of the final order entered in this matter, Respondent’s Class C-39R License No.130244 shall be revoked until the Registrar receives written proof that Respondent has paid or tendered to Complainants the amount of $30,000.00. It is further recommended that if Respondent pays or tenders the above stated amount to Complainants on or before the effective date of the final order entered in this matter, then the entire Citation and Complaint in Case No. 00-0520 shall be closed. Done this day, March 29, 2002.

______________________________________ Gregory L. Hanchett Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2002, 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