ALJDEC

01F-2356-ROC · Registrar of Contractors · 2002-02-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 6, 2002 APPEARANCES: John Notestein appeared at the hearing on his own behalf. Heller Construction, Inc. did not appear at the hearing. ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________ FINDINGS OF FACT

1. John Notestein (Complainant) entered into a contract (Contract) with Heller Construction, Inc. (Respondent) for a residence to be constructed on lot number 15 (lot 15) at Sundown Drive, Fountain Hills, Arizona (Home). 2. The Contract provided that construction of the Home would be completed 8-9 months after groundbreaking. Groundbreaking on lot 15 occurred on February 16, 2000. 3. The parties arranged for payments to be made on the Contract as construction of the Home progressed based upon spreadsheets and draw requests that Respondent was to provide to Complainant. 4. At all times material to this matter, Complainant dealt with Tom Derryberry, manager of Respondent’s residential construction division, and Maurice Deise, Respondent’s site construction superintendent. 5. Complainant testified that around September 2000, he began hearing from Respondent’s subcontractors that they were not getting paid by Respondent. 6. Complainant testified that as of October 2000, progress on construction of the Home slowed because Respondent had a problem getting subcontractors to show up at the jobsite. 7. After Respondent missed the scheduled deadline for completion of the Home, the parties agreed on a revised schedule with a new completion date of December 15, 2000. Complainant informed Respondent that the Home had to be completed by that date because his children and grandchildren had made plans to visit him from out-of-town and would be staying with him at the Home. 8. Complainant testified that Respondent did not complete construction of the Home by December 15, 2000. Complainant also testified that he paid Respondent for all of the invoices and draw requests, which amounted to payment for approximately 85%-90% of the Home’s construction. 9. Complainant testified that certain specified work that was to have been performed by Respondent pursuant to the Contract were either not completed or not performed properly. Those items are specifically referenced in Complainant’s Exhibit 3A, (a listing of work not completed by Respondent that refers to numbered items listed in Respondent’s draw request #8R dated December 22, 2000). 10. By December 15, 2000, Respondent obtained a temporary certificate of occupancy so that Complainant and his family could move into the Home. 11. Complainant testified that in addition to the money paid to Respondent, he spent more than $33,000.00 in order to have construction of the Home be 85%-90% completed. 12. The weight of the credible evidence of record established that Complainant incurred expenses in excess of $33,000.00 to repair and complete Respondent’s work. The Administrative Law Judge determines that the sum of $33,000.00 is a reasonable sum that Complainant had to expend to in order to have the Home 85%-90% completed. 13. Complainant testified that for all of the items and work addressed by Complainant in the above-mentioned $33,000.00 expenditures, Respondent received payment from Complainant for such work. 14. Complainant testified he paid Respondent $4,060.00 for a granite top in the east bathroom and that Respondent’s subcontractor installed a travertine top that had been previously bid at $3,190.00. This resulted in an overpayment made by Complainant in the sum of $870.00, that Complainant contends Respondent should refund to him. The weight of the credible evidence supports that contention. 15. Complainant testified that Respondent was to install a 14 inch “overhang” on the bar between the kitchen and great room but instead only installed an “overhang” of 6 inches, which was not agreed to by Complainant. Respondent also installed a serving top that was too low so as to provide adequate space for a refrigerator. Respondent’s tile subcontractor removed travertine tile that had previously been set so that a refrigerator could fit in the space below the serving top. 16. During the hearing, Complainant testified that he paid for and should have received the 14 inch “overhang”, that Respondent is responsible installing the serving top as originally intended, and that Respondent is responsible for providing and installing the tile that its subcontractor removed to make the refrigerator fit in the space below the serving top. 17. The testimony of Complainant, as set forth above, is determined to be credible. 18. Respondent did not appear at the hearing and did not present any evidence to refute or rebut the evidence presented by Complainant. 19. The weight of the evidence of record established that Respondent abandoned the construction of the Home because it experienced financial problems and did not pay its subcontractors to remain on the job. 20. Complainant has been substantially injured as a result of Respondent’s abandonment of the job. 21. The evidence of record established that Respondent is in bankruptcy court and that Complainant obtained relief from the automatic stay in order to proceed with the instant hearing. 22. The weight of the evidence of record established that Respondent owes Complainant a sum of at least $33,870.00 ($33,000.00 plus $870.00). 23. The weight of the evidence of record established that Respondent failed to perform work at the Home in accordance with industry and workmanship standards. The evidence of record also established that certain construction deficiencies attributable to Respondent have been corrected by Complainant and other deficiencies currently exist. 24. With respect to Complainant’s claim for restitution, ordering restitution is a matter of discretion in administrative proceedings. The instant matter is an administrative, disciplinary proceeding relating to a contractor’s license. The Registrar of Contractors’ role in this matter is not one of a collection agency or judicial tribunal, but merely one duty- bound to determine whether a violation of this State’s contracting laws has occurred and, if so, to impose a proper disciplinary sanction. Neither the filing of a complaint with the Registrar of Contractors, nor a demonstration that a contractor violated state law, vests in a complainant the right to receive any particular individualized relief or an order imposing any particular discipline. 25. The Administrative Law Judge determines that, under the particular facts and circumstances of this case, including consideration that Respondent is presently before the Untied States Bankruptcy Court, it is more appropriate to recommend that disciplinary action be taken against Respondent’s license rather than to provide for restitution or impose a condition to repair deficient items to avoid discipline. CONCLUSIONS OF LAW The weight of the evidence of record established that Respondent has violated the provisions of A.R.S. §2-1154(A)(1), (7) and (3), namely A.A.C. R4-9-108.

RECOMMENDED ORDER Based on the above, it is recommended that on the effective date of the Order entered in this matter, Respondent’s Class B license shall be revoked. Done this day, February 25, 2002.

______________________________________ Lewis D. Kowal 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