ALJDEC

01F-G0123-ROC · Registrar of Contractors · 2001-02-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 22, 2001 at 1:30 p.m. APPEARANCES: Complainants Mr. and Mrs. Leavitt appeared on their own behalf; Respondent Enterprise Carpet and Mattress Discounter, Inc. appeared through Greg E. Linaman II, Esq. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

Complainants presented some evidence and the remedies available to property owners who make administrative complaints to the Arizona Registrar of Contractors against a contractor’s license were discussed on the record. Complainants then elected to withdraw their complaint. Based on the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order. FINDINGS OF FACT The Registrar issued License No. 122482, Class C-08, to Respondent, a corporation, on April 9, 1997. In June 2000, Respondent contracted with Complainants to lay some carpet and vinyl flooring in a rental property that they were preparing to sell. A dispute arose and, on July 30, 2000, Complainants made a complaint to the Registrar against Respondent’s license, alleging that the “[q]uality of services and materials [it] used are very inferior compared to items [that Complainants] actually agreed to in original sales agreement.” In the Complaint, Complainants admitted that they had not paid $2,900.00 of the contract price. The Registrar’s Inspector Lee Deem performed a jobsite inspection and, on August 29, 2000, on behalf of the Registrar, directed Respondent to correct ten workmanship deficiencies at Complainants’ rental property. On September 15, 2000, Complainants requested an administrative hearing because they believed eight of the ten items on Inspector Deems’ directive had not been adequately corrected. On September 25, 2000, Respondent’s attorney informed Inspector Deem that it had corrected nine of the ten items in the directive and that it could not correct the tenth because it had to special order materials for the repair and, when the materials arrived, Complainants refused to allow Respondent access. Respondent’s attorney’s letter also noted that Complainants had paid only $300.00 of the $3,200.00 contract price. On October 18, 2000, the Registrar issued a Citation and Complaint against Respondent’s license, charging it with violations of A.R.S. § 32- 1154(A)(7), (23), and (3) (A.A.C. Rule R4-9-108). Respondent timely answered the Citation and Complaint, denying any statutory violations, and the Registrar scheduled an administrative hearing. In their opening statement, Complainants offered to pay Respondent $700.00, in addition to the $300.00 already paid, and withdraw their complaint against Respondent’s contractor’s license if it would relinquish any claim for nonpayment. Complainants testified that they did not want Respondent to lose its contractor’s license as a result of the dispute. Inspector Deem informed the Administrative Law Judge that he could not perform a prehearing jobsite inspection because Complainants had sold the rental property where Respondent had performed the work. Complainants confirmed that it was no longer possible for Respondent to perform additional corrective work. A discussion was held on the record, during which the Administrative Law Judge informed Complainants of applicable law, which is noted infra in the Conclusions of Law. It was also noted that the Registrar’s policy is to keep on his record for a period of at least two years all directives that the Registrar’s inspectors issue to contractors, like the one to Respondent in this matter, to perform corrective work. Based on the discussion on the record, Complainants elected to withdraw their complaint against Respondent’s contractor’s license. CONCLUSIONS OF LAW Complainants bear the burden of proof and must establish statutory violations by a preponderance of the evidence.[1] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[2] A preponderance of the evidence is “evidence which is of greater weight or more convincing than 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.”[3] “The goals and objective of the registrar of contractors are to protect the public health, safety and welfare by licensing, bonding and regulating contractors engaged in residential construction . . . .”[4] “[T]he Registrar is charged with the overall responsibility of protecting the welfare of the public dealing with persons engaged in the building contracting vocations and afford the public protection against incompetent, inexperienced, unlawful and fraudulent acts of building contractors.”[5] In most administrative proceedings, a property owner who sustains his or her burden to establish a statutory violation is entitled to a final order by the Registrar conditionally suspending or revoking the contractor’s license if it does not perform in a professional and workmanlike manner specified corrective work by a date certain. Although the Registrar may penalize a contractor’s license by ordering payment of money as restitution if corrective work is impossible or no longer warranted,[6] restitution is inappropriate where the contractor’s inability to perform corrective work is caused by the unilateral act of the property owner.[7] In this case, the parties agreed that Respondent could no longer perform corrective work because Complainants had sold the rental property. Moreover, the parties also agreed that Respondent did not at the time of the hearing owe Complainants any money under a theory of restitution or quantum meruit because they had not paid most of the contract price. The legislature has not empowered the Registrar to award civil damages, to resolve primarily contractual disputes between contractors and their clients that do not involve workmanship, or to order property owners to pay contractors any portion of the contract price.[8] But a property owner’s failure to pay the contract price may be considered in deciding his or her credibility. After considering the evidence they were prepared to offer and applicable law, as explained on the record and in this recommended decision, Complainants voluntarily and knowingly elected to withdraw their complaint against Respondent’s contractor’s license. RECOMMENDED ORDER In view of the foregoing, it is recommended that the Registrar close Case No. G01-0123 against License No. 122482, Class C-08 of Respondent Enterprise Carpet and Mattress Discounter, Inc. Done this day, February 26, 2001.

______________________________________ Diane Mihalsky Administrative Law Judge

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

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

By ___________________________

----------------------- [1] See A.A.C. R2-19-119; see also Culpepper v. State, 187 Ariz. 431, 438, 930 P.2d 508, 515 (App. 1996).

[2] Morris K. Udall, Arizona Law of Evidence § 5 (1960).

[3] Black’s Law Dictionary at page 1064 (6th ed. 1990).

[4] Laws 1985, Ch. 334, § 1.

[5] Burrows v. Taylor, 129 Ariz. 212, 214, 630 P.2d 35, 37 (Ct. App. 1981) (citation omitted).

[6] See Sunpower of Arizona v. Arizona Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (Ct. App. 1990).

[7] Cf. Sunpower, 166 Ariz. at 441, 803 P.2d at 434 (Restitution was appropriate where contractor’s “previous attempts to repair the [residential solar heating] system had failed to independently provide a habitable degree of home heating as represented by Sunpower’s salesman.”).

[8] See J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (Ct. App. 1984).

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