ALJDEC

01F-M0207-ROC-res · Registrar of Contractors · 2001-02-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 22, 2001 APPEARANCES: Complainant David Martin appeared representing himself. Respondent Carl Adolphus Peart appeared representing himself. 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. 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 was the construction contractor for an addition(s) to a pet grooming service office, with kennels, at the Complainant’s location: 1608 N. Greenfield in Mesa, Arizona. 2. Respondent is the holder of a Class B-01 license issued by the Registrar of Contractors (Registrar). 3. The January 2000 written contract called for work to be done: a kennel addition, a first and second floor addition, assembling of the kennels (metal and cage work) and a block wall around the new kennel and south of the kennel or addition. Respondent’s proposal shows the other portions of this work to include the concrete slabs, and the plumbing, electrical and mechanical in the additions. According to the contract and testimony, the contract payment amount was one hundred ninety- five thousand and one hundred fifty-three dollars [$195,153.00]. The agreed time frame for the contract was four months. 4. In August 2000, Complainant filed a formal complaint with the Registrar alleging complaints against Respondent’s work at the construction site. 5. On August 28, 2000, Complainant sent information to the Inspector, saying that Respondent still had not completed the work, and generally stated what was not “completed.” 6. The matter was not resolved between the parties, and Complainant requested that the matter proceed to hearing. 7. On September 26, 2000, the Registrar issued its Citation and Complaint against Respondent alleging violations of Arizona Revised Statutes (A.R.S.) §§32-1154.A.1 and 32-1154.A.7. 8. In October 2000, Respondent filed his written answer, indicating that Complainant had hired a new builder, that the project was 95% completed, that Respondent had paid the subcontractors and that the remaining subcontractors were to be paid after the final payment from the Bank. 9. Complainant testified that the project was not done in July 2000 and Respondent had indicated that he could not take another draw at that time and would need a loan to continue and finish the project. Complainant testified that, in July 2000, he wrote a personal check and the business wrote a check for a total of $20,000.00 so that the project could proceed to completion. Complainant testified that Respondent continued the work and received another draw near the end of July 2000, but then Respondent did not return to complete the project. 10. Complainant testified that they went to an attorney who drew up the August 4, 2000 demand (to finish) letter, which Complainant contends was ignored by Respondent. Complainant testified that he filed the complaint at the Registrar and then hired other contractors to assist in completing the project. 11. Complainant testified that his own employees worked and were paid, approximately $15,000.00, to install the kennel runs, which had been part of the Respondent’s contract. Complainant testified that the kennel runs had been installed, but the concrete “wasn’t right” and had to be jack- hammered out, repoured and the runs reinstalled. Additionally, Complainant testified that he had another company reseal the floor in the kennel runs.

12. Complainant testified that another contractor had to finish and was paid $12,859.00 for work: the cabinets and the tile. Complainant testified that the original installation of the cabinets “wasn’t right”, and the new contractor had to remove and reinstall the cabinets. 13. Complainant testified that there was an additional $13,271.31 interest on the construction loans after Respondent’s “breach of contract”, due to the non-timely completion of the project, and that he believes that Respondent should be held accountable for that interest as well. 14. Complainant testified that there were subcontractors which were not paid by Respondent but that had to be paid at the close, and complained that Respondent had circumvented the correct procedures by hiring people that the financing company knew nothing about and paying them outside the required procedures for these SBA loans. 15. Complainant testified that he was concerned about the workmanship within the building, and that there had not been a licensed electrician or a licensed plumber doing those trades in the project. Complainant testified that he could not get another contractor to guarantee those portions as they finished the electrical or plumbing work due to the “unlicensed” work that was present. Complainant testified that he has a “massive” roof leak which he cannot get resolved, and has costs from the damage from that leak. 16. In support of the additional work, Complainant presented a copy of a proposal from “Ironstone, Inc.” indicating a total of $12,869.00. Present on this proposal are initials and a date of August 30, 2000. This Ironstone proposal lists out various items in much more detail than Respondent’s contract for the “addition”. Respondent’s contract and bid were likely based on the plans, which were not entered into the record, but which were referred to in testimony. It is unclear from the presentation of both parties whether everything on the Ironstone contract was also a part of Respondent’s contract. 17. Respondent testified that he believed Complainant was exaggerating on this matter, but agreed that he had not completed the project. Respondent agreed that he had received the $20,000 loans to continue and complete the project, and that was because he had incurred additional costs [jack-hammering out the floor, filling in the septic tank after connecting to the sewer lines, and the concrete parking in the rear]. Respondent testified that he had told Complainant that, at that time, he had had to go and work on or complete a few other project before he could complete Complainant’s project. Respondent testified that he had a good relationship with Complainant all through the project, and that he had no intentions to rip-off anyone. Respondent testified that it was his fault that things did not get done, but that he had felt they could talk about it and work it out. 18. Respondent testified that he believed that the interest amount being claimed by Complainant was not all attributable to him, because he was just a portion of the entire 400,000-plus project. 19. Respondent testified that there had been a licensed electrician and a licensed plumber on the job, indicating Keith Riggs Plumbing and Source Electric. Respondent testified he personally was guaranteeing the work and would have taken care of it if there was a problem. Respondent testified that this was the first he had heard of any roof leak, and he would have gotten the roofer in to take care of it. 20. Respondent testified that he was going to pay the remaining subcontractors out of the final draw, and there would have been enough to make those payoffs. 21. Respondent testified that he realizes that he owes Complainant monies, and that he had hoped to settle out with Complainant as to the monies Respondent claims he is still owed and make some other arrangements for the remaining amount. Respondent testified that he is willing to take care of things. 22. Although the complaint was filed before the work was completed by another contractor, there was no site inspection by Registrar’s Inspector, to determine any deficiencies in the work which had been completed by Respondent. The reason for no site inspection is unknown. 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. … 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. Credible testimony by Complainant indicated the existence of some deficiency problems [cabinets and roof] which were uncontroverted by Respondent. However, at no time did Complainant present any supporting evidence as to the actual problems or extent of the problems. Complainant did not indicate that Respondent had been given an opportunity to come in and correct any problems. In the Registrar’s Citation and Complaint, the Registrar did not cite any workmanship deficiencies based on the filed complaint. Therefore, it is determined that, as to these issues raised by Complainant, there is insufficient evidence of violations, by Respondent, of specific workmanship standards. 2. Credible testimony by Complainant established that there was abandonment of contract or failure to complete, without legal excuse for either abandonment or failure to complete. Respondent’s failure to respond to the August 2000 demand letter could be construed to be a refusal to perform. Therefore, as to this item, the testimony at the hearing established violation, by Respondent, of A.R.S. §32-1154.A.1. 3. In this case, the failure by Respondent to complete the contract, especially after having also received a personal loan from Complainant for the purpose of allowing him the finances to continue and to complete the contract, indicated the commission of a wrongful act to the detriment of Complainant, pursuant to A.R.S. §32-1154.A.7. 4. The competing testimony as to the interest, along with the contract draw information, leaves the undersigned with the conclusion that not all the alleged “after the breach” interest which was a cost of the project may be attributable to this Respondent’s contract. There was insufficient proof that this Respondent’s failure to complete the contract was the cause for the “additional” interest. 5. There appears to be a good faith issue as to the amount of monies owed by Respondent to Complainant and as to the exact costs of Complainant to remedy the Respondent’s failure to complete, determined herein. The administrative disciplinary process is not a collection process and is ill- equipped to adjudicate or mediate such good faith monetary disputes. RECOMMENDED ORDER 1. In view of the foregoing, it is recommended commencing on the effective date of the Registrar’s ORDER, that the Respondent’s Class B license be suspended for one month. 2. It is further recommended that if Respondent and Complainant settle the matter, evidenced by written stipulated agreement, on or before the effective date of that ORDER, then the above recommended license suspension shall not take place and Citation No. M01-0207 shall be closed. RECOMMENDED this day, February 12, 2001.

______________________________________ Kay A. Abramsohn Administrative Law Judge

Transmitted by mail this _____ day of February, 2001 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