ALJDEC

01F-M1523-ROC-com · Registrar of Contractors · 2002-04-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 19, 2002 APPEARANCES: Complainants Robert and Christine Hakes appeared on their own behalf. Respondent Jeffrey Alan Middleton, dba Middleton Construction, failed to appear. ADMINISTRATIVE LAW JUDGE: Daniel G. Martin _____________________________________________________________________

FINDINGS OF FACT This matter came on for compliance hearing on April 19, 2002, pursuant to a Notice of Compliance Hearing issued by the Registrar of Contractors (“ROC”) on March 20, 2002. The ROC originally noticed the hearing in this matter for May 14, 2002; however, by Order dated April 4, 2002, the Administrative Law Judge accelerated the hearing to April 19, 2002. Complainants Robert and Christine Hakes timely appeared for the hearing; Respondent Jeffrey Alan Middleton, doing business as Middleton Construction (“Middleton”), failed to appear. The Administrative Law Judge delayed the start of the hearing for approximately fifteen (15) minutes so as to allow added time for appearance by or on behalf of Middleton. When Middleton failed to appear within that time, and further failed to inform the Office of Administrative Hearings of any reason that would establish good cause for its failure to appear, the Administrative Law Judge convened the hearing and proceeded in Middleton’s absence. Middleton holds a Class B license (No. 116877) issued by the ROC. According to the ROC’s official records, Middleton’s Class B license is currently suspended based on a recovery fund payout made in connection with an action against a separate license for which Mr. Middleton served as qualifying party. On January 11, 2002, Middleton and the Hakes participated in a hearing before the Office of Administrative Hearings in ROC Case No. M01- 1523 that arose from a May 25, 2001 complaint that the Hakes had filed against Middleton with the ROC. At the January 11, 2002 hearing, Middleton and the Hakes entered into a discussion outside of the Administrative Law Judge’s presence in which they concluded the terms of a settlement agreement. The Administrative Law Judge thereafter issued a decision setting forth the terms of the parties’ settlement and recommending that the ROC recognize and give effect to the parties’ agreement and dismiss the underlying Citation and Complaint. Among other things, Middleton agreed pursuant to the settlement agreement to perform certain enumerated corrective work at the Hakes’ residence and to make payment to the Hakes in the amount of $6,500.00. By Order dated January 30, 2002, the ROC adopted the Administrative Law Judge’s Recommended Order with the modification that on page 3, line 17, the ROC replaced the word “closed” with the word “dismissed.” The ROC stated in its Order that “[c]losure is appropriate when an agency inspection has established workmanship deviations” (as was the case with the Hakes’ complaint in ROC Case No. M01-1523). Finding of Fact No. 4 of the Administrative Law Judge’s Recommended Decision, as adopted by the ROC, states as follows:

The parties agreed that all rights and defenses were to be merged into the settlement agreement, and that if either party sought to re-open the complaint that gave rise to this matter, the sole issue for determination would be whether the parties performed their respective obligations under the terms of the settlement agreement.

At hearing, the Hakes presented credible evidence (the testimony of Mr. Hakes) that Middleton failed to comply with the terms of the settlement agreement. Specifically, Middleton failed to perform the corrective work required under the settlement agreement, and further failed to make the required $6,500.00 payment to the Hakes. Additional to the foregoing, Mr. Hakes credibly testified that after their last contact with Middleton on or about January 25, 2002, the Hakes attempted on numerous occasions to contact Middleton, both by phone and fax, and that Middleton failed to respond. The Administrative Law Judge finds, based on the weight of the evidence, that Middleton failed to perform its obligations under the terms of the settlement agreement, and therefore stands in breach of the settlement agreement. Because Middleton failed to appear for the hearing, Middleton did not present any evidence in mitigation of its breach of the settlement agreement. On February 26, 2002, after receiving notice from the Hakes that Middleton had breached the settlement agreement, the ROC issued an Order Reopening Complaint and Scheduling for Hearing. This matter was thereafter set for hearing as set forth in Finding of Fact No. 1. The Administrative Law Judge finds that in reopening the complaint in this matter, the ROC effectively re-alleged against Middleton the charges set forth in the ROC’s October 1, 2001 Citation and Complaint in ROC Case No. M01-1523, including the charge that Middleton violated A.R.S. § 32-1154(A)(7) (wrongful or fraudulent act resulting in another person being substantially injured).

CONCLUSIONS OF LAW Based upon the evidence presented at hearing, the Administrative Law Judge concludes that Middleton breached the settlement agreement into which it entered with the Hakes on January 11, 2002. The Administrative Law Judge finds, as an aggravating factor to this breach, that Middleton ceased communicating with the Hakes after January 25, 2002, notwithstanding the Hakes’ numerous attempts to communicate with Middleton. Middleton’s breach of the settlement agreement substantially injured the Hakes by depriving them of the benefit of the corrective work that Middleton promised to perform, and further by depriving them of the promised payment in the amount of $6,500.00. Middleton’s breach of the settlement agreement is a violation of A.R.S. § 32-1154(A)(7), and in consequence of this violation the ROC should take disciplinary action against Middleton’s Class B license. Although Middleton’s Class B license is currently suspended, that suspension does not preclude the ROC from taking disciplinary action against Middleton. See A.R.S. § 32-1154(C). Upon consideration of all of the facts and circumstances presented by this case, the Administrative Law Judge concludes that the ROC should revoke Middleton’s Class B license (No. 116877), insofar as little purpose would be served by imposing conditional discipline on an already-suspended license. RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge makes the following Recommended Order: Commencing on the effective date of the Order entered in this matter, Middleton’s Class B license (No. 116877) shall be revoked.

Done this day, April 26, 2002.

______________________________________ Daniel G. Martin Administrative Law Judge

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

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

By ___________________________ -----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826