ALJDEC

01F-RF0246-ROC · Registrar of Contractors · 2001-05-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 29, 2001 APPEARANCES: Plaintiff appeared on his own behalf and Defendant appeared through its qualifying party, Larry Benson. The Contractors’ Recovery Fund (“Fund”) was not represented. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. Defendant’s contracting license has been previously revoked by final Order of the Registrar of Contractors. Such revocation is determined to render this Defendant unable to remedy the violation of the State’s contracting laws which gave rise to the instant claim for damages.

2. The Registrar of Contractors has received advance notification of the existence and amount of the above named Plaintiff’s claim for an administrative payout from the Fund.

3. This hearing was convened following Defendant’s express request therefor, subsequent to its receipt of notice that the Fund intended to make a payout to Plaintiff.

4. Plaintiff seeks to recover the sum of $5,200.00 from the Fund.

5. The following salient facts were adduced at the hearing and are important to note:

a. On or about November 1997 the parties entered into a contract for a new home construction project. The option sheet for said contract shows that the concrete for the driveway and front walkway were to be completed with a salt finish. b. Uncontroverted evidence of record established that the above- described concrete work was not completed with a salt finish. c. Due to Plaintiff’s inability to obtain the contracted salt finish on the concrete work, Plaintiff ultimately filed a license disciplinary complaint with the Registrar of Contractors. d. A jobsite inspection by the appointed inspector for the Registrar of Contractors was held, pursuant to which that Agency sent Defendant a letter directing it to accomplish specified remedial work within a stated period of time. Notwithstanding the terms of said Agency directive, Defendant failed to comply with same. e. Based on Defendant’s failure to comply with the aforementioned Agency directive, Plaintiff requested an administrative hearing. Prior to the time that said hearing could be convened, the Registrar issued an order of closing, stating that Defendant’s license had previously been revoked on another case and thus, there would be no useful purpose in going further with the scheduled hearing. This action by the Registrar of Contractors effectively allowed Plaintiff to make a claim with the Fund. f. As part of Plaintiff’s claim for a payout from the Fund, he obtained three bids to have the concrete work removed and replaced. The amount of said bids ranged from a low bid of $5,200.00 to a high bid of $14,593.80. g. The Fund assigned another inspector to perform a jobsite inspection referable to Plaintiff’s Recovery Fund claim and said inspector recommended that the Fund pay the sum of $5,200 for said claim. h. Defendant objects to the payout, claiming that Plaintiff was required, by the applicable contract, to have the salt finish issue listed on the punch list for the final walk-through on the home and same is not clearly delineated on said document. Moreover, Defendant contends that it issued a check to Plaintiff, which was intended to compensate Plaintiff for the lack of a salt finish on the concrete. i. The walk-through punch list was entered into evidence at the instant hearing. This document was shown to have been prepared by Defendant’s agent (not Plaintiff) and same reveals the following statement: “Scott will arm wrestle with Ken re driveway.” Scott was shown to be Defendant’s superintendent at the time of the construction of Plaintiff’s home and Ken is the Plaintiff. j. A specified check for $750.00, which was made out to Plaintiff from Defendant was also entered into evidence. There is nothing filled in on the memo portion of said check to indicate why it was being issued to Plaintiff. Defendant’s former superintendent, Scott Switzer (“Scott”) appeared at the instant hearing and testified that the check was issued to compensate Plaintiff for Defendant’s inability to satisfy Plaintiff regarding specified interior wall texture and also for the failure to provide a salt finish on the concrete work. Scott further indicated that the compensation for the lack of salt finish on the concrete was $250.00 and the remainder of the check was for the interior texture complaint. k. Plaintiff disputes Scott’s claims regarding the aforementioned $750.00 check, asserting that he never agreed to accept $250.00 as compensation for the lack of salt finish on the concrete work and that the $750.00 check was intended to only provide him with compensation to hire others to correct the claimed deficiencies in the interior drywall texture.

6. The aforementioned final walk-through document was written by Defendant’s agent and although her comment about Plaintiff arm wrestling Scott was somewhat flippant, it is determined and held that same was adequate to place Defendant on written notice that Plaintiff was citing the lack of a salt finish as a punch list item on the final walk-through for his home. Moreover, regardless of Defendant’s claim regarding any contract language that would require written notice of punch list items, a review of the boilerplate “fine print”, cited by Defendant in paragraph no. 9 of said contract, fails to support Defendant’s contention regarding any necessity to place “walk-through” deficiencies in writing. Finally, notwithstanding any “fine print” contract boilerplate, Plaintiff had the right to complain to the Registrar of Contractors regarding perceived construction deficiencies within two (2) years of occupancy of his home.

7. The $750.00 check was prepared by Defendant and it was incumbent upon Defendant to clearly delineate, either on the check or by a companion written document, the purpose for said check. This Tribunal finds it very hard to believe that Plaintiff would be willing to relinquish his claim for the salt finish on his concrete for a mere $250.00, when the contract documents clearly required said finish and it would cost much more than $250.00 to remedy said omission in Defendant’s construction work. Thus, it is determined and held that the weight of the credible evidence of record supports a finding that the parties did not enter into an accord and satisfaction regarding the concrete salt finish issue.

8. Based on the bids submitted by Plaintiff, as well as the conclusions of the assigned inspector for the Fund, it is determined and held that $5,200.00 represents a reasonable sum to be paid to Plaintiff, in order to remove and replace the concrete installed at Plaintiff’s home.

9. Defendant contends that in the event that a payout is awarded to Plaintiff, that any such payout should contain the condition that same only be paid in the event that Plaintiff actually has the concrete removed and replaced. This Tribunal is unaware of any requirement in the law or in the policy and procedures of the Registrar of Contractors that requires a homeowner to actually use the money received from a Fund payout to correct the claimed deficiency in the construction work. Thus, no such condition shall be included in the instant Order.

CONCLUSIONS OF LAW

1. Plaintiff is determined to be an injured person as that term is defined in A.R.S. § 32-1131(3).

2. Under the facts and circumstances of this case, the Registrar of Contractors is empowered to determine and award proper payment to Plaintiff from the Contractors’ Recovery Fund pursuant to A.R.S. § 32-1154(E).

3. The within record supports an award to Plaintiff in the amount of $5,200.00, all of which shall be appropriately chargeable against Defendant and/or persons on the license as set forth in A.R.S. § 32-1139(B).

RECOMMENDED ORDER

In view of the foregoing, it is recommended on the effective date of the Order entered in this matter that the Registrar of Contractors shall commence and finalize payment procedures from the Contractors’ Recovery Fund to Plaintiff in the amount of $5,200.00. Done this day, May 31, 2001

______________________________________ Mark A. Silver Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2001, 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