ALJDEC

01F-T1190-ROC · Registrar of Contractors · 2001-12-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: Tuesday, December 18th, 2001; 1:30 p.m. APPEARANCES: The complainants, Ms. Denice Bagshaw and Ms. Kay Brown, represented themselves. The respondent, Mr. Dale Henes, represented himself. ADMINISTRATIVE LAW JUDGE: Grant Winston. _____________________________________________________________________ The administrative hearing of this matter was held in the Office of Administrative Hearings, Tucson, Arizona. Testimony was heard and other evidence admitted to the record, and, based on the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made. FINDINGS OF FACT 1. The respondent in this case, David Henes doing business as David Henes Excavating, is, and during all times material hereto was, a contractor, licensed by and doing business in the State of Arizona, holding Class C- License number 080592. That license is currently suspended for failure to renew. 2. The complainants, Denice Bagshaw and Kay Brown, own residential property in Mt. Lemmon, Arizona. They owned this property in the summer of 2000, and were at that time preparing the property for sale. They had retained a real estate agent to assist in selling the property, a Mr. Dick Bloomfield, of Summit Realty, in Mt. Lemmon. 3. One step complainants were taking to prepare the property for sale was the installation of a new septic system. This is where the respondent entered the picture. The complainants and respondent contracted on July 17th, 2000. According to the contract, drafted by the respondent, he was to “install septic system.” The contract stated that the price “does not include permits [or] inspections.” 4. Respondent never obtained any permits for the system, and that is where part of the problem began for complainants. 5. Although denied by the respondent, it was credibly testified to by complainant Ms. Bagshaw, and is found as a matter of fact, that prior to the installation of the new system, respondent told her in a telephone conversation that no permits would be necessary since respondent was only upgrading her present system, not installing a new one. It therefore appears that the respondent told the complainants that they would receive only an upgrade, but contracted to install a new system. 6. Respondent did install a new system, and failed to have the permits obtained from Pima County. 7. The house was for sale when the parties were contracting, and during the time respondent was installing the new septic system. He dealt with complainants’ real estate agent, Mr. Bloomfield. Respondent knew or should have known that the house was being prepared for sale and that an inspection would be necessary. 8. The house sold in September of 2000. While the house was in escrow, the buyers requested that the septic system be approved by Pima County. When Pima County was advised about the nature of the septic system work performed by respondent, it refused to certify the work as compliant with the county code. 9. From this point on the respondent refused to communicate with the complainants, although they made repeated efforts to contact him and arrange for him to do whatever work was required by the county to have the new system approved. Complainants even offered to pay respondent whatever additional sum he required just to bring the work up to code. He never would respond to them. 10. Winter arrived and it snowed on Mt. Lemmon. This precluded any work being done on the system for a substantial amount of time. 11. Complainants were able to close on the sale of the house, but $30,000.00 was retained in escrow until such time as the septic system was reworked and certified by the county. 12. In December the complainants hired an engineer to perform percolation testing at the site. This was done by a certified engineer who discovered that the system was not functioning properly. 13. In April the complainants contracted with another contractor to repair the work done by the respondent. The respondent had improperly constructed the two leach lines to the septic system, and as a result it was not percolating effectively. 14. The additional work cost the complainants almost three thousand dollars. 15. Complainants filed the instant complaint against the respondent on June 22nd, 2001. Respondent took no action to satisfy the complainants. Complainants requested an administrative hearing on July 19th, 2001. A Citation and complaint was issued from the Registrar of Contractors on September 3rd, 2001. The respondent was cited with possible violations of A.R.S. §32-1154.A.2., 7., and. 3., (citing A.A.C. R4-9-108, Workmanship Standards). 16. Respondent filed his written answer to the citation and complaint on September 18th, 2001, in which he stated: “I feel my past history should be reason enough not to revoke my license. I have not had to come in front of the board before and in this case I made a mistake and for that I am sorry.” (Emphasis added.) Respondent testified at the hearing that by “mistake” he meant installing the septic system without obtaining the permits from the county. 17. It is found from all the evidence that the respondent incorrectly led the complainants to believed that a permit would not be required. Naturally, the complainants were in favor of avoiding the additional expense and red tape of going through the permitting process if it could be avoided, and were relying on the respondent’s expertise when he assured them that it was unnecessary. 18. Notice is taken of the respondent’s prior license record with the Registrar of Contractors. CONCLUSIONS OF LAW 1. This hearing was held under authority of and pursuant to A.R.S. §32- 1156, and A.R.S. §41-1092. 2. The respondent herein is charged with possible violations of A.R.S. §32- 1154.A.2., 7., and 3. 3. A.R.S. §32-1154.A.2. prohibits a licensed contractor from, among other things, departing from or disregarding county building codes in any material respect which is prejudicial to another, without that person’s consent. Respondent violated this section in failing to obtain the proper certification or approval from Pima County for the new system. He knew or should have known of the permit requirement, and knew or should have known that the house was for sale, and the county certification would be required as incidental to the sale and purchase. Complainants never knowingly consented to unpermitted work. 4. A.R.S. §32-1154.A.3. prohibits a licensed contractor from violating any rule adopted by the registrar. The rule cited in this case is A.A.C. R4- 9-108, Workmanship Standards. That rule requires all of a licensed contractor’s work to be professional and workmanlike. Respondent’s work on the leach lines and his failure to obtain necessary county approval were unprofessional, and unworkmanlike. 5. A.R.S. §32-1154.A.7. prohibits a licensed contractor from engaging in any wrongful or fraudulent act as a contractor which results in a another person being substantially injured. Respondent violated this section when he effectively disappeared from the complainants for an extended period of time, ignoring their pleas to return to the job site and make necessary corrections to his work, even after their offer to pay him extra. This delayed for months the correction of the problems caused by the respondent, and substantially injured the complainants.

RECOMMENDED ORDER In view of the foregoing, it is hereby recommended that the respondent’s already suspended Class C-02 License number 080592 be revoked on the effective date of this . . . order (40 days after the date of service shown by the registrar’s certification on the order). Done this day, January 4th, 2002.

________________________________ GRANT WINSTON Administrative Law Judge

Original transmitted by mail this ____ day of January, 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 100 N. Stone Ave., Suite 704 Tucson, Arizona 85701 (520) 628-5488