ALJDEC

02F-0205-ROC · Registrar of Contractors · 2002-01-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 26, 2001 with further hearing on January 7, 2002. APPEARANCES: Complainant Mark Forbes appeared on his own behalf on both hearing dates. Respondent Daniel Simione appeared on behalf of AZ Construction Services, Inc., on both hearing dates. ADMINISTRATIVE LAW JUDGE: Constantino Flores _____________________________________________________________________ FINDINGS OF FACT AZ Construction Services Inc. (“AZ Construction”) is the holder of a Class KB-2 license (No. 137155) issued by the Registrar of Contractors (“ROC”). The qualifying party is Daniel Simione. On or about February 2001, Complainant Mark Forbes and Respondent AZ Construction entered into an agreement whereby AZ Construction was to remodel Mr. Forbes’ home located at 1410 E. Cortez, in Phoenix, Arizona. The home had been recently vandalized. As payment for the remodel work, AZ Construction was to receive the proceeds of the insurance claim payments which totaled $22,852.40. On or about March 8, 2001, AZ Construction received payment in the form of an insurance check in the amount of $18,052.40. The remodel work was begun sometime after March 8, but was never completed. In fact, in the subsequent months there were discussions between the parties, which led to a verbal agreement that Mr. Simione would purchase the house for an additional $63,000.00. Daniel Simione obtained an appraisal report for the property and attempted to obtain financing, but apparently was unable to do so. On July 26, 2001, Mr. Forbes filed a complaint against AZ Construction with the ROC alleging that AZ Construction received approximately $19,000.00 in payment for the remodel job but did not remodel the house as agreed, and in fact created “a huge mess in front of the job site” which caused the City of Phoenix to issue a citation for violation of city ordinance. Mr. Forbes further alleged that in March of 2001, Mr. Simione agreed to purchase the house for the additional $63,000.00 but as of the date of the complaint, Mr. Simione had not closed on the house per the agreement of the parties. On August 24, 2001, the ROC issued a Citation and Complaint charging AZ Construction with violations of A.R.S. § 32-1154(A)(1) (abandonment of a contract or refusal to perform after submitting a bid) and (A)(7) (wrongful or fraudulent act resulting in substantial injury). This matter came on for hearing on December 26, 2001, pursuant to a Notice of Hearing issued by the Registrar of Contractors on October 9, 2001. At hearing on December 26, 2001, the parties presented evidence but did not conclude their presentations in the allotted time, so the matter was set for further hearing on January 7, 2002. Prior to commencing the further hearing, the parties entered into settlement discussions outside of the Administrative Law Judge’s presence. The parties then concluded the terms of a settlement agreement in the presence of the Administrative Law Judge. The terms of the settlement agreement, which were read into the record by the Administrative Law Judge and confirmed by both parties, are as follows: a. AZ Construction shall begin the repairs on the house on or before January 14, 2002 and shall have until March 31, 2002 to complete the work. b. On March 31, 2002, the finished work shall leave the house in a livable, “turn-key” condition. The work to be completed includes the following: 1. In the kitchen, the cabinets shall be installed and the stove shall be hooked up. Damage to the kitchen flooring caused by construction shall be repaired;

2. In the “small” bedroom, the floor shall be carpeted to include carpet padding, and a door shall be installed;

3. The “big” bedroom shall be completed. This entails, among other things, the complete installation of the electrical system, the installation of plywood on the subfloor and ultimately carpet with padding, attaching the exterior and a vapor barrier, T-111 siding and the repair or replacement of windows utilizing “value engineering.”

4. The bathroom shall be in good working condition. It shall first have rough-in plumbing installed, and it shall ultimately have running hot and cold water. It shall also have all electrical and plumbing fixtures attached and have tile installed on the floor.

5. All plumbing and electrical fixtures shall be installed in the house, including ceiling fans and/or ceiling lights. The hot water heater shall be hooked up and working, and a heat pump shall be installed and ducted to each room in the house.

6. Plywood and roll roofing shall be installed on the house to match the existing roof.

7. The carport cover shall be kept at the current home of Complainant until such time as it is needed by AZ Construction to be installed at 1410 E. Cortez.

8. All broken glass and/or windows shall be either fixed or replaced, and all holes in the walls shall be repaired to a level III finished condition.

9. The inside of the house shall be cleaned, and the property on which the house sits shall also be cleaned, to include the pick up of trash, paint cans and other abandoned items.

c. Prior to beginning the repair work on the house, the parties shall agree to contact the City of Phoenix to resolve any citations issued in regards to the 1410 E. Cortez property. d. The total cost of any building permits in regards to the remodeling work to be done shall be shared between the parties in the following manner: Respondent shall pay the first $100.00, Complainant the next $300.00, and then the parties shall divide equally all further costs up to $900.00. Respondent’s responsibility for building permit costs shall not exceed $350.00. e. Respondent AZ Construction shall undertake and complete the above remodeling work for a total cost of $22,852.40, $18,052.40 of which it has already received as payment for this project, and $ 4,800 which it shall receive on March 31, 2002, upon satisfactorily completing the work. f. As of March 31, 2002, Daniel Simione shall purchase the property for an additional $63,000.00, contingent upon his ability to obtain financing. If Daniel Simione is unable to obtain financing, he shall not be obligated to purchase the property. In furtherance of the foregoing, the parties shall draw up a purchase agreement consistent with the applicable terms of this settlement agreement. If Daniel Simione is able to obtain financing, it shall close escrow on the property not later than April 20, 2002. 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. The Administrative Law Judge finds that the terms of the settlement agreement described herein are reasonable under the circumstances, and that the agreement was the product of knowing and voluntary action on behalf of each party. CONCLUSIONS OF LAW The policy of the law favors settlements of disputes, and adverse parties should be free to adjust their differences by entry into agreements or stipulations of settlement which should be recognized and given effect by all tribunals. The settlement reached and submitted during the hearing of this matter, having been found to be reasonable and voluntarily made, warrants the termination of the instant hearing. RECOMMENDED ORDER It is recommended that Citation No. 02-0205, together with the Complaint upon which it is based, be dismissed. Done this day, January 21, 2002.

______________________________________ Constantino Flores Administrative Law Judge

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