ALJDEC

02F-0265-ROC · Registrar of Contractors · 2002-01-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 4, 2002 APPEARANCES: Stephen Thompson and Lynette Pollari, Complainants David Reicher, Qualifying Party, for the corporate Respondent ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact 1. The Complainants are architects and were desirous of doing some remodeling at their home in Phoenix, Arizona. 2. In late May, 2001, the Complainants gave remodeling plans to the Respondent and asked for a proposal to do the job. The Complainants wanted the work completed by July 16, 2001. 3. On June 27, 2001, the Respondent met with the Complainants and made a verbal proposal to do what is described as phase 1 of the project. The major portion of phase 1 consisted of the demolition and construction involved in extending the living room and installing a bay window, replacing two doors and a screen door. The Respondent estimated the work at $2,900.00. There is some question about the status of electrical work which was to be a part of the project. The issue becomes moot in light of conclusions made later in this recommended Decision. 4. Phase 2 of the project included removal of the HVAC system, a swamp cooler and trim out of the openings left by the removal. Temporary window type air conditioning units would provide cooling. Once installed in the house, the units were to have been caulked with silicon. The Respondent used mortar around the air conditioning units rather than silicon and some of the mortar began falling out. Phase 3 of the project was to be limited to applying stucco around new openings and replacement of the living room window. The parties agree that phase 2 and 3 were to be on a time and materials basis. 5. Based on discussions by the parties, the Complainants initially thought that the Respondent had submitted a firm bid of $2,900.00 for phase I of the work. Although the evidence is conflicting, it tends to show that after further discussion between the parties, they agreed to a modification of any agreement which was being negotiated. On July 1, 2001, the Complainants sent a fax to the Respondent and stated in part that the job needed to be completed by July 16, 2001 and “…we can work out your hourly rate, so just call to discuss re: your $3,000.00 prelim. estimate for bid #1, with the cost of materials and at $60.00 an hour it appears we would have 20 to 25 hrs. of labor. Lets just get started on a time and materials basis.” 6. The Respondent began work on or about July 7, 2001, but none of the phases were completed by July 16, 2001. 7. On July 17, 2001, the Complainants paid $5,287.69 to the Respondent. Prior payment checks for lesser amounts had been voided because of disagreements on the amount owing. The payment of July 17, 2001 was almost $2,000.00 more than the amount submitted in payment just four days earlier (the check for this earlier payment had been voided). The Complainants assert that no additional work was done over those four days and that they paid the extra money because the Respondent “harassed” one of the Complainants into paying. The evidence does not support a finding of conduct rising to the level of harassment by the Respondent although the evidence did show that the Respondent was not to contact the particular Complainant (Lynette Pollari) on financial matters. 8. On or about July 25, 2001, the Complainants requested a schedule for completion of the work. By the Complainants’ estimate, approximately 50% of phase 1 and 2 was completed at that time. The disagreement of the parties about payment terms was not resolved and the Respondent did not return to the project. The Complainant (Stephen Thompson) has a bad back and had to complete much of the work by himself. Essentially the dispute was and still is whether the $2,900.00 was a fixed bid for phase 1. The Respondent would not return to the job unless the remainder of the job was subject to being bid. 9. On August 9, 2001, the Complainants filed their complaint with the Registrar of Contractors. 10. Inspector Joseph Cotton (Cotton) performed a job site inspection on August 21, 2001. Cotton made no determination regarding the contract dispute between the parties and no workmanship issues were addressed. The parties expressed some willingness to attempt to cooperate to complete the project but nothing came of this. Conclusions of Law The Citation and Complaint alleges violations of A.R.S.§32- 1154(A)(1), abandonment, (A)(2) deviation from plans and specifications, (A)(3)/A.A.C. R4-9-108 workmanship, (A)(7) wrongful act, and (A)(9), failure to complete for the price stated. 1. Based on the most competent evidence it is concluded that the parties did not have a fixed price agreement for phase 1 of the project. Exhibit A shows that as of July 1, 2001, the Complainants acknowledged that the Respondent had only given a $3,000.00 preliminary estimate for bid 1 and wanted the Respondent to “…get started on a time and materials basis.” Absent a written contract or other competent evidence that the parties agreed otherwise, the language in the Complainants’ document must be given a common sense interpretation. At best the language in the fax is conflicting and confusing. It is concluded that the parties did not have fixed price contract for $2,900.00 for phase 1. 2. Absent a fixed price contract and in light of the Complainants’ refusal to acknowledge that fact, it is concluded that there was a material unilateral mistake by the Complainants during the contract formation. The Respondent was not bound by that mistake and was not required to finish the project on terms which were not agreed to. Based on this conclusion, there is no need to determine whether the Respondent had contracted to do electrical work in phase 1. There is no abandonment or other violations of (A)(1) or (A)(9). 3. There is no violation of (A)(2). The use of mortar rather than silicon caulking around the window air conditioning units, was not shown to be material or prejudicial. The units are temporary and the Respondent testified he would have caulked them if he had been able to finish the project. 4. Cotton made no specific determination regarding workmanship and there was no substantial evidence that the work which was done by the Respondent failed to meet established standards. The rather minor matters such as the slight misfit of the screen door and the late clean up of debris is insufficient to establish a violation of (A)(3)/A.A.C. R4-9- 108. 5. The following conclusion concerns the allegation of violation of A.R.S. §32-1154(A)(7), wrongful act. The Respondent is not charged with violation of A.R.S.§32-1158 which addresses minimum elements of a contract. However, the fact is that the Respondent failed to provide a contract as required by law contributed to the ensuing confusion, delays and other problems for the Complainants in terms of finishing the project. Added to this is the failure to provide a cost breakdown until after a complaint was filed. The Respondent’s itemization for certain charges was highly questionable. The $60.00 an hour labor charge included charges for phone calls to order materials and other activities that did not result in any work being accomplished on behalf of the Complainants (the Respondent’s testimony indicated that he charged for time spent in acquiring and returning a substandard sill). The testimony and photographic evidence do not appear to justify the amount paid to the Complainant but this conclusion is a general impression and not based on specific cost evaluation. The fact that the Respondent obtained payment from Lynette Pollari after he had been told he should deal with Thompson is also considered in the context of a wrongful act. For the reasons expressed above and viewing the Respondent’s conduct in its entirety and the impact on the Complainants, it is concluded the Respondent is in violation of (A)(7), a wrongful act resulting in substantial injury to the Complainants. 6. The evidence is insufficient to determine with any accuracy, what if any amounts of damages or restitution are owed to the Complainants. It should be understood that the Complainants bear some of the responsibility for the confusion and uncertainty surrounding this case. As professionals in their field, they are aware of the need for a written contract to retain the specific conditions of any agreement in order to avoid confusion or at least to allow for the reasonably certain resolution of disputes such as presented by the instant case. The failure to have a written contract contributed to the inability to make specific findings as to possible restitution, in this case. Order In view of the foregoing it is recommended that commencing the effective date of the Order entered in this matter, that the Respondent’s Class B license shall be placed on probation for a period of 90 days.

Done this day, January 9, 2002

______________________________________ Allen Reed 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