ALJDEC

02F-M0253-ROC · Registrar of Contractors · 2002-03-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 7, 2002. APPEARANCES: Keith Black, Complainant’s representative; Becky Black, Complainant’s witness; Daniel Noma, Sr., Respondent’s representative; Judy Smith, Respondent’s witness. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________

In its complaint against the Respondent contractor for payment of the amount remaining due on a contract, Complainant has established that the Respondent should be held responsible to pay $761.90. Therefore, it is recommended that the Respondent be required to pay that amount, under threat of suspension, but that no further disciplinary action be imposed by the Registrar. FINDINGS OF FACT 1. Judy Smith was an owner/builder of her home who hired Dan Noma of Infinity Precision Builders, Inc. to be her construction manager. To that end, Mr. Noma found and hired subcontractors including Keith Black Roofing, Inc. Although Mr. Noma intended to hire Keith Black Roofing, Inc. only as a representative of Ms. Smith, only his . . . signature appears on the proposal, and Keith Black Roofing, Inc. was not made aware of Ms. Smith's involvement until after the roof was built. 2. The contract was for $9,573. The roof was completed on January 6, 2000. Keith Black Roofing, Inc. received a payment of $6,701.10 from Ms. Smith on April 17, 2000. It is seeking the balance of the contract in the amount of $2,871.90. 3. Mr. Noma, for Infinity Precision Builders, Inc. argued at hearing that the roof leaked and Keith Black Roofing, Inc. failed to repair the leaks, save one attempt, and should be responsible for the interior damage resulting from it. He testified that he attempted many times to contact Keith Black Roofing, Inc. to do the repairs, and while he received many promises, no one came to do the repairs. Ultimately, he hired someone else to repair the roof and Ms. Smith had to take a lower price for the home in consideration of the damage. 4. Keith Black, on behalf of Keith Black Roofing, Inc. indicated that he did not receive any written request for additional repairs, though his supervisor may have. He also stated that he'd agreed to give a credit for the damage but was never shown any invoices. In response, Mr. Noma stated that when Mr. Black's attorney wrote asking for the bids for the repairs, though he provided no bids or invoices, he did write a letter stating the costs of the repairs. It claimed that the cost of repainting the fascia and portion of the body of the exterior was $600, the cost of repairing the ceiling three times was $410, and his time, billed at $50 per hour for 22 hours, was $1100. The total estimated costs were $2110. The cost to Ms. Smith in negotiating a lower price on the home was not known because it was part of other items discussed in the sale. 5. According to the two year record of the Registrar of Contractors, the license in this matter has had only this complaint filed against it. CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§32-1104(A)(4), 32-1154(B) and 32-1156. 2. The Citation and Complaint issued by the Registrar of Contractors in this matter alleged potential violations of A.R.S. §32-1154(A)(7) and (11). 3. The Arizona Revised Statutes at §32-1154(A)(7) provides for suspension or revocation of a contractor’s license for the “doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured”. 4. The Arizona Revised Statutes at §32-1154(A)(11) provides grounds for suspension or revocation of a contractor’s license for failure to pay monies, when due, for materials or services rendered in connection with the licensee’s activities as a contractor. Exceptions may be recognized when the licensee lacks the capacity to pay or has not been sufficiently paid for the project. 5. The Registrar of Contractors may consider the prior record of a contractor in any disciplinary proceeding provided the records are introduced into evidence. A.A.C. R4-9-117. On standing motion by the Registrar of Contractors, the computer records of the Registrar of Contractors may properly be considered to be evidence in the event the Administrative Law Judge finds a violation of any of the statutory provisions cited in the Citation and Complaint. 6. In this case, Keith Black Roofing, Inc. has established that it had a contract with Mr. Noma because his name appears on the contract. For the purposes of the Registrar of Contractors, a direct contract between a contractor and subcontractor creates the obligations imposed by the above statutes. A.R.S. § 32-1129. While Mr. Noma claimed that the signed contract offered in evidence was not the original document, there is no basis to find that the copy offered into evidence by Keith Black Roofing, Inc. was not a true copy or that Mr. Noma's name was forged onto it. Further, Ms. Smith admitted that she did not hire Keith Black Roofing but allowed Mr. Noma to do it for her. Since there is no evidence that Keith Black Roofing was ever told that it was contracting with anyone else besides Mr. Noma's company, it must be found that Mr. Noma was acting as a general contractor and is primarily liable for the debts incurred to Keith Black Roofing, Inc. 7. On the other hand, Keith Black Roofing, Inc. has not established that the entire amount it seeks is due on the contract. It is undisputed that the roof leaked and repairs were needed. Although Keith Black stated that he, personally, was not made aware of the second and third leaks, his supervisor was informed. While the file makes it clear that he was having difficulties with his employees during this period, the supervisor’s knowledge was sufficient to constitute fair notice to the company that problems with the project required its attention. 8. Although no invoices were available at hearing, Mr. Noma’s estimates were reasonable in light of the facts. Although 22 hours of labor for coordinating the repairs to the home may seem excessive, it is perhaps balanced by the lack of an estimate of the deduction given in the sale of the home. From the final payment claimed of $2871.90, the amount of $2110 was not shown to be “due” under the statute and should be offset from the final payment amount. Although Mr. Noma was not paid for this by Ms. Smith, he did not establish that he lacks the capacity to pay it, his right to seek reimbursement from her notwithstanding. Thus, Infinity Precision Builders, Inc. should be considered responsible for $761.90 and, if it is not paid, should be considered to be in violation of the above statutes. 9. Infinity Precision Builders, Inc. has a good license history. Additionally, its failure to pay is mitigated by the fact that Daniel Noma consistently kept lines of communication open between himself and Keith Black Roofing, Inc. and the two lawyers who wrote to him regarding the debt. RECOMMENDED DECISION Based upon the foregoing considerations, the undersigned Administrative Law Judge hereby recommends to the Registrar of Contractors that, commencing on the effective date of the Registrar’s Order (40 days after the date of service by the Registrar of Contractors), Respondent’s Class B- license be temporarily and actively suspended until the Registrar receives proof that Respondent has paid the Complainant $761.90. If the Registrar receives proof the Respondent has paid the amount in full before the 40 days from service have passed, it is recommended that no disciplinary action be taken and that the complaint be closed. It is further recommended that, if any suspension should take place, that no other disciplinary action be imposed at the conclusion of such suspension. Done this day, March 15, 2002. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang 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