ALJDEC

02F-M0274-ROC · Registrar of Contractors · 2002-02-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 19, 2002. APPEARANCES: Charles R. Smith, Complainant; Gregory L. Gay, Respondent; Dell Bremer, Complainant’s witness; Walter L. Gay, Respondent’s witness; and Ron Lamp, Registrar of Contractors Inspector. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________ After filing a complaint with the Registrar of Contractors against Gregory Gay doing business as G. L. G. Construction, Charles R. Smith established that Mr. Gay abandoned the contract, did not meet minimum workmanship standards on some items and refused to do corrective work. Mr. Smith expended an additional $1189.00 over and above the contract price to have the work properly completed, but some painting has still not been done. It is therefore recommended that Mr. Gay’s license undergo a provisional suspension until he pays restitution to Mr. Smith, with a lingering penalty of a suspension and probation, and a 12 month increase in his bond amount. FINDINGS OF FACT 1. On or about May 29, 2001, Charles R. Smith hired Gregory Gay doing business as G. L. G. Construction to add a room to his manufactured home, enlarge the doors to his laundry room and master bedroom, do some remodeling in the kitchen, bathroom and laundry room, put new siding on the exterior of the home, install security doors and build a shed. On August 9, 2001, Mr. Smith filed a complaint against Mr. Gay with the Registrar of Contractors. 2. The complaint was assigned to Ron Lamp, a Registrar of Contractors Inspector, who conducted a job site inspection on September 25, 2001. On October 2, 2001, he issued a Corrective Work Order containing eleven items requiring correction or completion. On February 13, 2002, Mr. Lamp conducted a pre-hearing job site inspection. He found that some items on the Corrective Work Order had been corrected by Mr. Gay, but someone else had completed some other items and some areas still needed painting to uniformly cover the walls. 3. Mr. Gay testified that he made some corrections before the Corrective Work Order was issued such as trying to stop the leak in the roof and nailing the base of the shed. But he did not return to complete the Corrective Work Order because Mr. Smith was always trying to change the contract and add to it. Had he done so, it seems apparent that he would have discovered that some of his attempts to correct the problems had failed and needed further work. He stated that he would have gone back if he could have done so without Mr. Smith trying to get something for nothing from him. He argued that Mr. Smith’s complaint is another example of him trying to get something for nothing. He did not dispute that there were items on the Corrective Work Order that he did not correct. 4. Mr. Smith testified that he had corrective work done after Mr. Gay failed to complete the Corrective Work Order. He began to hire contractors to complete the work on November 24, 2001, over seven weeks after the Corrective Work Order was issued. He presented $1895.00 in receipts for work done that he felt Mr. Gay should have been responsible for. He offered other invoices to show that he is not attempting to get money from Mr. Gay for work that was not on the contract. Although Mr. Gay attempted to correct the roof leak, as he stated, it still leaked and required additional repairs. Water damage on the ceiling and drywall had to be repaired as well. The shed walls were not square and tile laid by Mr. Gay was coming loose. Mr. Gay began a drainage system, under a verbal agreement outside of the contract, and refused to finish it. Mr. Smith paid to have it finished but did not request reimbursement for materials because the agreement had been that Mr. Smith would buy the materials and Mr. Gay would do the work in exchange for something that had been dropped on the written contract. Further, some of the paint in the room addition and some on the exterior walls does not cover the area completely. No attempt was made to correct it. The additional costs to Mr. Smith could have been avoided had Mr. Gay returned and completed the Corrective Work Order and ensured that the corrective work he started had not failed. 5. The evidence established that Mr. Smith paid an additional $1189.00 above the contract price for the work the parties bargained for. He paid Mr. Gay the contract price less $706, but he paid $1985 for other contractors to finish the job. Mr. Smith testified that he paid short on the contract because some of the items on the contract had been dropped, but those items totaled only $310. On the other hand, he did not pay Mr. Gay for his labor on the grating and drainage. For the purpose of arriving at an equitable conclusion, it is presumed that the $310 in dropped items is substantially equal to the value of the labor for the grating and drainage. Mr. Smith’s deduction of $706 should not be allowed in light of this presumption, but his cost in having the grating and drainage completed shall be included in determining his damages. 6. According to the records of the Registrar of Contractors, the license in this matter, issued on April 12, 2001, 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)(1), (2), (3), (7) and (23) and A.A.C. R4-9-108. 3. The Arizona Revised Statutes at § 32-1154(A)(1) provides grounds for suspension or revocation of a contractor’s license for abandonment of a contract without legal excuse. Mr. Gay’s failure or refusal to complete the corrective work may properly be considered abandonment of his contract. His reasons for failing to return provide no legal excuse for the failure. 4. The Arizona Revised Statutes at § 32-1154(A)(2) provides grounds for suspension or revocation of a contractor’s license for departure from or disregard of plans or specifications or building codes without consent of the owner or his or her representative. It was not established at hearing that Mr. Gay departed from the plans or specifications of the project but the evidence indicated that a light was installed in violation of a building code. The matter was disputed and no further evidence was provided to establish the violation. Therefore, it was not established that Mr. Gay violated this section of the statute. 5. The Arizona Revised Statutes at § 32-1154(A)(3) provides grounds for suspension or revocation of a contractor’s license for “[v]iolation of any rule adopted by the registrar”. The Arizona Administrative Code, which contains the Registrar’s rules, requires Arizona contractors to meet minimum workmanship standards in the projects they undertake. A.A.C. R4-9- 108. It was clearly established at hearing that Mr. Gay violated this section of the statute when he constructed a room addition with a leak, failed to properly paint and remodel, and did other work that needed correction, and then did not correct it. 6. 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”. Mr. Gay accepted money for the work he contracted to complete and failed to do so in a workmanlike manner or to return and complete corrective work. Therefore, he is in violation of this section of the statute. 7. The Arizona Revised Statutes at § 32-1154(A)(23) provides grounds for suspension or revocation of a contractor’s license for failure to take appropriate corrective action on a Corrective Work Order without valid justification and within a reasonable period of time. The evidence at hearing established that Mr. Gay failed to take any action on his Corrective Work Order because he did not want to deal with Mr. Smith’s personality anymore. This does not constitute a valid justification for his failure, and Mr. Gay must be found to have violated this section of the statute. 8. 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. The disciplinary record of the license in this matter was not significant except to note that it is fairly new. RECOMMENDED DECISION In view of the foregoing, it is hereby recommended that, commencing on the effective date of the Registrar’s Order (forty [40] days after the date of service by the Registrar of Contractors), Respondent’s Class B-03 license be temporarily and actively suspended until the Registrar receives proof that Respondent has paid $1189.00 to the Complainant in reimbursement for the costs incurred in completing the corrective work for which Mr. Gay was responsible. It is further recommended that, in addition to the foregoing indefinite license suspension, if any, Respondent’s Class B-03 license be placed on active suspension for a period of three (3) days, followed immediately by a period of sixty (60) days disciplinary probation. This additional disciplinary penalty shall commence on the effective date of the Registrar’s Order or the date on which notice of Respondent’s compliance with the terms of this Order is filed with the Registrar, whichever is later. It is further recommended, in addition to the above provided penalties, if any, that any continuation or restoration of Respondent’s contracting rights, whether or not probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of 12 months, including future renewal periods, in the amount of $200, such bond or deposit to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. § 32-1152. Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above-provided 12 month period and only if no claims are then pending. Such bond shall be posted on or before the effective date of this Order or prior to the last day of any applicable active license suspension, whichever is later. Failure to timely post such bond shall result in the immediate or continued suspension of Respondent’s license. Done this day, February 25, 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