ALJDEC decisions subject to certification as final

03F-1949-ROC · Registrar of Contractors · 2003-08-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 13, 2003 APPEARANCES: Complainant Donna Jackley appeared on behalf of herself and Complainant John Jackley; Dale Pahl represented Respondent ADMINISTRATIVE LAW JUDGE: Wendy S. Morton _____________________________________________________________________ The issue presented by this matter is whether Respondent, Pahl Building, Inc. is subject to discipline for acts or omissions in violation of A.R.S. § 32-1154. Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order: FINDINGS OF FACT 1. Respondent Pahl Building, Inc. (“Pahl”) was the holder of a Class B- license (No. 123892) issued by the Registrar of Contractors (“ROC”). Pahl had an active license at all times relevant to this case; however, on May 31, 2003, Pahl canceled its license. Dale Pahl was Pahl’s president. 2. Complainants John and Donna Jackley, (collectively known as “Complainants”) own a home located at 15806 Palomino Boulevard, Fountain Hills, Arizona (“the Home”). 3. In November, 2002, Complainants signed a contract with Pahl to remodel the exterior of the Home. Complainants gave Pahl a deposit of $12,952.00, 1/3 of the total contract price of $38,856.00. Complainants believed that their deposit would be held in escrow until the project began. 4. Complainants intended to construct a new porte cochere as part of the remodel. Complainants hired an architect to develop plans for the new porte-cochere. 5. On February 18, 2003, Complainants submitted plans for the porte- cochere for approval by the City of Fountain Hills (“the City”). Complainants’ plans indicated an incorrect measurement for the right of way for the porte-cochere. Mr. Pahl assisted Complainants in attempting to rectify the problem. Mr. Pahl made four separate trips to the City and several visits to the architect’s office on Complainants’ behalf. 6. The City did not approve Complainants’ plans. On March 28, 2003, at Mr. Pahl’s suggestion, Complainants hired RDA Designs as their architect. RDA redrew plans for the front entry of the Home. 7. Mr. Pahl became extremely frustrated with the delay in the project. Mr. Pahl presented Complainants with an invoice for $2,500.00, charging them $50.00 per hour for 50 hours that he had spent working on the project. Complainants argued that this charge was not part of the original contract and was never discussed with or approved by them. 8. On or about March 31, 2003, with the project still stalled because of the difficulty getting the plans approved, Complainants contracted with Pahl to install 2 bedroom windows and remove a bathroom window and replace it with glass block. The cost for this work was $2,111.00. The parties agreed to deduct this amount from Complainant’s $12,952.00 down payment. 9. Shortly after the window project, Mr. Pahl contacted Complainants and demanded payment for the time that he had put into the project. (Mr. Pahl now claimed that Complainants owed him $3,000.00 for 60 hours of work). Mr. Pahl threatened to sue Complainants for the entire contract amount. He swore at them and hung up on them. 10. On April 2, 2003, Complainants met with Mr. Pahl to discuss issues regarding the project. Mr. Pahl became angry and walked out of the meeting. On the same day, Mr. Jackley contacted Mr. Pahl and asked that his deposit be refunded, less the amount Complainants owed for the windows. Mr. Jackley offered to also deduct the amount that Mr. Pahl felt he was owed for his time on the project. Mr. Pahl refused this offer and told Mr. Jackley that he was going to sue for the entire contract amount. Mr. Pahl began to use profanity and then hung up. 11. On April 5, 2003, Mr. Jackley contacted Mr. Pahl and asked him if he was going to honor the proposal and do the work. The parties agreed that the proposal had now changed because Complainants were not going to install the porte-cochere. Mr. Pahl agreed to re-quote the project once the City approved the plans. Mr. Pahl did not want Complainants to cancel the project and the parties agreed to work together. 12. The parties resumed working with RDA. RDA required Complainants to do a site survey. Complainants were at this stage of the process when, on April 24, 2003, Mr. Pahl contacted them again. Mr. Pahl asked if the plans were ready and accused Complainants of stalling with the survey. He told Mr. Jackley that he was “treading water” and that he could not keep things going. He advised that he was going to close his business on May 1, 2003. Mr. Pahl’s behavior again disintegrated into expletives and he hung up on Mr. Jackley. On the same evening, Mr. Jackley re-contacted Mr. Pahl and asked if he had their $12,952.00. Mr. Pahl told Mr. Jackley that he did not. 13. Several days later, Mr. Pahl’s attorney contacted Complainants and advised that Mr. Pahl would return $1,000.00 if Complainants did not pursue a complaint with the ROC. Complainants argued that Pahl should refund of the entire $12,952.00, minus the $2,111.00 for the window project. 14. On April 24, 2003, Complainants filed a complaint against Pahl with the ROC. 15. On May 9, 2003, Complainants requested the instant administrative hearing. 16. On May 22, 2003, the ROC issued Citation and Complaint No. 03- 1949 against Pahl, alleging violations of A.R.S. § 32-1154(A)(7). 17. At hearing, Complainants argued that Pahl improperly withheld their $12,952.00 deposit (minus the $2,111.00 for the window project). 18. With respect to Pahl’s additional $3,000.00 charge, Complainants maintained that a “consulting fee” was not part of their contract and was not a term they had agreed to. Complainants maintained that Mr. Pahl did not advise them that he would charge for consulting work. They believed he was simply “helping out” in order to move the project along. 19. Mr. Pahl agreed that his proposal did not indicate that there would be any extra charges for consulting. Mr. Pahl testified that Complainants asked if he would help them [with the problem with the plans] and said “yes, but it will cost you.” Mr. Pahl testified that “nobody works for free” and maintained that his charges were justified. The Administrative Law Judge disagrees. Mr. Pahl was obligated to inform Complainants that he would charge extra for any additional consulting work and was obligated to state what the rate for his service would be in advance of providing that service. The statement “it will cost you” does not constitute appropriate notice, nor is it specific as to what the charge will be. The Administrative Law Judge finds that Complainants did not have an agreement with Mr. Pahl to pay extra consulting charges. Without a prior agreement, such charges were improper. 20. Complainants maintained that “there was nothing else we could humanly do to get that project moving.” [1] Mr. Pahl argued that he waited six months to do Complainants’ project. The delay left him “desperate” and he had to bypass other jobs because of his commitment to Complainants. The Administrative Law Judge finds that Pahl did not present any specific evidence as to why it was unable to undertake other projects or that it lost work because of the delay on Complainants’ project. 21. By Mr. Pahl’s own admission, his desperation over the delay in the project caused his behavior to deteriorate. Mr. Pahl repeated screamed profanity and used other threatening language in his conversations with Complainants, causing such concern that Complainants resorted to tape recording their conversations with Mr. Pahl. Mr. Pahl admitted using profanity toward Complainants and in fact, continued to be extremely argumentative and hostile toward Complainants at hearing. The Administrative Law Judge finds that this type of behavior is inappropriate for a professional contractor. 22. Pahl did not do any work on the porte-cochere project, for which he was paid a $12,952.00 down payment. Although the error in the plans caused the delay during which it was impossible for Pahl to perform, the Administrative Law Judge finds that Pahl was not entitled to retain Complainants’ down payment. Complainants’ request that Pahl return their deposit was not due to the project’s delay, with which they were also frustrated and trying to resolve, but rather to Mr. Pahl’s extremely unprofessional behavior and the fact that Complainants became uncomfortable continuing to work with him. (Mr. Pahl agreed that he would not be willing to work with someone who treated him this way). The Administrative Law Judge finds Complainants’ request for a refund appropriate under the circumstances. Complainants established that Pahl owed $10,841.00 (the $12,952.00 down payment less the $2,111.00 that Complainants rightfully owed Pahl). The Administrative Law Judge finds that Pahl’s refusal to refund the aforementioned amount was improper and constitutes a violation of A.R.S. § 32-1154(A). 23. Based upon the foregoing, it is appropriate for the ROC to impose discipline upon Pahl’s Class B- license. CONCLUSIONS OF LAW 1. In this administrative proceeding Complainants bear the burden to prove, by a preponderance of the evidence, that Pahl violated A.R.S. § 32- 1154(A)(7) as charged by the ROC in its May 22, 2003 Citation and Complaint. See A.A.C. R2-19-119. 2. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 3. Under A.R.S. §32-1154(A)(7), a contractor is subject to discipline for “the doing of a wrongful or fraudulent act…resulting in another person being substantially injured.” The Administrative Law Judge concludes that Pahl violated A.R.S. § 32-1154(A)(7) by improperly failing to refund $10,841.00 to Complainants. 4. Because Pahl’s Class B- license (No. 123892) is already canceled, revocation appears to be the only appropriate disciplinary measure. RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge makes the following Recommended Order: On the effective date of the ROC’s order Pahl’s Class B- license (No. 123892) will be revoked. Done this day, August 29, 2003

______________________________________ Wendy S. Morton Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2003, to:

Registrar of Contractors Israel G. Torres ATTN: Jennifer Brown 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

----------------------- [1] Mr. Jackley testified that the City did not approve the plans until July 17, 2003.

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826