ALJDEC decisions subject to certification as final

05F-T0264-ROC · Registrar of Contractors · 2005-05-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 11, 2005, at 9:00 a.m. APPEARANCES: The Complainant appeared through its attorney, Joseph Watson. The Respondent appeared through its attorney, Evan Thompson. . ADMINISTRATIVE LAW JUDGE: M. Douglas

Evidence and testimony were presented and, based upon the entire record; the following Findings of Fact, Conclusions of Law and Recommendation are made:

FINDINGS OF FACT

1. Respondent is the holder of a Class B- License issued by the Registrar of Contractors. The Respondent also holds a Class KB-02 License. 2. This is a residential matter where the Complainant is a general contractor which is constructing a new cabin on Mount Lemmon. The Respondent performed construction work on the foundation for the new cabin. 3. The parties are in agreement that the construction site is steeply sloped with numerous large granite boulders and tree stumps and that it is a dangerous construction site. 4. There was no dispute that the parties entered into contract negotiations and that the Complainant gave the Respondent a written agreement which provided for the Respondent to be paid a total of $14,000.00 for construction of the cabin foundation and which provided for an initial payment of $7,000.00 before the Respondent started construction work at the cabin site. 5. There was no dispute that the Complainant paid $7,000.00 to the Respondent when the written contract was given to the Respondent. 6. There was no dispute that the Respondent did not sign the written agreement. However, there was also no dispute that the Respondent accepted and cashed the $7,000.00 check and began construction work on the cabin’s foundation. 7. The Respondent asserts that it rejected the written agreement and began its construction work on a time and materials basis. 8. There was no dispute that the Respondent began construction work at the cabin site and dug the footers and quickly discovered that it would not be able to complete the construction of the foundation of the cabin for $14,000.00. 9. The Respondent then stopped work and left the construction site. 10. Credible testimony and evidence established that the parties then met and entered into an oral agreement whereby the Respondent agreed to return to the construction site and complete the construction of the foundation for an additional $10,000.00. 11. The Complainant again gave the Respondent a written agreement which the Respondent declined to sign. 12. The parties then became embroiled in a dispute regarding when the additional $10,000.00 would be paid. 13. The parties were unable to resolve their dispute and the Respondent refused to return to the construction site until it was paid $10,000.00. 14. The Complainant refused to pay any additional money until the Respondent returned to the construction site. 15. When the Respondent failed to return to the construction site the Complainant completed the construction of the foundation work. 16. The Complainant then filed a formal complaint, against the Respondent, with the Registrar of Contractors. 17. .The parties were again unable to resolve their differences and the matter was set for formal hearing. 18. Credible testimony and evidence, presented at hearing, established that the Respondent, an LLC, has an undisclosed partnership agreement with an individual, Robert Castillo, who is not a member of the LLC and who is not listed on the Respondent’s Class B- License. 19. Robert Castillo testified that he is not a licensed contractor. 20. Credible testimony and evidence, presented at hearing, established that the Respondent failure to maintain required worker’s compensation insurance for its hourly employees during its work at the Complainant’s construction site. 21. Credible testimony and evidence established that the Respondent did not pay any income taxes or withholding taxes for its hourly employees. 22. Credible testimony and evidence, presented at hearing, established that the individuals that the Respondent employed at the jobsite were the Respondent’s employees rather than unlicensed subcontractors. 23. The Respondent’s actions, in failing to complete a construction project for the agreed upon price and refusing to return to the construction project and complete its construction work despite repeated demands that it do so, are found to constitute abandonment. 24. The Respondent’s actions, in abandoning a construction site without legal excuse, in failing to pay income taxes or withholding taxes and in entering into a partnership agreement with an unlicensed individual who is not listed as a member of the LLC and is not shown on the Respondent’s license application, are found to constitute a wrongful act. 25. Notice is taken of the Respondent’s prior License record with the Registrar of Contractors. CONCLUSIONS OF LAW

1. The credible evidence of record established violations by the Respondent of the provisions of A.R.S. (32-1154 (A) (Abandonment of a contract without legal excuse), (5) (Failure to pay income taxes, withholding taxes, or any tax imposed by title 42), (7) (Wrongful Act), (9) (Failure in a material respect for the license to complete a construction project or operation of the price stated in the contract, or in any modification of the contract), and (3); namely, Rule R4-9-108 (Failure to perform work in a professional and workmanlike manner).

RECOMMENDation In view of the foregoing, it is recommended that the Respondent’s Class B- License be revoked. In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of the certification. Done this day, May 24, 2005.

______________________________________ M. Douglas Administrative Law Judge

Original transmitted by mail this ____ Day of ____________, 2005, to:

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

By ___________________________

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Office of Administrative Hearings 100 N. Stone Ave., Suite 704 Tucson, Arizona 85701 (520) 628-5488