ALJDEC decisions subject to certification as final

06F-2125-ROC · Registrar of Contractors · 2007-01-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 10, 2007. APPEARANCES: Connie Martin appeared personally. BQ Custom Homes, L.L.C. was represented by its attorneys, Claudio Iannitelli, Esq. and Stewart Gross, Esq. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order:

FINDINGS OF FACT

1. BQ Custom Homes, L.L.C. (“Respondent”) is the holder of License No. 190529, a Class B- contracting license issued by the Registrar of Contractors. 2. At all times relevant to these matters, Connie Martin (“Complainant”) was the owner of two properties: 10406 N. Demaret Drive, Fountain Hills, Arizona (“Demaret”) and 10032 N. Palisades, Fountain Hills, Arizona (“Lot 6”). 3. On or about March 4, 2005, Complainant accepted Respondent’s proposal to perform framing work at Lot 6. The total contract price was $125,600.00. 4. On or about October 17, 2005, Complainant accepted Respondent’s proposal to perform framing work at Demaret. The contract price was $87,000.00. 5. On or about October 17, 2005, Respondent commenced work on the Demaret residence. 6. On or about November 14, 2005, Respondent commenced work on the Lot 6 residence. 7. A dispute arose between the parties concerning the payment of sales taxes for the respective properties for Respondent’s scope of work. 8. Complainant does not disagree that she is responsible for paying the sales tax for the Demaret residence’s framing work. However, she contends that she is not obligated to pay the tax until after the framing inspection of the residence. Respondent claims that the sales tax is due prior to the framing inspection. 9. Complainant contends that the contract price for the Lot 6 residence includes the sales tax. She refused to pay any additional money. 10. At the time it entered into the contract for the Lot 6 framing work, Respondent was aware that Complainant was attempting to become a licensed contractor. As a licensed contractor, Complainant would not be required to pay sales tax on Respondent’s framing work. Therefore, the parties agreed that if Complainant did not obtain a contracting license by the time the sales tax was due, then she would be responsible for its payment. The parties’ contacts do not address that issue. Complainant has subsequently obtained a contracting license. 11. On or about March 29, 2006, Respondent’s staff advised Complainant that it was ceasing work on both projects due to her refusal to pay the sales tax when due. 12. On or about April 14, 2006, Complainant filed two complaints against Respondent with the Registrar of Contractors: Case No. 06-2125 for the Lot 6 residence, and Case No. 06-2126 for the Demaret residence. 13. On May 1, 2006, the Registrar of Contractors’ assigned inspector, Geoff Galgan, performed jobsite inspections at the Demaret and Lot 6 residences. 14. Inspector Galgan’s inspection of the Lot 6 residence resulted in the issuance of a Corrective Work Order dated May 15, 2006. Inspector Galgan opined that there were no workmanship issues. The written directive required Respondent to perform work in a professional manner. 15. Inspector Galgan did not issued a Corrective Work Order after performing his inspection of the Demaret residence. 16. Complainant subsequently hired another framer to complete the two projects. 17. Complainant’s two complaints against Respondent were forwarded by the Registrar of Contractors to the Office of Administrative Hearings, an independent agency, for a consolidated hearing. 18. Respondent is found to have had legal justification to cease its work on the two projects due to a legitimate dispute with Complainant over the sales tax issues. 19. Respondent is found to have deviated from plans on the Demaret residence by placing a skylight in the wrong closet. 20. William Christenson, a certified structural engineer, credibly testified that Respondent deviated from the plans for the truss system for the Demaret residence, but he opined that the deviations were necessary due to field conditions being different than the plans. Mr. Christenson found that the changes made by Respondent were structurally sound. Mr. Christenson did note that “either Design Profile and, or (sic) Palos Verdes Engineering should have been consulted when the field conditions varied from the building plans.” 21. Respondent’s deviation in plans by installing the skylight in the wrong closet in the Demaret residence fell below minimum workmanship standards, and constitutes a wrongful act that substantially injured Complainant. 22. A review of the official records of the Registrar of Contractors reveals that Complainant’s two pending complaints against Respondent are the only ones listed against Respondent’s contracting license.

CONCLUSIONS OF LAW

1. The Registrar of Contractors has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.A.C. R2-19-119(B), Complainant has the burden of proof in this matter. The standard of proof is preponderance of the evidence. A.A.C. R2-19-119(A).

Case No. 06-2125 Demaret Residence

3. Respondent violated the provisions of A.R.S. § 32-1154(A)(1), as cited in the Citation and Complaint in Case No. 06-2125 issued by the Registrar of Contractors. Respondent had legal justification to suspend performance of its work due to the sales tax issues with Complainant. 4. The evidence of record demonstrated that Respondent violated the provisions of A.R.S. § 32-1154(A)(2) (7) and (3), specifically A.A.C. R4-9-108, as cited in the Citation and Complaint in Case No. 06-2125 issued by the Registrar of Contractors. The basis for this conclusion is Respondent’s deviation from the plans by installing the skylight in the wrong closet.

Case No. 06-2126 Lot 6 Residence

5. Respondent did not violate the provisions of A.R.S. § 32-1154(A)(1), as cited in the Citation and Complaint in Case No. 06-2126 issued by the Registrar of Contractors. Respondent had legal justification to suspend performance of its work due to the sales tax issues with Complainant. 6. Respondent did not violate the provisions of A.R.S. § 32-1154(A)(7), as cited in the Citation and Complaint in Case No. 06-2126 issued by the Registrar of Contractors. The evidence of record does not support this allegation.

RECOMMENDED ORDER IN CASE NO. 06-2125

In Case No. 06-2125, Respondent’s License No. 190529 shall be placed on disciplinary probation for a period of 90 days commencing on the effective dated of the Order entered in this matter. In the event of certification of the 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 that certification.

RECOMMENDED ORDER IN CASE NO. 06-2126

The Citation and Complainant issued by the Registrar of Contractors in Case No. 06-2126 is dismissed. In the event of certification of the 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 that certification.

Done this day, January 30, 2007

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2007, to:

Fidelis V. Garcia, Acting Director Registrar of Contractors Legal Department 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