ALJDEC decisions subject to certification as final

06F-2466-ROC · Registrar of Contractors · 2007-04-16

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 10 and March 28, 2007 APPEARANCES: Complainant: Merrill Schiffman appeared at both hearings represented by counsel, Douglas H. Allsworth. Respondent: Kent Brady, member and qualifying party, appeared at the January 10, 2007 hearing, pro per. Respondent failed to appear either by authorized representative or counsel at the March 28, 2007 hearing. Registrar of Contractors: Inspector Scott Deering appeared at the January 10, 2007 hearing on behalf of the Registrar of Contractors. ADMINISTRATIVE LAW JUDGE: Brian E. Smith _____________________________________________________________________ Evidence and testimony were presented and, based on the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. This matter first came for hearing at the time, date and place set forth in the Registrar of Contractors’ Notice of Hearing dated December 5, 2006. The parties did not conclude the presentation of evidence at that time and a further hearing convened on March 28, 2007. 2. Complainant is the owner of a residence located at 30600 N. Pima Road, Lot 81, Scottsdale, Arizona (“premises/project”). 3. Respondent Kentec Builders LLC (“Respondent”) is a limited liability company which holds Arizona Contractor’s License No. 191815, Class KB-02 (Dual Residence and Small Commercial) issued by the Registrar of Contractors (“ROC”) on January 5, 2004. Kent Vernon Brady (“Brady”) is a member and the qualifying party for the license. A review of the licensing database maintained by the ROC indicates that this license was suspended February 5 – 9, 2005 (lack of bond); July 12 -28, 2006 (lack of bond) and September 22, 2006 (lack of bond); and revoked (1st) in Case No. 06-2250 on January 22, 2007; 2nd revocation on January 25, 2007 (Case No. 06-2449); 3rd revocation on March 14, 2007 (Case No. 06-2501) and 4th revocation on March 27, 2007 (Case No. 06-2510). 4. Complainant filed a complaint with the ROC June 5, 2006 wherein its was alleged, inter alia, that Respondent failed to timely complete master bathroom and closet remodeling on the subject premises. In addition, Complainant alleged that Respondent failed to complete and/or completed in an unworkmanlike manner at least twenty-four (24) items. 5. On June 21, 2006, Complainant filed an addendum to the complaint (“addendum 1”) wherein were alleged an additional twenty-two (22) items that were completed and/or performed in an unworkmanlike manner by Respondent. 6. Registrar of Contractors Inspector Scott Deering (“Deering”) conducted a jobsite inspection on July 27, 2006 and issued a Corrective Work Order on August 18, 2006 which addressed items in both the complaint and addendum 1. In his Corrective Work Order, Inspector Deering required Respondent to perform corrective work on fourteen items from the complaint (1, 2, 3A, 3C, 8, 9, 10, 13 (16), 14, 15, 17, 20 and 21) and seventeen (17) items from addendum 1 (A1, A2, A3, A4, A5, A6, A7, A8, A9, A11 (10), A13, A14, A15, A17, A18, A19 and A20). 7. On September 5, 2006, Complainant filed a second addendum to the complaint (addendum 2) wherein were alleged three additional items of concern. 8. On September 15, 2006, the Registrar issued a CITATION AND COMPLAINT in Case No. 06-2466 charging Respondent with possible violations of A.R.S. §32-1154A 1, 2, 7, 11, 23 and 3 (namely, A.A.C. R4-9-108, the workmanship rule). 9. Respondent filed an answer on October 2, 2006 wherein was asserted a general denial of any alleged violations of contracting laws. Respondent further asserted as an affirmative defense denial of access to the premises by Complainant. 10. Complainant filed a first request for hearing on September 5, 2006 and a second on September 11, 2006 wherein safety concerns were noted. 11. At the hearing, Complainant testified and submitted Exhibits 1, 2, 3, 5 through 9, 11 through 17, 19 through 23, 24A, 24B, 25, 26, 28, 30A –X and 34 which were marked, admitted and considered. Brian Thomson (“Thomson”) also appeared and testified on behalf of Complainant. 12. Brady appeared on behalf of Respondent at the January 10, 2007 hearing but submitted no exhibits. Respondent failed to appear either by authorized representative or counsel at the March 28, 2007 hearing. 13. Inspector Deering testified on behalf of the Registrar of Contractors and described his observations and conclusions on his July 27, 2006 initial jobsite inspection and January 9, 2007 pre-hearing jobsite inspection. 14. From the evidence elicited at the hearings, the following facts are important to note: a. On or about July 7, 2005, the parties entered into a Proposal & Contract (Exhibit 1) by the terms of which Respondent was to complete the work required thereby “within four months of permit issuance” for a total of One Hundred Fourteen Thousand Nine Hundred Seventy-Two Dollars ($114,972.00). b. The Proposal & Contract (“Contract”) consisted of four (4) proposals which addressed the remodeling of the master bedroom, an addition to the premises for a new closet, remodeling of the kitchen island and construction of a guest house and excluded the cost of securing a City of Scottsdale Building Permit. c. A City of Scottsdale Building Permit was initially issued on October 17, 2005. (Exhibit 5) As a result, Respondent was contractually obligated to complete the project by approximately February 17, 2006. d. A second Building Permit for the guest house was issued on January 9, 2006 (Exhibit 5) which would have provided Respondent until approximately May 9, 2006 to complete the project. e. As of Inspector Deering’s July 27, 2006 jobsite inspection, thirty (30) items set forth in the complaint and/or addendum 1 remained incomplete and/or did not comply with acceptable minimum workmanship standards. (Exhibit 24A) f. As of Inspector Deering’s January 9, 2007 pre-hearing jobsite inspection, fifteen (15) items, i.e., complaint items 9, 10, 14 and 20 (A1) and addendum items A1, A2, A4, A5, A6, A7, A8, A13, A15, A17, A18 and A20 remained incomplete and/or not to acceptable minimum workmanship standards. g. Complainant credibly testified that most of the items corrected prior to the pre-hearing inspection were completed by contractors other than Respondent retained by Complainant.[1] Thomson testified that his company completed work on items 13, 15, 17 and A19. h. Complainant paid $81,048.40 to Respondent on the Contract. (Exhibit 3) i. Complainant made numerous requests of Respondent to complete the project all of which were ignored and/or resulted in false promises to return to the project. j. As a result of Respondent’s failure to complete the project in accordance with the Contract, the Corrective Work Order and revised project timetables, Complainant sent Respondent a termination letter on September 8, 2006. (Exhibit 18)

APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors charged Respondent with possible violations of A.R.S. §32-1154A 1, 2, 7, 11, 23 and 3 (namely R4-9-108). Those statutory sections require that the holder of a license or person listed on the license shall not commit the following:

1. Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

2. Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or his duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code. …

7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. …

11. Failure by a licensee or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with his operations as a contractor when he has the capacity to pay or, if he lacks the capacity to pay, when he has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased. …

23. Failure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for violation of this paragraph until after a hearing has been held pursuant to the provisions of this article. … 3. Violation of any rule adopted by the Registrar.

A.C.C. R4-9-108 is named as the rule violation charged pursuant to A.R.S. §32-1154A (3). Rule R4-9-108 provides that all work shall be done in a professional and workmanlike manner and in accordance with any applicable building codes and professional industry standards.

CONCLUSIONS OF LAW 1. The Registrar of Contractors has jurisdiction over this matter pursuant to A.R.S. § 32-1101, et. seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154. 2. To warrant such sanctions by the Registrar, Complainants must demonstrate by a preponderance of the evidence that Respondent violated any one, or more, of the statutory sections cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also, Culpepper v. State of Arizona, 187 Ariz. 43, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (Rev. 6th ed. 1990). 3. The purpose of licensing Arizona contractors is to regulate the conduct of contracting and protect the public from unscrupulous acts. Beazer Homes Ariz., Inc. v. Goldwater, 196 Ariz. 98, 101, 993 P.2d 1062, 1065 (App. 1999); Better Homes Constr. v. Goldwater, 203 Ariz. 295, 300, 53 P.3d 1139 (App. 2002). The statutory purpose is to prevent unscrupulous or financially irresponsible contractors from deceiving and taking advantage of those who engage them to build. Sobel v. Jones, 96 Ariz. 297, 394 P.2d 415 (1964). 4. This tribunal determines and concludes that Complainant established by a preponderance of credible, probative and relevant evidence that Respondent abandoned the project in violation of A.R.S. §32-1154A (1). 5. It is further determined and concluded that Complainant established by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (23) by failing to take appropriate corrective action without valid justification within a reasonable period of time after receiving a written directive from the Registrar of Contractors on the items set forth in the August 18, 2006 Corrective Work Order and Finding of Facts 6 and 14(e) above. 6. This tribunal further determines and concludes that Complainant established by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (3) and A.A.C. R4-9-108, the workmanship rule, as it pertains to those items delineated in Conclusion of Law 5 and incorporating Findings of Fact 6 and 14 (e). 7. The foregoing violations are deemed by this tribunal to have been wrongful and have resulted in substantial injury to Complainant. Therefore, violations of A.R.S. §32-1154A (7) have been proven as cited and as specifically indicated in Conclusions of Law 4, 5 and 6 hereof. 8. It is further determined and concluded that Complainants failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (2) and (11). 9. This tribunal further determines and concludes that the weight of credible, probative and relevant evidence established that Respondent failed to act in good faith during and subsequent to the construction of the project as well as in response to the Registrar of Contractors inspector’s corrective work order and Complainant’s numerous requests to Respondent to complete its obligations under the parties’ Contract. Such absence of good faith is further demonstrated by Respondent’s failure to appear at the second day of the instant hearing in this matter without legal or reasonable excuse. 10. It is further determined and concluded that Respondent’s four prior disciplinary revocations in Case Nos. 06-2250, 06-2449, 06-2501 and 06-2510 shall serve as factors in aggravation in this matter.

RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that, commencing on the effective date of the Registrar’s Order entered in this matter, the Class KB-02 license of Respondent be revoked.[2] Done this day, April 16, 2007.

_______________________ Brian E. Smith Administrative Law Judge

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

Registrar of Contractors Fidelis V. Garcia Legal Department 800 West Washington, 6th Floor Phoenix, AZ 85007

By _____________________ ----------------------- [1] See items 2, 3A, 3B, 3C, 3E (touch up on bathroom doors), 8, 13, 15, A3, A9, [2] 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 in this matter will be forty (40) days from the date of that certification.

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