ALJDEC decisions subject to certification as final

06F-2604-ROC · Registrar of Contractors · 2007-02-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 24, 2007. APPEARANCES: Charles Standage did not appear but was represented by his attorney, Dennis A. Sever, Esq. Bentley Restorations, LLC, formerly Venture Restorations, LLC, was represented by its member and qualifying party, Van Bagley. 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. Venture Restorations, LLC was the original holder of License No. 2011084, a Class B- contracting license issued by the Registrar of Contractors. The name of the licensee was recently changed to Bentley Restorations, LLC (Venture Restorations, LLC and Bentley Restorations, LLC are hereinafter jointly referred to as “Respondent”). 2. On or about June 23, 2006, Charles Standage (“Complainant”) filed a written complaint against Respondent with the Registrar of Contractors alleging that Respondent had hired unlicensed plumbers and electricians on two projects: the Heidi and Derrick Chapin residence located at 3705 W. Bethany Home Rd., Phoenix, Arizona; and, the John Pizer residence located at 4201 E. Desert Cove Avenue, Phoenix, Arizona. Complainant alleged that Respondent’s member and qualifying party, Van Bagley, had hired the unlicensed contractors over Respondent’s objections. 3. Complainant’s brother was married at one time to Mr. Bagley’s wife. 4. Complainant is also a revoked contracting licensee. Complainant, doing business as Quality Improvements, was the holder of License No. [number redacted], a Class C-61 Limited Remodeling and Repair contracting license issued by the Registrar of Contractors. Complainant’s contracting license was revoked on April 22, 1998 in Case No. M97- 1599. In addition to the revocation of his license, there was also a Residential Contractors’ Recovery Fund (“Fund”) payout against the license in the amount of $16,894.47. There is no evidence that Complainant repaid the Fund for the payout due to acts or omissions damaging a residential homeowner. Until Complainant repays the Fund, he is not eligible to appear on any contracting license issued by the Registrar of Contractors. 5. When Respondent obtained its contracting license, Complainant’s wife, Janice Standage, had a financial interest in Respondent. Because he is a revoked contractor, Complainant could not be named on Respondent’s license. 6. Complainant entered into a business relationship with David Young, a property insurance adjuster for Brown O’Haver. For a financial interest, Mr. Young would refer contracting jobs from clients of Brown O’Haver to Complainant, on behalf of Respondent. 7. Respondent contends that Complainant served as its superintendent. In a letter dated August 9, 2006 to Inspector Warren Duncan of the Registrar of Contractors, Complainant made the following statement: “I was never a superintendent and I was never paid.” 8. Mr. Bagley is a former inspector for the Registrar of Contractors. He now works full-time for the City of Mesa. He credibly testified that Complainant was responsible for obtaining bids and conducting Respondent’s daily operations. Mr. Bagley would attend to Respondent’s business when not working for the City of Mesa. 9. Mr. Young testified that he thought that Complainant had started Respondent. He further testified that Complainant was his “go to guy.” 10. On October 13, 2005, Complainant executed a written document setting forth the “description of item to be installed in the referenced structure” on behalf of Respondent for the Pizer project. Mr. Pizer executed the document on October 14, 2005. 11. On or about October 13, 2005, Complainant, on behalf of Respondent, executed the following handwritten contract with Mr. Pizer: “10/13/05 For consideration Re: material substitution as outlined in the Descr. Sheets(s) will pay the following to John Pizer - $3,000.00 from first draw.” 12. Respondent and John Pizer entered into a written agreement dated October 14, 2005 for a remodeling job. Mr. Bagley executed the agreement on behalf of Respondent. Mr. Young had referred the project to Respondent through Complainant. 13. By letter dated October 28, 2005, Mr. Pizer wrote to Complainant, on behalf of Respondent, at his home address. Mr. Pizer communicated his selection of specifications. 14. By letter dated October 31, 2005 addressed to Complainant, on behalf of Respondent, at his home address, Mr. Pizer communicated other changes to the project’s scope of work, noting that “these changes are not covered by the insurance and may be extra charges.” 15. By facsimile date January 5, 2006, an employee at Ballard Truss sent Complainant truss data for the Pizer project. 16. On February 2, 2006, Kool Knight-Air, Inc. sent a written proposal to Respondent at Complainant’s home address. That proposal was accepted by Mr. Bagley on February 3, 2006. 17. On or about February 13, 2006, Complainant received a statement from Valley of the Sun Roofing, LLC in the amount of $3,350.00 for a new roof for the Pizer project. 18. On or about February 15, 2006, Complainant received a Milgard Windows bid on behalf of Respondent. 19. On or about February 16, 2006, Complainant received a quote from R & R Building Supplies on behalf of Respondent for the Pizer project. 20. On or about March 2, 2006, Complainant, on behalf of Respondent, received a Pick Ticket for supplies from R & R Building Supplies. 21. On April 14, 2006, the City of Phoenix issued a Certificate of Occupancy for the Pizer project. It was mailed to Complainant on behalf of Respondent. 22. On or about June 22, 2005, Complainant accepted a written proposal for the following work to be performed on the Chapin project: “remove roof trusses, patio cover, fixtures, pull nails, if possible salvage AC unit, haul to landfill.” 23. On or about June 22, 2005, Complainant executed the Description of Materials document for the Chapin project on behalf of Respondent. Mr. Young had referred this project to Complainant. 24. On or about July 8, 2005, the Chapins forwarded the signed contract for their project to Complainant. 25. On or about August 3, 2005, Ballard Truss sent a facsimile to Respondent for the Chapin project, with the following handwritten notation: “Att. Charlie Is this what you were looking for?” 26. On August 4, 2005, Respondent submitted a City of Phoenix Residential Construction Permit/Plan Review Application as the named Applicant for the Chapin project. Respondent was the named prime contractor. 27. Despite Complainant’s assertion that he was never paid by Respondent, there is credible evidence that Respondent paid Complainant the sum of $2,000.00 by check dated August 9, 2005 for the Chapin project. 28. On or about August 5, 2005, S D I Paint & Drywall submitted a written proposal to Complainant for the Chapin project. That proposal was accepted by Mr. Bagley on August 15, 2005. 29. On or about August 10, 2005, Ballard Truss sent a facsimile of sealed drawings to Complainant on behalf of Respondent. 30. On or about October 12, 2005, S D I Paint & Drywall submitted a written proposal to Respondent, to the attention of Mr. Bagley or Complainant for the following scope of work:

We propose to furnish and install the labor and materials to complete the rough plumbing for the above reference project. We have included the installation of the fixtures and faucets (furnished by others) in this bid.

This is for the sum of $2,750.00.

Clean-up is to a general contractor provided dumpster.

31. On or about October 14, 2005, Falcon Air Conditioning submitted a proposal to Complainant, on behalf of Respondent, for the Chapin project. That proposal was accepted by Mr. Bagley on November 6, 2005. 32. By facsimile dated January 4, 2006, R & K Building Supplies sent a quote to Respondent, at the care of Complainant, for the Chapin project. 33. On or about February 6, 2006, Respondent purchased doors for the Chapin project from R & K Building Supplies. The doors were to be shipped to Respondent, to the attention of Mr. Bagley or Complainant. 34. On or about March 5, 2006, Complainant signed insurance documents for the Chapin project confirming that 95% of the repairs had been completed. 35. On April 11, 2006, the City of Phoenix issued a Certificate of Occupancy for the Chapin residence. It was mailed to Complainant on behalf of Respondent. 36. It is undisputed that an unlicensed electrician and plumber performed work for Respondent on these projects. However, it is determined that those individuals were hired by Complainant, as agent for Respondent. The workers had previously worked for a licensed contractor hired on a previous project by Respondent, but were hired on the side by Complainant for the Pizer and Chapin projects. 37. However, when Mr. Bagley discovered the unlicensed subcontractors performing work, he did not cause Respondent to immediately terminate them. Instead, he let them complete their phase of work and knowingly paid them for their unlicensed activity. Mr. Bagley testified that he felt morally obligated to pay the unlicensed workers. 38. As a former inspector for the Registrar of Contractors, Mr. Bagley knew that permitting and paying for unlicensed contracting was a violation of the state’s contracting laws. Respondent’s failure to cause such activity to immediately cease and to not pay for such illegal activity are a strong matter in aggrevation. 39. The long standing personal relationships between Complainant, Mr. Bagley and their respective families has deteriorated to the point where civil litigation is currently pending, and allegations that Complainant’s wife withdrew funds from Respondent’s checking account after she was forced to end her financial relationship with Respondent. Mr. Bagley and Mr. Young are also in civil litigation. 40. Complainant is found to have unclean hands in this matter. 41. Respondent’s action in permitting unlicensed contracting to continue on its project after discovering such activity and paying the individuals for their unlicensed contracting are wrongful acts which substantially injured the home owner.

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). 3. Respondent violated A.R.S. § 32-1154(A)(10) by allowing an unlicensed electrical subcontractor to perform work on its behalf after learning of such activity and then paying for such illegal work. 4. Respondent violated A.R.S. § 32-1154(A)(10) by allowing an unlicensed plumbing subcontractor to perform work on its behalf after learning of such activity and then paying for such illegal work. 5. Respondent violated A.R.S. § 32-1154(A)(7) because its wrongful acts of aiding and abetting an unlicensed electrical subcontractor resulted in substantial injury to the property owners. 6. Respondent violated A.R.S. § 32-1154(A)(7) because its wrongful acts of aiding and abetting an unlicensed plumbing subcontractor resulted in substantial injury to the property owners.

RECOMMENDED ORDER

Respondent’s License No. 06F-2604-ROC shall be suspended on the effective date of the entered Order in Case No. 06-2604 until the Registrar of Contractors receives written proof from Respondent that it has had the unlicensed electrical and plumbing work performed on the Chapin and Pizer projects inspected, and repaired if necessary, by appropriately licensed contractors at Respondent’s sole cost and expense. If Respondent properly accomplishes the above-described corrective work on or before the effective date of the entered Order in Case No. 06- 2604, then the above-provided license suspension shall not take place, but Respondent’s license shall be placed on probation for a period of 180 days commencing on the effective date of the entered Order in Case No. 06-2604 or the date on which notice of Respondent’s proper compliance with the terms of the entered Order is filed with the Registrar of Contractors, whichever is later. Any restoration of Respondent’s rights to resume contracting, 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 24 months, including future renewal periods, in the amount of $10,000.00, 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 24-month period and only if no claims are then pending. 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, February 13, 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