ALJDEC decisions subject to certification as final

06F-F0225-ROC · Registrar of Contractors · 2007-02-05

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 31, 2007 APPEARANCES: Complainant: Lori Zeltwanger appeared, pro per. Respondent: Vincent Loparco, Jr., corporate officer and qualifying party, appeared, pro per. 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 came for hearing at the time, date and place set forth in the Registrar of Contractors’ Notice of Hearing date December 11, 2006. 2. At all times here relevant, Complainant was the owner of a vacant parcel of land located at 10 Red Wing, Sedona, Arizona (“premises/project”). 3. Respondent Vincent Loparco Jr. Development Corporation (“Respondent”) is a corporation which holds Arizona Contractor’s License No. 126615, Class B (General Residential) issued by the Registrar of Contractors (“ROC”) on August 25, 1997. Vincent Loparco, Jr. (“Loparco”) is a corporate officer and the qualifying party for the license. A review of the licensing database maintained by the Registrar of Contractors indicates that this license was suspended September 12, 2002 through June 16, 2003 (lack of bond) and February 12-13, 2004 (lack of bond); the corporate status was dissolved April 30, 2003 and reinstated August 29, 2003; the license was also suspended February 11, 2005 (lack of bond) and expired September 1, 2006. 4. Complainant filed a complaint with the ROC on June 23, 2006. Therein she alleged, inter alia, that Respondent contracted to prepare and failed to complete architectural drawings required to obtain a permit for the project for which Respondent was paid $12,000.00. Complainant further asserted that she also paid Respondent an initial $11,000.00 retainer under a second contract whereby he (Respondent) was to act as the “contractor” on the project and Respondent failed to return the retainer when it “became clear…[Respondent] had no intention whatsoever of proceeding with this project.” 5. On September 22, 2006, the Registrar issued a CITATION AND COMPLAINT in Case No. F06-0225 charging Respondent with possible violations of A.R.S. §32-1165A 1, 2, 7 and 13 (namely, A.R.S. §32-1124 (B)). 6. Respondent filed an answer on October 10, 2006 wherein it alleged, inter alia, that it did what was contracted to do and “was paid for plans submitted.” Respondent further asserted that it was “paid retainer for $11,000.00, but contract was not honored no monthly payments received, still did what I could regarding the plans…” 7. At the hearing, Complainant testified and submitted Exhibits C-1, C-3, C-4, C-7 through C-12, C-15, C-17 through C-20, C-22 and C-27 through C-32 which were marked, admitted and considered. Exhibit C-16 was admitted over objection. Myles Lanson (“Lanson”), Complainant’s significant other, also testified on behalf of Complainant. 8. Loparco testified on behalf of Respondent and offered Exhibit C- which was not admitted over objection. 9. On the evidence and testimony of record, the following salient facts were adduced at the hearing and are important to note: a. In September 2004, Complainant contracted with Respondent, as a licensed architect, to perform various services including, without limitation, the preparation of plans and/or drawings to be submitted to the city of Sedona for approval for the purpose of securing a building permit for the project. (Exhibit C-4) b. Complainant paid Respondent $12,000.00 for the work to be performed under the September 2004 contract (“Contract 1”). (Exhibits C-7 through C-11) c. Loparco testified that, pursuant to paragraph 3 of Contract 1, Complainant was to provide Respondent with, inter alia, site elevations giving grades and lines of streets, encroachments and related information from which it would prepare the plans. Loparco further testified that, despite Complainant’s failure to provide such information, he prepared and submitted plans for the project to the city of Sedona which were not approved and required revisions. (Exhibits C-17 through C-20) d. Complainant applied for a building permit on July 5, 2005. (Exhibit C-17). e. Loparco testified that he made the required revisions and submitted them to the city for approval and permit. Complainant testified that she did not believe Respondent made the required revisions as when she attempted to retrieve the submitted plans from the city on April 17, 2006 she was advised they had been “picked up for correction and never returned.” (Exhibit C-22) f. No building permit has been issued for the project. g. No plans, specifications and/or drawings were introduced into evidence by either party. h. On or about February 28, 2005 Complainant and Lanson[1] executed a “Proposal Contract” on Respondent’s form as an architect (Exhibit C-12) whereby Loparco was to act as project coordinator for the residence to be constructed on behalf of Complainant as owner/builder. A factual dispute exists as to when Loparco signed this document. i. A factual dispute also exists as to whether the February 28, 2005 Proposal Contract was consummated. Complainant testified that, though both parties signed it, the referenced Proposal Contract expired after thirty (30) days pursuant to its terms due to the failure to close on a construction loan and the attendant lack of payment to Respondent of the retainer required thereunder. j. On April 7, 2005, Complainant paid Respondent $11,000.00 (Exhibit C-15). Complainant testified such payment was the twenty-five percent (25%) of the fee due under the Proposal Contract. Notwithstanding such payment, Complainant further testified that there was only a verbal agreement between the parties for Loparco to act as project coordinator as the original Proposal Contract had expired and a second document dated April 7, 2005 was never signed by her or Loparco. k. Loparco testified that he performed extensive work as project coordinator under his architect’s license. Loparco further testified that he ceased any further work on or about May 7, 2005 when Complainant failed and/or refused to remit the $3,000.00 monthly payment due under the parties’ agreement. l. Complainant asserts Loparco and/or Respondent performed little, if any, work as a project coordinator on the premises and therefore is obligated to refund the $11,000.00 retainer. Complainant further contends that, due to Loparco’s inaction and failure to perform as project coordinator, Respondent should also be required to pay restitution for the more than $16,009.70 in interest on a construction loan that was never used (Exhibits C-32) and paid $1,000.00 for course of construction insurance. m. Complainant further asserts that the project was able to proceed notwithstanding the proposed taking of a portion of the subject project by the State of Arizona for expansion of Highway 179. Loparco contends the project could not go forward until the State made an offer on the property to Complainant which did not occur until February 2006.

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 and (namely A.R.S. §32-1158(B)). 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. … 13. Failure in any material respect to comply with the provisions of this chapter.

A.R.S. §32-1124(B) is named as the statute violation charged pursuant to A.R.S. §32-1154A (13). That statute provides, inter alia, that a license issued by the Registrar of Contractors shall be properly exhibited and posted by the licensee.

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, Complainant 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 failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §321154A (1) as pertains to Contract 1. It is undisputed that Lomarco executed Contract 1 under his architect’s license, not his contractor’s license. Therefore, any claim asserted by Complainant based on this contract is outside the jurisdiction of the Registrar of Contractors. Irrespective of that fact, a factual dispute exists as to whether Respondent abandoned Contract 1 or performed Respondent’s required obligations under Contract 1 as no plans were produced. 5. This tribunal determines and concludes that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §321154A (1) as pertains to a second contract between the parties for Respondent’s services as a project manager. Complainant testified that she had only a verbal contract with Respondent pursuant to which she paid Loparco $11,000.00 and that the referenced two written “contracts” either expired or were never effective. Loparco testified he acted upon the April 7, 2005 document and ceased further services when Complainant refused to remit the first $3,000.00 monthly payment required thereunder. Given this factual dispute, it is impossible for this tribunal to determine the exact contractual terms between the parties and/or if a contract ever existed notwithstanding the fact that Respondent was paid $11,000.00 under some arrangement. In addition, it is unclear from the evidence elicited at the hearing whether any contract between the parties fell under Respondent’s contractor’s license or Loparco’s architect’s license. 6. It is further determined and concluded that, in addition to findings set forth in Conclusions of Law 4 and 5, Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (2) as no plans, specifications and/or code provisions were produced from which a determination could be made of whether they were followed by Respondent. 7. It is further determined and concluded that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (13) as no evidence was presented by Complainant with regard to this allegation. 8. Given this tribunal’s findings in Conclusions of Law 4, 5, 6 and above, it is further determined and concluded that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (7).

RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that the entire Citation and Complaint in Case No. F06-0225 be dismissed.[2] Done this day, February 5, 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] Lanson is Complainant’s significant other who, though not an owner of the premises, Complainant apparently authorized to act on her behalf in negotiations and/or transactions with Respondent. [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