ALJDEC decisions subject to certification as final

07F-1212-ROC · Registrar of Contractors · 2007-06-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 4, 2007 APPEARANCES: David and Ruth Waronker, on their own behalf; no one appeared on behalf of Respondent ADMINISTRATIVE LAW JUDGE: Michael K. Carroll ________________________________________________________________

On November 15, 2006, a Complaint was filed with the Registrar of Contractors (ROC) in which Complainants alleged that Respondent failed to complete work under the terms of a contract, that Respondent took personal items belonging to Complainants without reimbursement, that the work completed by Respondent was of poor quality, and that he failed to pay subcontractors after receiving advance payments from Complainants for the work. On February 22, 2007, the ROC issued a Citation, alleging that Respondent violated A.R.S. §32-1154A (1), (2), (7), (3), namely R4-9-108, and (13), namely A.R.S. §32-1124B.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Findings of Fact:

(1) In November, 2005, Respondent entered into a contract with Complainants to remodel a home they had recently purchased in Scottsdale. (2) The original contract provided that Respondent would renovate two bedrooms, a bathroom, a master suite and a guest house for approximately $96,600. (3) After Respondent began the renovation work on the residence, the parties entered into additional contracts to remodel a horse stall and hay barn, and construct a tennis court and a horse pasture on the property. The total amount agreed upon for the additional work was $204,777.00. (4) Between November 29, 2005 and July 17, 2006, Complainants paid Respondent $267,866.55 toward the total contract price (Exhibit C6). (5) The initial renovation work to the main house and the guest house went relatively smoothly. However, as work on the remainder of the project progressed, several problems surfaced with respect to Respondent’s performance under the terms of the contract. The following examples are illustrative of the problems experienced by Complainants: (a) Complainants discovered that Respondent was not paying some of the subcontractors for work they had completed on the property. The subcontractors began to contact Complainants directly for payment on work that was included in their contract with Respondent. (b) Complainants learned that Respondent had not obtained any of the necessary building permits from the City of Scottsdale for the work being done on their property. (c) While clearing a portion of the property for construction of the tennis court, two antique horse wagons and several saguaros, which were to have been replanted on another part of the property, were destroyed. (d) A pool table, Murphy bed, freestanding bar and two pinball machines, which were to be stored by Respondent while the guest house was remodeled, were never returned to Complainants. (e) An irrigation system, installed by Respondent to supply water for the new pasture, failed and caused the new sod and other landscaping to die. (f) Complainants paid for the concrete work on the tennis court twice -- once to Respondent as part of the contract, and once to the concrete contractor, who demanded payment from Complainants when Respondent refused to pay him. (g) After the tennis court was completed, a building inspector from the City of Scottsdale informed Complainants that Respondent had not obtained any of the necessary permits for construction of the tennis court. The building inspector discovered that the footings, installed by Respondent for the retaining wall surrounding the tennis court, did not meet the structural requirements of the building code. Complainants paid an engineer and another contractor to design and complete remedial work on the footings to bring them into compliance with the building code. (h) Electrical and water lines to the tennis court, which were supposed to be installed by Respondent, had to be installed by another contractor who was paid directly by Complainants. (i) Complainants had to pay a supplier for two new heating and air conditioning units installed by Respondent after the supplier informed them that Respondent’s checks had been had been declined by the bank due to insufficient funds (Exhibit C3). (j) A metal roof, which was to cover a shade structure built for Complainants’ horses, blew off in a storm the day after it was installed by Respondent. (k) Iron gates and ornamental work which were part of the contract with Respondent were never received by Complainants. (l) French doors leading into the master suite were not completed. An entry door in the guest house was not sealed or painted. Construction debris, which was to be removed as part of the contract with Respondent, was removed by laborers hired by Complainants. (m) Although the work for the hay barn was paid in full by Complainants, the work was never completed. Similarly, several items for the stable, which were included in the contract with Respondent, had to be completed by Complainants at additional expense to them. (7) Between January and October, 2006, Complainants wrote numerous letters and memos to Respondent complaining about the lack of progress on the project, poor workmanship, payment for work that was never completed and subcontractors who had not received payment from Respondent for work that was completed (Exhibit C2). Respondent promised to complete the work by certain dates (Exhibit C5), but he did not do so. He did not reimburse Complainants for expenses they incurred as a result of his failure to perform under the contract or pay the subcontractors. (6) After Respondent ceased all work on the project in August, 2006, Complainants paid approximately $70,000.00, in addition to what they had already paid Respondent, in order to complete much of the work that was supposed to have been done under their contracts with Respondent.

Conclusions of Law:

Based upon the forgoing, the uncontested evidence presented at the hearing was sufficient to establish violations of A.R.S. §32-1154A (1), (2), (7) and (3), namely R4-9-108. A.R.S. §32-1154A (1): Respondent abandoned the contract without legal excuse. He did not perform work for which he had been paid, and he failed to pay subcontractors who had performed work for which he had received payment from Complainants. Despite repeated requests by Complainants, Respondent either did not complete the work, or failed to do so in a professional and workmanlike manner. Ultimately, Complainants were forced to engage the services of other contractors to complete the work.

A.R.S. §32-1154A (2): Respondent did not obtain any required building permits from the City of Scottsdale, and disregarded building codes in the construction of the tennis court retaining wall. A.R.S. §32-1154A (7): Respondent took several items of personal property belonging to Complainants and did not return those items. Respondent destroyed personal property and landscaping on Complainants’ property. Respondent caused Complainants to pay double for items originally included in the contract price by (1) failing to pay subcontractors for the work they had performed on Complainants’ property and (2) requiring Complainant’s to hire contractors to finish work originally agree to and paid for under their contract with Respondent. The wrongful acts listed above caused substantial financial injury to Complainants. A.R.S. §32-1154A (3), namely R4-9-108: Respondent installed footings for a retaining wall that did not comply with the City of Scottsdale building code. New sod and landscaping was destroyed due to Respondent’s improper installation of an irrigation system. A roof blew off a shade structure built by Respondent. Valuable items of personal property belonging to Complainants were destroyed during construction of the tennis court. Several aspects of the project, which had been started by Respondent, were not completed, or were completed improperly. A.R.S. §32-1154 (13), namely A.R.S. §32-1124B: There was no evidence presented at the hearing which specifically related to this allegation in the Citation. Therefore, this allegation was not proven.

RECOMMENDED ORDER

Based upon the egregious and cumulative nature of the violations in this case, the substantial financial losses suffered by Complainants, and Respondent’s failure to present any evidence which either controverted or mitigated the evidence presented by Complainants, it is recommended that Respondent’s Class KB-02 license be revoked on the effective date of the Order in this case.[1]

Done this day, June 5, 2007.

_________________ Michael K. Carroll 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] Pursuant to A.R.S. §41-1092.08D, failure by the Registrar of Contractors to accept, reject or modify this decision within thirty days of receipt by the agency will result in this Decision being certified by the Office of Administrative Hearings as the final administrative decision. In the event of certification of the Administrative Law Judge Decision by 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