ALJDEC decisions subject to certification as final

07F-2423-ROC · Registrar of Contractors · 2008-05-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 28, 2008 and April 21, 2008. APPEARANCES: On January 28, 2008, Paul K. Woodward appeared and was represented by his attorney, Carl Lee, Esq.. Universal Contracting, LLC did not appear. On April 21, 2008, Paul K. Woodward appeared and was represented by his attorney. Universal Contracting, LLC was represented by its attorney, Gary L. Rosser, Esq. ADMINISTRATIVE LAW JUDGE: Maurice McWhirter presided over the hearing on January 28, 2008. Judge McWhirter retired from the Office of Administrative Hearings prior to the April 21, 2008 further hearing. Brian Brendan Tully presided over the hearing on April 21, 2008. Judge Tully listened to the audio recording of the January 28, 2008 hearing. _____________________________________________________________________ On January 28, 2008, Paul K. Woodward presented his case in chief and closing statement in the absence of Universal Contracting, LLC, who did not appear. Judge Maurice McWhirter subsequently granted a request by Universal Contracting, LLC to reopen the case. On April 21, 2008, Universal Contracting, LLC was given the opportunity to supplement the record by presenting its defense and closing statement.

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. Universal Contracting, LLC (“Respondent”) is the holder of License No. 225916, a Class K-61 contracting license, issued by the Registrar of Contractors (“Registrar”). 2. On or about January 2007, Paul K. Woodward (“Complainant”) undertook a remodeling project for his family residence located at 6744 N. 12 Place, Phoenix, Arizona. 3. Complainant is a licensed podiatrist. 4. Complainant hired Doug Andersen, A/A of Studio Group 3 Architects as the project’s architect. 5. On or about January 20, 2007, Complainant and Respondent entered into a written agreement dated January 17, 2007. The scope of work was the construction of a two car garage and a studio for a contract price of $26,200.00. The contract provided for the payment of 50% of the contract price upon acceptance of the contract. The written agreement properly listed Respondent’s contracting license number. 6. On or about January 20, 2007, Complainant and Respondent entered into a second written agreement dated January 17, 2007. The scope of work for this contract was the construction of a specified patio cover for a contract price of $3,020.00. The contract provided for the payment of 50% of the contract price upon acceptance of the contract. The written agreement properly listed Respondent’s contracting license number. 7. Respondent’s contract, as amended, failed to state a completion date. 8. On or about January 23, 2007, Complainant paid the sum of $40,000.00 by check to Respondent. 9. On or about January 25, 2007, Respondent presented Complainant with a written receipt acknowledging receipt of $40,000.00 from Complainant for the following projects: family room addition; garage; and studio 10. By letter dated January 31, 2007, Complainant expressed his concerns to Respondent and requested the following: a time performance schedule; a payment schedule; a list of materials to be purchased; lien releases from each subcontractor; a schedule of overall sequencing of the project; and, an itemization of project costs. 11. By letter dated January 31, 2007, Respondent responded to Complainant’s January 31, 2007 letter. 12. By letter dated April 9, 2007, Complainant’s attorney at the time, M. Kent Mecham, Esq. communicated to Respondent’s qualifying party, Lisa Lichter, concerning a failed inspection for the project on or about March 29, 2007 and Respondent’s failure to return to the project. Mr. Mecham informed Ms. Lichter that Respondent had 14 days to return to the jobsite, or Complainant would take action to mitigate his damages. He also stated that Respondent negligently caused damage to the residence during the performance of its scope of work. 13. Mecham’s April 9, 2007 also discussed Respondent’s demand for additional payment from Complainant. He noted that Respondent had been paid $57,000.00 for the expanded scope of work, including change orders, and that Complainant was not obligated to make any additional payment, except for change orders, until completion of the project. 14. By letter dated April 18, 2007, Ms. Lichter responded to Mr. Mecham’s letter. Ms. Lichter claimed that there was mediation between the parties on March 19, 2007 with David Peevyhouse acting as mediator. She stated that the parties agreed that Respondent would be paid $10,000.00 on March 21, 2007 and an additional sum of $10,000.00 within 10 days from that date. She claims Respondent left the jobsite on April 2, 2007 because Complainant failed to pay it pursuant to that payment schedule. 15. Complainant disputes that he agreed to that financial resolution. 16. Mr. Peevyhouse is an employee of Saguaro Drywall Company, the subcontractor for the drywall installation. He is an acquaintance of Complainant and a former patient. 17. On or about April 20, 2007, Complainant filed a written Complaint with the Registrar alleging statutory and regulatory violations by Respondent. 18. Ms. Lichter is also known as Lisa Lundskow. Her legal name is Lichter. She is married to Milton Lundskow. 19. On or about May 22, 2007, Ms. Lichter, using the surname of Lundskow, filed a written Complaint against Respondent with the Arizona State Board of Podiatry Examiners (“Podiatry Board”). In the Complaint Ms. Lichter alleged that Complainant “displayed irratic [sic] and irrational behavior while [her] company performed work at his residence.” The Complaint goes on to allege that Complainant “has a prescription drug habit” and conspires to divert medications from individuals receiving prescriptions from him. 20. Ms. Lichter is found to have filed Complaint with the Podiatry Board as a representative of Respondent, rather than as an individual. 21. Ms. Lichter, using the surname, also filed a written Complaint against Complainant with the Arizona Medical Board. That Complaint made similar allegations against Complainant. In the Medical Board Complaint, Ms. Lichter identifies three individuals alleging involved in the diversion of medications prescribed by Complainant. Complainant is not regulated by the Medical Board. 22. By letter dated May 22, 2007, the Podiatry Board’s Executive Director, Linda A. Wells, advised Complainant of Ms. Lichter’s Complaint and provided him with a copy of it. Ms. Wells requested that Complainant file a response within 15 days. 23. By letter dated June 4, 2007, Complainant filed a response to Ms. Lichter’s Complaint. He denied all of her allegations. 24. On June 13, 2007, the Podiatry Board considered Ms. Lichter’s Complaint against Complainant. The Podiatry Board voted to table the Complaint for further investigation and to issue a subpoena duces tecum for the medical records of those individuals named in the Complaint. 25. On or about June 18, 2007, the Podiatry Board’s Executive Director issued a subpoena duces tecum to Complainant for the medical records for the three individuals named in Ms. Lichter’s Complaint. 26. On December 12, 2007, the Podiatry Board voted to dismiss Ms. Lichter’s Complaint against Complainant after finding no statutory violations by Complainant governing the practice of podiatry. 27. Ms. Lichter’s testimony that the Complaint filed with the Podiatry Board was merely coincidental to Complainant’s Complaint filed earlier with the Registrar lacks credibility. 28. Respondent failed to comply with plans and specifications for the project. For example, Respondent failed to order and install the specified girder in Complainant’s garage. 29. Respondent was not duly licensed to perform the scope of work for this project. Respondent’s Class K-61 license limits the licensee’s scope of work to no more than $25,000 per project. Respondent was paid $88,417.67 by Complainant on this project. Respondent greatly exceeded the scope of its license on this project. 30. Respondent abandoned the project without legal justification. Respondent claims it left the jobsite over a monetary dispute with Complainant, which is a disputed amount exceeding the scope of its license. 31. Respondent’s abandonment of the project, its failure to comply with plans and specifications, its deficient workmanship, its failure to include a completion date in its contract with Complainant, its contracting beyond the scope of its license are wrongful acts that substantially injured Respondent. 32. The parties’ financial dispute should be resolved in a civil court of competent jurisdiction.

CONCLUSIONS OF LAW

1. The Registrar 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 the provisions of A.R.S. § 332-1154(A) (1), as cited in the Citation and Complaint in Case No. 07-2423 issued by the Registrar. 4. Respondent violated the provisions of A.R.S. § 332-1154(A) (2), as cited in the Citation and Complaint in Case No. 07-2423 issued by the Registrar. 5. Respondent violated the provisions of A.R.S. § 332-1154(A) (3), specifically A.A.C. R4-9-108, as cited in the Citation and Complaint in Case No. 07-2423 issued by the Registrar. 6. Respondent violated the provisions of A.R.S. § 332-1154(A) (7), as cited in the Citation and Complaint in Case No. 07-2423 issued by the Registrar. 7. Respondent violated the provisions of A.R.S. § 332-1154(A) (13), specifically A.R.S. § 32-1158, as cited in the Citation and Complaint in Case No. 07-2423 issued by the Registrar. 8. Respondent violated the provisions of A.R.S. § 332-1154(A) (17), as cited in the Citation and Complaint in Case No. 07-2423 issued by the Registrar. 9. Pursuant to A.R.S. § 32-1154(B), the Registrar may impose disciplinary action against Respondent for the above described violations. Respondent’s conduct in this matter warrants severe discipline.

RECOMMENDED ORDER

Respondent’s License No. 225916 shall be revoked on the effective date of the Order entered in Case No. 07-2423 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, May 12, 2008

______________________________________ Brian Brendan Tully Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Fidelis V. Garcia, Director Registrar of Contractors 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________ -----------------------

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