ALJDEC decisions subject to certification as final

07F-2427-ROC · Registrar of Contractors · 2008-03-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 10, 2008. APPEARANCES: K N C Contractors was represented by its authorized employee, Kirk Nielson. Welch Companies, Inc., doing business as Welch Electric, was represented by its attorney, Susan Larsen, Esq. 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. Welch Companies, Inc., doing business as Welch Electric (“Respondent”), is the holder of License No. 208522, a Class C-11 contracting license, issued by the Registrar of Contractors (“Registrar”). 2. K N C Contracting, Inc. (“Complainant”) was the general contract for a fire damage restoration project at the Blaser residence. 3. On or about September 6, 2006, Complainant accepted Respondent’s written proposal for electrical work for the restoration project. 4. Respondent’s bid did not specify whether the replacement wiring would be copper or aluminum. The residence had existing aluminum wiring. 5. The scope of work for the fire restoration did not require approved plans. 6. Several months after Respondent’s work on the project commenced, the scope of work for the project included a 2,300 square foot remodeling extension to the residence. 7. In December 2006, plans for the project were approved by the City of Tempe. 8. On or about April 23, 2007, Complainant filed a written Complaint with the Registrar alleging the following violations by Respondent:

Work performed not to code as per City of Tempe Building Department. Overcharge to run power from transformer to electrical panel on house. Electrical panel on house never installed. Told SRP holding up project. Called SRP. They stated that [Respondent] was holding up project.

9. As a result of the filed Complaint, the Registrar’s assigned inspector, Randy Cason, performed a jobsite inspection to review the Complaint items. That inspection resulted in the issuance of a Corrective Work Order dated May 22, 2007 which required Respondent to timely take action as follows:

Complaint #1 Work performed not to code per City of Tempe. Contractor is to comply with contract, blueprints, specifications and City of Tempe Correction notice dated 4/12/07 by appropriate means.

Complaint #2 Over charged [sic] to run power from transformer to electrical panel on house. This inspector has no jurisdiction over a pre agreed [sic] contractual amount for services to be performed by contractor.

Complaint #3 Electrical panel not installed. Contractor to comply with contract, blueprints, specifications and City Building Codes and complete by appropriate means.

Complaint #4 Contractor is holding up job. Contractor is to complete/correct by appropriate means per contracts, blueprints, specifications, City Building Codes and City Inspection required.

10. On or about June 15, 2007, Complainant, Respondent and the homeowners entered into a written settlement agreement, which was admitted into evidence as Exhibit 10. 11. Pursuant to the terms of the settlement agreement, Respondent paid the homeowners the sum of $8,000.00 at the signing of the agreement with an additional sum of $7,000.00 to be paid at a later date. 12. Complainant agreed “to immediately remove Complaint #07-2427” upon payment of $8,000.00. 13. On or about June 19, 2007, Inspector Cason closed Case No. 07-2427 after being requested to do so by Complainant’s staff. 14. The remaining sum of $7,000.00 was to be paid by Respondent to the homeowners within 30 days of the date of the settlement agreement. 15. After Respondent learned that the Registrar’s records would reflect the parties’ settlement of Case No.07-2427 as “Closed Complaints – Resolved/Settled/Withdrawn,” Respondent requested that the case be cited and sent to formal hearing so that it could seek a dismissal of the charges. 16. Respondent did not timely pay the final payment of $7,000.00 to the homeowners pursuant to the terms of the parties’ settlement agreement. 17. The parties’ settlement agreement did not require that the Registrar’s official records reflect that the Citation and Complaint in Case No. 07-2427 be dismissed. It required that Complainant “remove” or withdraw its complaint, which it did do. 18. Respondent breached the agreement of settlement agreement by not timely paying the final payment to the homeowners. 19. Respondent’s breach of the settlement agreement is a wrongful act that substantially injured Complainant and the homeowners.

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, even though Respondent requested that the Citation and Complaint be issued in Case No. 07-2427. 3. As a result of the parties’ settlement agreement, all issues in this matter merged into the agreement. Therefore, Respondent did not violate the provisions of A.R.S. § 32-1154(A) (1), (2), (9), (23) and (3), as cited in the Citation and Complaint issued in Case No. 07- 2427. 4. Respondent violated the provisions of A.R.S. § 32-1154(A) (7), as cited in the Citation and Complaint issued in Case No. 07-2427. The factual basis for this violation is Respondent’s failure to fully perform its contractual obligations pursuant to the parties’ settlement agreement.

RECOMMENDED ORDER

Respondent’s License No. 208522 shall be suspended on the effective date of the Order entered in Case No. 07-2427 until the Registrar receives written proof that Respondent has paid the homeowners, Jackie and Clint Blaser, the outstanding balance of $7,000.00 pursuant to the parties’ settlement agreement. If Respondent pays the Blasers the sum of $7,000.00 on or before the effective date of the Order entered in Case No. 07-2427, then the above- provided license suspension shall not take place, and the Citation and Complaint in Case No. 07-2427 shall be closed. In addition to the above-provided disciplinary penalty, if any, any restoration of Respondent’s rights to resume contracting 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 $1,500.00, 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(C). 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, March 24, 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 ___________________________

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