ALJDEC decisions subject to certification as final

07F-A0214-ROC · Registrar of Contractors · 2007-05-08

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 8, 2007 APPEARANCES: Complainant: William Clegg appeared, pro per. Respondent: Respondent failed to appear either by authorized representative or counsel. 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. The matter came for hearing at the time, date and place set forth in the Registrar of Contractors’ Notice of Hearing dated April 6, 2007. 2. At all times here relevant, Complainant William Clegg (“Complainant”) was the owner of a residence located at 25700 Poppy Dr., Paulden, AZ (“premises/project”). 3. Respondent Santa Fe Engineering and Development Company (“Respondent”) is a corporation which holds Arizona Contractor’s License No. 172694, Class KB-02 (Dual Residence and Small Commercial) issued by the Registrar of Contractors (“ROC”) on March 5, 2002. Lyn Thomas Pehl (“Pehl”) 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 February 12 through March 5, 2004 (lack of bond) and April 1 through May 30, 2006 (non-renewal) and revoked October 12, 2006 (A06-0573), January 4, 2007 (A07-0010) (Recovery Fund claim), April 16, 2007 (A06-0578) and April 27, 2007 (A07-0154). 4. Complainant filed a complaint with the ROC on October 26, 2006 wherein it was alleged, inter alia, that Complainant paid Respondent $1,407.50 to “start the work” and Respondent never applied for the required county permit. 5. On January 18, 2007, the Registrar issued a CITATION AND COMPLAINT in case No. A07-0214 charging Respondent with possible violations of A.R.S. §32-1154A 1, 2 and 7. 6. Respondent filed an answer on January 31, 2007, wherein it alleged, inter alia, that it “purchased all the material and paid for the plans to complete [Complainant’s] project….[but] were then told [it] could not do any work or collect any moneys for work already completed because [its] license had been revoked.” Respondent further asserted that it would complete the project as soon as the Registrar of Contractors tells them they can. 7. At the hearing, Complainant credibly testified and submitted Exhibits C-1, C-2 and C-3 which were marked, admitted and considered. 8. Respondent failed to appear through any authorized representative or counsel. 9. On September 6, 2006, Complainant contracted with Respondent, by and through its representative, Tom Pehl, whereby the latter was to enclose Complainant’s garage for a total price of $2,888.03 pursuant to Estimate 97 (“contract”) dated September 5, 2006. (Exhibit C-2) 10. Complainant paid Respondent $1,407.50 toward the contract price on September 6, 2006 per Pehl’s request. (Exhibit C-3) 11. Respondent never performed any work on the project nor returned the $1,407.50 down payment. 12. Complainant testified that he contacted the county and determined that Respondent never applied for or obtained the requisite permit to commence construction under the contract.

APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors in Case No. A07-0214 charged Respondent with possible violations of A.R.S. §32- 1154A 1, 2 and 7. 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 code 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 code.

… 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

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 established by a preponderance of credible, probative and relevant evidence that Respondent abandoned the subject project in violation of A.R.S. § 32- 1154A (1). 5. This tribunal further determines and concludes that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. § 32-1154A (2). Complainant did not submit any plans, specifications and/or code provisions from which this tribunal could determine that Respondent departed and/or disregarded. 6. It is further determined and concluded that Complainant established by a preponderance of credible, probative and relevant evidence that Respondent’s failure to perform any work on the project and/or obtain the requisite permit therefor was wrongful and resulted in substantial injury to Complainant. Therefore, violations of A.R.S. § 32-1154A (7) have been proven as charged in the issued Citation in Case No. A07-0214. 7. This tribunal also determines and concludes that the weight of credible, probative and relevant evidence established that Respondent failed to act in good faith by performing no work on the project pursuant to the parties’ contract and failing to secure the requisite permit therefor. Such absence of good faith is further demonstrated by Respondent’s failure to appear at the hearing which shall also serve as a factor in aggravation in this matter. … … … RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that commencing on the effective date of the Registrar’s Order entered in this matter, the Class KB-02 license of Respondent be revoked.[1] Done this day, May 8, 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] 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 the certification.

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