ALJDEC decisions subject to certification as final

07F-F0194-ROC · Registrar of Contractors · 2007-12-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 11, 2007

APPEARANCES: Complainant appeared through its vice-president, Michael Kern (“Kern”) and Respondent was represented by its attorney, Fred Thomas. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. Pursuant to written contract, Complainant retained Respondent to accomplish specified plumbing and electrical “rough-in” on a tenant improvement project, wherein Complainant was going to open a new restaurant in an existing commercial building. Complainant alleges certain deficiencies in the work performed and/or materials provided and same are discussed in the findings below.

2. Evidence of record established that Respondent utilized a plumber with a residential license on this commercial project. Andrew Hamby (“Hamby”), Respondent’s qualifying party and member, appeared at the hearing and presented testimony. According to Hamby, he knew that the plumber did not possess the proper license for this commercial project, however, he believed that he could use the plumber, since he was working on the project wherein Respondent had a commercial license. Although this conduct would normally support a finding of a violation of A.R.S. §32-1154A (14), this statute was not charged in the Citation issued in this matter.[1]

3. Notwithstanding the fact that the applicable Citation issued in this matter failed to charge the Respondent named herein with a violation of A.R.S. §32-1154A (14), the Registrar of Contractors should consider commencing its own investigation into the activities of the plumber (Ross Pro-Formance Plumbing) on this project.

4. Kern and his son, Dustin Kern (“Dustin”) testified that there were deficiencies in the work performed by Respondent’s improperly licensed plumber, as manifested by toilets not being set eighteen (18) inches from a wall, as required by the A.D.A., sewer venting installed incorrectly, and failure to install the type of floor drains required by the applicable plans and specifications. Kern testified that he incurred expenses to hire another plumber to correct these deficiencies in the work of Respondent’s plumber. The evidence of record is found to be sufficient to support a finding that these plumbing complaints by Complainant are indicative of substandard and unacceptable workmanship, causing a substantial injury to Complainant. Thus, under all of the facts and circumstances presented herein, Respondent’s failure to use a properly licensed contractor is found to constitute a wrongful act, within the meaning of the applicable charged section of the State’s Contracting laws.

5. Although Kern contends that Respondent committed fraud by virtue of the fact that the applicable permit shows that Mountain High Plumbing was to be the plumbing subcontractor on the project, Hamby testified that it was Complainant’s responsibility to obtain the permit, not Respondent’s. Moreover, Hamby indicated that he did not sign for the permit and did not pay for same. Complainant failed to sustain the requisite burden of proof on this issue.

6. Kern objects to the use of the PVC piping for the electrical conduit, indicating that the applicable plans and specifications called for some type of metal conduit. Nevertheless, evidence of record showed that the applicable contract between the parties was a time and materials contract and did not contain a provision for a “not to exceed price.” Thus, Complainant only paid for PVC conduit. In addition, evidence of record showed that Kern was aware during construction that PVC conduit was being installed and he never told Respondent to stop and change it while it was being installed. The conduit passed the inspection of the local building authority. Complainant failed to show any prejudice, as contemplated by the language of A.R.S. §32-1154A (2), by the installation of PVC conduit.

7. Kern contends that Respondent abandoned the project, without completing same. Evidence of record showed that Respondent did terminate work on the project, prior to completion of the contract. However, Hamby testified that Respondent left the project due to a payment dispute with Complainant. Moreover, Hamby points out that the applicable contract provides, in pertinent part, “…if payment is not made when due, Contractor may suspend work on the job until such time as all payments due have been made.”

8. Evidence of record showed that on or about March 19, 2007, Respondent presented Complainant with a billing, which Complainant disputed as being excessive. The parties were unable to resolve their differences on this time and material billing and thus Respondent never returned to work on the project.

9. Hamby contends that Complainant owes Respondent approximately $30,000 for time and materials for the project. Kern contends that the March 19, 2007 billing was excessive by approximately $9,000.00 in overcharges, including charging Complainant for travel time for the electrician to travel from Yuma to Flagstaff.

10. Kern asserts that it was outrageous for Respondent to bill for the travel time for the electrical subcontractor to travel from Yuma to Flagstaff. Nevertheless, Hamby testified that he advised Kern that the electrical subcontractor would be coming from Yuma. There was no adequate showing that the charges from the electrical contractor, even including the travel costs, were grossly or improperly excessive, when compared to what other local electrical contractors may have charged for the same work.

11. The dispute over what sum of money Respondent is entitled to receive under the time and materials contract terms is an accounting issue and is found to be a good faith money dispute between the parties. The Registrar of Contractors, acting through an administrative license disciplinary hearing, is the inappropriate forum to adjudicate and liquidate such a money dispute. If the parties continue to be unable to resolve this money dispute, then the dispute will have to be brought before a civil court of competent jurisdiction. Under all of the facts and circumstances presented herein regarding the money dispute and the language of the applicable contract, Respondent is found to have a legal excuse for the cessation of work on the project.

12. Subsequent to Respondent’s termination of work on the project, Complainant retained other contractors to complete the project, including a new plumber and a new electrical subcontractor. Kern claims entitlement to monetary damages for the costs expended to have corrections made to some of Respondent’s work. However, Respondent was never given notice and/or an opportunity to correct any claimed deficiencies. Under the facts and circumstances presented herein, this type of money damage claim must also be brought before a civil court of competent jurisdiction. In addition, there was no charge in the applicable Citation regarding workmanship (i.e., A.R.S. §32-1154A (3); namely Rule R4-9-108).

13. Although Respondent was shown to have started work on the project, prior to issuance of the permit, there was no showing that this caused any problems with the inspections from the local building authority or that Complainant was prejudiced by said activity. Complainant failed to sustain the requisite burden of proof on this issue.

14. Kern contends that Complainant still experiences problems with lights flickering and circuit breakers going off. However, Complainant hired another electrical contractor to complete work on the project, including installation of the electrical panel, switches, and receptacles. The evidence presented at the hearing was inadequate to support any finding that the electrical problems are attributable to the work performed by Respondent’s subcontractor’s work on the project. Complainant failed to sustain the requisite burden of proof on this issue.

15. Kern asserts that there is some type of sewer smell that appears at times in the restaurant. However, he was unable to demonstrate that this odor is attributable to the work performed by Respondent’s plumber. Complainant failed to sustain the requisite burden of proof on this issue.

16. As set forth in the Citation and Complaint issued by the Registrar of Contractors, Respondent was advised that in the event of a finding of a violation against Respondent, Respondent’s prior disciplinary record of final Registrar of Contractors’ orders may be considered in mitigation or aggravation. Accordingly, subsequent to conclusion of the instant hearing, notice was taken of official records of the Registrar of Contractors regarding any prior final disciplinary orders against Respondent and said notice revealed the absence of any prior disciplinary sanctions on the Registrar of Contractors’ current record regarding Respondent. Therefore, Respondent’s prior record is properly deemed to be excellent and thus, is viewed as a matter in mitigation for any disciplinary penalties to be imposed as a direct result of this case.

CONCLUSIONS OF LAW

1. Complainant has the burden of proof and must establish statutory violations by a preponderance of the evidence. A.A.C. R2-19-119. Proof by “preponderance of the evidence” means that it 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, 654 (9th Cir. BAP (Ariz.) 1994). 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).

2. Complainant failed to sustain his burden of proof to establish that Respondent violated A.R.S. § 32-1154A (1), (2), and (9).

3. Evidence of record established that Respondent violated the provisions of A.R.S. § 32-1154A (7), by using an improperly licensed contractor on the project.

RECOMMENDED ORDER

In view of the foregoing it is recommended, commencing on the effective date of the Order entered in this matter, that the Class B-02 license of Respondent shall be placed on a period of disciplinary probation for ninety (90) days. 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.

Done this day, December 14, 2007.

______________________________________ Mark A. Silver 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] The filed Complaint (dated April 17, 2007) contains only a narrative of the alleged abandonment of the project by Respondent and some general allegation of fraud. The original Complaint form does not indicate any allegation of using an improperly licensed plumber on the project. Nevertheless, on or about May 14, 2007 Complainant filed a document with the Registrar of Contractors, which Kern indicates was an amendment to the filed Complainant. This document does itemize the Complaint and shows the allegation of using an improperly licensed contractor to perform the plumbing. The Citation in this matter was not issued until July 3, 2007.

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