ALJDEC decisions subject to certification as final

07F-F0195-ROC · Registrar of Contractors · 2008-02-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 11, 2008 APPEARANCES: Complainants appeared on their own behalf and Respondent appeared through its president and qualifying party, Robert Corrigan (“Corrigan”). 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. Complainants retained Respondent to accomplish new home construction. Complainants allege a specified deficiency in the work performed and/or materials provided by Respondent and this issue is discussed in the findings below.

2. The following salient facts were adduced at the hearing and are important to note:

a. Robert Breton (“Robert”) testified that the new home constructed by Respondent included a hot water in-floor heating system. According to Robert, the heating of the master bedroom never worked properly, in that the temperature in the bedroom would constantly vary some six (6) to eight (8) degrees from the rest of the home. b. Complainants advised Respondent of the problem with the heating system in the master bedroom and according to Robert, Respondent sent its subcontractor out numerous times to attempt to repair and/or balance the heating system. Robert testified that none of the remedial efforts, performed by Respondent’s subcontractor, corrected the heating problem. c. After enduring Respondent’s repeated unsuccessful attempts to correct the problem, over an extended period of time, Complainants ultimately sought help from another contractor. The information that they received from the new contractor showed that they needed more zones in the heating system. On or about March 26, 2007, Complainant sent Respondent a letter, describing the bid that they had received from the new contractor and requesting that Respondent participate in paying the bill for the remedial work. According to Complainants, Respondent refused to participate in paying for the remedial work. d. Finally, after Respondent failed to either correct the heating deficiency or agree to pay for others to complete said remedial work, Complainants filed the instant Complaint with the Registrar of Contractors.

e. On or about December 13, 2007, Complainants hired the new contractor to correct the problem with heating the master bedroom. Robert testified that after the remedial work was performed by the new contractor, the heating of the master bedroom became consistent with the temperature level in the rest of the home. Complainants paid the new contractor the total sum of $2,316.91 to correct the heating deficiency in their home and this cost was not shown to be unreasonable. The invoice for this billing was entered into evidence as Complainants’ exhibit no. 15. f. Corrigan did not dispute the fact that the system has been repaired. He indicates that he tried to get the original subcontractor to return to Complainants’ home but the subcontractor refused, stating that his warranty period had expired. g. Corrigan further testified that he believed the heating issue was more of an installation problem, as opposed to a design issue. h. During the course of the hearing, Complainants attempted to raise a new issue, regarding the adequacy of the hot water production by the hot water tank. They were unable to show that this issue was described in the filed Complaint and thus, based on basic principles of due process under the law, the issue was disallowed from consideration at the instant hearing. Nevertheless, nothing in this ruling would serve to prevent Complainants from filing a new Complaint in this regard if the applicable statute of limitations has not run out.

3. The weight of the evidence of record was sufficient to support a finding that the in-floor heating system failed to operate properly, as manifested by the fact that the original thermostat installed in the home could not keep the heat in the master bedroom consistent with the rest of the home. This failure in the heating system is determined to constitute substandard and unacceptable workmanship. In addition, the heating system deficiency is found to constitute a wrongful act, within the meaning of the applicable charged section of the State’s Contracting laws.

4. Under all of the facts and circumstances presented herein, it is determined and held that the payment of the above-described invoice by Complainants, for the purpose of correcting the deficiency in their heating system, should serve as a reasonable condition to allow Respondent to avoid the imposition of otherwise appropriate disciplinary sanctions.

5. 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 only one other Complaint on Respondent’s record and that Complaint was settled, withdrawn or otherwise resolved by Respondent. Therefore, Respondent’s prior record is properly deemed to be good 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. Respondent violated the provisions of A.R.S. § 32-1154A (7), and (3); namely Rule R 4-9-108.

2. The Registrar of Contractors’ authority in matters such as presented herein, includes the ability to impose restitution, in whole or in part, as a reasonable condition to reduce any possible disciplinary action against contractors. The exercise of such authority is deemed appropriate in the instant case. Therefore, based upon all the evidence, a reasonable condition in this case would consist of the payment by Respondent to Complainants of $2,316.91, as restitution. Imposing such a condition is more preferable than merely imposing a disciplinary action against Respondent’s license without providing a condition to reduce or eliminate same. However, nothing in this order would prevent either party from seeking a lesser or greater monetary award from a civil court of competent jurisdiction.

3. The Registrar may order a “restitutionary remedy...as part of the Registrar’s regulatory authority to take appropriate disciplinary action against those who violate the licensing”...laws set forth in A.R.S. § 32- 1154A (1) through (24), inclusive. An administrative award of damages is not an unconstitutional exercise of administrative authority where due process procedural rights are protected, where the authority to prohibit conduct has been well defined, as in A.R.S. § 32-1154, and where judicial review is available as provided in A.R.S. § 12-901, et seq. Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 803 P.2d 430 (App. 1990).

4. In addition to the Sunpower case, A.R.S. § 32-1156.01 provides, in pertinent part, that “after a hearing…an administrative law judge may recommend that a licensee provide restitution to any person who is injured….by an action of the licensee.

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 KB-02 license of Respondent shall be suspended until the Registrar of Contractors receives written proof that Respondent has paid or tendered to Complainants the sum of $2,316.91. It is further recommended that if Respondent pays or tenders the above-described sum of money to Complainants on or before the effective date of the Order entered in this matter, then the aforementioned license suspension shall not take place and in that event this Citation, together with the Complaint upon which it is based, shall be closed. 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, February 14, 2008.

______________________________________ Mark A. Silver Administrative Law Judge

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

Registrar of Contractors Fidelis V. Garcia 3838 N. Central Ave., Ste. 400 Phoenix, AZ 85012-1906

By ___________________________

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