ALJDEC decisions subject to certification as final

07F-L0124-ROC · Registrar of Contractors · 2007-03-27

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 27, 2007 APPEARANCES: Complainant : Dennis Walker appeared pro se. With Mr. Walker was his wife, Joan Walker. Respondent : Bruce Davis, Qualifying Party, represented Arizona Extreme Pool Builders, L.L.C. ADMINISTRATIVE LAW JUDGE: Gary B. Strickland _____________________________________________________________________ A Hearing was convened to determine whether Respondent Extreme Pool Builders, L.L.C. (hereinafter also, “Respondent” or “Extreme Pool Builders” or “the Contractor”) violated state law as has been alleged by Complainant Walker and as has been cited by the Arizona Registrar of Contractors (also, the “ROC”). Evidence and testimony were presented. Respondent formerly held a B-05 (Residential General Swimming Pool Contractor) license issued by the Registrar of Contractors. Complainant alleges that Respondent accepted money from Complainant for the construction and installation of a pool but abandoned the contract by not maintaining active ROC licensure so that it could legally complete the construction. Based upon an examination of the entire record,[1] the following Findings of Fact are made, Conclusions of Law rendered, and DECISION AND RECOMMENDED ORDER issued: FINDINGS OF FACT 1. Respondent’s license (No. 196668) was initially issued on June 7, 2004, renewed on June 30, 2006 with viability through June 30, 2008. The license was revoked effective September 6, 2006 in Complaint Nos. L06-0427 and L06-0414.[2] 2. Bruce Andrew Davis is the Qualifying Party identified on the Extreme Pool Builders, L.L.C. license. 3. The project at issue involved the construction and installation of a residential pool at the Walker home situated at 3160 Thistle Drive in Lake Havasu City, Arizona. The contract was entered into in Arizona; the Contractor is licensed by the State of Arizona; and the property on which the construction was undertaken is situated in Arizona. As such, the acts and omissions alleged fall within the requirements of Title 32, Article 3. 4. Complainant Walker entered into an agreement with Extreme Pool Builders, L.L.C. on or about February 16, 2006 whereby the Contractor agreed to perform the construction and installation for a $39,390.00 contract price.[3] Respondent stipulates that this was the agreement with the upgrades noted on Exhibit C-1. 5. Respondent stipulates that Complainant has paid $28,000.00 of the contract price. 6. Respondent stipulates that it was not able to complete the contract due to Respondent’s September 6, 2006 license revocation. . . . 7. The revocation of Lic. No 196668 constituted a breach of contract; licensure being a condition precedent to fulfillment of agreed- upon obligation. The breach constituted an abandonment of the contract. 8. Disconcerted over the contract abandonment and breach and seeking to follow the appropriate steps to recovery from the ROC's RECOVERY FUND, Mr. Walker filed a Complaint to the ROC on September 20, 2006 alleging abandonment.[4] 9. Thereafter, upon motion of Mr. Walker, the ROC issued a CITATION AND COMPLAINT against the Extreme Pool Builders license on December 4, 2006, alleging therein violations of A.R.S. § 32-1154(A)(1), (7), and (13). It is those allegations that are herein considered in light of the evidence offered. 10. Respondent Extreme Pool Builders filed an ANSWER to the CITATION AND COMPLAINT on December 20, 2006 wherein was implied that Respondent would make restitution to Complainant once Respondent was given indicia of expenditures resultant from the abandonment.[5] 11. At the Hearing, Complainant Walker was not prepared to offer specified evidence of expenditure and receipt vis-à-vis necessity to have third-party Contractors complete the contract. 12. The weight and sufficiency of the evidence establishes that Extreme Pool Builders abandoned its contract with Dennis Walker, without legal excuse, to construct and install a residential pool. The evidence further makes it probable (and uncontested) that Complainant had to pay costs beyond those costs demanded by the contract to have the contract completed. 13. Complainant is entitled to an unspecified (at this juncture) restitutionary award (A.R.S. § 32-1156.01).[6] 14. Respondent Extreme Pool Builders’ abandonment of the contract was and is wrongful under A.R.S. § 32-1154(A)(7). 15. No evidence of fraud was entered.[7] 16. Respondent’s failure to complete the contract caused Complainant substantial injury in that Complainant was required to pay monies beyond the contract price to have the pool completed.[8]

APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors charged Respondent with possible violations of A.R.S. § 32-1154(A)(1), (7), and (13). Those statutory sections require that a holder of a license or a person listed on a license 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.

. . .

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

. . .

13. Failure in any material respect to comply with this chapter. . . .

CONCLUSIONS OF LAW 1. The Registrar of Contractors has jurisdiction over Complaint No. L07-0124 under A.R.S. § 32-1101, et seq., a section that authorizes the Registrar to impose disciplinary sanctions against licensees for violations identified at A.R.S. § 32-1154(A). Extreme Pool Builders, L.L.C. was licensed at the time that the subject agreement for construction and installation work was undertaken. 2. The burden of persuasion generally at an administrative hearing falls to the party asserting a claim, right or entitlement, or an Agency seeking to impose a penalty.[9] Further, the standard of proof is that of the “preponderance of the evidence”.[10] 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.”[11] The evidence taken as a whole must convince the decision maker that the party who bears the overall burden of persuasion, in this case Complainant Walker, is more probably correct on the issue(s) in dispute. 3. Observing these standards, Mr. Walker has satisfied his burden, by a preponderance of the evidence, that Respondent Extreme Pool Builders has violated (1), (7), and (13) of A.R.S. § 32-1154(A) as charged in the CITATION AND COMPLAINT. The Contractor abandoned its contractual obligations by not maintaining active licensure. The failure to maintain active licensure throughout the duration of the contract was wrongful; the injury caused Complainant thereby was substantial. 4. An examination of Extreme Pool Builders, L.L.C.’s Complaint history reveals that nine (9) other Complaints have been filed against its license, resulting in two (2) impositions of discipline. Seven (6) other Complaints remain “Open” and one (1) is listed “Resolved/Settled/Withdrawn.” The license was initially granted in June 2004, a not very lengthy tenure. Therefore, license history presents significant bases for aggravation in an assessment of a proper penalty for the violations herein found.[12]

RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors revoke Lic. No. 196668. In the event of the certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will fall forty days from the date of that certification.

Done this 27th day of March 2007.

______________________________________ Gary B. Strickland Administrative Law Judge

Original transmitted by mail this 27th day of March 2007 to:

Registrar of Contractors Fidelis V. Garcia, Director Legal Department 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________ ----------------------- [1] The record consists of those documents found within the Agency’s case file, the contents of which the Administrative Law Judge has accorded Administrative notice, the exhibits offered by the Complainant (C-1 through C-20), and the digital record of the proceedings under A.A.C. R2-19-121.

[2] See http://www.azroc.gov/clsc/AZROCLicenseQuery

[3] See Exhibit C-1.

[4] See COMPLAINT within the Agency Hearing file.

[5] See ANSWER within the Agency Hearing file.

[6] See Murdock-Bryant Constr. v. Pearson, 146 Ariz. 48, 52; 703 P.2d 1197, 1201 (1985) “Restitution began as an ancient remedy to enforce contractual rights which could not be enforced in common law courts due to lack of formality of the contract. D. Dobbs, Remedies § 4.2 at 233 (1973). Various forms of action evolved to permit recovery of goods or money on contracts implied in fact -- that is, those which the law implied from the conduct of the party rather than from any explicit words. Id. at 234.”)

[7] See Echols v. Beauty Built Homes, 132 Ariz. 498, 500; 647 P.2d 629, 631 (Ariz. 1982) (“A showing of fraud requires (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) the speaker's intent that it be acted upon by the recipient in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) the hearer's reliance on its truth; (8) the right to rely on it; (9) his consequent and proximate injury. (citation omitted). Each element must be supported by sufficient evidence. ‘Fraud may never be established by doubtful, vague, speculative, or inconclusive evidence.’ In re McDonnell's Estate, 65 Ariz. 248, 253, 179 P.2d 238, 241 (1947)”).

[8] Meaning, a material injury, one that is not illusory. See ”substantial”: WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 2280 (2002). [9] See Ariz. Admin. Code R2-19-119(B).

[10] Culpepper v. Arizona Board of Nursing, 187 Ariz. 431, 930 P.2d 508 (App. 1997); See also Ariz. Admin. Code R2-19-119(A).

[11] In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). See also J. LIVERMORE, R. BARTELS, & A. HAMEROFF, LAW OF EVIDENCE ( 301.1(4th ed. 2000) (One party bears the overall burden of persuasion on each fact material to the party’s claims and defenses. Further, the party with the burden of persuasion on a particular fact is required to satisfy the burden of production of enough qualitative evidence sufficient to support a finding of the existence of the fact, following a reasonable person standard.)

[12] See A.A.C. R4-9-117. Prior Record

In any disciplinary proceeding conducted by the Registrar, the licensee's entire license file including the record of prior citations and decisions may be considered by the Registrar in making a decision and order in the case.

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