ALJDEC decisions subject to certification as final

07F-L0227-ROC · Registrar of Contractors · 2007-08-03

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 2, 2007 APPEARANCES: Complainant : William Borman appeared pro se. In addition to Mr. Borman, Cliff Corlett, Registrar of Contractors Inspector, testified. Respondent : No representative appeared for Mountain Shores Landscaping, L.L.C. ADMINISTRATIVE LAW JUDGE: Gary B. Strickland _____________________________________________________________________

A Hearing[1] was convened to determine whether Respondent Mountain Shores Landscaping, L.L.C. (hereinafter also, “Mountain Shores Landscaping” or, “the Contractor”) violated state law as has been alleged by Complainant William Borman and as cited by the Arizona Registrar of Contractors (hereinafter also, “the ROC”). Evidence and testimony were presented. Respondent Mountain Shores Landscaping, L.L.C. holds a Class K-21 (Dual Landscaping and Irrigation Systems) license issued by the Registrar of Contractors. Complainant alleges that Respondent has abandoned its contractual responsibilities and has performed in a less-than-workmanlike manner. Based upon an examination of the entire record,[2] the following Findings of Fact are made, Conclusions of Law rendered, and DECISION AND RECOMMENDED ORDER issued: FINDINGS OF FACT 1. Respondent Mountain Shores Landscaping’s license (No. 217279) was initially issued on March 8, 2006 with viability through March 31, 2008.[3] 2. Charles Payton Dallas is the Qualifying Party identified on the Mountain Shores Landscaping license. 3. Complainant William Borman is homeowner residing on the subject property. 4. The project at issue involved landscaping construction at a location generally known as 31798 Rio Vista Road, Parker, Arizona. The work was performed on Arizona soil, the verbal contract under which the construction was performed was created in Arizona, and the Contractor is licensed by the ROC. As such, the acts and omissions alleged in the Borman Complaint fall within the requirements of Title 32, Chapter 10, Article 3. 5. Complainant Borman entered into a verbal contract with Mountain Shores Landscaping for the landscaping construction. Work proceeded according to the terms of understanding until a dispute arose. 6. The parties have litigated their monetary dispute over the contract before the Justice of the Peace, La Paz County, on November 29, 2006. The Court issued a Small Claims Judgment on December 5, 2006, awarding Mountain Shores Landscaping $909. on its claim, and awarding William Borman $245. on his counterclaim.[4] On December 6, 2006, the Court issued a Satisfaction of [the] Judgment.”[5] At the administrative Hearing, Mr. Borman testified that his counterclaim award of $245. was issued on his claim for damages resultant from dead plants installed by Mountain Shores Landscaping. 7. Having become disconcerted over the quality of Mountain Shores Landscaping’s performance on specific aspects of the landscaping, William Borman also filed a Complaint before the Registrar of Contractors on or about November 6, 2006.[6] 8. An inspection of the site was conducted by ROC Inspector Cliff Corlett on November 21, 2006 with both parties present. 9. Based upon his observations made at the November 21, 2006 inspection and upon his discussions had with the parties, Inspector Corlett issued a “Corrective Work Order” on November 21, 2006 directing Mountain Shores Landscaping to “properly complete all remaining landscape, irrigation, lighting issues and replace dead plants.”[7] 10. Thereafter, because, allegedly, no resolution had been accomplished, William Borman requested that a CITATION AND COMPLAINT be issued and that a Hearing be convened. 11. An ROC CITATION AND COMPLAINT was issued on March 28, 2007 citing Mountain Shores Landscaping for possible violation of A.R.S. § 32- 1154(A)(1), (2), (3), (7), and (23).[8] 12. Mountain Shores Landscaping filed an A.R.S. § 32-1155 ANSWER to the CITATION AND COMPLAINT on April 2, 2007 asserting that it had done everything possible to satisfy Mr. Borman and implying that it had been denied access to the property to perform further.[9] 13. Upon request of Mr. Borman, the ROC issued a NOTICE OF HEARING on June 14, 2006 and the Hearing convened pursuant thereto. 14. At the Hearing, ROC Inspector Cliff Corlett testified. He related that he had not conducted a Prehearing Inspection of the property because attempts to schedule a time for the inspection had been frustrated by an inability to make telephonic contact with Mr. Borman. At the Hearing, Mr. Borman related that he had converted from his land phone to cellular use without informing the ROC of the change in telephone number. Nevertheless, the issue is obviated by Mr. Borman’s testimony that the three items comprehended by the “Corrective Work Order” had been completed: (1) the issue of dead plants – obviated by the counterclaim award of $245; and (2) and (3) the sprinkler-head and light installation issues obviated by Mr. Borman’s hiring of another individual who performed the tasks in late December 2006 or early January 2007 at a cost of $200. Therefore, all work contemplated by the “Corrective Work Order” has been accomplished. 15. Although provided notice of the Hearing by the ROC having certified on June 14, 2007 issuance of the NOTICE OF HEARING to Mountain Shores Landscaping’s address of record, no representative appeared to defend. 16. A “substantial injury” under A.R.S. § 32-1154(A)(7) is reasonably construed as one that is real and identifiable.[10] On this record, Mr. Borman’s having to pay $200. to have the corrective work (the sprinkler-head and light installation) completed constituted a substantial injury. 17. Mountain Shores Landscaping’s failure to make the corrections on the sprinkler-head and light installation when directed so to do was wrongful. Mountain Shores Landscaping did not appear and present evidence of legal excuse for the failure. Further, the failure to make the corrections is evidence of an abandonment of contractual duties. The value of the failure was $200., as so confirmed by Mr. Borman’s that he paid that much to have the unfinished work performed. Therefore, it is fitting that Mountain Shores Landscaping be required to pay $200. in restitution[11] to Mr. Borman. 18. No evidence of specific workmanship deficiency was entered. 19. No evidence of unauthorized deviation from codes and/or specifications was entered. 20. There has not been any evidence intimating fraudulent conduct.[12] . . . APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors charged Respondent Mountain Shores Landscaping, L.L.C. with possible violations of A.R.S. § 32-1154(A)(3) (and A.A.C. R4-9-108, the “workmanship rule”), (1), (2), (7), and (23). 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.

2. Departure from or disregard of plans or specifications or any building codes 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 the owner's 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 and code.

3. Violation of any rule adopted by the Registrar.

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

23. Failure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held.

. . . A.A.C. R4-9-108 is the rule violation charged under A.R.S. § 32- 1154(A)(3). The rule requires that all construction work be done in a professional and workmanlike manner and in accordance with applicable building codes and professional industry standards. CONCLUSIONS OF LAW 1. The Registrar of Contractors has jurisdiction over Complaint No. L07-0227 under the authority of A.R.S. § 32-1101, et seq., a section that enables the Registrar to impose disciplinary sanctions against licensees for the violations noted at A.R.S. § 32-1154(A). Mountain Shores Landscaping, L.L.C. is a licensee. 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.[13] Further, the standard of proof is that of the “preponderance of the evidence.”[14] 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.”[15] The evidence taken as a whole must convince the decision maker that the party who bears the overall burden of persuasion, in this case William Borman, is more probably correct on the issue(s) in dispute. 3. Observing these standards, Complainant Borman has persuaded, by a preponderance of the evidence, that Respondent Mountain Shores Landscaping has violated several of the cited statutory and regulatory provisions by failing to correct and complete the project. The failure was wrongful, without legal excuse, and has caused Mr. Borman substantial injury. 4. By a preponderance of all of the evidence, Complainant has persuaded that, in the landscaping project under consideration, Mountain Shores Landscaping violated A.R.S. § 32-1154(A)(1), (7), and (23), but not (2) and (3), as charged in the CITATION AND COMPLAINT. 5. An examination of Mountain Shores Landscaping’s license record[16] reveals that this is the only complaint that has been filed against this license during the brief period of licensure.[17] The disciplinary history of the license presents no basis for an assessment founded in aggravation. However, Mountain Shores Landscaping’s failure to appear at the Hearing to defend against the allegations causes concern. A Contractor has an obligation to defend against a disciplinary Complaint regardless disposition of any civil action. 6. A restitutionary award is in order.[18]

RECOMMENDED ORDER In view of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors suspend Lic. No. 217279 unless and until Mountain Shores Landscaping and William Borman provide written proof to the ROC that Mountain Shores Landscaping has paid $200. to William Borman. Should the parties provide such proof before the effective date of the Registrar’s Order, Complaint No, L07-0227 shall be closed. . . . . . . In the event of the certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order shall fall forty days from the date of that certification.

Done this 2nd day of August 2007.

_____________________________________ Gary B. Strickland Administrative Law Judge

Original transmitted by mail this 6th day of August 2007 to:

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

By ___________________________ ----------------------- [1] The Hearing was conducted via videoconferencing technology with the parties situated at the offices of the ROC in Lake Havasu City and the Administrative Law Judge located at the Office of Administrative Hearings in Phoenix. [2] 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 parties, respectively, and the digital record of the proceedings under A.A.C. R2-19-121. Complainant offered several exhibits, marked C-1 through C-19D. The exhibits were received.

[3] http://www.azroc.gov/clsc/AZROCLicenseQuery

[4] See “La Paz County Small Claims Division Judgment” within the Agency Hearing file.

[5] See Exhibit C-3H.

[6] See “COMPLAINT” within the Agency Hearing file.

[7] “Corrective Work Order” within the Agency Hearing file.

[8] Within the Agency Hearing file.

[9] ANSWER within the Agency Hearing file.

[10] Meaning, a material injury, one that is not illusory. See ”substantial”: WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 2280 (2002).

[11] § 32-1156.01. Restitution

After a hearing pursuant to this article, an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee.

See Bentivegna v. Powers Steel & Wire Prods., Inc., 206 Ariz. 581, 585; 81 P.3d 1040, 1044 App. 2004) (“[T]he sole issue in a proceeding before the ROC is whether a license should be suspended or revoked, and, if so, what conditions must be fulfilled before it is reinstated. See A.R.S. §§ 32- 1154, 1155. Although the ROC may order restitution as a condition of license reinstatement, it cannot issue an enforceable order or judgment for money damages against a contractor. See Sunpower of Ariz. v. Ariz. State Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990) (ROC may order payment of restitution as condition of license reinstatement); J.W. Hancock Enters. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (App. 1984) (finding that ‘the Registrar's power is limited to suspending or revoking a contractor's license, or attaching conditions to the license. Money damages may not be awarded.’). If a contractor subject to an ROC restitution order were to choose not to have his license reinstated, the restitution order would be ineffective. To fully protect a plaintiff's rights, he must be allowed to seek money damages in the courts in addition to any remedies available through the ROC complaint procedure.”)

“Restitution” is an ambiguous term. But, the concept generally refers to a compensation for injury done. See JOHN D. CALAMARI & JOSEPH M. PERILLO, THE LAW OF CONTRACTS § 9-23, at 376 (3d ed. 1987).

See also 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.”)

See further, Restatement of the Law, Restitution § 1 cmt a. (1937):

a. A person is enriched if he has received a benefit (see Comment b). A person is unjustly enriched if the retention of the benefit would be unjust (see Comment c). A person obtains restitution when he is restored to the position he formerly occupied either by the return of something which he formerly had or by the receipt of its equivalent in money. Ordinarily, the measure of restitution is the amount of enrichment received (see Comment d), but as stated in Comment e, if the loss suffered differs from the amount of benefit received, the measure of restitution may be more or less than the loss suffered or more or less than the enrichment. (Emphasis added.)

[12] 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)”).

[13] See Ariz. Admin. Code R2-19-119(B).

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

[15] 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.)

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

[17] 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.

[18] See FINDINGS OF FACT ¶17, above.

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