ALJDEC decisions subject to certification as final

07F-L0242-ROC · Registrar of Contractors · 2007-11-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 21, 2007 APPEARANCES: The Complainants Ralph and Heidi, appeared in their own behalf. No one appeared for the Respondent. ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ This matter came on for videoconference hearing as scheduled in the August 9, 2007, Order Continuing Hearing issued by ALJ Michael Carroll. The Complainants[1] appeared for the hearing. The Respondent failed to appear. The Complainant presented testimony and documentary evidence which was not disputed. Based on the evidence of record, the following findings are submitted. Findings of Fact 1. On March 6, 2006, the four Complaint entered a contract (Exhibit C 9) with the Respondent whereby the Respondent would build a single family residence in Lake Havasu City, Arizona. The cost which did not include land, was not to exceed $251,653.00. 2. At the time of the contract, the Complainant Ralph Bowser (Bpwser), was the Respondent’s CEO. 3. The plans for the home were approved by the local authority on or about April 20, 2006 and work began on construction. 4. In approximately late May or early June, 2006, Bowser left the employ of the Respondent. 5. Work progressed until November 18, 2006, when the Complainant received a notice from the Respondent that it was ceasing operations. The Complainant had paid $100,000.00 in draws from the bank for work done to that time by the Respondent. 6. According to the Complainant, most of the foundation had been completed, external walls were constructed, the Respondent had begun to “roll trusses” and underground plumbing was done. 7. Based on the ROC website, the Respondent’s license was cancelled November 14, 2006, followed by four revocations in separate cases. 14 cases are listed as still open. 8. According to the Complainant, the bank which was paying draws to the Respondent, claimed only 23% of the work had been completed by September 21, 2006.[2] The Complainant does not know how much of a financial injury he suffered as a consequence of the Respondent’s failure to complete the project. The Complainant testified he paid over $12,000.00 in extra interest on the construction loan because the home was not timely completed. The interest on the loan was 9.75%. That amount however, should be decreased by the interest the Complainant would have paid on any financing (mortgage or otherwise) if the home was completed on schedule. The Complainant also testified he had to pay an additional $3,400.00 for lumber for framing after the Respondent had taken the full lumber draw. Another additional expense was a special roof truss. Despite the additional expenses, the Complainant did not establish if or how much over the maximum contract price of $251,653.00, he paid for the construction of the home or how he was otherwise substantially injured. 9. The Complainant testified the garage was built two feet less wide than it should have been because it was improperly located. This makes it more difficult for the Complainant to drive into and out of the garage. Conclusions of Law The Citation and Complaint alleges violations of A.R.S. §32- 1154(A)(1), Abandonment; (A)(2), Disregard of plans and specifications to the prejudice of another; (A)(7), a wrongful act with substantial injury; and (A)(9), failure to complete for the price stated. 1. (A)(2) has been proven by substantial evidence based on the garage dimensions and difficulty in entering and exiting. 2. The allegations regarding (A)(1) and (A)(9) are somewhat duplicative. By logical inference, abandonment generally includes a failure to complete for the price stated. (A)(1) is proven by substantial evidence. 3. Although the Respondents acts are considered wrongful, absent some more conclusive overall evidence of the Complainant’s financial injury[3], no substantial injury required for a violation of (A)(7) is found. Recommended Order It is recommended commencing the effective date of the Order[4] issued in this matter, that the Respondent’s Class B license no. 197770, shall be revoked. Done this day, November 21, 2007

______________________________________ Allen Reed Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2007, to:

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

By ___________________________

----------------------- [1] Although there are four Complainants, Ralph and Heidi Bowser, and James and Patricia Bailey, the Complainants will be referred to in the singular unless otherwise necessary. [2] Generally a bank is not to pay draws until an inspection on behalf of the lender confirms the work for which payment was being made, was in fact satisfactorily completed. [3] What was the Complainant’s total loss or other substantial injury as a consequence of the Respondent’s violations? [4] Forty (40) days from the date of the Order or date of certification if certified by the Director of the Office of Administrative Hearings.

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