ALJDEC decisions subject to certification as final

07F-L0243-ROC · Registrar of Contractors · 2007-08-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 16, 2007 APPEARANCES: Ralph and Heidi Bowser, Complainants; Dana R. Stoker, an attorney, on behalf of Respondent ADMINISTRATIVE LAW JUDGE: Michael K. Carroll _____________________________________________________________________

On November 17, 2006, three Complaints were filed with the Registrar of Contractors (ROC) alleging that Respondent had failed to properly perform some dirt work on three different lots owned by Complainant. On April 4, April 13, and April 17, 2007, three Citations were filed by the ROC alleging that, with respect to each Complaint filed by Complainant, Respondent had violated A.R.S. §32-1154A (1), (2), (7) and (9). All of the Complaints and Citations were consolidated for hearing, and are addressed in this consolidated Decision.

FINDINGS OF FACT AND CONCLUSIONS OF LAW Findings of Fact: (1) In late April, 2006, Complainant entered into a verbal contract with the vice president of operations for Respondent, Jason Gillespie, to complete some “dirt work” on three lots owned by Complainant in Lake Havasu, Arizona. At the time of the contract, Complainant was working as Respondent’s Chief Executive Officer, a position that he left a few months after the contract was negotiated. (2) Under the terms of that verbal contract, Respondent, acting through a subcontractor, was to remove some dirt from Complainant’s lot at 2982 Talley Drive (Lot B) and transfer that dirt to Complainant’s lot at 3342 Oasis Drive (Lot A). Additionally, Respondent was to remove dirt from Complainant’s lot at 2990 Talley Drive (Lot C) and transfer that dirt to Lot A. The dirt transferred to Lot A from Lots B and C was to be compacted and compaction tested by the subcontractor in preparation for the construction of a residence on Lot A. The total price of the contract was $12,000. (3) In late May, 2006, the subcontractor excavated Lot B and stored the excavated dirt on Lot B. The dirt excavated from Lot B sat on the lot for approximately one month, at which time the subcontractor filtered the dirt, sold it to a party who is not a subject of this proceeding, and, contrary to the agreement of the parties, moved it to a location other than Lot A. (4) In June, 2006, the subcontractor brought some other dirt to Lot A, where it was compacted and tested by the subcontractor in accordance with the contract between Complainant and Respondent. (5) Complainant was satisfied with the work that had been done as to both Lots A and B, but the excavation work that was to occur on Lot C was never started. (6) Several months after the work on Complainant’s lots was begun, Respondent went out of business. By that time, both Jason Gillespie and Respondent had left their employment with Respondent. (7) Between May 12, 2006 and September 6, 2006, Complainant paid Respondent a total of $9,460 for the work done pursuant to the contract. See Exhibits C7, C7A, C8, C8A, C9, C10 and C10A. (8) In December, 2006, Respondent received an Arizona Preliminary Twenty Day Lien Notice from the excavation subcontractor which indicated that the subcontractor was owed a total of $15,075.00 for the excavation work done with respect to Lot A. Exhibit C11. The lien referenced in the Notice was never placed against Complainant’s property, nor was any attempt made by either the subcontractor or Respondent to collect additional money from Complainant for the work that had been done. (9) After receipt of the preliminary lien notice, Complainant filed a complaint with the ROC alleging that Respondent had not completed the dirt work pursuant to the contract, and that Respondent had not paid the subcontractor for the work performed. (10) At the time of the hearing, Complainant had not been contacted by either the subcontractor or Respondent concerning additional payment. Complainant admitted that the amount he had already paid to Respondent was a fair amount for the work that had actually been performed under the contract. Conclusions of Law: (1) Alleged violation of A.R.S. §32-1154A (1): Respondent did not dispute either the terms of the contract or the fact that the contract had not been completed. There was sufficient evidence to establish a violation of A.R.S. §32-1154A (1). (2) Alleged violation of A.R.S. §32-1154A (2): Respondent did not dispute Complainant’s testimony that the dirt work had not been completed as agreed between the parties. The dirt removed from Lot B was not moved to Lot A as agreed and none of the work was done on Lot C. There was sufficient evidence to establish a violation of A.R.S. §32-1154A (2). (3) Alleged violation of A.R.S. §32-1154A (7): Violations of this statutory provision are classified as criminal offenses under A.R.S. §32-1164A (1). As such, they appear to be outside the purview of this administrative proceeding. However, assuming that alleged violations of this statutory provision are cognizable in an administrative proceeding and subject to a lesser evidentiary standard than that applicable in a criminal proceeding, there was no evidence to establish such a violation in this case. (4) Alleged violation of A.R.S. §32-1154A (9): Respondent did not dispute that it had failed to complete the project for the price stated in the contract. There was a violation of A.R.S. §32- 1154A (9). (5) Although there were three separate lots and three separate Complaints, each alleging four separate violations, there was, in reality, only one contract governing a single project involving three different locations. Consequently, Respondent is in violation of one count of A.R.S. §32-1154A (1), one count of A.R.S. §32-1154A (2), and one count of A.R.S. §32-1154A (9). RECOMMENDED ORDER Respondent is no longer in business. Furthermore, Respondent, through its subcontractor, satisfactorily completed much of the work under the contract for which it was fairly compensated by Complainant. Respondent has not sought additional payment from Complainant, and, unless either Respondent or its subcontractor seeks additional payment, Complainant has not been substantially harmed by the actions of Respondent. Based upon the foregoing, it is recommended that, beginning on the effective date of the Order in this case,[1] Respondent’s Class B license be suspended. There has been no loss suffered by Complainant which would preclude Respondent from renewing its license pursuant to A.R.S. §32-1161A. Done this day, August 20, 2007.

______________________________________ Michael K. Carroll 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]Pursuant to A.R.S. §41-1092.08D, failure by the Registrar of Contractors to accept, reject or modify this Decision within 30 days of receipt by the agency will result in this Decision being certified by the Office of Administrative Hearings as the final administrative decision. In the event of certification of this Decision by the Office of Administrative Hearings, the effective date of the Order in this matter will be 40 days from the date of that certification

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