ALJDEC decisions subject to certification as final

07F-M1021-ROC · Registrar of Contractors · 2007-06-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 7, 2007. APPEARANCES: Perfection Mechanical, LLC, doing business as Royal Wall Systems Stucco, was represented by its attorney, C. David Martinez, Esq. Dynamite Custom Homes, LLC was represented by its authorized employee, Joey Plany. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order:

FINDINGS OF FACT

1. Dynamite Custom Homes, LLC (“Respondent”) is the holder of License No. 182238, a Class B- license issued by the Registrar of Contractors (“Registrar”). 2. Perfection Mechanical, LLC, doing business as Royal Wall Systems Stucco (“Complainant”), is the holder of License No. 179767 issued by the Registrar. 3. On or about December 16, 2004, Complainant submitted a written stucco proposal to Respondent for The Summit Lot 18 at Las Sendas (“Lot 18”). Complainant’s scope of work was to install a “1 Coat System with 1” Rigid Interlocking 1.5# Grooved Foam with 1” .20 Gauge Wire Netting” and “J-Weep scored @ Base Malcor Trim and/or Celolaz where necessary.” Complainant’s bid price of $29,096.00 was for a sand finish. The proposal provided an option for a synthetic finish for an additional price of $9,750.00. Payment was to be made as follows: 50% due at lath and 50% due at completion. 4. On or about November 1, 2005, Complainant submitted a second stucco proposal for Lot 18. Because Respondent had not accepted the earlier proposal, pricing for materials had increased. The second proposal was intended to supersede the first proposal. The second proposal contained the same scope of work, but the bid price increased to $31,800.00. Respondent accepted the second stucco bid. Complainant completed its scope of work on March 1, 2006. 5. On December 16, 2004, Complainant submitted a drywall proposal for Lot to Respondent, who later accepted it. The scope of work for the drywall proposal was as follows

• ¾” Bullnose Santa Fe Finish • Add $795.00 for 1” ½ Bullnose • Add $585.00 for Kurf Door Package

6. The drywall bid price of $28,000.00 was to be paid by Respondent as follows: 50% at hang of drywall and 50% at completion. 7. Due to Respondent’s delay in accepting Complainant’s drywall proposal for Lot 18, Complainant submitted a second drywall proposal to Respondent due to increased material costs since the first submission. Respondent accepted the second drywall proposal. The bid price increased to $33,600.00, which was to be paid as follows: 1/3 at stock of drywall, 1/3 at hang of drywall and 1/3 at completion. Complainant completed its drywall work for Lot 18 on September 30, 2006. 8. Complainant sent Respondent Invoice No. 1696 dated February 18, 2006 for the 50% due upon completion of the stucco for Lot 18, which amount is $16,125.00. 9. Complainant sent Respondent Invoice No. 1695 dated February 18, 2006 for the 50% due at drywall hang, which amounts to $18,990.00. 10. On or about December 29, 2004, Complainant submitted a written stucco proposal to Respondent for Lot 12 of Windfield (“Lot 12”), which was later accepted by Respondent. Complainant’s scope of work was to install a “1 Coat System with 1” Rigid Interlocking 1.5# Grooved Foam with 1” .20 Gauge Wire Netting” and “J-Weep scored @ Base Malcor Trim and/or Celolaz where necessary.” Complainant’s bid price of $18,800.00 was for a sand finish. The proposal provided an option for a synthetic finish for an additional price of $6,993.00. Payment was to be made as follows: 50% due at lath and 50% due at completion. 11. Complainant completed its scope of work for the December 29, 2004 proposal on June 10, 2005. 12. On or about December 29, 2004, Complainant submitted a drywall proposal to Respondent for Lot 12, which was later accepted by Respondent. The scope of work for the drywall proposal was as follows

• ¾” Bullnose Santa Fe Finish • Add $895.00 for 1” ½ Bullnose • Add $685.00 for Kurf Door Package

13. The contract price of $22,766.00 for the Lot 12 drywall proposal was to be paid as follows: 50% at hang of drywall and 50% at completion. 14. Complainant completed its scope of work for the Lot 12 drywall proposal on June 7, 2005. 15. Complainant submitted Invoice No. 1481 dated June 2, 2005 to Respondent upon completion of the Lot 12 drywall work. The invoice reflected a contract price of $24,346.00, an amount paid of $7,000.00, and an outstanding balance due of $17,346.00. 16. Complainant submitted Invoice No. 1495 dated June 6, 2005 to Respondent upon completion of the Lot 12 stucco work. The invoice reflects an outstanding balance due of $18,800.00. 17. Complainant submitted Invoice No. 1597 dated October 16, 2005 to Respondent for additional drywall repairs for Lot 12 requested by Respondent. The invoice reflects an outstanding balance due of $3,885.00 for that work. 18. Complainant submitted Invoice No. 1755 dated May 7, 2006 to Respondent upon completion of stucco on a fence and upon completion of lath and stucco changes and repairs at the front entry of the Lot 12 residence. The invoice reflects a total outstanding balance due of $4,660.00. 19. On or about October 23, 2006, Complainant filed a written complaint with the Registrar alleging statutory violations by Respondent. Complainant’s complaint states that Respondent owes it the total sum of $79,806.00 for work it performed on Lot 12 and Lot 18. 20. Complainant did some work for Respondent’s successor, Landmark Builders, on Lot 18. Complainant was compensated for that work. 21. In response to the Complaint, the Registrar issued a Citation and Complaint in Case No. M07-1021 alleging that Respondent violated the provisions of A.R.S. § 32-1154(A)(7) and (11). 22. As a result of the Citation and Complaint, Respondent filed an Answer to it through its member, Paxton Anderson. Respondent’s Answer included the following statements:

The claim Royal Wall Systems filed is baseless, as this company was unable to perform, they refused to correct their mistakes, leaving us no other choice but to replace them. We’ve had several back charges on Lot 12 Winfield that we have as a counter claim as well as Lot 14 Firerock that there has been ongoing problems on. On Lot 18, Royal Wall Systems went against our wishes and directly did contracted (sic) work for the owner. We can not (sic) be held liable for Lot 18’s owner and Royal Wall System’s (sic) contract.

23. The Registrar forwarded the case to the Office of Administrative Hearings, an independent agency, for formal hearing. 24. At the hearing, Respondent was represented by its authorized employee, Joey Plany. During the hearing Mr. Plany stated that Respondent did not dispute that it owed Complainant the claimed amount. That position is contrary to the position expressed in Respondent’s Answer. Mr. Plany testified that Respondent does not have the financial resources to pay the outstanding amount owed to Complainant. He also testified that Respondent is not contracting at this time. 25. Complainant presented credible evidence that Respondent should have been paid for Complainant’s work on both projects. 26. Respondent’s failure to pay Complainant the outstanding amount due for its work on the two projects constitutes wrongful acts that substantially injured Complainant. 27. A review of the official records of the Registrar reveals that Respondent’s License No. 182238 was revoked on April 20, 2007 in Case No. A07-0055. Those records also reflect that there are eight open complaints, one disciplined complaint, and seven resolved/settled/withdrawn complaints against its Class B- license.

CONCLUSIONS OF LAW

1. The Registrar has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.A.C. R2-19-119(B), Complainant has the burden of proof in this matter. The standard of proof is preponderance of the evidence. A.A.C. R2-19-119(A). 3. Respondent violated the provisions of A.R.S. § 32-1154(A)(7), as cited in the Citation and Complaint issued by the Registrar. 4. Respondent violated the provisions of A.R.S. § 32-1154(A)(11), as cited in the Citation and Complaint issued by the Registrar. 5. Pursuant to A.R.S. § 32-1154(C), the prior revocation of Respondent’s Class B- license does not deprive the Registrar of authority to impose discipline against Respondent’s Class B- license for the above violations.

RECOMMENDED ORDER

Respondent’s License No. 182238 shall be revoked on the effective date of the Order entered in Case No. M07-1021. 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 will be 40 days from the date of that certification.

Done this day, June 25, 2007

______________________________________ Brian Brendan Tully 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 ___________________________ -----------------------

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