ALJDEC decisions subject to certification as final

07F-M1241-ROC · Registrar of Contractors · 2007-12-04

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 29, 2007.

APPEARANCES: >The Complainant appeared in his own behalf. >The Respondent failed to appear.

ADMINISTRATIVE LAW JUDGE: Robert I. Worth _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made.

FINDINGS OF FACT

1. The instant hearing was duly scheduled on advance written notice duly sent to both parties. Although the start of the scheduled hearing was delayed for over thirty minutes to afford added time in which to make an appearance, the Respondent failed to appear either through any proper, authorized member of the LLC entity or through any appropriate legal representative.

2. The Complainant’s uncontroverted testimony and evidence revealed that, pursuant to a written proposal and estimate, duly accepted by Complainant and thereby ripening into a contract, Respondent agreed to and did perform certain specified landscaping work on Complainant’s property.

3. The originally quoted cost price was subsequently changed on several occasions by the mutual agreement of the parties to reflect various additions and/or deletions to the originally contemplated work. The final adjusted contract price was shown to have been in the total amount of $10,138.00, all of which was fully paid by Complainant to or for the benefit of Respondent. (Included within the total payments due under the contract was a payment of $1,960.00 that was made by Complainant to a bricklayer who was to have been paid directly by Respondent).

4. Credible evidence tended to indicate that, during the performance of trenching work, Respondent had damaged portions of the water lines and also the electrical timer wiring that had formed part of Complainant’s previously existing irrigation system in the rear and at a side of the home. As a result, and because of Respondent’s failure to undertake and complete necessary repairs to the damaged components of the system, numerous plants and trees were not receiving sufficient water. Complainant was required to perform all needed watering by hand.

5. Respondent’s contractual scope of work included the designing and installing of a sprinkler and bubbler system in the front of the dwelling. From the outset, the coverage of the lawn and shrubbery areas to be watered was insufficient and unacceptable. The quantity and placement of the heads throughout the installed system was shown to have been suspiciously inappropriate for the intended purposes. The head placement as well as the spacing and quantity, was shown to have been at variance with express manufacturer’s recommendations and specifications.

6. Following a jobsite visit, the Registrar’s assigned Inspector issued a written Corrective Work Order to Respondent that effectively confirmed all of the items of complaint, as filed by Complainant. Respondent was directed to accomplish proper remedial measures within fifteen days. However, the evidence revealed that Respondent did not accomplish or even commence any corrective action to rectify the deficiencies in the installed irrigation and sprinkler system or in the previously existing system that had been damaged by Respondent during its work, thereby wholly failing or refusing to comply with the terms of the issued directive.

7. After having waited for a prolonged time period following the verbally communicated complaints, the formally filed complaint, the jobsite inspection and the expiration of the deadline date set forth in the Inspector’s directive, Complainant understandably and prudently undertook to conclude arrangements with another licensed specialty contractor for the repair of the damaged portions of the existing system and for the corrections of the newly installed system. Such action on the part of Complainant is found not to have been unreasonable or unwarranted under the circumstances not only by way of satisfying an applicable obligation on the part of the homeowner to mitigate his damages but also in order to terminate the ongoing necessity to perform hand watering so as to avoid loss of trees and shrubs, especially after having contracted for and fully paid for an adequate automated watering system.

8. Complainant was shown to have incurred monetary expenses by having to pay the selected successor contractor for repairing the damaged existing system and for correcting the system installed by Respondent. The charges by such successor contractor, not found to have been excessive or unreasonable, consisted of $2,941.00 for the damaged pre-existing system repairs and $3,050.00 for the corrections to the front yard system installed by Respondent, in the combined aggregate total sum, after applicable sales taxes, of $6,318.78.

9. Since the corrective actions by the successor contractor appeared to have included substantially more and larger heads than the system designed improperly by Respondent and included within the contractual scope of work, Complainant does not seek to be reimbursed for the entire amount of $3,050.00 charged to and paid by him to a successor contractor for the installation in the front yard of a properly designed and installed system. Instead, Complainant, in addition to a reimbursement for the costs to repair damage to the previously existing irrigation system, seeks only the return of the consideration paid to Respondent for the new watering system portion of the overall landscaping work as part of the parties’ agreement.

10. It is found and determined, as to the front yard irrigation and sprinkler system designed and installed by Respondent, that the Complainant has not received the benefit of his contractual bargain with respect to this component of the specified and agreed landscaping work. The portions of the contract shown by documentary and testimonial evidence to have been applicable to such work consisted of an adjusted cost for the sprinkler system of $1,050.00 plus $325.00 for trenching equipment rental, in the total sum of $1,375.00, no part of which should be retained by Respondent. When such sum of $1,375.00 is added to the damage repair costs of $2,941.00, a resulting, realistic out-of pocket loss to Complainant of an aggregate total of no less than $4,316.00 has been sufficiently demonstrated.

11. It was candidly admitted by Complainant that he has collected $1,000.00 from the Respondent’s dual license bond. Despite diligent efforts, Complainant has not collected any further amounts despite having successfully obtained a Small Claims Court judgment against Respondent for over $2,600.00, representing the maximum limits of that tribunal’s jurisdiction that, if paid or collected, could have otherwise been applied to a portion of Complainant’s greater damages. However, for the purposes of formulating reasonable conditions for inclusion in the Order to be entered hereunder, the collected bond proceeds should properly be deducted from the above-described demonstrated out-of-pocket loss to Complainant, resulting in a net loss of $3,316.00.

12. Although it is not a proper function of either the Office of Administrative Hearings or the Registrar of Contractors to adjudicate and award money damages which must be recovered, if at all, through pursuit of a civil court action, the Registrar is empowered by statute to impose reasonable conditions which may serve to reduce or eliminate any otherwise appropriate disciplinary penalties for proven violations of the State’s contracting laws. Whenever the performance of further corrective or remedial measures on a jobsite by the original contractor is no longer warranted or desired, the inclusion of a condition in the nature of restitution, total or partial, is fully appropriate and equitably justified. Such authorization to provide for restitution from a contractor to a prevailing party in an administrative action has been legally upheld in Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 803 P.2d 430 (1990), and subsequently was expressly confirmed by the statutory enactment of A.R.S. §32-1156.01. In this way, a Complainant in an administrative action who has sustained the burden of proving contracting law violations does not have to await the outcome of protracted civil litigation in order to recover at least a portion of a demonstrated loss and, of equal or perhaps greater significance, a licensed contractor/Respondent is given the means to control, to some extent, the severity of any otherwise appropriate disciplinary penalty.

13. It is found and determined, based upon the undisputed evidence of record at the hearing, that the Registrar’s Order in this case should include a payment condition by way of partial restitution from Respondent to Complainant, and that such condition should consist of a total monetary amount of $3,316.00, representing the minimum damages sustained by Complainant and caused by Respondent, also reflecting credit for the recovery of some portion of the loss from Respondent’s license bond.

14. By the failure of Respondent to appear at and participate in the scheduled hearing of this matter, no evidence in defense or in mitigation of the charged violations was presented to the tribunal.

15. Notice is taken of the Registrar’s license files which reveal that Respondent’s Class K-21 license, held by a Limited Liability Corporation (L.L.C.) entity, has been suspended by operation of law since September 1, 2007 for non-renewal and since October 11, 2007 for lack of a proper bond. Such license suspensions do not prevent the Complainant from pursuing his available administrative remedies against Respondent nor do they preclude the Registrar from conducting these administrative disciplinary proceedings which are expressly authorized by statute.[1] Moreover, since little or no motivation would exist for any entity to undertake and accomplish remedial actions, whether of a construction or restitutionary nature, to avoid the imposition of a suspension of an already-suspended license, the Registrar must properly consider and implement the imposition of a provisional license revocation when formulating reasonable conditions for possible inclusion in the Order to be entered in this case.

CONCLUSIONS OF LAW

1. The undisputed evidence of record adequately established that Respondent has violated the provisions of A.R.S.§32-1154(A) (2),(7), (23) and (3); namely, Rule R4-9-108, A.A.C.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that Respondent’s Class B license shall be revoked on the effective date of the Order entered in this matter.

It is further recommended that if the Registrar receives written proof on or before this Order’s effective date that Respondent has paid or tendered the sum of $3,316.00 to Complainant, then the above-provided license revocation shall not take place.

It is further recommended, in addition to the above-provided penalty, if any, that Respondent pay the sum of $250.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32-1154(D). The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. §32-1101A(5), unless payment of any outstanding prior civil penalty is tendered.

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 forty (40) days from the date of that certification.

Dated: December 6, 2007. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

Fidelis V. Garcia, Director Registrar of Contractors Legal Department 800 West Washington Street (6th Floor) Phoenix, AZ 85007 ----------------------- [1] See A.R.S.§32-1154(C).

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