ALJDEC decisions subject to certification as final

07F-M1272-ROC · Registrar of Contractors · 2007-08-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 14, 2007 APPEARANCES: Complainants appeared on their own behalf and Respondent appeared through its office manager/employee, Anthony Graziano (“Graziano”). ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________ Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. Pursuant to contract, Complainants retained Respondent to accomplish plumbing repairs, following the flood that occurred in their home. Complainants contend that Respondent overcharged them for the work performed, Respondent’s billings did not accurately reflect the work performed, there were errors on the billing, performed work without authorization, and failed to quote the cost of the work in advance of performing the work. These issues are discussed in the findings below.

2. The following salient facts were adduced at the hearing and are important to note:

a. Complainants had some type of yearly service contract with Respondent. On or about November 22, 2006, Complainant appeared at Complainants’ home to check on the heat pump and at that time, it was noted on their invoice that a small leak may be present under the bathroom sink. No remedial work was ordered or performed in this regard. Notwithstanding this information, Complainants left town for the holiday, without turning the water off to the home and upon their return found their home had suffered flooding. Respondent was the only company they contacted to make the necessary repairs to the home and thus, did not take the time to receive any competitive bids for the remedial work. b. Respondent agreed to perform all necessary plumbing related work to correct the problems related to the plumbing. Despite the fact that Respondent did not provide any bid or estimate regarding cost, Complainants directed Respondent to proceed with the repair work. In addition, Complainants authorized certain other work to be performed. c. Respondent completed all of the plumbing work and upon completion submitted a billing to Complainants in the amount of $5,713.99. Although the bill was much higher than what Complainants were expecting, they nevertheless paid said bill. d. It was only after paying the bill that Complainants began to question the validity of the bill. They did some research, after the fact, with other plumbers and received information indicating that Respondent’s billing was very much on the high side for the type of work performed. They also received information from the handyman who was working on their home, indicating that Respondent’s bill was extremely high. e. Complainants questioned the billing with Respondent. Although Respondent contended that the charges were all consistent with their normal “book” charges to all customers, they discovered that there was a significant error for the water re-pipe aspect of the project, since the billing charge was for the entire house, when only a small portion was re- piped. Upon discovery of this error, Respondent immediately submitted a new billing which showed that the original charge of $2,125.00 for this item, had been changed to $940.00. After the correct bill was submitted to Complainants, Respondent billed Complainants’ credit card for the first time. f. Notwithstanding the correction to the bill, Complainants were still not satisfied with the billing and ultimately filed the instant Complaint with the Registrar of Contractors. g. Complainants object to the cost for the leak detection performed on the home. They later found out the amount Respondent paid for the leak detection company to perform the work and decided that Respondent’s marked- up for this charge was excessive. Nevertheless, there was no evidence that Complainants inquired regarding the price that Respondent would charge for this service and they authorized the work to be performed. h. Respondent advised Complainants that they needed a high pressure regulator on the outside of the home, since such a device would help prevent any further flooding from occurring inside the home. Complainants approved this item. After approving this work and paying the bill, Complainants investigated the water pressure in their neighbor’s home and are now of the opinion that such a device was not necessary. Notwithstanding their claim, the evidence presented was found to be inadequate to support any finding that Respondent should not have installed the high pressure regulator, which Complainants had approved. i. Complainants object to a $444.00 charge for a hard dig in the front yard, which Respondent claimed was necessary to locate another leaking plumbing pipe. Although they contend that they did not authorize this work, said work is properly found to be part of the “blanket” authorization that Complainants gave to Respondent, since Respondent’s invoice shows that the main service connection was cracked under ground. It is determined and held that this type of problem would need to be corrected in order to accomplish an appropriate repair on the plumbing inside the house and was possibly an issue that was discovered as a direct result of the aforementioned leak detection test. j. Subsequent to filing the instant Complainant with the Registrar of Contractors, Respondent determined that there was another error on the billing. Complainants were charged for a commercial high pressure water regulator, when it should have been a standard device. Thus, Respondent admits that Complainants are entitled to a refund, in the amount of $962.85. Nevertheless, as of the date of the instant hearing, Complainants have not received this refund. k. Graziano testified that he has no knowledge why the $962.85 refund has not been made, even though Respondent has been aware of this error since at least April 9, 2007 (four months before the instant hearing date). He further indicates that he will take immediate steps to rectify this error. l. According to Graziano, Respondent is a very high priced plumber and he would not be surprised to see that other plumbers may have performed the same work, at a lower price.

3. The evidence presented militates for the conclusion that Complainants experienced a case of buyers’ remorse. They had neglected to obtain any bids prior to entering into the contract with Respondent and it was only after signing the contract with Respondent and paying the billing presented by Respondent that they decided to see if they could have had the job done at a cheaper price. Although it is understandable that Complainants were faced with a nightmare situation upon discovering the flooding of their home, they still could have taken the time and made the effort to obtain competitive bids, prior to allowing Respondent to proceed with the work, without even a bid price from Respondent.

4. In the United States we live in a capitalistic society. Businesses are free to charge whatever they want for their goods and services and buyers are free to “shop-around” for the best price. However, the process of “shopping-around” for price needs to occur before, not after, one enters into a contract.

5. The mere fact that Respondent may be a more expensive contractor than other contractors does not equate with any violation of the State’s Contracting laws. However, providing customers with inaccurate billings, and failing to correct such mistakes within a reasonable period of time, is determined to constitute a wrongful act, within the meaning of the applicable charged section of the State’s Contracting laws.

CONCLUSIONS OF LAW

Respondent violated the provisions of A.R.S. § 32-1154A (7).

RECOMMENDED ORDER

In view of the foregoing it is recommended, commencing on the effective date of the Order entered in this matter, that the Class C-37R license of Respondent shall be suspended until the Registrar of Contractors receives written proof that Respondent has paid $962.85 to Complainants. It is further recommended that if Respondent pays or tender the above- described sum of money to Complainants on or before the effective date of the Order entered in this matter, then the aforementioned license suspension shall not take place and this Citation (no. M07-1272), together with the Complaint upon which it is based, shall be closed. 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 in this matter will be forty (40) days from the date of that certification.

Done this day, August 14, 2007.

______________________________________ Mark A. Silver Administrative Law Judge

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

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

By ___________________________

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