ALJDEC decisions subject to certification as final

07F-M2116-ROC · Registrar of Contractors · 2008-01-31

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 17, 2008 APPEARANCES: Complainant: Bianca Worley appeared, pro per. Respondent: Ronald Harvey, corporate officer and qualifying party, appeared, pro per. Interpreter: Gabriela Contreras served as an interpreter for the hearing. ADMINISTRATIVE LAW JUDGE: Brian E. Smith _____________________________________________________________________ Evidence and testimony were presented and, based on the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. The matter convened for hearing at the time, date and place set forth in the Registrar of Contractors’ Notice of Hearing dated December 11, 2007. 2. Complainant Bianca Worley (“Complainant”) is the owner of a residence located at 2049 N. Ashbrook Circle, Mesa, Arizona (“premises/project”). 3. Respondent Beeline Service Electric, Inc. (“Respondent”) is a corporation which holds Arizona Contractor’s License No. 210106, Class K-11 (Dual Electrical) issued by the Registrar of Contractors (“ROC”) on August 2, 2005. Ronald Eric Harvey (“Harvey”) is a corporate officer and the qualifying party for the license. 4. Complainant filed a complaint with the ROC on May 3, 2007 to which was attached a three (3) page addendum to section 5 thereof. Therein, Complainant alleged, inter alia, a claim for “specific damages, negligence, violation of contract terms regarding advance payments, and failure to perform the terms of the contract: (1) Failure to perform contracted services as specified in the contract : $2,000; (2) Failure to perform any measurable constructive work in return for subsequently- demanded additional payment $1,000; (3) Failure to perform contract terms regarding HVAC system, which required separate work by another contractor to complete: $500 paid and open contract worth $1,000 for work to be completed by May 3, 2007; (4) Excessive and want-on destruction of property, which required separate work by another contractor to repair/restore. $900; and, (5) Theft of a 200 amp plug-in breaker from junction box, which I needed to replace ($105 for the fuse, $100 for the labor for another electrician to replace it so that I had power in the building).” Complaint also asserted that she contracted with Respondent on or about March 24, 2007 to “complete specified and itemized work to the satisfaction of the City of Mesa inspection department in compliance with provided blueprints in exchange for $6,5000 [sic] ($2,000 as a deposit toward costs and $4,500 payable upon completion of the project to the City’s requirements). Complainant seeks damages from Respondent in the amount of $4,505.00. 5. On May 29, 2007, Complainant filed a request for hearing with the Registrar of Contractors. 6. On September 5, 2007, the Registrar issued a CITATION AND COMPLAINT in Case No. M07-2116 charging Respondent with possible violations of A.R.S. §32-1154A 2, 7, 9 and 3 (namely, R4-9-108, the workmanship rule). 7. Respondent filed an answer with the Registrar of Contractors on September 18, 2007 wherein it affirmatively alleged, inter alia, that it could not energize the garage Complainant had built on the premises because “the print did not match what she had built, Mark Dipple the city inspector refused to allow [Respondent] to energize the panel, [and that Complainant] had to demo the apartments (Complainant had improperly built there) and convert to her prints.” Respondent further affirmatively alleged that Complainant signed a “contract to have [it] demo the apartments and convert to original prints on 3-24-07…for $6500.00 [which included] remove [sic] plumbing and rewire the building.” Respondent also asserted that the “HVAC was already done,…[Complainant] refused to pay any subcontractors” and acknowledged that Complainant paid it $2,000.00 on 3-28 and $1,000.00 on 3-31 “to pay for a plumber, carpenter and removal of construction materials.” Respondent also asserts that it performed all work required by the parties’ contract and, upon completion, Complainant “refused to pay [the balance owed] and threw [Respondent] off the property.” 8. At the hearing, Complainant testified and submitted Exhibits C-1, C-2, C-5, C-6 and C-8 which were marked, admitted and considered. Exhibits C-3, C-4 and C-7 were admitted over objection. 9. Harvey testified on behalf of Respondent and submitted Exhibits R- through R-7 which were marked, admitted and considered. Brian Shouse (“Shouse”) also testified on behalf of Respondent. 10. From the evidence elicited at the hearing, the following salient facts are important to note: a. City of Mesa permit number BLD2006-10339 was issued February 20, 2007 for the subject premises. (Exhibit C-6) b. Complainant first met Respondent on March 18, 2007 when the latter was called to Complainant’s residence regarding electrical problems with the subject secondary building located on the premises. At that time, Complainant provided Harvey with a copy of the plans/blueprint (“plans”) for the secondary building approved by the City of Mesa on February 8, 2007. (Exhibit R-1) c. The plans specifically provided that the “detached building including the game room and storage area shall not be used as an accessory living quarters or dwelling unit.” d. Harvey testified that upon presenting to Complainant’s residence on March 18, 2007, the secondary building was not constructed per the approved plans there being three sub-divided studio style apartments with additional interior walls as well as individual tubs, commodes, air conditioning units, water heaters and air handlers among other modifications present. (Exhibit R-1, red markings added by Harvey) At that time, Harvey advised Complainant that Respondent could not “energize” the secondary building without a courtesy inspection by the City of Mesa due to there being discrepancies between the as-built building and approved plans. e. Pursuant to the request of Harvey, a courtesy inspection of the premises was conducted by City of Mesa Building Inspector Mark Dipple (“Dipple”) on March 22, 2007. Dipple issued an Inspection Report on that date (Exhibit C-6) wherein he determined, inter alia, that (1) the “Customer (Complainant) has gone beyond scope of work [and] (2) all work must match approved plans.” f. On March 24, 2007, the parties executed “Contractors Invoice” (“contract”) whereby Respondent was to, inter alia, “remodel out building to conform to original prints.” (Exhibit R-2) g. The contract further provided the “total estimated cost of project not to exceed 6,500.00…with 2000.00 [sic] to be paid on 3-24-07 [and] remaining funds to be paid to individual contractors & [Respondent] on completion.” Respondent was to “hire plumber, HVAC & carpenter to complete project.” h. In addition, the contract was to “include demo of interior walls, plumbing, HVAC & electric” and also provided that Respondent “will be responsible for demo & electric to include all inspection.” i. Per the contract, Respondent was “responsible to start project on 3-26-07 and finish by 4-10-07.” j. On March 24, 2007, Complainant paid Respondent $2,000.00 as down payment on the contract. (Exhibit C-1) k. On March 31, 2007, Complainant paid Respondent an additional $1,000.00. (Exhibit C-2) l. Complainant testified that Harvey/Respondent refused to complete all work required under the contract to bring the project in compliance with City of Mesa code. m. Complainant seeks restitution in the total amount of $2,359.54 for costs incurred by her from April 15, 2007 through September 14, 2007 for electrical, plumbing, drywall, air conditioning and other “guest room repair” work performed by others in order to complete the project which still has not passed final inspection with the City of Mesa.[1] (Exhibits C- and C-8) n. Complainant also testified that Harvey cut electrical cable and removed a breaker/fuse without her authorization which had to subsequently be remedied. (Exhibit C-5) o. Harvey testified and produced a video (Exhibit R-7) which he asserts established that all work required by the City of Mesa pursuant to the itemization set forth in its Inspection Report was completed by Respondent. (Exhibit C-6) p. Harvey further testified that he performed work in excess of that required by the contract, i.e., installation of an attic access, ceiling fans and track lighting, at no cost to Complainant. (Exhibit R-7) q. Harvey further asserted that he installed the subject electrical feeder cable and breaker/fuse at his own expense (Exhibit R-3) and, when Complainant refused to remit the balance due under the contract, he removed these items. r. Harvey testified that, at no cost to Complainant, he obtained an addendum from the engineer who drew up the plans to allow Complainant to keep the three air handlers, three air conditioners and water heater as well as obtained his own permit for such work. (Exhibit R-4) s. Harvey also contended that Complainant is attempting to circumvent applicable City of Mesa code by allowing and/or providing persons to reside in the subject out building which is to only be used as a shop/storage/game room. (Exhibit R-1) t. Harvey further testified that once he demonstrated to Complainant that the electrical worked properly, Complainant ordered Respondent off the premises without any further payment on the contract. According to Harvey, the property has electrical power without passing the required final City of Mesa building inspection.

APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors in Case No. M07-2116 charged Respondent with possible violations of A.R.S. §32- 1154A 2, 7, 9 and 3 (namely R4-9-108). Those statutory sections require that the holder of a license or person listed on the license shall not commit the following:

2. Departure from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or his duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code. …

7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

…

9. Failure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract. … 3. Violation of any rule adopted by the Registrar.

A.C.C. R4-9-108 is named as the rule violation charged pursuant to A.R.S. §32-1154A (3). Rule R4-9-108 provides that all work shall be done in a professional and workmanlike manner and in accordance with any applicable building codes and professional industry standards

CONCLUSIONS OF LAW 1. The Registrar of Contractors has jurisdiction over this matter pursuant to A.R.S. § 32-1101, et. seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154. 2. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated any one, or more, of the statutory sections cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also, Culpepper v. State of Arizona, 187 Ariz. 43, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (Rev. 6th ed. 1990). 3. The purpose of licensing Arizona contractors is to regulate the conduct of contracting and protect the public from unscrupulous acts. Beazer Homes Ariz., Inc. v. Goldwater, 196 Ariz. 98, 101, 993 P.2d 1062, 1065 (App. 1999); Better Homes Constr. v. Goldwater, 203 Ariz. 295, 300, 53 P.3d 1139 (App. 2002). The statutory purpose is to prevent unscrupulous or financially irresponsible contractors from deceiving and taking advantage of those who engage them to build. Sobel v. Jones, 96 Ariz. 297, 394 P.2d 415 (1964). 4. It is determined and concluded that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (2). 5. It is further determined and concluded that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (3) and A.A.C. R4-9-108, the workmanship rule. 6. It is further determined and concluded that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (9). 7. This tribunal further determines and concludes that Complainant failed to establish by the requisite weight of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A (7).

RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that the entire Citation and Complaint in Case No. M07-2116 be dismissed.[2] Done this day, January 31, 2008.

_______________________ Brian E. Smith Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Registrar of Contractors Fidelis V. Garcia 3838 N. Central Ave., Ste. 400 Phoenix, AZ 85012-1906

By _______________________ ----------------------- [1] As set forth in Exhibits C-3, C-4 and C-7 which were admitted over relevance objections by Respondent, Complainant also seeks restitution for an additional $1,133.75 in costs she claims are the responsibility of Respondent. However, upon completion of the presentation of evidence, the undersigned determined that such costs were incurred by Complainant prior to the execution of the subject contract for which Respondent should not be held accountable. Moreover, Complainant failed to establish that the contractors performing the remedial work were licensed so as to entitle her to restitution for such costs. [2] 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.

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