ALJDEC decisions subject to certification as final

07F-T1247-ROC · Registrar of Contractors · 2008-01-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 22nd, 2008, 1:30 p.m. APPEARANCES: Complainants, Mr. William and Ms. Rosalie Clapet, represented themselves. Respondent, The Gerdes Corporation, failed to appear. ADMINISTRATIVE LAW JUDGE: Grant Winston _____________________________________________________________________ The administrative hearing of this matter was held in the Office of Administrative Hearings, Tucson. Testimony was heard and other evidence admitted to the record, and, based on the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made.

FINDINGS OF FACT 1. Respondent, The Gerdes Corporation, is, and during all time material hereto was, a contractor licensed by and doing business in the State of Arizona, holding Class KB-02 License number 221145. 2. Complainants, Mr. William and Ms. Rosalie Clapet, are a married couple of distinguished years who purchased an undeveloped lot in Tubac, Arizona, on which they intended to have built their final home. 3. Acting as owners-builders, the Complainants contracted with Respondent in writing, in December, 2006, for Respondent to act as the construction manager in the building process. Respondent disputed this, and had claimed that he was hired to perform as the general contractor, but the greater weight of evidence proved that Complainants are correct on this. 4. Complainants obtained a construction loan from M&I Bank. They had control over the disbursement of draws from this fund, and the credible testimony of Complainants proves that when Respondent’s Qualifying Party, Mr. Steve Gerdes, discovered that he did not control disbursements of the draws he was disappointed and became visibly perturbed. 5. Pursuant to the parties’ contract Complainants paid Respondent/Steve Gerdes $18,210.00 as the first payment for Respondent to see to all the site prep, including clearing the lot, hauling away the debris, providing a port-a-potty and dumpster for the time of construction, soils testing, and fill dirt. 6. Respondent took the money, and in return scraped up some vegetation on the lot into a big pile and left it, and spray painted some orange markings on the dirt. That is all he did, and then abandoned the job. 7. Complainants filed this Complaint. Respondent asserted in his Written Answer to the Citation and Complaint, unpersuasively and contrary to the evidence, that Complainants had breached the contract, and that is why he left the job. More likely it appears from the evidence that upon learning that he could not draw out money from the construction loan on his own, Mr. Gerdes decided to abandon the contract and project after taking more than 18 thousand dollars for very little work. 8. Credible evidence from the Complainants proves that Mr. Gerdes also tried to involve the Complainants in a kickback scheme on another project, which they refused to be a part of. 9. The actions of Respondent agitated Ms. Clapet’s rheumatoid arthritis which had been in remission, sending her to the doctor for treatment. Respondent’s actions compelled Complainants to sell their lot and abandon their dream of building their final residence together. 10. Notice is taken of Respondent’s prior license record with the Arizona Registrar of Contractors.

CONCLUSIONS OF LAW 1. This administrative hearing was held under authority of and pursuant to A.R.S. 32-1156, and A.R.S. 41-1092. 2. Respondent is charged in the instant Citation and Complaint with possible violations of A.R.S 32-1154.A.1, 2, and 7. 3. The greater weight of evidence proved that the Respondent did violate A.R.S. 32-1154.A.1 by abandoning the contract and refusing to perform the contracted work with out legal excuse. 4. There is insufficient evidence to conclude that Respondent disregarded plans or specifications in violation of A.R.S. 32- 1154.A.2, only because he did so little work at all there is hardly any of his work to be held up to the plans and specifications. He bladed the lot, and sprayed some paint on the ground, none of which is in deviation from plans or specifications. 5. Independently of the above violations, Respondent violated A.R.S. 32-1154.A.7 by his wrongful actions causing Ms. Clapet’s arthritis to recur and sending her to the doctor. 6. A.R.S. 32-1156.01 allows an Administrative Law Judge to recommend that licensed contractor pay restitution to a person who has been injured by the contractor’s actions. In this case a fair amount of restitution to be ordered is the $18,200.00 paid by Complainants to Respondent.

RECOMMENDED ORDER In view of the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that Respondent’s Class KB-02 License number 221145 be revoked on the effective date of this Order. It is further recommended that if the Registrar receives written proof that the Respondent has made restitution to Complainants in the amount of $18,200.00, on or before the effective date of this Order, then the Respondent’s license shall not be revoked, but in lieu of revocation shall be suspended for five calendar days, commencing on the effective date of this Order. It is further recommended that in addition to the license suspension, if ordered in lieu of revocation, that as an express condition for the next annual renewal of Respondent’s license, notwithstanding the existence or absence of any uniform assessment by the agency then in effect, Respondent shall be required to pay an additional $500.00 into the Arizona Registrar of Contractors Residential Contractors’ Recovery Fund, as authorized by A.R.S. 32-1132.B. Failure to pay such additional deposit into the Fund shall result in the rejection of any license renewal application and a continued suspension of Respondent’s license until payment is made and the renewal issued. In the event of certification of the Administrative Law Judge’s Decision and Order by the Director of the Office of Administrative Hearings, then the effective date of the Order shall be 40 days after the date of that certification. Done this day, January 25th, 2008.

______________________________________ Grant Winston 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 ___________________________

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Office of Administrative Hearings 100 N. Stone Ave., Suite 704 Tucson, Arizona 85701 (520) 628-5488