ALJDEC decisions subject to certification as final

08F-2155-ROC · Registrar of Contractors · 2009-01-21

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 13, 2009 APPEARANCES: Authorized employee Robert Chambers appeared for Complainant; Qualifying Party Nelu Ardelean appeared for Respondent. ADMINISTRATIVE LAW JUDGE: Michael G. Wales _____________________________________________________________________ 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. This matter convened for hearing at the time, date and place set forth in the Registrar of Contractors’ Notice of Hearing dated July 23, 2008. 2. Complainant Golden Eagle Homes, Inc. (“Complainant”) is a developer of homes who contracted with Respondent to install a sewer line on a lot at 18426 W. Caribbean Lane in Surprise, Arizona where new construction of a home was underway. 3. Respondent United Waterworks Plumbing, Inc. (“Respondent”) is an Arizona corporation which holds Arizona Contractor’s License No. 188474, Class C-37R (Residential Plumbing) issued by the Registrar of Contractors on August 24, 2003. Nelu Ardelean is a corporate officer and is the qualifying party for the license. 4. Complainant filed a complaint with the Registrar of Contractors on January 31, 2008, wherein it alleged that Respondent refused to repair a faulty sewer line that Respondent installed during new home construction in July 2005. 5. On March 18, 2008, Complainant contacted the Registrar of Contractors and requested a hearing on the matter. 6. On August 26, 2008, the Registrar issued a CITATION AND COMPLAINT in Case No. 08-2155 charging Respondent with possible violations of A.R.S. § 32-1154A (7), (3) (namely, A.A.C. R4-9-108), and (13) (namely, A.R.S. § 32-1124(B)). 7. Respondent filed an answer on September 10, 2008 denying the allegations and alleging that the complaint was filed outside of the two year statute of limitations. The matter was set for the instant hearing before the Office of Administrative Hearings, an independent state agency. 8. At the hearing, Complainant’s customer service representative Robert Chambers and Complainant’s construction superintendent Mack Wood testified. Complainant submitted Exhibits 1 through 7 which were marked, admitted and considered. Nelu Ardelean testified for Respondent and submitted one exhibit, designated as Exhibit A, which was marked, admitted and considered. 9. From the evidence elicited at the hearing, the following salient facts are important to note: a. In July, 2005, Respondent, pursuant to a contract with Complainant, installed the underground sewer line at the new home construction at 18246 W. Caribbean Lane in Surprise, Arizona (“the jobsite”). b. The new home construction at the jobsite was completed and the home closed escrow on February 14, 2006. February 14, 2006 was also the first day the home was occupied. c. On January 25, 2008, the owners of 18246 W. Caribbean called Complainant to report a sewer line backup. Complainant contacted Respondent, but Respondent refused to respond, stating the warranty period had run. d. Complainant investigated the sewer backup and determined the sewer pipe was blocked on the home’s lot in the front yard. Complainant contracted with Roto Rooter to run a camera down the line. e. The video inspection of the line determined that, at the blockage, a belly, or deviation in uniform grade, existed. f. Based on the observations made during the video inspection, Complainant excavated and exposed approximately 18‘ of sewer line. Mack Wood, Complainant’s construction superintendent, testified that as the soil above the sewer pipe was exposed, he observed a section of the sewer pipe, several feet long, that was raised several inches above proper grade and, he opined, the raised pipe caused, over time, the blockage to occur. g. Over the next few days, Complainant removed and replaced the improperly installed sewer pipe and compacted the soil above the sewer pipe. h. Robert Chambers, Complainant’s customer service representative, testified that Complainant incurred the following expenses due to Respondent’s failure to properly install the sewer pipe and refusal to repair the improperly installed pipe: i. $487.50 to Roto Rooter for the video inspection; ii. $386.23 to Dynamic Plumbing for the sewer pipe repair; iii. $442.00 to Labor Ready for labor; iv. $44.25 to Palo Verde Rentals for a soil compaction rammer; and v. $36.00 to home depot for miscellaneous materials necessary to complete the repair. i. Respondent’s representative, Nelu Ardelean testified that the sewer pipe was laid at the proper grade when initially installed and alleged that some other trade may have caused the pipe to be off grade. Mr. Ardelean also testified that he does not place his Registrar of Contractors license number on his invoices and he does not have to.

APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors in Case No. 08-0963 charged Respondent with possible violations of A.R.S. §32- 1154A (7) and (3)(namely, A.A.C. R4-9-108) and (13) (namely A.R.S. 32- 1124(B). Those statutory sections require that the holder of a license or person listed on the license shall not commit the following: 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

3. Violation of any rule adopted by the Registrar.

13. Failure in any material respect to comply with the provisions of this chapter.

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. A.R.S. §32-1124(B) is named as the statute violation charged pursuant to A.R.S. §32-1154A (13). That statute provides that every license and/or renewal must be signed by the Registrar or the Registrar’s designated representative and the licensee. It further provides that every license number must be preceded by the acronym “ROC” and be posted in a conspicuous place on premises where any work is being performed, on all written bids submitted by the licensee and on all advertising, letterheads and other documents used by the licensee in the conduct of business.

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, Complainants 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. This tribunal determines and concludes that the Complaint in this matter, filed on January 31, 2008, was filed within two years of the close of escrow date of February 14, 2006 and, therefore, was timely filed pursuant to A.R.S. § 32-1155(A). 5. This tribunal determines and concludes that Complainant has established by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A(3) as it pertains to the initial installation of the sewer pipe at the project location by Respondent. 6. This tribunal further determines and concludes that Complainant did establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. § 32-1154A(7) as it pertains to Respondent's installation and subsequent refusal to correct its defective work Complainant’s costs incurred for the repair constitute a substantial injury caused by the actions of Respondent. 7. This tribunal further determines and concludes that the evidence of record did establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. §32-1154A(13) , namely A.R.S. § 32-1124(B) by failing to place its license number and the acronym Registrar of Contractors on its invoices. 8. As discussed above, Respondent violated the provisions of A.R.S. § 32-1154A(3), (7) and (13), and the evidence supports a determination that in this case disciplinary action is appropriate and fully warranted. 9. The Registrar of Contractors’ authority in matters such as presented herein, includes the ability to impose restitution, in whole or in part, as a reasonable condition to reduce any possible disciplinary action against contractors. The exercise of such authority is deemed appropriate in the instant case. Therefore, based upon all the evidence, a reasonable condition in this case would consist of the payment by Respondent to Complainant of $943.98 as restitution for Complainant’s cost of repair. Imposing such a condition is preferable to imposing a disciplinary action against Respondent’s license without providing a condition to reduce or eliminate same. 10. In determining the sum above, this tribunal has disallowed the $442.00 paid to Labor Ready. The invoice from Labor Ready is dated February 8, 2008, some 13 days after the event, and describes a location of 3724 N. Briere Court. Thus, the invoice is not sufficient credible evidence to support restitution of the $442.00 cost. 11. The Registrar may order a “restitutionary remedy...as part of the Registrar’s regulatory authority to take appropriate disciplinary action against those who violate the licensing”...laws set forth in A.R.S. § 32-1154A (1) through (24), inclusive. An administrative award of damages is not an unconstitutional exercise of administrative authority where due process procedural rights are protected, where the authority to prohibit conduct has been well defined, as in A.R.S. § 32-1154, and where judicial review is available as provided in A.R.S. § 12-901, et seq. Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 803 P.2nd 430 (App. 1990). 12. In addition to the Sunpower case, A.R.S. § 32-1156.01 provides, in pertinent part, that “after a hearing…an administrative law judge may recommend that a licensee provide restitution to any person who is injured….by an action of the licensee.

RECOMMENDED ORDER In view of the foregoing, it is recommended that Respondent’s Class C- 37R license shall be suspended on the effective date of the Order entered in this matter until Respondent provides written proof of payment of $943.98 to Complainant and the Registrar of Contractors accepts such proof. It is further recommended that if Respondent pays, or tenders, $943.98 to Complainant, on or before the effective date of the Order entered in this matter, then the above-provided license suspension shall not take place.

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, January 21, 2009.

Office of Administrative Hearings

__________________________ Michael G. Wales Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2009, to:

Registrar of Contractors Armando Contreras 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________ -----------------------

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