ALJDEC decisions subject to certification as final

08F-3277-ROC · Registrar of Contractors · 2009-08-24

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 4, 2009 APPEARANCES: Complainant: Steven Rodgers appeared, pro per. Respondent: David Ruiz, member and qualifying party, appeared, pro per. Registrar of Contractors: Inspector James Hennessey appeared on behalf of the Registrar of Contractors. 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. This matter convened for hearing at the time, date and place set forth in the Notice of Hearing issued by the Registrar of Contractors (“ROC/Registrar”) on April 24, 2009. 2. Complainant Steven Rodgers (“Complainant”) is the owner of real property located at 7408 S. Russell Rd., Globe, Arizona (“premises/project”). 3. Respondent Excel Pump and Well Service, LLC (“Respondent”) is a limited liability company which holds Arizona Contractor’s License No. 222883, Class K-53 (Dual Water Well Drilling) issued by the ROC on August 4, 2006. David Troy Ruiz (“Ruiz”) is a member and the qualifying party for the license. 4. Complainant filed a Complaint with the ROC on March 18, 2008, wherein he alleged seven (7) problems with Respondent’s work pertaining to two wells dug on the premises and requested that Respondent remove a lien placed on the property, “complete work [and] refund excess charges.” 5. ROC Inspector Jack Clark (“Clark”) conducted a jobsite inspection on April 15, 2008, and issued a Corrective Work Order on April 23, 2008 which required Respondent to perform corrective work on Corrective Work Order item 7 (false reporting on well drilling reports (x2)). No remedial action was required of Respondent on items 1 through 6 of the Corrective Work Order. 6. On March 5, 2009, the Registrar issued a Citation and Complaint in Case No. 08-3277 charging Respondent with possible violations of A.R.S. § 32-1154 (A) (2), (7), (9), (23), (3) (namely, R409-108, the workmanship rule), and (13( (namely, A.R.S. § 32-1124 (B)). 7. Respondent filed an answer on March 19, 2009, wherein it asserted a general denial of all allegations. 8. At the hearing, Complainant testified and submitted Exhibits C-1 through C-6 which were marked, admitted and considered. 9. Ruiz testified on behalf on behalf of Respondent and submitted Exhibits R-1, R-2 and R-3 which were marked, admitted and considered. Dillon Zimmerman (“Zimmerman”) also testified on behalf of Respondent. 10. Inspector Jim Hennessey (“Hennessey”) testified on behalf of the ROC and described his observations at an August 3, 2009 pre-hearing inspection.[1] 11. In 2007 the parties entered into a verbal agreement (“agreement”) whereby Respondent was to drill two (2) wells on the premises. 12. A good faith factual dispute exists between the parties as to the depth of the wells and the price per foot to be charged. Complainant testified that the wells were to be no deeper than 240 feet at a cost of $17.00 per foot based on a “friendship price.” Ruiz testified that Respondent has no such discount and that Complainant was aware that the well cost was Respondent’s standard $25.00 per foot. Ruiz further testified that each well was drilled to 420 feet based on his experience and expertise so as to ensure that Complainant had an adequate water source. 13. In late September and/or early October 2007, Respondent drilled two wells on the premises, i.e., well no. 1 (south well (#55-215547)) and well no. 2 (north well (#55-216511)). 14. Ruiz testified that both wells were drilled to minimum workmanship standards with 1.5” grout to a minimum of twenty feet. Ruiz further testified that the south and north wells contained thirty and forty feet of grout, respectively. 15. On approximately October 16, 2007, Respondent submitted to Complainant Invoice 231 which set forth Respondent’s charges of $21,000.00 for the wells, i.e., $23,250.00 less a $2,450.00 discount). (Exhibit R-3) 16. Complainant has paid Respondent a total of $18,000.00 for its well services. (Exhibit R-3) 17. On approximately January 8, 2008, Respondent filed a Notice and Claim of Lien for Labor, Material and/or Machinery (“Notice of Lien”) wherein it asserts Complainant owes Respondent a total of $5,450.00. (Exhibit C-4) 18. Complainant asserts that the Notice of Lien was improperly filed. 19. At the April 15, 2008 jobsite inspection, Inspector Clark determined that, because of his lack of well drilling experience, he recommended that Michael Ball (“Ball”) of the Arizona Department of Water Resources (“ADWR”) conduct an inspection of the subject wells to determine whether they were properly constructed. 20. On April 17, 2008, Ball conducted an inspection of the wells. As a result thereof, Ball determined, inter alia, that the subject wells “were constructed with cement grout surface seals that were either inadequate or consisted of a powdery substance that did not comply with the definition of cement grout (AAC R12-15-801.15.). Both wells were left in an open and dangerous condition (only covered with a plate or aluminum piping) in violation of AAC R12-15-815 and 822. Well driller reports were filed at least eight months after the drilling rig was removed in violation of A.R.S. § 45-600.A.” (Exhibits C-1, C-2 and C-3)[2] 21. A good faith factual dispute exists between the parties regarding whether Complainant and/or a third party contractor performed work on the well sites which compromised and/or otherwise destroyed certain of Respondent’s work. 22. Hennessey opined that a violation of A.R.S. § 32-1154 (A) (3) existed based on Ball’s inspection and report regarding the concrete used on the wells. 23. Though the ROC licensing database indicates that, other than the instant Complaint, Respondent’s license record is without prior discipline or other complaints, the facts presented herein relative to the apparent animosity between Complainant and Ruiz justify a departure from a long- standing policy of the Registrar of Contractors to allow a contractor an opportunity to correct construction deficiencies which are determined at a hearing., Respondent is on notice that it will have one, and only one, final opportunity to correct the deficiencies set forth in the Order entered in this matter.

APPLICABLE LAW The Citation and Complaint issued by the Registrar in Case No. 08- 3277 charged Respondent with possible violations of A.R.S. §32-1154 (A) (2), (7), (9), (23), (3) (namely 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:

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.

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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.

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23. Failure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive. A license shall not be revoked or suspended nor shall any other penalty be imposed for violation of this paragraph until after a hearing has been held pursuant to the provisions of this article. … 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 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 established by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. § 32-1154 (A) (2) and (3) (namely, A.A.C. R4-9-108, the workmanship rule), by failing to properly grout/cement the two wells as set forth in Finding of Fact 20. 5. It is further determined and concluded that, based on the violations set forth in Conclusion of Law 4 above, Complainant established by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. § 32-1154 (A) (7) as charged in the issued Citation in Case No. 08-3277. 6. This tribunal further determines and concludes that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. § 32-1154 (A) (9) given the good faith dispute regarding the actual terms of the parties’ agreement as set forth in Finding of Fact 12. 7. It is also determined and concluded that Complainant failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. § 32-1154 (A) (13) (namely, A.R.S. § 32- 1124 (B)) and (23). RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that commencing on the effective date of the Registrar’s Order entered in this matter, Respondent’s Class K-53 license be suspended until the Registrar receives written proof that Respondent has caused to be performed by a duly licensed contractor the corrective work on the two subject wells as indicated in Finding of Fact 20 and set forth in Conclusions of Law 4 and 5, with the exception of filing of the well driller reports referenced therein. IT IS FURTHER RECOMMENDED that if Respondent causes the above- described work to be accomplished by a duly licensed contractor or is denied access to perform same on or before the effective date of the Registrar’s Order then, in that event, no license suspension shall take place due to Respondent’s failure to comply with this Order. Respondent shall notify the Registrar in writing of the denial of reasonable access to the premises.[3] Done this day, August 24, 2009.

______________________ Brian E. Smith Administrative Law Judge

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

William A. Mundell, Director Registrar of Contractors c/o Legal Department 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________ ----------------------- [1] Inspector Hennessey was present in lieu of Mr. Clark who had passed away since the initial jobsite inspection. [2] Neither party presented Ball as a witness in this matter. [3] 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