ALJDEC decisions subject to certification as final

08F-4238-ROC · Registrar of Contractors · 2009-04-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 7, 2009 APPEARANCES: The Complainant represented himself with assistance from his daughter. Steve Vandehei, Director of Operations, and Rick Vandehei, Owner, represented the Respondent. ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact 1. In late 2007, the Respondent general contractor contacted the Complainant, currently 77 years old, regarding the sale and installation of carpeting in the Complainant’s home in Youngtown, Arizona. The Complainant’s carpeting was approximately 12 years old and the home is approximately 1000 square feet. 2. The Respondent’s salesperson, Charlie Moore (Moore), met with the Complainant and showed the Complainant what the Complainant testified was represented to be comparable carpeting to what was in the Complainant’s home. Moore has been in carpeting sales for seven years. He denied having so informed the Complainant. The parties executed a contract on December 18, 2007. 3. Under the contract, the Respondent would remove existing carpeting, and install a new Shaw Berber carpet with a six pound ½ “ rebond pad and tackless strips. The amount of carpet ordered for the job was 80 yards. The total cost for the entire project was $4,131.00, and the Complainant paid $2,065.50 down. The contract had a cancellation clause allowing the Complainant to cancel the contract within three days. 4. The Complainant testified he was not informed of his right to cancel and therefore failed to cancel the contract within three days. He subsequently contacted his daughter in Oregon and informed her of the contract. The Complainant’s daughter, Debbie Albritton (Albritton), has over 10 years experience in the carpeting business and believed her father had been taken advantage of and was being significantly overcharged for the carpeting. 5. In May 2008, the Complainant filed a Complaint with the Registrar of Contractors (ROC). The basis of the Complaint is that the Complainant believes he was overcharged in light of the quality of the carpeting and the quality of the carpet was misrepresented. He wishes to rescind the contract and have his deposit returned. 6. The Respondent contends it has been in the carpeting business since 1994 and its contract with the Complainant was standard for its business. According to the salesperson (Moore), most of his sales are not broken down by specific items such as cost of removal of old carpeting, cost per yard of new carpet, and cost of installation, but rather the cost is an all inclusive or total cost. The Respondent’s owner, Rick Vandehei (Vandehei) testified the final cost is determined by the cost of materials and labor plus 100% overhead. According to Vandehei, the 100% overhead is standard in the industry. This figure appears high. Albritton testified the standard is 33%. However, neither party presented corroborative evidence. 7. According to Albritton, the Complainant’s existing carpet is 100% nylon. The replacement carpeting is 93% Olefin and 7% nylon. Albritton testified nylon is a better wearing material. She presented three carpet samples, one of which represented carpet which was ordered for the Complainant, another was 100% nylon, and the third was a Home Depot sample of 91% Olifin and 9% nylon. According to Albritton, the Home Depot sample was $6.48 a yard. When asked by the Complainant to make a tactile judgment of the quality, the Administrative Law Judge (ALJ) believed the Complainant’s carpet felt more lush than the Home Depot sample. The Complainant urged that this was the wrong determination. The ALJ’s determination regarding carpet plushness is not being considered in determining which carpet sample is of higher quality. Based on the lack of evidence, that issue remains undetermined. Albritton also testified she obtained estimates of $2,936.00 and $2,185.00 from other carpet retailers for installation of 100% nylon carpeting at the Complainant’s home. Considering the nature of the question in this case, the hearsay nature of this evidence makes it somewhat unreliable. 8. The Respondent was clear that it bid this job on a total cost basis and did not bid it based on itemizing various portions of the job. After questioning by the ALJ, the Respondent submitted documentary evidence that it paid $1,120.00 for the carpet installed at the Complainant’s home. If marked up 100%, the cost to the Complainant is $2,240.00. The evidence indicates this price includes the price of the pad because no separate cost is identified. According to documentary evidence and the testimony of Steve and Rich Vandehei, the Respondent’s charges included $412.72 for tear out of the old carpet, $3.75 a yard or $300.00 for installation of the new carpet, $40.00 for floor preparation, $60.00 for moving appliances, and $30.00 for trip costs. This brings the listed costs to $3,082.72 with tax at 5.5% for an additional $169.55, for a total of $3,252.27. Conclusions of Law The Citation and Complaint alleges violation of A.R.S § 32-1154 (A)(7), a wrongful act with substantial injury; and (A)(16), false or deceptive advertising. 1. The Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Vazzano v. Superior Court, 74 Ariz. 369, 249 P.2d 837 (Ariz. 1952); Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). A “preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence, §5 (1960). 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 (6th ed. 1990). 2. The evidence in an administrative hearing must be “substantial, reliable and probative” (A.R.S. §41-1092.07(F)(1)). This means the Complainant has the affirmative responsibility to present sufficient competent evidence to meet the preponderance standard. 3. “Substantial evidence is evidence possessing something of substance and relevant consequence and which furnishes substantial basis of fact from which issues tendered can be reasonably resolved.” Black’s Law Dictionary, Special Deluxe Fifth Edition, (St. Paul Minn.: West Publishing Co., 1979) p. 1281, citing State v. Green, 218 Kan. 438, 544 P. 2d 356, 362. 4. The evidence in this case clearly suggests the Respondent’s total price was exceedingly high. However, there is no substantial evidence that the Respondent engaged in false advertising or any clearly identifiable wrongful or fraudulent act to induce the Complainant to enter the contract. The Complainant testified he could not explain why he entered the contract. He considered his actions as thoughtless. It appears that the Complainant, at his age, is susceptible to persuasion and suggestion. This is not sufficient to conclude the Respondent’s actions constituted a wrongful act. Absent clear evidence of wrongful conduct, it is not legally appropriate for the ALJ or ROC to determine the competency of an adult to enter a contract or to set price controls for the particular economic transactions. Rescission or restitution cannot be ordered. 5. The Complainant has failed to prove the allegations in the Citation and Complaint by a preponderance of the evidence. Recommended Order It is recommended that the Citation and Complaint upon which it is based be dismissed. The effective date of the Order in this case is forty (40) days from the date of the order or from the date of certification if certified by Director of the Office of Administrative Hearings.

Done this day, April 21, 2009

______________________________________ Allen Reed 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 ___________________________

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