ALJDEC decisions subject to certification as final

08F-A0190-ROC · Registrar of Contractors · 2008-09-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 16, 2008 APPEARANCES: Complainants appeared through Co-Complainant, Tracey Bowden and Respondents[1] appeared through their owner and qualifying party, Hector Gonzalez. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. Pursuant to contract, Complainants retained Respondent to accomplish new home construction. Complainants allege numerous deficiencies in the work performed and/or materials provided by Respondent and same are discussed in the findings below.

2. Evidence of record showed that Respondent did not complete the project in question and it has since been completed by another contractor. Complainants seek monetary damages against Respondent and/or access to the Residential Contractors’ Recovery Fund.

3. Suzanne Gillies (“Gillies”) testified for Complainants. She is a vice-president of the bank that provided the construction loan for the new home construction project. According to Gillies, Respondent submitted draws on the construction loan prior to the time the work was to have been fully completed for said draw.

4. Due to Respondent’s failure to complete the home in a timely manner, Gillies testified that the construction loan had to be extended and that caused the loan to go up from $372,000.00 to $412,000.00. In addition, Complainants were forced to add another $20,000.00 of their own money into the project in order to get the project completed.

5. Ultimately, Complainants filed the instant Complaints with the Registrar of Contractors. After receiving the Complaints, the matter was assigned to one of the Agency’s inspectors. The inspector conducted a jobsite inspection and after concluding the inspection, he issued a Corrective Work Order[2] (“CWO”), requiring Respondent to accomplish specified remedial work within a stated period of time.

6. The weight of the evidence of record was sufficient to support a finding that the following deficiencies were present in Respondent’s work, at the time Respondent ceased working on the project:

a. One window was installed out of square. Another window was installed upside down and there was a window with broken glass. b. There was significant water damage to areas of the interior wood, since Respondent installed said interior wood without properly completing the dry-in of the roof. c. The applicable plans and specifications called for a coat closet in the basement, however, Respondent installed the mechanical equipment in said area. d. The tongue and groove ceiling in the master bedroom was damaged, as manifested by holes in the ceiling, chipped wood, and wood that had been generally beaten on. e. One of the columns for the walking deck was more than twelve (12) inches out of plumb. f. There was no rebar in specified concrete columns. g. The walking deck was six (6) inches out of square. h. Corner piers had no rebar i. Wood posts were placed directly in the soil. j. Logs planned for the interior of the home were left outside and unprotected. These logs were ruined due to exposure to rain water.

7. Evidence of record demonstrated that the applicable contract failed to show an expected completion date, in violation of the applicable charged section of the State’s Contracting laws.

8. Gonzalez testified at the hearing and the salient portions of his testimony included the following:

a. He attributes a degree of the delay on the project to the fact that the excavator was behind schedule by at least two (2) months, the log home kit was delivered before Respondent was ready to install it and arrangements had to be made to store and then re-deliver same, there was very bad winter weather, and the plans and specifications that were not very specific, requiring Respondent to bring in an engineer to assist with the project. b. He denies that he ever sought construction draws ahead of schedule. c. This was a difficult project, due to the fact that the home was being built on a cliff. d. Complainants terminated Respondent from the project and thus, he could not correct and/or complete the project.

9. Complainants’ exhibit no. 12, entered into evidence at the hearing, is a letter Complainants sent to Respondent, after the Agency inspector completed his jobsite inspection but prior to the issuance of the CWO. Gonzalez testified that based on his interpretation of said letter, he understood that Complainants had terminated him from the project and that is the reason why he never attempted to comply with the CWO. The letter is somewhat ambiguous. Although the first sentence advises Respondent that he is terminated, on the second page Complainants gave Respondent certain options to rectify the situation, including “continue with the process with the Registrar of Contractors and allow you to attempt to make the necessary corrections…” or have Respondent pay for a new contractor to make the corrections ordered by the Registrar of Contractors.

10. Although Gonzalez claimed he contacted the assigned Registrar of Contractors’ inspector regarding the language of the above-described letter, he admits that he never contacted Complainants. He should have contacted Complainants to resolve the issues set forth in the CWO and his failure to contact them in this regard is found to be a violation of the applicable charged section of the State’s Contacting laws regarding the need to fully comply with an official Agency directive.

11. Although Complainants claim damages in excess of the $50,000.00, the instant record was insufficient to show a liquidated sum due and owing to Complainants from Respondent. The instant matter is an administrative, disciplinary proceeding relating to a contractor’s license. The Registrar’s role in this matter is not one of a collection agency or judicial tribunal, but merely one duty-bound to determine whether a violation of this State’s contracting laws has occurred and, if so, impose a proper disciplinary sanction. Neither the filing of a Complaint with the Registrar, nor a demonstration that a contractor violated state law, vests in a Complainant the right to receive any particular individualized relief or an order imposing any particular discipline.

12. As set forth in the Citation and Complaint issued by the Registrar of Contractors, Respondent was advised that in the event of a finding of a violation against Respondent, Respondent’s prior disciplinary record of final Registrar of Contractors’ orders may be considered in mitigation or aggravation. Accordingly, subsequent to conclusion of the instant hearing, notice was taken of official records of the Registrar of Contractors regarding any prior final disciplinary orders against Respondent’s C-39R license and said notice revealed that the instant complaint was the only complaint on the Registrar of Contractors’ current record regarding said license. Therefore, Respondent’s prior record is properly deemed to be excellent and thus, is viewed as a matter in mitigation for any disciplinary penalties to be imposed against that license as a direct result of this case. Although Respondent’s KB-02 license shows one matter that was resolved there are no other Complaints pending on that license, other than the instant Complaint, and thus, that record is also deemed to be good.

CONCLUSIONS OF LAW

Respondents violated the provisions of A.R.S. § 32-1154A (23), (7), (2) and (3); namely Rule R 4-9-108.

RECOMMENDED ORDER

In view of the foregoing it is recommended, commencing on the effective date of the Order entered in this matter, that the Class KB-02 license of Respondent shall be suspended for 21 days, followed immediately by a period of disciplinary probation for 180 days. It is further recommended, in addition to the above-provided penalties,, that on behalf of the KB-02 license Respondent pay the sum of $425.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32-1154D. The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s KB-02 contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. §32-1101A(5), unless payment of any outstanding prior civil penalty is tendered. It is further recommended, in addition to the above provided penalties, if any, that any continuation or restoration of Respondent’s KB- contracting rights, whether or not probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of twenty-four (24) months, including future renewal periods, in the amount of $3,000.00, such bond or deposit to be for the sole benefit of persons injured as defined in A.R.S. § 32-1131 (3) and to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. § 32-1152 (D). Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above-provided twenty-four (24) month period and only if no claims are then pending. In view of the foregoing it is recommended, commencing on the effective date of the Order entered in this matter, that the Class C-39R license of Respondent shall be suspended for 7 days, followed immediately by a period of disciplinary probation for sixty (60) days. It is further recommended, in addition to the above-provided penalties , that on behalf of the C-39R license Respondent shall pay the sum of $150.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32-1154D. The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s C-39R contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent , as defined in A.R.S. §32- 1101A(5), unless payment of any outstanding prior civil penalty is tendered. 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.

Done this day, September 22, 2008.

______________________________________ Mark A. Silver Administrative Law Judge

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

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

By ___________________________

----------------------- [1] For the purpose of this Decision and Order the term Respondent shall be used, since Respondents’ KB-02 general contractors license was ultimately responsible for all of the work, regardless of whether or not the HVAC work was performed under Respondent’s C-39 license. [2] The inspector actually issued two Corrective Work Orders, due to the fact that two (2) licenses were involved but the issues on the CWO issued to the HVAC license basically overlapped the same issues on the CWO issued to Respondent’s general contractor’s license.

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