ALJDEC decisions subject to certification as final

08F-G0245-ROC · Registrar of Contractors · 2008-12-10

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 20, 2008 APPEARANCES: Complainant: John Younkman appeared, pro per. Respondent: Richard Eugene Foster, corporate officer and qualifying party, appeared, pro per. Registrar of Contractors: Inspector Eric Ulinger 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[1] 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 this tribunal’s July 15, 2008 Order Granting Continuance. 2. Complainants John F. and Arleen Younkman (“Complainants”) are the owners of a residence located at 410 Ironwood Place, Wickenburg, Arizona (“premises/project”). 3. Respondent Desert Resorts Development Group, Inc. (“DRD”) is a corporation which holds Arizona Contractor’s License Nos. 184305, Class KB- (Dual Residence and Small Commercial) and 205698, Class K-11 (Dual Electrical) issued by the Registrar of Contractors (“ROC/Registrar”) on April 25, 2003 and March 26, 2005, respectively. A review of the licensing database maintained by the Registrar indicates that DRD License No. 184305 was suspended March 21 through April 2, 2004 for lack of a qualifying party, May 1 through June 3, 2005 for non- renewal, September 29 through October 17, 2006 for lack of bond and cancelled October 30, 2007 which followed the resignation of its qualifying party, Richard Eugene Foster (“Foster”) on October 4, 2007. The ROC licensing database further indicates that DRD License No. 205698 was suspended September 29 through October 17, 2006 for lack of bond, April 1 – 5, 2007 for non-renewal and cancelled October 30, 2007 which followed the resignation of its qualifying party, Foster, on October 12, 2007. 4. Respondent Desert Resorts Plumbing and Electrical, Inc. (“DRPE”) is a corporation which holds Arizona Contractor’s License No. 198605, Class K037 (Dual Plumbing) issued by the ROC on August 6, 2004. A review of the licensing database indicates that this license was suspended September 1 - 28, 2006 for non-renewal, September 29, 2006 through January 26, 2007 for lack of bond and cancelled October 30, 2007 following the resignation of its qualifying party, Foster, on October 12, 2007. 5. Complainants filed a complaint with the ROC on August 14, 2007 wherein they alleged eight (8) problem items with the construction of the premises performed by Respondent. 6. Registrar of Contractors Inspector Craig Ulinger (“Ulinger”) conducted a jobsite inspection on September 11, 2007 and issued a Corrective Work Order on September 12, 2007 which required Respondents to perform corrective work on the following items which were enumerated from Complainants’ complaint: 2, 5, 6 and 8. In addition, Inspector Ulinger opined that no action was required of Respondent on Corrective Work Order items 1, 3, 4 and 7 together with two additionally listed items 9 and 10. 7. On October 3, 2007, Complainants filed a request for hearing wherein they advised that only four (4) complaint/Corrective Work Order items remained unresolved: 2 (exterior electrical outlets do not operate), (side door does not fit), 6 (electrical lines to the fountain not properly protected) and 8 (interior doors stick). 8. On March 13, 2008, the Registrar issued a CITATION AND COMPLAINT in Case Nos. G08-0245, G08-0245W and G08-0245X charging respondents with possible violations of A.R.S. §32-1154A 2, 7, 23, 3 (namely, R4-9-108, the workmanship rule) and 13 (namely, A.R.S. §32-1124(B)). 9. Respondent filed an answer on March 26, 2008 wherein was alleged a general denial. Respondents also affirmatively asserted, inter alia, that they acted as subcontractors to Complainants who served as the general contractor/owner/ builder on the project, certain items were outside of the scope of their contract with Complainants and denial of access to perform remedial work. 10. At the hearing, John Younkman (“Younkman”) testified and submitted Exhibits A and B which were marked, admitted and considered. 11. Foster testified telephonically on behalf of Respondent but submitted no exhibits. 12. Inspector Eric Ulinger appeared at the hearing on behalf of the Registrar of Contractors but was excused prior to testifying after each party advised the tribunal that he would not be called as a witness. 13. Prior to the presentation of evidence, Younkman advised that only Corrective Work Order items 2 and 6 remained in issue. 14. On or about August 1, 2005, Respondent submitted a proposal to Complainants to provide, inter alia, “labor, supervision and material for the Younkman residence…” for a total of $175,757.53. (Exhibit A) Annexed to the proposal were itemized lists of labor and materials which both Complainants and Respondent were to provide. 15. Item 11 of Respondent’s obligations provided “materials and installation of electrical rough in including tie in to city stub out.” 16. Respondent thereafter provided Complainants with a list of “project estimates” which delineated expected costs for various aspects of the project. (Exhibit B) Therein, the electrical estimate “prior to meeting with utility company for service location” was $19,978.00 which included installation of the “electrical interior.” 17. Complainants acted as the general contractor on the project; Respondents DRD and DRPE serves as subcontractors under their respective licenses. 18. Younkman testified that with regard to Corrective Work Order 2, the GFI as well as the additional electrical outlets on the East and North exterior walls are included under proposal item 11, were paid for and do not operate. Foster testified that the GFI outlet was in the plans and part of the proposal and was operational at the time Respondent left the project. However, Foster contends that the additional electrical outlets referenced by Younkman were not part of the proposal nor called for under any change order. 19. Younkman testified that with regard to Corrective Work Order 6, though the plans do not indicate an outlet for the fountain, Respondent installed a fountain west of the patio it poured and installed a switch therefor inside the residence. Younkman further testified that the conduit installed by Respondent for the fountain was installed in the ground without the proper conduit. Foster contends that the fountain and attendant electrical work was not part of the proposal and/or evidenced by any change order. 20. Neither party introduced into evidence any plans for the project.

APPLICABLE LAW The CITATION AND COMPLAINT issued by the Registrar of Contractors in Case Nos. G08-0245, G08-0245W and G08-0245X charged Respondents with possible violations of A.R.S. §32-1154A 2, 7, 13 (specifically A.R.S. §32- 1124(B)), 23 and 3 (namely R4-9-108). 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. … 13. Failure in any material respect to comply with the provisions of this chapter. …

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.

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. 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.

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. It is determined and concluded that Complainants failed to establish by a preponderance of credible, probative and relevant evidence that Respondents DRD and/or DRPE violated A.R.S. §32-1154A (2) with regard to Corrective Work Order items (2) and (6). 5. It is further determined and concluded that Complainants failed to establish by a preponderance of credible, probative and relevant evidence that Respondent DRD and/or DRPE violated A.R.S. §32-1154A (13) and, namely, A.R.S. §32-124(B). 6. This tribunal further determines and concludes that Complainants established by a preponderance of credible, probative and relevant evidence that Respondent DRPE violated A.R.S. §32-1154A (23) by failing to comply with the Registrar of Contractors’ September 12, 2007 Corrective Work Order items (2) (exterior electrical outlets do not operate) and 6 (electrical lines to the fountain not properly protected). 7. This tribunal further determines and concludes that Complainants established by a preponderance of credible, probative and relevant evidence that Respondent DRPE violated A.R.S. §32-1154A (3) and A.A.C. R4-9-108, the workmanship rule, by failing to construct in a workmanlike manner items (2) (exterior electrical outlets do not operate) and (6) electrical lines to the fountain not properly protected) of the subject Corrective Work Order. 8. It is further determined and concluded that based on the violations set forth in Conclusions of Law 6 and 7 above, Complainants established by a preponderance of credible, probative and relevant evidence that Respondent DRPE violated A.R.S. §32-1154A (7) as charged in the issued Citation in Case No. G08-0245X.

RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that commencing on the effective date of the Registrar’s Order entered in these consolidated matters, the Class K-37 License No. 198605 of Respondent DRPE be suspended until the Registrar of Contractors receives written proof that Respondent DRPE has remitted to Complainants a sum adequate to allow Complainants to retain a third party contractor to correct Corrective Work Order (2) and (6) as set forth in Conclusions of Law 6 and 7 hereof. IT IS FURTHER RECOMMENDED that the entire Citation and Complaint in Case Nos. G08-0245 and G08-0245W regarding Respondent DRD and its License Nos. 184305 and 205698, respectively, be dismissed.[2] Done this day, December 10, 2008.

________________________ Brian E. Smith 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] The record consists of those documents found within the Registrar of Contractors’ file, the content of which the Administrative Law Judge took Administrative notice, the exhibits offered by the parties and admitted into evidence and the digital record of the proceedings under A.A.C. R2-19- 121. [2] 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