ALJDEC decisions subject to certification as final

08F-G0718W-ROC · Registrar of Contractors · 2008-11-13

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 4, 2008.

APPEARANCES: >The Complainant appeared in her own behalf. >The Respondent appeared through Carrol Lee Powell, its qualifying party and a member of the LLC entity.

ADMINISTRATIVE LAW JUDGE: Robert I. Worth _____________________________________________________________________

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

FINDINGS OF FACT

1. Notice is taken of the Registrar’s license files which reveal that Respondent’s Class B license, held by a Limited Liability Corporation (L.L.C.) entity, had expired on August 1, 2008 while this action was pending, after having been allowed to remain suspended for Non-Renewal since July 31, 2007. Such license expiration status does not preclude Complainant from continuing to pursue her available administrative

remedies nor does it prevent the Registrar from conducting these administrative disciplinary proceedings which are expressly authorized by statute.[1]

2. Complainant was shown to have filed her complaint against another licensed contractor, Kalosa Builders, LLC (herein called “Kalosa”), and not against the above-named Respondent. Since some allegations contained in the complaint and also one of the submitted documents made reference either to Respondent’s business name (Rocking P Concrete) or to its license number, the Registrar determined that a Citation should be issued against both entities, assigning different Case Numbers to the respective administrative actions.

3. The reported result of the Citation against Kalosa, according to the testimony at the instant hearing, was a default for failure to file a timely answer, and if no further review or appeal rights are exercised or granted, the Default Order that had been entered against Kalosa, soon to become final, reportedly included a provisional license suspension conditioned upon the satisfaction of the complaint allegations plus the payment of a civil penalty. The instant hearing was scheduled following the filing of a timely answer to the Citation issued against the license of Rocking P Concrete.

4. The credible testimony tended to indicate that Joshua Stine (herein called “Stine” or “Mr. Stine”), an individual recommended by another contractor with whom Complainant was working on other aspects of her exterior home remodeling project, had submitted a proposal to Complainant on October 18, 2007 for certain specified concrete slab and sidewalk work on the property. The total cost price, agreed to by Complainant, was stated to be $6,250.00, and an advance down payment of $4,000.00 was to be payable at the time of the contract, with the balance of $2,250.00 to be paid upon completion of the contemplated concrete work.

5. Mr. Stine had initially represented himself to Complainant as being affiliated with Respondent, Rocking P Concrete, and his cellular phone voice mail had purportedly confirmed such affiliation. However, Stine had admitted to Complainant at their initial meeting that the license of Rocking P Concrete was then under suspension, accurately disclosing the non-renewal suspension status that had existed since July 31, 2007, but that he was also able to work under another current license; namely, that of Kalosa.

6. Complainant had herself confirmed the suspended status of Respondent’s license before she signed any contractual agreement with Mr. Stine and she also confirmed the current status of the license held by Kalosa. She even caused an initialed deletion and insertion on the submitted proposal form so as to reflect the correct license number for Kalosa, including the name of its listed owner, Brad Austin Fourdray.

7. On or about the time of entering into the agreement with Mr. Stine, Complainant had made a telephone call to Mr. Foudray, the listed principal on the license of Kalosa, and obtained confirmation that he knew Mr. Stine, implicitly demonstrating some extent of authorization for the contemplated construction-related dealings, after which she signed the proposal form, thereby effectively entering into a contract relationship.

8. The express language of the written proposal was shown to have required that all checks by Complainant were to be made payable to Joshua Stine, and Complainant, exercising what may be somewhat questionable wisdom, did abide by such requirement by tendering the advance payment of $4,000.00 by a check made payable directly to Stine, believing he was fully authorized by Kalosa to receive the monies on behalf of Kalosa under whose license the agreed work would be performed.

9. The credible evidence of record, not effectively disputed by Complainant, was that Stine was never employed by Respondent in any capacity nor was he ever independently authorized to conduct business on behalf of Respondent. It did appear that Stine was merely a friend of the son of Respondent’s qualifying party, Carrol Lee Powell, who might see Stine not more than two or three times a year. Respondent remained wholly unaware that Stine was using its business name or was otherwise holding himself out to members of the public as a representative for the bidding or performing of construction work.

10. Complainant candidly admitted that she did not intend to file any complaint against Respondent, since, at the outset of her contractual arrangements, she had been made aware of its (Respondent’s) then-suspended license status. Instead she believed that she had contracted with Kalosa, verified that Kalosa’s name and license number was accurately reflected on the contract agreement and expressly identified Kalosa on the formal complaint filed with the Registrar.

11. Stine did commence performance of the specified concrete work by obtaining concrete materials and installing a significant portion of the concrete slabs and walkways. The performed work, including a lack of levelness and deficient finishing, was shown to be substandard and unacceptable, also consisting of materials that were not equal to the contractually specified 3,000 p.s.i strength. Moreover, Stine left the jobsite work incomplete and in a condition where any successor contractor would not be able to utilize most all of the partially installed concrete slabs and walks. The incomplete status of the project effectively eliminated any duty by Complainant to transmit the unpaid contract balance, and she did not do so.

12. Complainant was shown to have resorted to another licensed contractor to achieve completion of the construction work that was poorly performed and left incomplete by Stine. The use by the successor contractor of different materials over a

portion of the slab work was further shown not to represent any upgrade since the costs of total demolition and removal of Stine’s underlying work appeared to more or less balance out any higher materials cost differential charged by the successor contractor and paid by Complainant.

13. It must be held that the evidence failed to sufficiently demonstrate that Stine was acting with any actual or even ostensible authority for Respondent under all the circumstances, but instead was acting impermissibly as an unlicensed independent contractor in all dealings with Complainant without any actual or imputed knowledge of Respondent.[2]

14. To the extent that this individual (Mr. Joshua Stine) may be following a past or ongoing pattern of using licenses of other licensed contractors without knowledge or authorization, the Registrar of Contractors may well consider initiating an investigation into the activities of such individual and the subsequent taking of appropriate action, if and as may be warranted.

CONCLUSIONS OF LAW

1. At these administrative hearings, the complaining party generally has the burden of proof, Vazzano v. Superior Court, 74 Ariz. 369, 249 P.2d 837 (1952) and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (1996). See also Smith v. Arizona Department of Transportation, 146 Ariz. 430, 706 P.2d 756 (1985); Utah Construction Company v. Berg, 68 Ariz. 285, 205 P. 2d 367, (1949); Rule R2-19-119, A.A.C. 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 of record did not sufficiently establish that Respondent has violated the provisions of the State’s contracting laws enumerated in the issued Citation. On the contrary, it appeared that Respondent was itself victimized by the illegal and wrongful actions of an unlicensed individual.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that the Citation and Complaint in Case Number G08-0418W against Respondent, Rocking P Concrete, LLC, be dismissed.

It is further recommended that the Registrar initiate an investigation into the possibility of past or ongoing criminal or otherwise wrongful activities of Joshua Stine that may constitute violations of the State’s contracting laws.

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 forty (40) days from the date of that certification.

Dated: November 14, 2008. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

Armando Contreras, Director Registrar of Contractors 3838 North Central Avenue (Suite 400) Phoenix, AZ 85012 - 1906 ----------------------- [1] See A.R.S.§32-1154(C).

[2] A different conclusion may be appropriate when evaluating the contracting law responsibility of Kalosa under all the circumstances, since one of the owners of that licensed entity had expressly been made aware by Complainant of Stine’s activities and involvement on Complainant’s jobsite premises, thereby potentially aiding and abetting the impermissible conduct of Mr. Stine. That issue is not properly before this tribunal.

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