ALJDEC decisions subject to certification as final

08F-G0819-ROC · Registrar of Contractors · 2008-10-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 22, 2008 APPEARANCES: Complainant Dan Jarrett appeared on his own behalf. Respondent G D E Construction, Inc., doing business as Sun Valley Pools and Spas, failed to appear. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ The issue presented by this matter is whether Respondent G D E Construction, Inc., doing business as Sun Valley Pools and Spas (“Sun Valley”), is subject to discipline for acts or omissions in violation of A.R.S. § 32-1154(A). Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law and Recommended Order: Procedural Background On August 15, 2008, the Registrar of Contractors issued a Notice of Hearing advising the parties that the scheduled hearing of this matter would convene on September 22, 2008 at 1:30 p.m. On the date and at the time scheduled for the hearing, Complainant Dan Jarrett was present. No one appeared on behalf of Sun Valley. The Administrative Law Judge delayed the commencement of the hearing for approximately fifteen minutes to allow for the appearance of Sun Valley, or the receipt of any information that would constitute good cause for Sun Valley’s absence or delay. No such information was received. Therefore, the hearing proceeded in Sun Valley’s absence.

FINDINGS OF FACT Sun Valley is the holder of a Class B-05 license (No. 198439) issued by the Registrar of Contractors (“ROC”).[1] 2. On August 13, 2007, Complainant Dan Jarrett contracted with Sun Valley for the construction of a pool and spa at the Jarretts’ home located at 42622 North 44th Drive, in Phoenix, Arizona. The contract price was $50,051.00. See Exhibit 5. Also on August 13, 2008, Mr. Jarrett and Sun Valley executed an Additional Work Authorization that included a landscape and barbeque package, for an additional $11,949.00. Id. Mr. Jarrett explained at hearing that the landscape and barbeque project was to be accomplished by a separate contractor, however, for purposes of obtaining his bank loan, all work was encompassed into one contract, and he and Guy Erickson, Sun Valley’s qualifying party, had agreed that all of the progress payments issued by the bank would contain an overage, the amount of which Sun Valley would give to Mr. Jarrett to pay toward the landscaping and barbeque. 3. Construction began shortly after the contract was executed, and Mr. Jarrett was pleased with the progress until October 2007 when construction ceased. Mr. Jarrett attempted to contact Sun Valley, but was unsuccessful until late November 2007. Mr. Erickson then advised Mr. Jarrett that Sun Valley was no longer in business and would be unable to complete the construction of the pool. Mr. Erickson sent a letter to Mr. Jarrett dated November 23, 2007, advising of the remaining steps necessary to complete the pool and spa, along with the names and telephone numbers of subcontractors he recommended that Mr. Jarrett use for the completion of construction. See Exhibit 4.

4. On August 13, 2007, Mr. Jarrett had paid Sun Valley a $1,000.00 down payment. On August 24, 2007, Sun Valley received a progress payment in the amount of $18,300.00, of which Mr. Jarrett received a $3,584.70 rebate. On September 24, 2007, Sun Valley received a progress payment in the amount of $18,300.00, of which Mr. Jarrett received a $3,584.70 rebate. On November 16, 2007, Sun Valley received a progress payment in the amount of $18,300.00, however, Mr. Jarrett did not receive a $3,584.70 rebate from this payment. Mr. Jarrett has paid a total of $55,900.00 to Sun Valley, and has received rebates from Sun Valley in the total amount of $7,169.48. Therefore, Mr. Jarrett has paid $48,730.52 toward the pool and spa contract price of $50,051.00, leaving an unpaid balance of $1,320.48. 5. On November 28, 2007, Mr. Jarrett filed a complaint against Sun Valley with the ROC. In his complaint, Mr. Jarrett alleged the following: Guy Erickson of Sun Valley Pools informed me today that he is going out of business. My pool still has several steps that need to be completed, is not finished. I have reason to believe that subcontractors have not been paid for services completed.

6. Mr. Jarrett submitted copies of photographs taken on November 30, 2007, depicting the condition of the pool at that time. See Exhibit 2. Mr. Jarrett credibly testified that it cost $12,020.73 to complete the pool, and as such, the Jarretts expended $10,700.33 above the pool and spa contract price to complete the pool and spa. CONCLUSIONS OF LAW In this proceeding, Mr. Jarrett bears the burden to prove, by a preponderance of the evidence, that Sun Valley is subject to discipline for violations of A.R.S. § 32-1154(A)(1), (A)(7), and/or (A)(11) as charged by the ROC in its June 3, 2008 Citation and Complaint. See Arizona Administrative Code R2-19-119. 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). The Administrative Law Judge concludes that Mr. Jarrett met his burden of proof as to two of the three ROC charges. Under A.R.S. § 32-1154(A)(1), a contractor is subject to discipline for “abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” The Administrative Law Judge concludes, based on the weight of the credible evidence of record, that Sun Valley failed to complete the project that it contracted to perform without legal excuse for such failure. Therefore, the Administrative Law Judge concludes that Sun Valley violated A.R.S. § 32- 1154(A)(1). Under A.R.S. § 32-1154(A)(11), a contractor is subject to discipline for “failure . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with his operations as a contractor . . .” Mr. Jarrett did not address this alleged violation. As such, the Administrative Law Judge does not conclude that Sun Valley violated A.R.S. § 32-1154(A)(11). Under A.R.S. § 32-1154(A)(7), a contractor is subject to discipline for “the doing of a wrongful or fraudulent act . . . as a contractor resulting in another person being substantially injured.” The Administrative Law Judge concludes, based on the weight of the credible evidence presented at hearing, that Sun Valley committed a wrongful act that substantially injured Mr. Jarrett by failing to complete the project that it contracted to perform. Therefore, the Administrative Law Judge concludes that Mr. Jarrett established that Sun Valley violated A.R.S. § 32- 1154(A)(7). Based on the foregoing, it is appropriate for the ROC to impose discipline against Sun Valley’s Class B-05 license. Upon consideration of all of the facts and circumstances presented by this case, including Sun Valley’s failure to appear for hearing and its suspended license status, the Administrative Law Judge concludes that the ROC should revoke Sun Valley’s Class B-05 license. RECOMMENDED ORDER In view of the foregoing, it is recommended that Sun Valley’s Class B- license shall be revoked on the effective date of the Order entered in this matter. 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 40 days from the date of that certification. Done this day, October 1, 2008.

______________________________________ Sondra J. Vanella Administrative Law Judge

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

Armando Contreras, Acting Director Registrar of Contractors 3838 North Central Avenue Phoenix, AZ 85012

By ___________________________

----------------------- [1] A review of the ROC's official records revealed that Sun Valley’s contracting license was suspended on September 1, 2008 for nonrenewal, and was suspended on December 29, 2007 for lack of bond. Such suspended license status does not preclude this tribunal from conducting these administrative proceedings. A.R.S. § 32-1154(C).

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