ALJDEC decisions subject to certification as final

08F-T0245-ROC · Registrar of Contractors · 2009-04-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 6, 2008, March 9 and 10, 2009. APPEARANCES: Complainant, Ms. Mary McCarthy, was represented by Mr. Robert F. Kuhn, Attorney-at-Law. Respondents, Barnett Building and Development Corporation and Barnett Construction Co., LLC, were represented by Ms. Brenda J. Lee, Attorney-at-Law. ADMINISTRATIVE LAW JUDGE: Grant Winston _____________________________________________________________________ The administrative hearing of this matter was held in the Office of Administrative Hearings. Testimony was heard and other evidence admitted to the record and based on the entire record the following Findings of Fact, Conclusions of Law and Recommended Order are made. FINDINGS OF FACT 1. Respondent Barnett Building and Development Corporation (BBDC) is, and during all time material hereto was, a contractor licensed by and doing business in the State of Arizona, holding Class B License number 086778. 2. Respondent Barnett Construction Company, LLC, (BCC) doing business as Tracy Barnett was a contractor licensed by and doing business in the State of Arizona, holding Class B License number 110877. However, BCC was not a licensed Arizona contractor at the time of the construction project and contracting for the construction project which is the subject of his Complaint. 3. Ms. Tracy Barnett is the Qualifying Party and Member of the LLC holding License number 110877 issued to BCC. That license is inactive. She is also a Principal on License number 086778 issued to BBDC. That license is current. Ms. Barnett is the person associated with the Respondents’ licenses who conducted the business dealings with the Complainant in this case. 4. Complainant Ms. Mary McCarthy is the owner of residential property in Tucson, Arizona located at 440 S. Country Club Road. This Complaint concerns the Contract she entered into with BBDC, not BCC, in 2007. 5. The construction permit from Pima County was pulled by Ms. Barnett in the name of BBDC. 6. The construction Contract for this project was a Cost-Plus Contract prepared by Respondents and does not include an estimated date of completion. The Contract heading indicates the contractor is BBDC but at the end of the Contract Respondents included license number 110877 which is the license number of BCC, not BBDC. 7. Much confusion arose over the question of who was Ms. McCarthy’s contracting partner, BBDC or BCC. Although it is found that BBDC was the Complainant’s contracting partner, the blame for the confusion lies squarely with Ms. Barnett and Respondents. It was she who printed BBDC at the head of the Contract, but BCC’s license number is at the foot of the Contract. It was she who paid subcontractors who worked on this project out of BCC funds. It was she who allowed subcontractors to invoice BCC. Naturally, persons dealing with Ms. Barnett could be unsure of which entity she was representing at any given time and assume she was representing BCC when in reality she was representing BBDC. This is clearly what occurred in this case and Ms. Barnett should have been more careful. 8. Finding that BBDC was Complainant’s contracting party necessarily means that BBDC was conducting its contracting business in a name other than the name that appears on License number 086778. Ms. Barnett cannot have it both ways. She cannot be found to have been contracting only for BBDC in this case, without also being found in every instance during the course of this project where she paid for work or used the name or license number of BCC to be contracting in a name other than the name appearing on the license, that is, BBDC. 9. Allegations also arose as to whether Respondent in this project (now having found to have been BBDC) was aiding or abetting unlicensed persons to contract without a license. This matter was fully investigated by the Registrar of Contractors prior to this hearing by Registrar of Contractors Investigator Ms. Tammi Jo Anders. Ms. Anders testified credibly at the hearing. Based on the testimony and Registrar of Contractors records, it is found that this matter was resolved finally by the Registrar of Contractors in a manner favorable to Respondents and there are no facts in evidence to justify reopening that allegation at this time. 10. Respondent BBDC or its subcontractors or employees at the direction of BBDC commenced demolition of the project prior to Pima County issuing the permit for the project. The permit was issued June 11, 2007, but the evidence proved that demolition had begun as early as May 2007. 11. Much if not most of the dispute between these parties is over issues pertaining to what the Contract provided and money. Very little of the agreement was reduced to writing. Even Complainant so testified. There was ample evidence to find that parties were repeatedly making verbal changes as to what was to be done. It is not surprising that now they disagree over whether Respondent BBDC exceeded the scope of demolition or overcharged for the work. Nor is it surprising that the parties have taken their good faith monetary and contract disputes to Superior Court in and for the County of Pima. These parties are currently embroiled in litigation involving claims and counterclaims over this project in Hon. Paul Tang’s court in Superior Court Case No. C2007-5070. Those matters will be more properly resolved in that forum. 12. Notice is taken of Respondents’ prior license records with the Arizona Registrar of Contractors.

CONCLUSIONS OF LAW 1. This administrative hearing was held under authority of and pursuant to A.R.S. § 32-1156, and A.R.S. § 41-1092. 2. Respondents are charged in the instant Citation and Complaint with possible violations of A.R.S. § 32-1154.A.2, 7, 10, 15, 3 (namely A.A.C. R4-9-108, Workmanship Standards), and 13 (namely A.R.S. § 32-1124.B and A.R.S. § 32-1158). 3. There is insufficient evidence to conclude that Respondent BCC, holder of License umber 110877, was a contracting party in this case and therefore BCC ought to be dismissed from the Citation and Complaint. 4. There is insufficient evidence to conclude that Respondent BBDC violated A.R.S. § 32-1154.A.10 by aiding or abetting unlicensed persons to evade the contractor laws of Arizona. 5. Respondent BBDC violated A.R.S. § 32-1154.A.15 by acting in the capacity of a contractor in a name other than the name appearing on the license. 6. Respondent BBDC violated A.R.S. § 32-1154.A.2 and 3. (Namely, A.A.C. R4-9-108) by disregarding the Pima County building codes by beginning demolition prior to the issuance of a construction permit. This also is unprofessional conduct. 7. Respondent BBDC violated A.R.S. § 32-1154.A.13 and A.R.S. § 32- 1124.B. by failing to include its license number preceded by “ROC” on the Contract (included the license number of BCC instead). 8. Respondent BBDC violated A.R.S. § 32-1154.A.13 and A.R.S. § 32- 1158 by failing to include in the Contract the estimated completion date. 9. There is insufficient evidence in the record to conclude that either Respondent committed any wrongful or fraudulent act in violation of A.R.S. § 32-1154.A.7 independent of the other violations already concluded to have occurred. The parties do indeed have good faith monetary and contract disputes which are now being resolved in Superior Court.

RECOMMENDED ORDER In view of the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that License number 110877 of Respondent Barnett Construction Company, LLC be dismissed and that License number 086778 of Respondent Barnett Building and Development Corporation be suspended for a period of five consecutive calendar days commencing on the effective date of this Order (40 days after the date of service appearing on the Registrar’s certification on the Order). It is further recommended in addition to the above-provided penalty that as an express condition for the next annual renewal of Respondent’s license notwithstanding the existence or absence of any uniform assessment by the agency then in effect, the Respondent be required to pay an additional $250.00 into the Residential Contractors’ Recovery Fund, as authorized by A.R.S. § 32-1132.B. Failure to pay such additional deposit into the Recovery Fund shall result in the rejection of any renewal application and a continued suspension of Respondent’s license until payment is made and the renewal issued. In the event of certification of the Administrative Law Judge’s Decision and Order by the Director of the Office of Administrative Hearings, then the effective date of he Order shall be 40 days after the date of that certification. Done this day, April 10, 2009.

______________________________________ Grant Winston Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2009, to:

Registrar of Contractors William A. Mundell c/o Legal Department 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________

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Office of Administrative Hearings 100 N. Stone Avenue, Suite 704 Tucson, AZ 85701 (520) 628-5488 Fax: (520) 628-5575 www.azoah.com