ALJDEC decisions subject to certification as final

09F-0231-ROC · Registrar of Contractors · 2009-11-30

STATE OF ARIZONA OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 10, 2009

APPEARANCES: Complainants appeared and testified on their own behalf; Respondent was represented by its President and Qualifying Party Troy Teague, who also testified on his own behalf. Other witnesses were ROC Inspector Dennis Cook and former employee of Respondent James Wesolaski.

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainants bring this action against Respondent Teague Homes for failure to complete a construction project, which Complainants claim was abandoned when Respondent breached the contract by refusing to continue work on the project without further payment. Respondent denies the allegation, claiming that he is not required by the contract to continue the project unless payment is made. This tribunal entered the complaint file received from the Registrar of Contractors into the record, along with an exhibit notebook from each party containing Complainant’s Exhibits 1 through 10, Complainant’s Photographic Exhibits Photo-A through Photo-E, and Respondent’s Exhibits A through O. The parties presented evidence and testimony. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Decision finding no abandonment but ordering Respondent to perform several corrections or face license discipline. FINDINGS OF FACT 1. Respondent is the holder of a class B- general residential contractor license (No. 165534) issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform general residential construction of a structure or appurtenance, except for certain specialty contracting such as electrical, plumbing, swimming pools, etc.[1] Troy Teague is Respondent’s President and Qualifying Party.[2] 2. In October 2007, the parties entered into a contract[3] whereby Respondent was to build a substantial addition (casita) to Complainants’ house. The contract price for the project was over $88,000, to be paid in progress payments paid out in six installments and one final payment upon completion (seven payments in total), according to a disbursement schedule listed in the contract. Complainants paid the first five installments up though “completion of drywall,” the condition for the fifth installment.[4] 3. The sixth installment was conditioned upon “completion of painting.” The testimony at hearing revealed that the interior and exterior of the addition have been painted, although Complainants claim that the painting was not done properly and needs correction. Complainants paid Respondent half of the sixth installment before the painting was completed. Upon completion of the painting, Respondent demanded the second half of the sixth installment before proceeding further with the project. 4. The greater weight of the evidence at hearing fails to show that Respondent is in breach of contract or has abandoned it without legal excuse. Respondent has substantially complied with the condition for payment of the sixth installment and has not abandoned the project.[5] 5. ROC Inspector Dennis Cook inspected the parts of the project that are substantially complete and issued a Corrective Work Order (“CWO”) in September 2008 that listed several items for correction, and ordered Respondent to otherwise complete the project according to the contract. Some of these correction items were raised at the hearing, in addition to the abandonment claim, as described in the following findings. 6. The Inspector, during his pre-hearing inspection on November 4, 2009, found with respect to the roof that tiles were not in alignment (wavy edge lines) in some areas and that there were excessive gaps.[6] These conditions on the roof need correction. 7. When Respondent stopped work on the job, dirt piles were left and Complainants had them removed by others because they presented an unsightly hazard. This cost Complainants $200, for which they ask to be reimbursed as restitution. The evidence does not support this request because no invoice was provided in support of the request. 8. During the hearing, Respondent agreed to repair the cable leading to the satellite dish. 9. A set of French doors in the addition is mismatched (CWO item 1) and needs to be corrected per the homeowners’ choice of available options. 10. Respondent agreed at the hearing to pay $310 for roof inspection fees incurred due to an independent professional roof inspection. 11. Respondent also agreed to pay $30 for a plant that was damaged. 11. No other claim by Complainants was supported by sufficient evidence.[7] 12. Finally, the project needs to be completed according to the terms of the contract. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[8] Further, the standard of proof at hearing is by preponderance of the evidence.[9] Therefore, Complainants bear the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint.[10] Complainants have met that burden in part. 2. The Citation and Complaint alleges violations of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(1), (A)(2), (A)(7), (A)(11), (A)(12), (A)(17), (A)(23), and (A)(3) by way of ROC Rule R4-9-108. Subsection (A)(1) prohibits a contractor from abandoning a project without legal excuse. Subsection (A)(2) requires contractors to build according to applicable plans, specifications, and building codes. Subsection (A)(7) prohibits wrongful acts that substantially harm another. Subsection (A)(11) prohibits a contractor from failing to pay an amount greater than $750.00 when due for materials in connection with a licensee’s operation as a contractor. Subsection (A)(12) requires contractors to comply with applicable safety or labor laws. Subsection (A)(17) prohibits a contractor from knowingly contracting outside the scope of a license. Subsection (A)(23) prohibits failure to comply with an ROC Corrective Work Order. And subsection (A)(3) prohibits violating any ROC rule, namely R4-9-108 which prohibits poor workmanship. 3. Regarding subsection (A)(1), the evidence does not show that Respondent abandoned the project. 4. However, regarding subsections (A)(3), (A)(7) and (A)(23), the evidence shows that Respondent violated those provisions and that corrective work is needed. 5. No other violations have been shown. 6. A review of current ROC records shows that Respondent’s license was issued in 2001 and has not been disciplined in that time. This is seen as a good record. 7. Under the circumstances of this case, this tribunal concludes that the appropriate remedy is to require that Respondent to correct the roof, pay $340 to Complainants as agreed at the hearing, repair the satellite cable as agreed, correct the mismatched doors, and complete the project per the contract as noted above or face a suspension of its license until the corrections are made. RECOMMENDED ORDER IT IS RECOMMENDED that Class B- license 165534, held by Teague Homes, Inc. dba Woodbridge Homes and Remodeling be suspended beginning the effective date of the Registrar’s Order unless Respondent provides written proof to the Registrar of correction of the items above and written proof of payment of $340.00 to Complainants and the Registrar of Contractors accepts such written proof. IT IS FURTHER RECOMMENDED that if Respondent makes the corrections and full payment of the restitution on or before the effective date of the Registrar’s Order, the license suspension shall not take place and case 090231 shall be closed.

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 30th day of November 2009.

Office of Administrative Hearings

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See, Arizona Revised Statutes (“A.R.S.”) § 32-1102 and Arizona Administrative Code (“A.A.C.”) R4-9-103 for a description of license classifications. [2] Hereinafter, “Respondent” will refer to either the company or Troy Teague, depending on context. [3] Exhibit 2 and Exhibit A. [4] By making these payments, Complainants are found to have waived any contractual claims up to those points of the project progress. [5] Complainants’ position that cabinet-work is included in the “completion of painting” portion of the progress payments is not persuasive. [6] These conditions are depicted in Exhibit Photo-B. [7] The “bee infestation” claim is not found to be Respondent’s fault or responsibility. [8] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [9] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [10] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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