ALJDEC decisions subject to certification as final

09F-1821-ROC · Registrar of Contractors · 2009-08-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 7, 2009 APPEARANCES: Marisol Alvarez, Complainant’s representative; Angelo Palombi, Respondent’s representative; Juan Ugalde, Complainant’s witness ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang _____________________________________________________________________ After filing a complaint regarding the Respondent’s failure to pay the remaining amount due on a contract, the Complainant has established that the Respondent failed to make the final payment in the amount of $10,500.00. The Respondent argued that the Complainant’s work did not meet workmanship standards and it was entitled to an off-set of more than the amount remaining due on the contract. However, the Respondent offered evidence that the contractor it hired to complete the work was not licensed in the State of Arizona. Therefore, Respondent was unable to establish a legal defense to his failure to pay the amount due on the contract. FINDINGS OF FACT 1. Complainant was a subcontractor that installed stucco on a home where the Respondent was the general contractor. Complainant filed a complaint with the Registrar of Contractors against the Respondent alleging that the Respondent failed to pay the amount due on the contract in violation of the Arizona statutes governing licensed contractors. 2. At the hearing, the Respondent admitted that it had not paid the contracted price in full, though it disputed the Complainant’s statement of the agreed upon amount. Respondent argued that the Complainant’s work was not done properly. It had resulted in a Corrective Work Order being issued by a Registrar of Contractors Inspector, and the Respondent had paid $11,860 correcting the work because the Complainant refused to do it. 3. The hearing was set for a further hearing so that the Complainant’s appeal with the Registrar of Contractors would have time to come to the Office of Administrative Hearings. However, the Registrar of Contractors notified the Office of Administrative Hearings that it had not received timely appeal in the case in which the Corrective Work Order had been issued. 4. The Complainant did not dispute that a Corrective Work Order had been issued on the project regarding its work, but Complainant contended that the work was actually correct. Complainant also alleged that the Respondent had not done any corrections to its work. 5. The contract signed by both parties specifies that the final payment is due when the finish coat is done. It provides for a contract price of $35,500.00 for synthetic stucco. It was not disputed that synthetic stucco was the agreed upon application. Respondent paid $25,450.00 to the Complainant, leaving 10,500.00 unpaid. The contract also provides that it will be completed in a substantially workmanlike manner. (See file.) Because there was no signed change order, the Complainant was unable to establish that the contract price was in excess of $35,500.00 as stated in the written contract. 6. In support of its defense, the Respondent submitted a statement by the homeowner that the stucco corrections had been completed and a statement by AMJ Stucco, Masonry LTD. that the Respondent had contracted to complete the repairs for $11,860.00. (Exhibits A and B.) However, a search of the Registrar of Contractors website reveals that AMJ Stucco, Masonry LTD is not a licensed contractor in the State of Arizona. Therefore, Respondent’s defense of expending more than the amount due on the contract to affect repairs should not be accorded any weight. There was insufficient evidence to find that the Respondent was unable to pay or that it had not received sufficient payment on the project to cover the unpaid amount. 7. The Respondent’s license in this matter was suspended from January 9 to 17, 1997, November 22 to December 16, 1998, November 25, 2001 to April 23, 2002, October 6 to November 2, 2004 and June 25 to July 26, 2007 for lack of bond. It was also suspended from August 23 to 28, 2006 and on probation from August 28 to December 26, 2006 as a result of a complaint (05-1190). CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§ 32-1104(A)(4), 32-1154(B) and 32-1156. 2. The Citation and Complaint issued by the Registrar of Contractors in this matter alleged potential violations of A.R.S. § 32-1154(A)(7) and (11). 3. A.R.S. § 32-1154(A)(7) provides for suspension or revocation of a contractor’s license for the “doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured”. 4. A.R.S. § 32-1154(A)(11) provides grounds for suspension or revocation of a contractor’s license for failure to “pay monies in excess of seven hundred fifty dollars when due….when he has the capacity to pay or, if he lacks the capacity to pay, when he has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.” 5. In this case, the Complainant has established that Respondent was in violation of A.R.S. § 32-1154(A)(7) and (11). RECOMMENDED DECISION Based upon the foregoing considerations, the undersigned Administrative Law Judge hereby recommends to the Registrar of Contractors that, commencing on the effective date of the Order in this matter, Respondent’s Class B- license shall be actively suspended until the Registrar receives and accepts sufficient proof that Respondent has paid the Complainant $10,500.00. It is further recommended, in addition to the foregoing indefinite license suspension, if any, that Respondent’s Class B- license shall be placed on active suspension for a period of fourteen (14) days, followed immediately by a period of l80 days disciplinary probation. This additional disciplinary penalty shall commence on the effective date of the Order in this matter or the date on which notice of Respondent’s compliance with the terms of this Order is filed with the Registrar, whichever is later.

If the Director of the Office of Administrative Hearings certifies this Administrative Law Judge Decision, the effective date of the order will be forty (40) days from the date of certification. Done this day, August 17, 2009 OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang Administrative Law Judge

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

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

By ___________________________ -----------------------

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