ALJDEC decisions subject to certification as final

09F-2321-ROC · Registrar of Contractors · 2009-11-03

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 14, 2009 APPEARANCES: Complainant: Charles R. Sprinkle appeared, pro per. Respondent: Jose Arnoldo Figueroa, member and qualifying party, appeared and was represented by counsel, Bill King. ADMINISTRATIVE LAW JUDGE: Brian E. Smith _____________________________________________________________________ Evidence and testimony were presented and, based on the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. This matter convened for hearing at the time, date and place set forth in the Notice of Hearing issued by the Registrar of Contractors (“ROC/Registrar”) on July 23, 2009. 2. Complainant Charles R. Sprinkle (“Complainant”) is the owner of a residence located 10801 E. Happy Valley Road, #51, Scottsdale, Arizona (“premises/project”). 3. Respondent West Coast Painting and Construction, L.L.C. (“Respondent”) is a limited liability company which holds Arizona Contractor’s License No. 219500, Class K-34 (Dual Painting) issued by the Registrar on April 29, 2006. Jose Arnoldo Figueroa (“Figueroa”) is a member and the qualifying party for the license. 4. Complainant filed a Complaint with the Registrar wherein he alleged, inter alia, that “Lorenzo,” an employee of Respondent, had stolen jewelry while performing painting work on the project. 5. On November 4, 2008, Complainant filed a request for citation against Respondent with the ROC. 6. On December 12, 2008, Complainant filed an addendum to the Complaint wherein he alleged workmanship problems with the painting work performed by Respondent. 7. On May 29, 2009, the Registrar issued a Citation and Complaint in Case No. 09-2321 charging Respondent with possible violations of A.R.S. § 32-1154 (A) (7) and (3) (namely, R4-9-108, the workmanship rule). 8. Respondent filed an Answer on June 12, 2009, wherein it asserted, inter alia, a general denial of any allegation which would result in discipline of its license and specific denied that it had reason to believe that an employee “would be likely to engage in theft or any other illegal activity at the job site.” Respondent further affirmatively alleged that, with respect to Exhibit 1 of the Complaint, such document is “not enforceable due to lack of consideration and because it constitutes illegal extortion in violation of A.R.S. § 13-1804.” 9. Prior to the presentation of any testimony or other evidence at the hearing, Complainant advised this tribunal, and Respondent stipulate thereto, that no workmanship issues under A.R.S. § 32-1154 (A) (3) and A.A.C. R4-19-108, the workmanship rule) were to be addressed and the scope of the hearing would be limited to possible violation of A.R.S. § 32-1154 (A) (7) only. 10. At the hearing, Complainant testified and submitted Exhibits C-, C-2 and C-3 which were marked, admitted and considered. Joan F. Sprinkle (“J. Sprinkle”) also testified on behalf of Complainant. 11. Figueroa testified on behalf of Respondent and submitted Exhibit R-1 which was marked, admitted and considered. 12. In 2008, Complainant retained Respondent to perform painting work on the premises. 13. On approximately March 28, 2008, during the course of Respondent’s painting the interior of the premises, Complainant noticed seven (7) pieces of jewelry and an undetermined amount of cash were missing from the bedroom area where no work was being performed. 14. At that time, two of Respondent’s employees, “Lorenzo” and Figueroa’s father-in-law, Samuel, had been assigned to paint the interior of the project. 15. Upon learning of loss, Complainant contacted Figueroa and advised him of the situation and identified the missing items. 16. Complainant testified that on March 29, 2008, the day after noticing the theft, Samuel returned to work on the project with Figueroa; Lorenzo did not appear and has never returned to the premises. At that time, Samuel related to Complainant that when Lorenzo was last on the premises he repeatedly went between Complainant’s bedroom/bath area and his (Lorenzo’s) car. Complainant contemporaneously advised Figueroa of the missing items and, thereafter, provided him with a list thereof. 17. Approximately seven to ten days later, Figueroa returned all of the missing jewelry pieces to Complainant; no cash was ever returned. Figueroa never explained the specific details of how he was able to retrieve these items although he testified that Lorenzo never denied taking them. 18. During this period, Complainant also learned of the disappearance of eight (8) other pieces of jewelry from the premises, advised Figueroa of same and subsequently provided Figueroa with a list of the second group of jewelry (Exhibit R-1). 19. Figueroa undertook an investigation of these items including discussing the matter with Lorenzo. Figueroa testified that Lorenzo denied taking these additional eight items. 20. Notwithstanding Lorenzo’s denial and Figueroa’s concomitant disavowal of any responsibility therefor, Figueroa executed and “Acknowledgement of Debt and Repayment Schedule” (“acknowledgement”) on June 16, 2008. (Exhibit C-3) By the terms thereof, Respondent promised to repay Complainant the sum of $15,426.00 (the reported appraisal value of the second group of jewelry) in the following manner: $8,000.00 in October 2008 and the balance “before 2009.” In exchange, Complainant promised to “keep this whole event confidental [sic] and cooperate with [Respondent] in any effort to recover any additional stolen items and reserve the reputation of [Respondent].” 21. Respondent failed to make the required $8,000.00 payment in October 2008 as a result of which Complainant filed the instant Complaint. 22. Respondent failed to pay any amount due under the acknowledgement.

APPLICABLE LAW The Citation and Complaint issued by the Registrar in Case No. 09- 2321 charged Respondent with possible violations of A.R.S. § 332-1154 (A) (7) and (3) (namely, A.A.C. R4-9-108, the workmanship rule). Those statutory sections required that a holder of a license or a person listed on a license shall not commit the following:

7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

…

3. Violation of any rule adopted by the Registrar.

A.A.C. R4-9-108 is named as the rule violation charged pursuant to A.R.S. § 332-1154 (A) (3). That rule provides that all work shall be done in a professional and workmanlike manner, and in accordance with any applicable building codes and professional industry standards.

CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over this matter pursuant to A.R.S. § 32-1101, et. seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154. 2. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated any one, or more, of the statutory sections cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also, Culpepper v. State of Arizona, 187 Ariz. 43, 930 P.2d 508 (App. 1996). 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 (Rev. 6th ed. 1990). 3. The purpose of licensing Arizona contractors is to regulate the conduct of contracting and protect the public from unscrupulous acts. Beazer Homes Ariz., Inc. v. Goldwater, 196 Ariz. 98, 101, 993 P.2d 1062, 1065 (App. 1999); Better Homes Constr. v. Goldwater, 203 Ariz. 295, 300, 53 P.3d 1139 (App. 2002). The statutory purpose is to prevent unscrupulous or financially irresponsible contractors from deceiving and taking advantage of those who engage them to build. Sobel v. Jones, 96 Ariz. 297, 394 P.2d 415 (1964). 4. It is determined and concluded that Complainant established by a preponderance of credible, probative and relevant evidence that Respondent’s failure to remit to Complainant the sum of $15,416.00 pursuant to the acknowledgement set forth in Finding of Fact 20 and Conclusion of Law 4 constituted a wrongful act and substantial injury to Complainant in violation A.R.S. § 32-1154 (A) (7). Contrary to Respondent’s assertion, such document constitutes a valid accord without satisfaction of the acknowledged debt by Figueroa for the eight pieces of jewelry that remain missing from the premises. Moreover, Respondent’s argument that the acknowledgement was executed under duress and is, therefore, unenforceable is without merit. Although Figueroa may have been concerned with his company’s reputation, Complainant was free to exercise his right to file a complaint with the Registrar and seek redress pursuant to a hearing once he learned that Figueroa did not and had no apparent intention to comply with the terms of the acknowledgement. Such action cannot legitimately be considered theft by extortion as posited by Respondent. 5. It is further determined and concluded that, pursuant to the parties’ stipulation prior to the hearing, no violation of A.R.S. § 32-1154 (A) (3) (namely, R4-9-108, the workmanship rule) was proven. …

RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that, commencing on the effective date of the Registrar’s Order entered in this matter, the Class K-34 license of Respondent be suspended until the Registrar receives written proof that Respondent has paid or tendered to Complainant the sum of $15,416.00 in satisfaction of the acknowledgement set forth in Finding of Fact 20 and Conclusion of Law 4. IT IS FURTHER RECOMMENDED that, if Respondent pays or tenders to Complainant the sum of $15,416.00 on or before the effective date of the Registrar’s Order then, in that event, no license suspension shall take place.[1] Done this day, November 3, 2009.

_______________________ Brian E. Smith 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 ___________________________ ----------------------- [1] 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 in this matter will be forty (40) days from the date of that certification.

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