ALJDEC decisions subject to certification as final

09F-2363W-ROC · Registrar of Contractors · 2009-10-05

STATE OF ARIZONA OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 14, 2009

APPEARANCES: Complainant was represented by attorney Mark Hansen, accompanied by Managing Member Piyu Robinson; Respondent was represented by attorney Chase Halsey, accompanied by sole proprietor Rob Planty.

WITNESSES: For Complainant: Larry Job, Bannon Construction Piyu Robinson Amil Fornatora, Construction Forensic Consultants

For Respondent: Rob Planty

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant Jungle 168, LLC brings this action claiming that Respondent Rob’s Contracting, during the remodeling of a building into the Jungle Buffet restaurant, failed to follow plans, specifications, and building codes, performed with faulty workmanship, aided and abetted unlicensed contracting activity, acted wrongfully and substantially harmed Complainant, and abandoned the contract without legal excuse. Respondent denies these allegations, claiming that the dispute is merely a contractual dispute that does not rise to the level of a violation of contracting laws. This tribunal entered the complaint file received from the Registrar of Contractors into the record, along with Complainant’s C1, C4 through C11, C13, C16, C17, C23, and C27,[1] and Respondent’s Exhibits Volumes A (A1 through A6), B (B1 through B7), and C (C1 through C4).[2] The parties presented evidence and testimony from the witnesses listed above. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Decision finding violations of Arizona contracting law and recommending revocation of the licenses. FINDINGS OF FACT 1. Respondent Robert Frederick Planty dba Rob’s Contracting Services is the holder of a class B-02 license (No. 076250), a general small commercial building contractor’s license issued by the Registrar of Contractors (“ROC”). It authorizes Respondent to perform general small (up to $250,000) commercial construction, except for electrical, plumbing, air conditioning, and other specialty trades.[3] Respondent also holds a class L-11 license (No. 076251), a specialty (electrical) commercial contracting license issued by the ROC. It authorizes Respondent to perform electrical work on commercial projects.[4] Rob Planty is Respondent’s sole proprietor and Qualifying Party. Hereinafter, “Respondent” will refer to the business and Rob Planty. 2. In June 2008, Complainant hired Respondent to remodel a building for an Asian food restaurant. The total contract price was $245,000.00, to be paid in five equal draws.[5] Under the terms of the contract, the project was to be completed on or before September 28, 2009 (90 days).[6] The contract provided for a daily penalty of $500.00 for each day that the project was not complete after the deadline. 3. Respondent did not finish the project by the deadline. Indeed, there is ample evidence that Respondent’s work on the project was sub- standard and did not follow the plans and specifications. The evidence shows that in October 2008, the project was only 50% complete. 4. Complainant submitted testimony and documentation from two experts, Larry Job of Bannon Construction Company, LLC and Amil Fornatora of Construction Forensic Consultants, LLC, showing that at 50% completion of the project serious workmanship issues were present. For example, the evidence shows that the drain in the kitchen flooring is higher than the surrounding floor, such that the floor slopes toward the walls rather than toward the drain in the center. Complainant has to have workers spend 45 minutes pushing water up to the drain each night after the floor is cleaned. Furthermore, the grease ducts are undersized, presenting a fire hazard, and the grease duct vents were not installed according to plan (some of them are up against a parapet wall). Another example of shoddy workmanship is that an electrical receptacle was placed inside a fountain at the waterline. In sum, the record is filled with evidence of very poor workmanship and failure to follow plans, specifications, and building codes. 5. At hearing, Respondent testified that the plumbing work on the project was performed by Lenny Kong. He did not know if Kong held a license and did not check to see if that was the case. ROC records show that Kong does not hold any license for contracting work and did not hold a license at the time of this work. 6. In addition, Respondent admitted in his testimony that he performed mechanical work on the project even though he does not have a specialty license for that type of work. 7. Even more alarming than that testimony, Respondent testified that Lenny Kong was the project manager on the job because of his language and ability to speak with Complainant’s principals. However, Respondent testified that Kong was not Respondent’s employee. He also testified that he was not aware of any license that Kong held. After testifying to this at hearing, Respondent then would not admit that he knew this was contracting without a license by Kong. He also would not admit that he aided and abetted unlicensed contracting. 8. Respondent testified that Lenny Kong “had carte blanche” on the project.[7] 9. In late October 2008, Complainant reasonably fired Respondent and brought in others to complete the job enough to get the restaurant open. 10. The evidence shows that Complainant was substantially damaged by Respondent. However, the evidence presented as to how much restitutionary damages Respondent caused is not clear enough to settle on a particular amount. There is a good faith dispute as to the amount of restitutionary damages. 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, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint.[10] Complainant has met that burden. 2. The Citation and Complaint alleges violations of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(1), (A)(2), (A)(7), (A)(9), (A)(10), (A)(17), and (A)(3) by way of ROC Rule R4-9-108. Subsection (A)(1) prohibits abandonment of a contract without legal excuse. Subsection (A)(2) prohibits departure from plans, specifications, or building codes. Subsection (A)(7) prohibits wrongful acts that substantially harm another. Subsection (A)(9) prohibits failure to complete a project for the price stated. Subsection (A)(10) prohibits aiding and abetting an unlicensed person to contract without a license. Subsection (A)(17) prohibits knowingly contracting beyond the scope of the license. And subsection (A)(3) prohibits violating any ROC rule, namely R4-9-108 which prohibits poor workmanship. 3. The evidence is sufficient to show that Respondent has violated those statutes cited in the Citation and Complaint. 4. The evidence shows that Respondent gave Lenny Kong, an unlicensed person and not an employee, full authority to act and make decisions on Respondent’s behalf for this project. This is an egregious violation of subsection (A)(10). Kong then proceeded to do a very poor job and failed to meet the completion deadline. This caused a breach of contract and abandonment without legal excuse. The record shows serious workmanship violations and failure to follow plans, specs, and codes. This supports the remaining violation allegations. 5. The amount of damages caused by Respondent’s violations is a matter not clear on the record here, and is better suited for adjudication in the civil courts. 6. A review of current ROC records shows that Respondent has held both licenses since 1988, with no disciplinary actions against it. This is an excellent record. However, the violations in this case are especially serious. A substantial amount of harm to Complainant was shown. Even more so, Respondent’s testimony that he did not understand that Kong was operating as a contractor without a license is most alarming. 7. Under the circumstances of this case, this tribunal concludes that the appropriate remedy is to revoke the licenses. Respondent is a harm to the people of this state. RECOMMENDED ORDER IT IS RECOMMENDED that Class B-02 license 076250, held by Respondent Robert Frederick Planty dba Rob’s Contracting Services, and Class L-11 license 076251, held by Respondent Robert Frederick Planty dba Rob’s Contracting Services, be revoked.

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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 4th day of October 2009.

Office of Administrative Hearings

______________________________ Eric A. Bryant Administrative Law Judge

Copy mailed this ___ day of September 2009 to:

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

By ___________________________ ----------------------- [1] Exhibit C26 was offered but not admitted by the tribunal due to lack of foundation. [2] Respondent’s Exhibits in Volume C are items in the complaint file (Complaint, Inspector’s notes, Citation & Complaint, and Answer). These Exhibits will not be cited by using Respondent’s designation so as not to confuse them with Complainant’s Exhibits, which also begin with the letter “C.” [3] See, Arizona Revised Statutes § 32-1102 and Arizona Administrative Code R4-9-102 for a description of commercial contracting license classifications and scope of work. [4] Id. [5] Exhibit C1. [6] Id. at page 1 of 5. This was the date that Complainant’s landlord had given Complainant to finish the tenant improvements or pay a penalty. [7] 9/14/09 Hearing Record at 05:40:54. [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