ALJDEC decisions subject to certification as final

09F-4230-ROC · Registrar of Contractors · 2009-11-17

STATE OF ARIZONA OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 29, 2009

APPEARANCES: Complainant appeared on her own behalf, accompanied by her husband Ike Martinez, and was represented by attorneys Sean St. Clair and Jeff Johnson; Respondent was represented by its Managing Member and Qualifying Party Paul Steen.

WITNESSES: For Complainant: Dennis Cook, ROC Inspector Mia Martinez Ike Martinez Becky Brothers, Town of Superior

For Respondent: no witnesses

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant Mia Martinez brings this action against Respondent Steen Brothers for failure to complete a construction project (remodeling) and failure to obtain a permit for that project. Respondent denies that the contract was abandoned, raising as a defense a dispute about Complainant owing money for verbal change orders to the contract. This tribunal entered the complaint file received from the Registrar of Contractors into the record, along with Complainant’s Exhibits 1 through 20. Complainant presented evidence and testimony at the hearing; Respondent did not, but Respondent’s representative questioned the witnesses called by Complainant. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Decision finding that Respondent has violated provisions of the law pertaining to licensed contractors and ordering provisional revocation of the license. FINDINGS OF FACT 1. Respondent is the holder of a class KB-02 dual residential and small commercial contractor’s license (No. 212300) issued by the Registrar of Contractors. It authorizes Respondent to perform general residential and general small commercial construction.[1] Paul Steen is Respondent’s Qualifying Party. 2. In March 2007, the parties entered into a contract[2] whereby Respondent was hired to substantially remodel a house owned by Complainant in Superior, Arizona. At hearing, the parties agreed, and the documents show, that the full contract price for the project was $62,586.74. This was to be paid out in a down payment (at the start of the job) and then in three equal payments of the remaining amount, the first after 45 days from the down payment, the second thirty days after that, and the final payment thirty days after that, for a total of four payments. The contract also required written change orders. 3. Complainant made payments as set by the contract until the fourth payment. Thus, Complainant has paid over 80% of the contract price. 4. The evidence (testimony and documentation) shows that the work is less than 50% complete. 5. The contract contemplated a completion of the project within about four months from the start date. This did not happen. In September 2008, the project was still ongoing and the parties agreed to an addendum to the contract concerning the completion date. In that signed addendum,[3] Respondent agreed to complete the project by January 3, 2009. Respondent did no further work on the project and Complainant filed her complaint with the ROC in late January 2009. 6. The project was inspected by ROC Inspector Dennis Cook in March 2009 and a Corrective Work Order (“CWO”) was issued. The order stated the following: Steen Brothers Construction LLC should complete all work as specified in the contract documents after obtaining permits required by the local building authority.

The lack of approved plans at the jobsite inspection and the dispute over verbal agreements between the parties made it impossible for this inspector to verify the complete scope of work included in the contract.

Thus, the CWO ordered Respondent to complete the work according to the terms of the contract, but could not be more specific than that. The parties continued to dispute their obligations under the contract and Complainant requested a hearing. 7. Complainant presented testimony from Becky Brothers, Building and Safety Director for the Town of Superior. She stated that the project at issue has not been permitted by the town. An application for permit was filed by Respondent and the fee was paid, but plans have not been provided for review and approval. Thus, no permit was obtained by Respondent for this project. 8. The evidence does not show valid change orders, as raised by Respondent, that might give Respondent a legal excuse for stopping the work on the project. 9. The record shows that Respondent has not completed the project and has no valid legal excuse for failing to do so. 10. Complainant did not provide adequate documentation that supports an award of any specific amount of restitution. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[4] Further, the standard of proof at hearing is by preponderance of the evidence.[5] 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.[6] 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)(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 follow plans, specifications, and local building codes, which includes obtaining necessary building permits. Subsection (A)(7) prohibits wrongful acts that substantially harm another. 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. The evidence supports a conclusion that Respondent has violated all of these provisions by failing to fulfill its obligations under the contract and failing to obtain a permit. Also, Respondent did not comply with the CWO. 4. Complainant failed to show that restitution is due. 5. A review of current ROC records shows that Respondent’s license was suspended for lack of bond in September 2009 and suspended for nonrenewal on November 1, 2009. Pursuant to A.R.S. § 32-1154(C), the suspension of the license does not deprive the ROC or this tribunal of jurisdiction and does not render the Registrar powerless to discipline the license in this matter. 7. Under the circumstances of this case, this tribunal concludes that the appropriate remedy is to require that Respondent complete the job under the terms of the contract or face a revocation of its license. Under this contract, this means that Respondent must obtain the appropriate permits and complete the job to at least 80% before it is entitled to the final payment. This also means that Respondent will have to renew its license and bond in order to comply. RECOMMENDED ORDER IT IS RECOMMENDED that Class KB-02 license 212300, held by Steen Brothers, LLC be revoked beginning the effective date of the Registrar’s Order unless Respondent provides written proof of completion of the project as set forth above and the Registrar of Contractors accepts such written proof. IT IS FURTHER RECOMMENDED that if Respondent completes the project as set forth above on or before the effective date of the Registrar’s Order, the license suspension shall not take place and case 09-4230 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 17th 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 § 32-1102 and Arizona Administrative Code R4-9-104 for a description of dual contracting license classifications and scope of work. [2] Exhibit 1. [3] Exhibit 3. [4] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [5] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [6] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

-----------------------

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