ALJDEC decisions subject to certification as final

09F-4925-ROC · Registrar of Contractors · 2009-10-14

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 8, 2009 APPEARANCES: Complainant: Rhonda L. James appeared, pro per. Respondent: Respondent failed to appear either through authorized representative or counsel. 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 30, 2009. 2. Complainant Rhonda L. James (“Complainant”) is the owner of a residence located at 12102 N. 52nd Drive, Glendale, Arizona (“premises/project”). 3. Respondent Distinctive Secure Door, Inc. (“Respondent”) is a corporation which holds Arizona Contractor’s License No. 169293, Class K-05 (Dual Security Doors, Sunscreens and Gates) issued by the ROC on October 17, 2001. James Arthur Rohrer, Jr. is a corporate officer and the qualifying party for the license. A review of the licensing database maintained by the ROC indicates that this license was suspended May 23 through June 4, 2007, for lack of bond, placed on probation January 28 through February 4, 2008 (G07-1140), cancelled on March 16, 2009 and revoked September 4, 2009 (07-2436). 4. On March 17, 2009, Complainant filed a Complaint with the Registrar wherein she alleged, inter alia, that she had entered into a contract with a company called Distinctive Iron, Inc. (“DI”) on January 14, 2009, and had given its representative a cash down payment of $1,100.00 for fabrication of wrought iron. Complainant further asserted that, though the product was to be completed in about eight weeks, it was never delivered. Follow up telephone calls to Respondent were met with busy signals and the Respondent’s website no longer existed. 5. On May 15, 2009, the Registrar issued a Citation and Complaint in Case No. 09-4925 charging Respondent with possible violations of A.R.S. § 32-1154 (A) (1) and (7). 6. Respondent filed an Answer on May 21, 2009, which denied any statutory violation and affirmatively alleged that Respondent “installs products for Distinctive Iron which is a separate corporation that only manufactures products and that Respondent had “never received the products to install.” Respondent further contended that it “never received any money from Complainant.” 7. At the hearing, Complainant testified and submitted Exhibits A and B which were marked, admitted and considered. 8. Respondent failed to appear either through any authorized representative or counsel. 9. On the credible testimony and uncontroverted evidence of record, the following salient facts are important to note: a. On January 14, 2009, Complainant met with “JC”, a designated salesman of both Respondent and DI; b. As a result of her discussions with JC, Complainant was under the impression that he was employed by and/or represented both Respondent and DI and, essentially, there was little, if any, distinction between the two companies; c. As a result of the representation made by JC, Complainant executed a “Sales Invoice” on DI letterhead (“contract”) for the purchase of wrought iron for a total of $2,775.00 (Exhibit A); d. Upon executing the contract, Complainant gave JC $1,100.00 in cash as a down payment for the wrought iron; e. Contemporaneous with the execution of the contract, JC provided Complainant with a Service/Installation Agreement (“SIA”) whereby Respondent agreed to install the subject wrought iron at no cost (Exhibit B). Complainant did not notice at the time that the name of the company on the contract differed from that on the SIA; f. Although the contract and SIA set forth different addresses for Respondent and DI, the same business telephone number was listed for both companies; g. Complainant testified that, upon discussing the matter with ROC representatives, she was informed that Respondent does business under both names; h. JC represented to Complainant that it would take approximately eight weeks to fabricate the wrought iron; i. No wrought iron was ever delivered to Complainant in accordance with the contract; and j. After approximately February 2009, efforts to contact DI and/or Respondent by telephone were met with busy signals and Complainant also discovered that DI’s website no longer existed.

APPLICABLE LAW The Citation and Complaint issued by the Registrar Case No. 09-4925 charged Respondent with possible violations of A.R.S. §32-1154 (A) (1) and (7). Those statutory sections require that the holder of a license or person listed on the license shall not commit the following:

1. Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

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

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. The revoked status of Respondent’s license does not preclude Complainant from pursuing this administrative remedy nor preclude the Registrar from conducting these disciplinary proceedings.[1] 5. Design and fabrication of wrought iron for installation onto residential real property is contracting as defined by Arizona statute.[2] Design and fabrication of wrought iron for installation therefore requires a contractor’s license.[3] 6. It is determined and concluded that Complainant established by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. § 32-1154 (A) (15) by contracting in the name of DI.[4] Due to the fact that this violation was not charged in the Citation and Complaint, it is considered solely as a factor in aggravation of the recommended penalty. In this instance, it appears that both Respondent and DI operated out of the same facility and used the same telephone number as represented by their salesman, JC. 7. It is further determined and concluded that Complainant established by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. § 32-1154 (A) (1) by failing to provide the wrought iron it contracted to produce and accepting the $1,100.00 deposit. 8. This tribunal further determines and concludes that the foregoing violations are deemed to have been wrongful acts resulting in the substantial injury to Complainant. Therefore, violations of A.R.S. § 32- 1154 (A) (7) have been proven as cited. 9. It is further determined and concluded that Respondent failed to act in good faith toward fulfilling its contractual obligations to Complainant which lack of good faith is further manifested by its failure to appear at the instant hearing both of which shall serve as factors in aggravation in this matter as will the prior disciplinary revocation set forth in Finding of Fact 3. … RECOMMENDED ORDER On the basis of the foregoing, IT IS RECOMMENDED that, commencing on the effective date of the Registrar’s Order issued in this matter, the Class K-05 license of Respondent be revoked unless the Registrar receives written proof that Respondent has paid or tendered the sum of $1,100.00 to Complainant as a refund of the deposit made on the subject wrought iron. IT IS FURTHER RECOMMENDED that, if Respondent remits and/or tenders the sum of $1,100.00 to Complainant on or before the effective date of the Registrar’s Order, the above license revocation shall not take place. IT IS FURTHER RECOMMENDED that, in the event Respondent timely remits and/or tenders to Complainant the above-referenced $1,100.00 and no revocation occurs, the Class K-05 license of Respondent be suspended for a period of thirty (30) days and, thereafter, placed on a period of probation for one (1) year. IT IS FURTHER RECOMMENDED that, in addition to the above-provided discipline, Respondent first post an additional surety bond, cash or alternative deposit in the amount of $1,500.00 for a period of two (2) years from the effective date of the Registrar’s Order.[5] Done this day, October 14, 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] See A.R.S. § 32-1154(C). [2] See A.R.S. § 32-1101(A)(7)(a) (“‘Residential contractor’ is synonymous with the term ‘residential builder’ and means any . . . corporation . . . or any officer, director, [or] qualifying party . . . that undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid to, or does himself or by or through others, within residential property lines . . . [c]onstruct, alter, repair, add to, subtract from, [or] improve . . . any residential structure. . . . Residential structures also include . . . any appurtenances on or within residential property lines.”). [3] See A.R.S. § 32-1151 [4] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[a]cting in the capacity of a contractor under any license issued under this chapter in a name other than as set forth upon the license.” [5] 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