ALJDEC decisions subject to certification as final

09F-A0019-ROC · Registrar of Contractors · 2009-07-01

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 17, 2009 APPEARANCES: Complainants: Angele and Chris Thompson 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 March 30, 2009. 2. At all times here relevant, Complainants Angele and Chris Thompson (“Complainants”) were the owners of certain real property located at 4497 N. Comanche Dr., Cottonwood, Arizona (“premises/project”). 3. Respondent Jimenez Home Builders, Inc. (“Respondent”) is a corporation which holds Arizona Contractor’s License No. 205551, Class B- (General Residential) issued by the ROC on April 5, 2005. Gonzalo Jimenez (“Jimenez”) is a corporate officer and the qualifying party for the license. A review of the licensing database maintained by the Registrar indicates that this license was suspended September 11, 2008, for lack of bond and May 1, 2009, for nonrenewal. 4. Complainants filed a Complaint on July 17, 2008, wherein they alleged, inter alia, that they paid Respondent a “10% ‘soft cost’ draw of $30,500.00 in January of 2007, to start construction” on a new house. Complainants further alleged that Respondent “never started construction and never returned funds.” 5. On January 27, 2009, the Registrar issued a Citation and Complaint in Case No. A09-0019 charging Respondent with possible violations of A.R.S. § 32-1154(A) (1), (7) and (13) (namely, A.R.S. § 32-1134(B)). 6. Respondent filed an Answer on February 2, 2009, wherein it requested a hearing and related its intent to attempt to resolve the matter. 7. At the hearing, Chris Thompson and Angele Thompson credibly testified and submitted Exhibit C-1 which was marked, admitted and considered. 8. Respondent failed to appear either through authorized representative or counsel. 9. Based on the uncontroverted evidence elicited at the hearing, the following salient facts are important to note: a. On approximately January 30, 2007, Complainants qualified for $305,000.00 of construction funding pursuant to a Residential Construction Loan. (Exhibit C-1); b. At approximately the same time, Complainants contracted with Respondent to construct the project. c. Soon after Complainants qualified for the above-referenced construction loan, a ten percent (10%) “soft cost draw” was paid to Respondent to begin work on the project; d. Although Respondent had preliminary plans drawn, it never performed any work on the project nor did it refund the above-referenced “soft cost draw” to Complainants; and, e. Complainants have lost the premises to the lender due to its being used as collateral for the construction loan.

APPLICABLE LAW The Citation and Complaint issued by the Registrar in Case No. A06- 0019 charged Respondent with possible violations of A.R.S. § 32-1154(A) (1), (7) and (13) (specifically A.R.S. § 32-1124(B)). 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. …

7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured. … 13. Failure in any material respect to comply with the provisions of this chapter.

A.R.S. §32-1124(B) is named as the statute violation charged pursuant to A.R.S. §32-1154A (13). That statute provides that every license and/or renewal must be signed by the Registrar or the Registrar’s designated representative and the licensee. It further provides that every license number must be preceded by the acronym “ROC” and be posted in a conspicuous place on premises where any work is being performed, on all written bids submitted by the licensee and on all advertising, letterheads and other documents used by the licensee in the conduct of business.

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 Complainants have established by a preponderance of credible, probative and relevant evidence that Respondent abandoned the project without legal excuse in violation of A.R.S. § 32-1154(A) (1). 5. It is further determined and concluded that the foregoing violation and Respondent’s failure to refund the $30,500.00 “soft cost draw” to Complainants constitute wrongful acts and have resulted in substantial injury to Complainants. Therefore, violations of A.R.S. § 32- 1154(A) (7) have been proven as cited. 6. This tribunal further determines and concludes that Complainants failed to establish by a preponderance of credible, probative and relevant evidence that Respondent violated A.R.S. § 32-1154(A) (13) (namely, A.R.S. § 32-1124(B)). 7. This tribunal also determines and concludes that the weight of credible, probative and relevant evidence established that Respondent failed to act in good faith by abandoning the project and failing to refund to Complainants the above-referenced $30,500.00 “soft cost draw.” Such absence of good faith is further demonstrated by Respondent’s failure to appear at the hearing without legal or reasonable excuse. …

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 B- license of Respondent be revoked.[1] Done this day, July 1, 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