ALJDEC decisions subject to certification as final

2007A-42932-ROC · Registrar of Contractors · 2011-10-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

COMPLIANCE HEARING: October 3, 2011 APPEARANCES: Larry Bunger appeared personally. Star Crest Construction, Inc. was represented by its authorized representative, Brandon Garvin. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order on Compliance: FINDINGS OF FACT 1. Star Crest Construction, Inc. (“Respondent”) is the holder of License No. 154063, a Class KB-2 contracting license issued by the Registrar of Contractors (“Registrar”). 2. On November 28, 2006, the Registrar issued a default Decision and Order in the above-entitled matter providing that Respondent’s contracting license would be suspended on the effective date of the Order, and remain suspended, until the Registrar received proof that Respondent appropriately rectified the items involved in the Complaint and Corrective Work Order. If Respondent properly rectified all of the Complaint and Corrective Work Order items, on or before the effective date of the Order, then no suspension would be imposed. Respondent was further required to pay a $250.00 civil penalty no later than the expiration of 30 days from the effective date of the Order or risk the revocation of Respondent’s contracting license. The Order had an effective date of January 7, 2007. 3. Respondent paid the civil penalty to the Registrar on December 7, 2006. 4. Respondent, Larry Bunger (“Complainant”), and Mrs. Jill Bunger entered into an Addendum to Construction Contract dated December 12, 2006 (“Addendum”) that reads as follows: On this 12 day of December 2006, Star Crest Construction, Inc., herein known as “STAR CREST”, [sic] along with Mr. Larry Bunger and Mrs. Jill Bunger, herein known as “BUNGERS”, [sic] do hereby enter into an agreement to amend the construction contract between STAR CREST and BUNGERS, that has previously been entered into for the construction of the residential dwelling located at 4440 W. Shaggy Bark[,] Show Low, AZ 85901. The parties hereby agree to the following:

1. Occupancy: The BUNGERS first took occupancy of the above mentioned residence in December of 2004. BUNGERS are satisfied with the overall construction and quality of construction.

2. Good Faith Efforts: Since the date of occupancy the BUNGERS and STAR CREST have been working together to fix certain defects in the materials or construction of the residence. STAR CREST has made the appropriate corrections to the defects in the materials or workmanship to the satisfaction of the BUNGERS except for a few items to include sauna, exterior vent(s), exterior stone, bath fan, burglar alarm, gutter’s [sic]/down spouts, and front door. STAR CREST continues to work on said items and will complete the work as required by Arizona Registrar of Contractors. All work on the above listed items, except for the exterior stone, shall be completed by January 31, 2007. All work done on the exterior stone shall be completed by May 30, 2007.

3. Withdrawal/Dismissal of Complaint: Due to STAR CREST’S cooperation, BUNGERS agree to withdraw/dismiss their complaint filed with the Arizona Registrar of Contractors, specifically Case No. P07-0004.[1] If defects in the materials or workmanship are not repaired up to industry standards, as described by the Arizona Registrar of Contractors, BUNGERS retain the right to re- file a complaint with the Arizona Registrar of Contractors in accordance with their [sic] rules and statutes.

4. Principal Owed: Due to an overpayment of funds to STAR CREST, for the construction of said residence by the BUNGERS, STAR CREST agrees to pay the BUNGERS the amount of twenty four thousand dollars ($24,000.00), herein known as “Principal”. [sic] Payments shall be made over a period not to exceed twenty- four (24) months at a rate of no less than one thousand dollars ($1,000.00) per month. Payment shall be made by the fifteenth (15th) of each month, with the first payment due January 15, 2007. Last payment shall be due December 15, 2008.

5. Interest: STAR CREST shall also pay the BUNGERS the amount of two thousand five hundred dollars ($2,500.00) for interest accrued on the full amount owed as described in paragraph 4. If STAR CREST pays the full amount owed in paragraph 4 within twelve (12) months, the amount owed for interest accrued shall be one thousand two hundred and fifty dollars ($1,250.00). Payment of interest owed shall be made no later than the date of the last payment owed, that being December 15, 2008.

6. Late Fees: STAR CREST shall be assessed a late fee of fifteen dollars ($15.00) per day for every day payment is late beginning with the 16th of each month. Any payment made more than thirty (30) days late shall be credit to the previous month’s balance owed. Any overpayment shall be applied to the principal owed and not applied to the next month’s payment.

7. Waiver of Statute of Limitations: STAR CREST agrees to waive the statute of limitation [sic] for breach of the original Construction Contract and any addendums.

8. Waiver of Future Liability: Upon the completion of this addendum, BUNGERS agree to release STAR CREST from any future liability related to the construction of the residence, except for any remedies or obligations that are created by the Arizona Registrar of Contractors.

9. Choice of Law and Jurisdiction: Arizona Laws and Statutes shall apply to the interpretation and any litigations that may be associated with this contract. Any litigations that may result for the breach of contract shall be under the Jurisdiction of the Navajo County Superior Court.

10. Voluntary Waiver of Representation: STAR CREST and BUNGERS agree that this contract was entered into knowingly, voluntarily, and without any promise, threat, coercion, or undue influence. BUNGERS have been informed of their right to consult an attorney concerning their legal rights, and have in fact consulted an attorney or have knowingly waived their right.

(Emphasis in the original).

5. On or about December 20, 2006, Complainant submitted a Motion to Dismiss with the Registrar requesting that the matter be dismissed without prejudice due to “[Complainant’s satisfaction] with the overall quality and construction of my residential dwelling.” The Registrar subsequently closed the matter as Respondent having fully complied with the terms of the November 28, 2006 default Decision and Order. 6. On or about March 2, 2009, Complainant submitted correspondence with the Registrar requesting that the matter be reopened alleging that Respondent failed to comply with the terms of the Addendum, and that as of February 25, 2009, Respondent failed to pay any monies to Complainant. 7. On or about April 9, 2009, Respondent submitted its Response and Objection to Complainant’s Request to Reopen. 8. On August 15, 2011, the Registrar issued a Notice of Compliance Hearing advising the parties of the time, date, and location of a compliance hearing before the Office of Administrative Hearings, an independent agency. The Notice of Compliance Hearing informed the parties that the scope of the compliance hearing would be “to determine whether or not Respondent breached the terms set forth in [the Addendum] and failed to comply with the terms of the November 28, 2006 Default Decision and Order.” 9. On August 31, 2011, the Registrar issued an Order Reopening Complaint and Setting Compliance Hearing in this matter. The Registrar ordered that a compliance hearing be scheduled where “the parties may present evidence and testimony as to whether or not Respondent breached the terms set forth in [the] December 12, 2006 [Addendum] and failed to comply with the terms of the November 28, 2006 Default Decision and Order.” 10. Complainant’s Complaint did not contain any allegation involving a monetary dispute. The Complaint was never amended to include such an allegation. 11. In paragraph 3 of the Addendum, the parties agreed that Complainant retained the right to re-file a complaint with the Registrar concerning workmanship issues. 12. In paragraph 9 of the Addendum, the parties agreed that any breach of the Addendum would be litigated in Superior Court. 13. As to workmanship issues, there was credible evidence at the compliance hearing that Respondent complied with the Registrar’s default Decision and Order by performing the required corrective work and paying the civil penalty. 14. The issue of a breach of the Addendum by Respondent for not performing the stated monetary payments to Complainant, together with Complainant’s claim for compensatory damages and attorney fees, should be properly addressed before the Navajo County Superior Court as agreed upon by the parties in the Addendum. 15. A review of the Registrar’s official electronic licensing records reveals that Respondent’s License No. 154063 was revoked on October 27, 2009. Those records reflect further revocations of the license on February 23, 2011. CONCLUSIONS OF LAW 1. The evidence of record established that Respondent complied with the Registrar’s default Decision and Order, and the workmanship items in the Addendum. 2. The non-workmanship breach of contract issue should be resolved before the Navajo County Superior Court as agreed upon by the parties in the Addendum. The terms of the Addendum do not provide for the resolution of such a non-workmanship dispute in an administrative proceeding before the Registrar. 3. The evidence of record supports the closing of Case No. 2007-42932. RECOMMENDED ORDER ON COMPLIANCE Case No. 2007-42932 shall be closed as Respondent having fully complied with the terms of the Registrar’s November 28, 2006 default Decision and Order, and the workmanship items contained in the Addendum. 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 five (5) days from the date of that certification. Done this day, October 24, 2011.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The Registrar originally designated Complainant’s Complaint as Case No. P07-0004, but later re-designated it as Case No. 2007-42932

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