ALJDEC decisions subject to certification as final

2009A-23640946-ROC · Registrar of Contractors · 2011-03-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 16, 2011 APPEARANCES: Ugalde Construction, L.L.C. was represented by its authorized representative, Marisol Alvarez. Palombi Homes Co., Ltd. was represented by its authorized representative, Angelo Palombi. 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 Orders: FINDINGS OF FACT 1. Ugalde Construction, L.L.C. (“Ugalde”) is the holder of License No. 221730, a Class K-36 contracting license issued by the Registrar of Contractors (“Registrar”). 2. Palombi Homes Co. Ltd. (“Palombi”) is the holder of License No. 110896, a Class B contracting license issued by the Registrar. 3. Palombi, as a general contractor, hired Ugalde to perform stucco work on a residence located at 1415 W. Coolidge Street, Phoenix, Arizona. 4. Ugalde filed a written Complaint with the Registrar alleging nonpayment by Palombi on the subject project. The Registrar designated Ugalde’s Complaint as Case No. 09-1821. The Registrar later re- designated the Complaint as Case No. 2009-18218215. 5. The Registrar issued a Citation and Complaint in Case No. 2009- 18218215 charging Palombi with violating the provisions of A.R.S. § 32- 1154(A) (7)[1] and (11). 6. Palombi subsequently filed a Complaint with the Registrar alleging 18 areas of deficient workmanship by Ugalde on the subject project. The Registrar originally designated Palombi’s Complaint as Case No. 09- 2364, but later re-designated the Complaint as Case No. 2009-23640946. 7. Palombi’s Complaint against Ugalde listed the following items of allegedly deficient workmanship by Ugalde: 1) Office arches not true[.] 2) Office wall not true. 3) Master bath popout radius not true. 4) Master walkout deck not finished[.] 5) Master walkout door frame not cleaned[.] 6) Top of master sitting window arch not true. 7) Master walkout windows doors [sic] not clean[.] 8) Top of 2nd floor living room arches not true. 9) Base of 2nd floor living room 1st window poorly done. 10) Bedroom #6 clean window frames[.] 11) Damage to kitchen/game room/family room/dining window frames. 12) NE tall wall has many imperfections. 13) NE popout not true + has large bump. 14) NE soffit wall not radiused[.] 15) 2nd floor balcony at tile line poorly done. 16) Main entry arch is not smooth. 17) Wall by exterior stairs has many imperfections[.] 18) Popouts on office + master bath not radiused[.]

8. In response to the filed Complaint in Case No. 2009-23640946, the Registrar’s assigned inspector, Jim Dimond, performed a jobsite inspection on November 18, 2008, to view the complaint items. 9. As a result of his jobsite inspection, Inspector Dimond issued a Corrective Work Order dated December 2, 2008, that directed Ugalde to timely perform the following remedial work: “With the exception of item #9, it is this Inspector’s opinion that the other 17 items are the contractor’s responsibility to correct in an appropriate manner.” 10. The Registrar issued a Citation and Complaint in Case No. 2009- 23640946 charging Ugalde with violating the provisions of A.R.S. § 32- 1154(A) (1), (3), namely A.A.C. R4-9-108, (7), (18), and (23). 11. An evidentiary hearing was conducted before the Office of Administrative Hearings in Case No. 2009-18218215/09-1821. On December 14, 2010, the Registrar issued a Notice of Appeal Hearing (Evidentiary Hearing) in Case No. 2009-18218215. 12. On September 15, 2009, the Registrar issued a Default Decision and Order in Case No. 2009-23640946/09-2364. On January 24, 2011, the Registrar issued an Order Granting Request for Rehearing that ordered a full rehearing to be consolidated with Case No. 2009-18218215 before the Office of Administrative Hearings. 13. The Registrar forwarded Case Nos. 2009-18218215 and 2009-23640946 to the Office of Administrative Hearings, an independent agency, for a consolidated evidentiary rehearing. 14. Ugalde failed to comply with Inspector Dimond’s Corrective Work Order issued in Case No. 2009-23640946. 15. Ugalde’s Complaint No. 2009-18218215 alleges non-payment of the final payment by Palombi. As a result of Ugalde’s failure to comply with the Registrar’s Corrective Work Order, Palombi hired an unlicensed contractor to make repairs. The parties are determined to have a bona fide financial dispute as to what amount, if any, is owed to Ugalde under the parties’ contract. 16. A review of the Registrar’s electronic licensing records reveals the following status of Ugalde’s License No. 221730: SUSPENDED TIL COMPLIANCE 02/22/2011....REVOKED FAILURE TO PAY CIVIL PENALTY 02/22/2011….REVOKED FAILURE TO PAY CIVIL PENALTY 02/22/2011....SUSPENDED NON-RENEWAL 08/01/2010….SUSPENDED 7/1/09 LACK OF BOND….SUSPENDED 8/1/08 – 9/29/08 RENEWAL.” (Emphasis in the original).

CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over the parties and the subject matters in these consolidated cases. 2. Pursuant to A.A.C. R2-19-119(B), the burden of proof is upon Ugalde in Case No. 2009-18218215 and Palombi in Case No. 2009-23640946. The standard of proof is by a preponderance of the evidence. A.A.C. R2-19- 119(A). Case No. 2009-18218215 3. Ugalde failed to sustain its burden of proving that Palombi violated the provisions of A.R.S. § 32-1154(A) (7) and (11). Ugalde’s failure to comply with the Registrar’s Corrective Work Order results in a bona fide dispute between the parties as to what amount, if any, is owed by Palombi to Ugalde. Case No. 2009-23640946 4. Ugalde violated the provisions of A.R.S. § 32-1154(A) (1), as charged in the Citation and Complaint issued by the Registrar. The Administrative Law Judge concludes that Ugalde abandoned its scope of work by not completing its work to workmanship standards. 5. Ugalde violated the provisions of A.R.S. § 32-1154(A) (23) and (3), namely A.A.C. R4-9-108, as charged in the Citation and Complaint issued by the Registrar. Ugalde failed to comply with the Registrar’s Corrective Work Order requiring Ugalde to timely perform remedial repairs to its deficient workmanship. 6. Ugalde’s violations of A.R.S. § 32-1154 (A) (1), (23), and (3), namely A.A.C. R4-9-108 constitute wrongful acts resulting in substantial injury to Palombi under A.R.S. § 32-1154(A) (7). 7. At the hearing, no evidence was presented to support the charge that Ugalde violated the provisions of A.R.S. § 32-1154(A) (18). RECOMMENDED ORDERS Case No. 2009-18218215 The Citation and Complaint in Case No. 2009-18218215 shall be dismissed on the effective date of the Order entered in this matter. Case No. 2009-23640946 Ugalde’s License No. 221730 shall be revoked on the effective date of the Order entered in Case No. 2009-23640946. In addition to the revocation of Ugalde’s contracting license, Ugalde shall pay the sum of $500.00 to the Registrar by way of a civil penalty pursuant to A.R.S. § 32-1154(D). The failure by Ugalde to pay the entire amount of the aforesaid civil penalty on or before 30 days following the effective date of the Order entered in Case No. 2009-23640946 shall result in an additional automatic revocation of Ugalde’s contracting license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Ugalde, as defined in A.R.S. § 32-1101(A) (5), unless payment of any outstanding prior civil penalty is tendered. 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 day, March 8, 2011.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The charged violations of A.R.S. § 32-1154(A) (7) in these consolidated matters refer to the former statute in effect at the time of the Citation and Complaint that read: “The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.”

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