ALJDEC decisions subject to certification as final

2009A-60616859-ROC · Registrar of Contractors · 2010-10-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 7, 2010 at 8:00 a.m. APPEARANCES: The Complainants appeared through their attorney, John C. Breslo. The Respondent failed to appear. ADMINISTRATIVE LAW JUDGE: M. Douglas

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. License No. B.215652-R of Respondent Five Stone Developments LLC was revoked by the Registrar on August 24, 2010 (ROC Case No. 2009-60629680). 2. This is a residential matter where the Respondent entered into a written construction agreement with the Complainants wherein the Respondent agreed to perform an extensive remodeling of the Complainants’ residence. 3. During the course of construction the Complainants became increasingly alarmed about the poor quality of the Respondent’s work. 4. The extremely poor quality of the Respondent’s construction work was confirmed to them by the City of Scottsdale’s actions in repeatedly failing the Respondent’s construction work. 5. The Complainants were also dissatisfied with the Respondent’s very obvious deviations from approved plans and specifications. 6. The Complainants retained an alternative licensed general contractor to act as a consultant to try and act as a knowledgeable intermediary between the Complainants and the Respondent in an attempt to salvage the Respondent’s construction work on the remodeling project. 7. Undisputed credible testimony and evidence established that the Respondent rejected the Complainants’ repeated efforts to save the construction project. 8. There was no dispute that the Respondent stopped work on the Complainants’ residence and abandoned the construction project leaving the Complainants’ with an unfinished residence. 9. The Complainants then retained the alternative licensed contractor that they had previously attempted to utilize as an intermediary with the Respondent to attempt to correct the Respondent’s construction errors and to properly complete the construction work on their residence. 10. When the Complainants discovered the true state of the construction project, including the Respondent’s numerous violations of code requirements, the Complainants filed a formal Complaint against the Respondent with the Registrar of Contractors. 11. Pursuant to the filing of the formal Complaint, an assigned Agency Inspector reviewed the matter. There was no Corrective Work Order issued because the Respondent’s construction work had already been corrected and completed by the alternative licensed contractor retained by the Complainants. 12. Undisputed credible testimony and evidence established that the Respondent had been fully paid for the framing work on the construction project and that the Complainants’ alternative licensed contractor found that no more than fifty percent (50%) of the framing had been completed. 13. Undisputed credible testimony and evidence established that the Respondent had failed to fully pay the Respondent’s subcontractors on the construction project despite the Respondent’s repeated assurances to the Complainants that the subcontractors were being paid in accordance with the parties’ construction agreement. 14. Undisputed credible testimony and evidence established that on at least one occasion the Respondent utilized money from the construction project for the Respondent’s own use and then knowingly and falsely represented to the Complainants that the money had been paid to a subcontractor for the construction project. 15. Undisputed credible testimony and evidence established that Respondent displayed an inability to pass required city inspections and that the Respondent was unable to properly correct the unsatisfactory construction deficiencies despite being given repeated opportunities to do so. 16. Undisputed credible testimony and evidence established that the Respondent’s very poor construction work created numerous health and safety dangers at the jobsite which the Respondent knowingly attempted to conceal from the Complainants. 17. Undisputed credible testimony and evidence established that the Complainants have been required to spend over thirty nine thousand one hundred and six dollars and twenty four cents ($39,106.24) to try and correct the Respondent’s poor construction work. 18. There was no dispute that despite the best efforts of the Complainants’ alternative building contractor, and the Complainants’ architect, much of the Respondent’s construction work is simply not correctable and that the Complainants must either live with the imperfect results or, at an extensive additional cost, completely remove and replace the Respondent’s construction work. 19. Undisputed credible testimony and evidence established that the Respondent simply ignored the Complainants’ architect and performed its construction work in a lackadaisical and haphazard manner without regard to the architectural plans and specifications for the construction project. 20. Undisputed credible testimony and evidence established that the Respondent failed to comply with the provisions of A.R.S. § 32-1124 (B). 21. The Respondent’s actions, in knowingly attempting to conceal code violations that constituted health and safety dangers to the Complainants and in knowingly misrepresenting the actual status of the construction project and in misrepresenting payments allegedly made to subcontractors, are found to constitute a fraudulent act. 22. Notice is taken of the Respondent’s prior License record with the Registrar of Contractors. CONCLUSIONS OF LAW 1. The credible evidence of record established violations by the Respondent of the provisions of A.R.S. § 32-1154 (A) (2) (Departure or disregard of approved plans and specifications), A.R.S. § 32-1154(A) (7) (Fraudulent Act), A.R.S. § 32-1154 (A) (13) (Namely; A.R.S. § 32-1124 (B)) and A.R.S. § 32-1154 (A) (3); namely, Rule R4-9-108 (Failure to perform work in a professional and workmanlike manner). RECOMMENDed order In view of the foregoing, it is recommended that the Respondent’s License B.215652-R be revoked. In the event of certification of this 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 the certification. Done this day, October 13, 2010.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to: William A. Mundell, Director Registrar of Contractors -----------------------

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