ALJDEC decisions subject to certification as final

2010A-19410004-ROC · Registrar of Contractors · 2011-06-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 1, 2011 APPEARANCES: Golinaz Asadi and Amir Akhlaghi appeared personally and they were represented by their attorney, Gary Lee Henman Jr., Esq. L T Construction, Inc. did not appear. 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: FINDINGS OF FACT 1. L T Construction, Inc. (“Respondent”) is the holder of License No. 247066, a Class B contracting license issued by the Registrar of Contractors (“Registrar”). 2. Golinaz Asadi and Amir Akhlaghi (“Complainants”) hired Respondent to finish the construction of a partially constructed residence they bought at 13120 E. Fairbook St., Mesa, Arizona. 3. On November 24, 2009, Complainants filed a written Complaint with the Registrar alleging statutory violations by Respondent on the subject project. The Registrar initially designated Complainants’ Complaint as Case No. 10-1941, but later re-designated the Complaint as Case No. 2010-19410004. 4. The Registrar issued a Citation and Complaint in Case No. 2010- 19410004 charging Respondent with violating the provisions of A.R.S. § 32-1154(A) (1), (7), and (13), specifically A.R.S. § 3-1158. 5. The Registrar forwarded Case No. 2010-19410004 to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 6. The Registrar issued a Notice of Hearing in Case No. 2010-19410004 that advised the parties of a hearing scheduled on May 25, 2011. 7. On April 28, 2011, Complainants filed a motion to continue the May 25, 2011 hearing. 8. On May 11, 2011, the tribunal issued an Order Denying Continuance. 9. On May 12, 2011, Complainants filed a motion for reconsideration of their request for a continuance. 10. On May 12, 2011, the tribunal issued an Order Scheduling a Telephonic Prehearing Conference (“Order”) scheduling a prehearing conference on May 18, 2011, at 1:00 p.m. The Order was sent to the parties at their addresses of record with the Office of Administrative Hearings. 11. On May 18, 2011, Complainants and their counsel appeared telephonically. 12. On May 18, 2011, the tribunal issued an Order Granting Continuance that advised the parties that the hearing had been continued to June 1, 2011, at 1:00 p.m. The Order Granting Continuance was sent to the parties at their addresses of record with the Registrar. 13. On June 1, 2011, the commencement of the scheduled hearing was delayed minutes to allow for the late arrival of Respondent’s authorized representative. After the delay, the Administrative Law Judge conducted the hearing in Respondent’s absence. 14. Respondent filed a bankruptcy action. Complainants obtained relief from the automatic stay in that bankruptcy action. 15. Complainants paid Respondent the sum of $9,210.00 for HVAC work to be performed by Orange Street Mechanical, who had been hired by Respondent. Respondent paid Orange Street Mechanical, but then Respondent abandoned the project. Orange Street Mechanical returned the $9,210.00 payment to Respondent. However, Respondent kept the money and did not return it to Complainants. 16. The next issue involves special ordered tile. Respondent never paid the supplier for the tile that cost $4,800.00. 17. The third issue involves a $5,000.00 payment made by Complainants to Respondent. Respondent had stopped work on the project. Respondent complained that its subcontractors were not getting paid. Complainants explained the bank construction loan process to Respondent. Notwithstanding that process, Complainants gave Respondent a $5,000.00 payment, which they were not required to pay at the time, so that Respondent could pay subcontractors. Instead of paying the subcontractors, Respondent kept the money. Respondent’s principal, Trent Duncan, later claimed that the $5,000.00 payment from Complainants was a birthday gift from them to him. 18. The evidence of record supports a finding that Respondent abandoned Complainants’ project without legal justification. 19. Respondent wrongfully withheld the refund from Orange Street Mechanical and the $5,000.00 payment from Complainants. 20. Complainants did not establish the elements of fraud in this matter. 21. Respondent’s contract with Complainants failed to comply with the statutory minimum elements of a contract pursuant to A.R.S. § 32-1158. 22. A review of the Registrar’s official electronic licensing records reveals that Respondent’s License No. 247066 was suspended by operation of law for non-renewal on August 1, 2010.

CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.R.S. § 32-1154(C), the suspension of Respondent’s License No. 247066 by operation of law for non-renewal does not deprive the Registrar of authority to impose discipline upon Respondent’s contracting license for proven statutory violations in this case. 3. Pursuant to A.A.C. R2-19-119(B), Complainants have the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. A.A.C. R2-19-119(A). 4. Respondent violated the provisions of A.R.S. § 32-1154(A) (1), as charged in the Citation and Complaint issued by the Registrar. The evidence of record established that Respondent abandoned the subject project without legal justification. 5. Complainants failed to sustain their burden of proving that Respondent violated the provisions of A.R.S. § 32-1154(A) (7), as charged in the Citation and Complaint issued by the Registrar. Complainants failed to prove the elements of fraud in this matter. 6. Respondent violated the provisions of A.R.S. § 32-1154(A) (13), specifically A.R.S. § 32-1158, as charged in the Citation and Complaint issued by the Registrar. For example, Respondent’s contract does not explain Complainants’ right to file a complaint with the Registrar as required by the statute. RECOMMENDED ORDER Respondent’s License No. 247066 shall be revoked on the effective date of the Order entered in Case No. 2010-19410004. 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, June 14, 2011.

/s/ Brian Brendan Tully 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