ALJDEC decisions subject to certification as final

2010A-21802614-ROC · Registrar of Contractors · 2010-07-14

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 25, 2010 at 8:00 a.m. APPEARANCES: Complainant Jerry Willwater appeared on his own behalf; Respondent Walker Construction and General Contracting, L.L.C. appeared through Keith McCulloch, its qualifying party. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On February 14, 2006, the Registrar of Contractors (“the Registrar”) issued License No. ROC216788, Class KB-2 for dual residential and small commercial general contracting to Respondent Walker Construction and General Contracting L.L.C., a limited liability company. On December 15, 2009, the Registrar received a complaint from Complainant Jerry Willwater against Respondent’s license concerning Respondent’s contracting work at Complainant’s residence at 1512 West Estrella Drive in Chandler, Arizona 85224. The complaint included four allegations, which are summarized below: 1. The contract required Respondent to complete the project within 90 days or to pay a $50.00/day penalty. Respondent neither completed the project nor paid the penalty.

2. The contract provided that the contractor’s warranty began on the date the work was accepted. Complainant had not accepted Respondent’s work.

3. The contract required Respondent to conduct a final walk- through inspection with Complainant and the City of Chandler’s representative to prepare a punch list before Respondent submitted an invoice for 90% of the project. Although Respondent submitted the final invoice, it had not conducted a final walk-through inspection with Complainant.

4. The contract required Respondent to add insulation in the attic space above all livable areas in the house. Complainant had constructed a room addition to the house which did not have access to the attic. Although Respondent had not added insulation to the attic space above the room addition, it had been paid the full contract amount for adding insulation.

The Registrar’s inspector, Ted Gerold, performed a jobsite inspection on January 21, 2010. On January 25, 2010, Inspector Gerold sent letter to the parties, informing them that he had determined to close Complainant’s complaint because “[i]n this inspector’s opinion insufficient evidence was provided to show wrongdoing by this contractor.” On January 29, 2010, the Registrar received Complainant’s request for hearing. On March 5, 2010, the Registrar issued a Citation and Complaint against Respondent’s license, charging Respondent with violating A.R.S. § 32- 1154(A)(2) and (9). Respondent timely answered the Citation and Complaint, denying any statutory violations. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, to schedule and to conduct a fair hearing. A hearing was held on June 25, 2010. Inspector Gerold testified. Complainant testified and submitted seven exhibits. Respondent presented the testimony of two witnesses: (1) Keith McCulloch, its qualifying party; and (2) Ryan Carter, its superintendent on the job at Complainant’s residence. Respondent submitted one exhibit. Additional Evidence On May 22, 2008, the City of Chandler (“the City”) awarded a contract to Respondent under the City’s Housing and Rehabilitation Program to perform certain work at Complainant’s residence. All the work was to the exterior of Complainant’s residence except for the insulation that was to be added in the attic space. The parties to the contract were the City and Respondent. Complainant was not required to pay for the improvements to his residence. However, in the event that Complainant sells his house within the next fifteen years, he will be required to reimburse a portion of the sale proceeds to the City. Respondent’s representative met with Complainant to prepare the specifications for Respondent’s contract with the City. Complainant did not inform Respondent that the room addition that he had constructed did not have attic access. When Respondent’s insulation installer realized that it could not add additional insulation to the attic space above the room addition, Mr. McCulloch contacted the City. The City rehabilitation specialist assigned to the job instructed Respondent to add the insulation that would have gone over the addition to the accessible attic space over the remainder of the livable area in the house. Complainant asserted that because he would be required to reimburse the City for Respondent’s work if he sold the house, he had in effect paid for a certain amount of insulation. Complainant asked Respondent to install in the attic space above the garage the insulation that could not be installed above the addition. Respondent denied Complainant’s request because the contract required it to follow the City’s instructions. The City inspected Respondent’s work. The City also verified Respondent’s work under the contract before authorizing progress payments to Respondent. By early September 2008, Respondent completed the work required by its contract with the City. The City determined that Respondent had completed the project within 90 days and did not assess any penalties. Complainant refused to schedule or to participate in a final walk-through inspection of Respondent’s work with the City. The City could not retain the final payment due to Respondent indefinitely. Therefore, the City arranged and conducted the final walk-through inspection without Complainant’s knowledge. After the final walk-through inspection, the City paid Respondent the final payment for the project. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[1] Complainant bears the burden of proof and must establish Respondent’s statutory violations by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[4] Complainant has not borne his burden to establish that Respondent violated the charged provision of this state’s contracting laws, namely, A.R.S. § 32- 1154(A)(2)[5] or (9),[6] with regard to the complaint at issue in this matter. RECOMMENDED ORDER It is recommended that, on the effective date of the Registrar’s final order, Case No. 2010-21802614 against Respondent Walker Construction and General Contracting, L.L.C.’s License No. ROC216788, Class KB-2 be dismissed. If the Director of the Office of Administrative Hearings certifies this Administrative Law Judge Decision, the effective date of the order will be forty days from the date of certification. Done this day, July 14, 2010.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See A.R.S. § 32-1101 et seq. [2] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] Black’s Law Dictionary at page 1220 (8th ed. 1999). [5] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[d]eparture from or disregard of plans or specifications or any building codes of any state or any political subdivision of the state in any material respect which is prejudicial to another without consent of the owner or the owner’s duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.” [6] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.”

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