ALJDEC decisions subject to certification as final

2010A-22612211-ROC · Registrar of Contractors · 2011-05-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 12, 2011 APPEARANCES: Cheryl L. Magnusson appeared personally. She was represented by her attorney, Greg Gillis, Esq. T N T Home Services, 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. T N T Home Services, Inc. (“Respondent”) is the holder of License No. 236555, a Class C-61 contracting license issued by the Registrar of Contractors (“Registrar”). 2. A Class C-61 contracting license is a limited remodeling and repair contracting license for performing work valued at less than $25,000.00 per project. 3. On December 24, 2009, Cheryl L. Magnusson (“Complainant”) filed a written Complaint with the Registrar alleging 28 Complaint items against Respondent on a project at her residence at 5527 E. Beck Lane, Scottsdale, Arizona. The Registrar designated the Complaint as Case No. 10-2261, but later re-designated it as Case No. 2010-22612211. 4. On January 7, 2010, Complainant filed an addendum to her Complaint adding an additional 31 Complaint items. 5. The Registrar issued a Citation and Complaint in Case No. 2010- 22612211 charging Respondent with violating the provisions of A.R.S. § 32-1154(A) (1), (2), (3), namely A.A.C. R4-9-108, (4), (5), (7), (9), (10), (12), (13), specifically A.R.S. § 32-1158, (14), (17), (23), and (24). 6. The Registrar forwarded Case No. 2010-22612211 to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 7. The Registrar issued a Notice of Hearing in Case No. 2010-22612211 that advised the parties of the time, date, and location of the formal hearing. The Notice of Hearing was sent to the parties at their addresses of record with the Registrar. 8. The commencement of the scheduled hearing was delayed 15 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. 9. Respondent filed a bankruptcy action. Complainant obtained relief from the automatic stay in that bankruptcy action. 10. Complainant paid Respondent the sum of $30,250.00 for work on the subject project. Therefore, Respondent exceeded the scope of its C-61 contracting license by contracting to perform a project whose value exceeded $25,000.00. 11. The Registrar’s assigned inspector, Scott Deering, performed a jobsite inspection on January 21, 2010, to view the Complaint items. 12. As a result of the jobsite inspection, Inspector Deering issued a Corrective Work Order dated February 5, 2010, the terms of which are incorporated herein by reference, that required Respondent to timely perform specified remedial work. The Corrective Work Order addressed each Complaint item. The Corrective Work Order also addressed Complaint items that were not within the Registrar’s jurisdiction, or that Inspector Deering could not verify. In addition, the Corrective Work Order identified items that had been corrected, or that were within workmanship standards, as well as items outside the scope of the parties’ contract, or to be corrected using a properly licensed contractor, or that required no action by Respondent. 13. The evidence of record established that Respondent abandoned the subject project. 14. The evidence of record established that Respondent failed to comply with local building code requirements. For example, Respondent performed electrical work without subcontracting the electrical work to a properly licensed electrical subcontractor. Further, Respondent failed to obtain a city permit for the electrical work it performed. 15. The evidence of record established that Respondent failed to perform its work in a workmanlike manner. Respondent’s deficient workmanship is outlined in the Corrective Work Order. 16. The evidence of record established that Respondent aided and abetted an unlicensed tile contractor on the subject project. 17. The parties’ contract is a series of written invoices. Those invoices do not contain the statutory minimum elements of a contract provisions. 18. Respondent failed to comply with the Registrar’s Corrective Work Order. 19. A review of the Registrar’s official electronic licensing records reveals that Respondent’s License No. 236555 has been suspended by operation of law for lack of bond since September 6, 2010. 20. Any allegation contained in the Complaint and Addendum not specifically addressed in the above-provided Findings of Fact is determined to either lack sufficient evidence of record to support a finding of a statutory and/or regulatory violation, to meet workmanship standards, and/or to be outside the Registrar’s jurisdiction. 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 contracting license for lack of bond does not deprive the Registrar of the power to impose discipline upon that license for proven statutory and/or regulatory violations in this matter. 3. 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 supports the conclusion that Respondent abandoned the subject project. 4. Respondent violated the provisions of A.R.S. § 32-1154(A) (2), as charged in the Citation and Complaint issued by the Registrar. The evidence of record supports the conclusion that Respondent failed to comply with local building code requirements. 5. Respondent violated the provisions of A.R.S. § 32-1154(A) (10), as charged in the Citation and Complaint issued by the Registrar. The evidence of record supports a conclusion that Respondent aided and abetted the unlicensed tile contractor. 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. Respondent’s invoices do not comply with the statutory requirements for the minimum elements of a contract. 7. Respondent violated the provisions of A.R.S. § 32-1154(A) (14), as charged in the Citation and Complaint issued by the Registrar. The evidence of record supports a conclusion that Respondent contracted with the tile contractor who did not possess the required license to perform tile work on the subject property. 8. Respondent violated the provisions of A.R.S. § 32-1154(A) (17), as charged in the Citation and Complaint issued by the Registrar. Respondent exceeded the scope of his Class C-61 license on the subject project. 9. Respondent violated the provisions of A.R.S. § 32-1154(A) (23), as charged in the Citation and Complaint issued by the Registrar. Respondent failed to comply with the Registrar’s Corrective Work Order. 10. Complainant failed to sustain her burden of proving the Respondent violated the provisions of A.R.S. § 32-1154(A) (4), as cited in the Citation and Complaint issued by the Registrar. There is insufficient evidence of record to support a violation that Respondent failed “to comply with the statutes or rules governing social security, workers’ compensation or unemployment insurance. Complainant did not address this allegation at the hearing. 11. Complainant failed to sustain her burden of proving the Respondent violated the provisions of A.R.S. § 32-1154(A) (5), as cited in the Citation and Complaint issued by the Registrar. There is insufficient evidence of record to support a violation that Respondent failed “to pay income taxes, withholding taxes or any tax imposed by title 42, chapter 5, articles 1 and 4 and incurred in the operation of the licensed business. Complainant did not address this allegation at the hearing. 12. Complainant failed to sustain her burden of proving the Respondent violated the provisions of A.R.S. § 32-1154(A) (9), as cited in the Citation and Complaint issued by the Registrar. Respondent could not legally perform the scope of work for the contract price in excess of $25,000.00. Respondent’s conduct is addressed in the other above- described violations. 13. Complainant failed to sustain her burden of proving the Respondent violated the provisions of A.R.S. § 32-1154(A) (12), as cited in the Citation and Complaint issued by the Registrar. There is insufficient evidence of record to support a violation of Respondent’s “[f]ailure to comply with any safety or labor laws or codes of the federal government, state or political subdivisions of the state. Complainant did not address this allegation at the hearing. 14. Complainant failed to sustain her burden of proving the Respondent violated the provisions of A.R.S. § 32-1154(A) (24), as cited in the Citation and Complaint issued by the Registrar. There is insufficient evidence of record to support the allegation that Respondent threatened or intimated any contractor or material supplier on the project. RECOMMENDED ORDER Respondent’s License No. 236555 shall be revoked on the effective date of the Order entered in Case No. 2010-22612211. In addition to the above-provided license revocation, Respondent 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 Respondent 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. 2010-22612211 shall result in the additional automatic revocation of Respondent’s contracting license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, 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, May 2, 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