ALJDEC decisions subject to certification as final

2010A-308471851-ROC-rhg · Registrar of Contractors · 2011-08-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

REHEARING: July 22, 2011, at 1:00 p.m. APPEARANCES: Complainant Christopher J. Lulek appeared on his own behalf; Respondent Monte Verde Homes, L.L.C. appeared through Alfred Padron, its qualifying party and member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In January 2006, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC215345, Class B for residential general contracting to Monte Verde Homes, L.L.C. (“Respondent”). On or about March 23, 2010, Christopher J. Lulek (“Complainant”) filed a complaint to the Registrar against Respondent that alleged that Respondent had contracted to construct a casita to match Complainant’s house at 38320 North 15th Avenue in the Anthem community in Phoenix, Arizona. According to the complaint, Complainant had paid Respondent all but $5,360.00 of the $68,000.00 contract price to construct the casita, but the casita was only about 50% complete and Respondent had stopped working on the casita. On August 16, 2010, the Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(1) and (2). Respondent filed a timely written answer to the Citation and Complaint, acknowledging that Respondent had not completed and was no longer working on the casita, but affirmatively alleging that the poor economy prevented Respondent from completing the contract. Respondent denied that it had departed from plans, specifications, or building codes in its construction of the casita. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent agency, for an evidentiary hearing. Complainant did not appear at the initial hearing that was held at the OAH on December 8, 2011, at 8:00 a.m. Because it did not appear that Complainant received actual or constructive notice of the start time of the initial hearing, on May 20, 2011, the Registrar issued an order granting Complainant’s petition for rehearing, and remanded the matter back to the OAH. A rehearing was held on July 22, 2011. Complainant testified and submitted exhibits. Respondent’s qualifying party and member, Alfred Padron, and his wife, Silvia Padron, testified. Additional Evidence Respondent constructed Complainant’s house. Because the house did not have a room for Complainant’s pool table, in late 2007, the parties began discussing construction of an approximately 1,000 square foot, 1-bedroom, 1- bath casita with a full kitchen and a large recreation room for the pool table. On or about January 21, 2008, after an architect prepared plans for the casita, Respondent contracted to construct the casita for a total price of $68,000.00, payable in three draws: (1) $27,200.00 to begin construction; (2) $22,440.00 on the completion of framing; and (3) $18,360.00 upon final completion. Complainant paid Respondent $27,200.00 in March 2008, and $22,440.00 in October 2008. Complainant testified that after the second payment, “everything slowed down,” and he “didn’t see much work for six months.” Mr. Padron went to Complainant in late May 2009, and asked for the final draw to complete the casita. Although Complainant had some misgivings, he paid Respondent $13,000.00 on June 5, 2009, and Mr. Padron signed a written promise that Respondent would complete the casita on or before August 15, 2009. Complainant submitted photographs of the casita that he took in November 2010, showing that construction had been completed through interior drywall, trim, and painting stages. The following work was incomplete: (1) No flooring had been installed; (2) Although the interior doors were hung, they lacked door knobs and other hardware; (3) The bathroom had only a bathtub, and lacked a sink, toilet, fixtures, and cabinets; (4) The kitchen had only hookups for the sink, and lacked cabinets, countertops, a sink, fixtures, and built-in appliances; (5) The electrical outlets and switches had not been finished, and were just wires in holes in the walls; (6) Although Respondent had sealed cracks in the exterior stucco, the stucco was unfinished and unpainted; (7) Three windows were broken; (8) There was a large hole in the ground outside the casita, where the plumbing for the casita was to tie into the septic system;[1] (9) A small patio cover was unfinished; and (10) Substantial construction debris was present on the interior and exterior of the casita. Mr. Padron testified consistently with Respondent’s written answer. Mr. Padron testified that the casita was 75% or 80% complete, not the 50% that Complainant alleged on his complaint, and that Mr. Padron regretted that he was unable to finish the casita due to cash flow problems caused by the poor economy. Mrs. Padron testified that she started doing Respondent’s office work after it could no longer pay office staff and that unfortunately, Complainant was not able to advance more money for additional materials so that Mr. Padron could at least provide labor to complete the casita. According to the Registrar’s electronic record, on September 19, 2010, Respondent’s license was suspended by law for lack of bond, and remained suspended on the date of the rehearing. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[2] Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[3] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[4] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] The administratively suspended status of Respondent’s license does not deprive Complainant of his right to prosecute his complaint against Respondent, or prevent the Registrar from determining the merits of Complainant’s complaint.[6] Respondent’s suspended license prevents it from performing or from hiring others to perform any further work to complete the casita.[7] The parties agreed that the casita is incomplete, that Respondent has not completed construction according to the terms of the parties’ contract, and that Complainant has paid more than is due under the contract. Therefore, Complainant established that Respondent abandoned the project, in violation of A.R.S. § 32-1154(A)(1).[8] Complainant did not present any evidence to establish that Respondent’s incomplete construction was not according to plan or in violation of applicable code, in violation of A.R.S. § 32-1154(A)(2).[9] RECOMMENDED ORDER In view of the foregoing, it is recommended that on the effective date of the Registrar’s final order, the Registrar revoke License No. ROC215345, Class B previously issued to Respondent Monte Verde Homes, L.L.C. It is further recommended that the Registrar not revoke Respondent’s license and, instead, close Complainant Christopher J. Lulek’s complaint in Case No. 2010-[number redacted] if on or before the effective date of the Registrar’s final order, Respondent provides satisfactory written proof to the Registrar that Respondent has paid Complainant by certified or cashier’s check, and Complainant has accepted, an amount of money that is sufficient to allow Complainant to hire an appropriately licensed contractor of his choice to complete construction of the casita according to the parties’ contract and plans, less the $5,360.00 that remains unpaid under the contract. 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, August 9, 2011. /s/ Diane Mihalsky Administrative Law Judge Transmitted electronically to: William A. Mundell, Director Registrar of Contractors ----------------------- [1] The parties agreed to exchange a patio on the plans for a connection to the septic system. [2] See A.R.S. § 32-1101 et seq. [3] 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). [4] See A.A.C. R2-19-119(B)(2). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] See A.R.S. § 32-1154(C). That statute provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such license, or to render a decision suspending or revoking such a license . . . .” [7] It is unlawful for anyone without a contractor’s license in good standing to engage in contracting. See A.R.S. § 32-1151. “Contractor” is defined as anyone who “does himself or by or through others” performs construction. A.R.S. § 32-1101(A)(3) (emphasis added). [8] A.R.S. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” [9] A.R.S. § 32-1154(A)(2) 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.”

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