ALJDEC decisions subject to certification as final

2010A-308474606-ROC · Registrar of Contractors · 2011-10-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 3, 2011, and October 11, 2011, at 8:00 a.m. APPEARANCES: The Complainant appeared through her attorney, David Gaona. The Respondent appeared through its attorney, Jeffrey M. Hall.

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. The Respondent is the holder of a Class KB-2 (No. 240142) License issued by the Registrar of Contractors. 2. This is a residential matter where the Respondent performed remodeling work on the Complainant’s residence located at 10975 E. Bahia Drive, Scottsdale, Arizona. 3. There was no dispute that the parties entered into a written construction agreement prepared by the Respondent. 4. Credible testimony and evidence established that the written construction agreement provides that the Respondent was to complete the agreed upon construction work for the total sum of $34,938.75. 5. Credible testimony and evidence established that the parties’ written construction agreement provides that the agreed upon total sum does not include change orders or items that were added on during the course of construction. 6. Credible testimony and evidence established that paragraph 8 of the parties construction agreement provides, in relevant part, as follows: Owner may make changes to the scope of work, including changes to the drawings and specifications, from time to time during the construction of the Project. However, any such change or modification shall only be made by written “Change Order” signed by both parties. Such Change Orders shall become part of this Contract.

7. There was no dispute that the parties entered into several hand written signed change orders and that the written change orders became part of the parties’ construction agreement. 8. There was no dispute that the parties’ written construction agreement was prepared by the Respondent. 9. When the construction project neared completion, the parties became embroiled in a monetary dispute regarding the Respondent’s claim for additional monies due to the Respondent for labor costs on several oral Change Orders that the Complainant allegedly agreed to. 10. The Complainant declined the pay the full amount claimed as due and owing by the Respondent, and on May 13, 2010, the Respondent filed a notice and claim of mechanic’s, materialman’s or professional services lien on the Complainant’s residence for the sum of $13,630.16, plus $265.00 for costs for preparation and filing. 11. When the Respondent refused to remove the notice and claim of lien, the Complainant filed a formal complaint against the Respondent with the Registrar of Contractors. 12. In her formal Complaint, the Complainant alleges, among other things, that she has overpaid the Respondent the sum of $5,490.00. 13. Pursuant to the filing of the formal Complaint, a formal Citation and Complaint was issued by the Registrar of Contractors charging the Respondent with alleged violations of A.R.S. § 32-1154 (A) (2) (departure from or disregard of plans or specifications or any building codes), A.R.S. § 32-1154 (A) (9) (failure to complete a construction project or operation for the price stated in the contract), and A.R.S. § 32-1154 (A) (3), namely, A.A.C. rule R4-9-108 (failure to perform work in a professional and workmanlike manner). 14. There was no credible evidence that the Respondent’s workmanship on the Complainant’s residence failed to comply with applicable workmanship and industry standards. 15. The credible testimony and evidence of record is inadequate and fails to support a finding that the Respondent departed from or disregarded plans or specifications or any building codes in its construction work at the Complainant’s residence. 16. The parties’ monetary dispute, consisting of Complainant’s claim that she has overpaid the Respondent and Respondent’s claim that the Complainant has failed to pay the Complainant for agreed upon oral change orders, is found to be a good faith dispute which necessarily will involve a monetary adjudication and which must be resolved, if at all, in a civil court of competent jurisdiction. 17. The Respondent’s actions, in utilizing oral change orders instead of the written change orders required by the parties’ written construction agreement and then presenting the Complainant with a list of increased labor costs allegedly due for the oral change orders, are found to be in violation of the terms of the parties’ written construction agreement and are found to constitute a violation of the charged provisions of A.R.S. § 32-1154 (A) (9) (failure in a material respect to complete a construction project for the price stated in the contract). 18. Notice is taken of the Respondent’s prior License record with the Registrar of Contractors. / / / / / /

CONCLUSIONS OF LAW 1. The Complainant has the burden of demonstrating by a preponderance of the evidence that the Respondent violated the charged sections of the state’s contracting laws. See Culpepper v. State of Arizona, 187 Ariz. 431, 437-38, 930 P.2d 508 (Ariz. App. 1996). 2. Proof by “preponderance of the evidence” means that it is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). Proof by preponderance of the evidence “is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (rev. 6th ed. 1990). 3. The Complainant failed to sustain her burden of proof to establish that the Respondent violated the provisions of A.R.S. §32-1154 (A) (2) (departure from or disregard of plans or specifications or any building codes), and A.R.S. § 32-1154 (A) (3), namely, A.A.C. rule R4-9-108 (failure to perform work in a professional and workmanlike manner), as charged in the Citation and Complaint. 4. Credible testimony and evidence supported findings which establish Respondent’s violation of the charged provisions of A.R.S. § 32-1154 (A) (9) (failure in a material respect to by the licensee to complete a construction project for the price stated in the contract). RECOMMENDed order In view of the foregoing, it is recommended that, commencing on the effective date of the Registrar’s Order, the Respondent’s License be placed on active suspension for a period of five (5) days, followed immediately by a period of fifteen (15) days disciplinary probation. 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 26, 2011. /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