ALJDEC decisions subject to certification as final

2010A-308475257-ROC · Registrar of Contractors · 2011-03-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 24, 2011

APPEARANCES: Daryl Choby dba Moldex appeared and was represented by attorney Lance Entrekin; Windsor Partners, Inc. was represented by Qualifying Party James Sasser.

WITNESSES: Daryl Choby Chester R. Leathers, Ph.D. James Sasser

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Daryl Robert Choby dba Moldex the Mold Experts (“Choby”) brings this action claiming that he is owed $3,480.00 from Windsor Partners, Inc. (“Windsor”) for materials and services Choby supplied to Windsor as mold remediation in a residential home.[1] Windsor admits that Choby did the work but denies owing any money to Choby because Choby breached their agreement by not complying with the warranty that Choby provided. Windsor also brings an action against Choby (cross-complaint),[2] claiming that Choby abandoned the project by not honoring the warranty and by asking for additional payment for work that was part of the original agreement. Choby denies breaching the agreement. This tribunal entered the complaint files for both complaints received from the Registrar of Contractors into the record, with the addition of Windsor’s Exhibits 1A, 1B, 1C, 1D, and 1E, which are photographs submitted at the hearing. The parties presented evidence and testimony at the hearing. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding that Choby has not violated the statutes and that Windsor owes Choby $3,480.00. FINDINGS OF FACT 1. Windsor Partners, Inc. is the holder of license B.176900-R, a general residential contracting license issued by the Registrar of Contractors (“ROC”). The license authorizes Windsor to operate as a general contractor for residential projects. Windsor’s corporate President and Qualifying Party is James Sasser (“Sasser”).[3] 2. Daryl Robert Choby dba Moldex the Mold Experts is the holder of license K-61.187342-D, a dual specialty contracting license issued by the ROC. Choby’s license authorizes him to perform carpentry remodeling and repairs for both residential and commercial projects. Choby is a sole proprietor and is, therefore, the Qualifying Party for the license. 3. In April 2010, Sasser hired microbiologist Chester R. Leathers, Ph.D. to inspect a house for mold. The house was owned by JAS Management, LLC (“JAS”), of which James Sasser was the Managing Member. Dr. Leathers found mold in several areas of the house and issued a report to Sasser. Based on a recommendation from Dr. Leathers, Sasser contacted Choby to discuss doing the mold remediation work needed. 4. After talking with Sasser and observing the house, Choby prepared a written bid for the work, with a total price of $3,480.00. A meeting was set for Sasser and Choby to meet and sign the bid. Sasser could not make the meeting, but verbally agreed to the written bid and authorized Choby to do the work. Sasser did not see the written bid until later, but the evidence shows that the contents of the bid were discussed by the parties. 5. The evidence shows that Sasser verbally accepted the contents of the written bid.[4] There is no evidence showing that Sasser informed Choby that he was acting on behalf of JAS and not Windsor when he hired Choby. Indeed, there is evidence that Windsor had workers at the house performing construction work in other areas. Those workers were the ones who initially discovered the mold. It was reasonable for Choby to believe that he was hired by Windsor. 6. The written bid described three areas of the house that the remediation work was to be performed in: (1) northwest corner wall and subfloor of upstairs northeast bedroom; (2) wall in garage; and (3) half wall and cabinets at downstairs wet bar. The bid also provided for general decontamination and sanitization procedures and indoor air scrubbing. In addition, the bid provided a lifetime warranty to the remediated areas as long as new water, moisture, or humidity did not get into those areas. 6. Choby performed the remediation work stated in the bid in April 2010. He completed the work described in the bid, but was not paid any amount of the contract price. In late June 2010, Sasser found mold in a new area of the house, the upstairs bathroom that was adjacent to one of the areas in which Choby performed remedial work. Sasser requested that Choby remove the mold in the new area. Choby was willing to do so for an additional charge. Sasser took the position that the work was covered under the warranty stated in the written bid. Choby disagreed, stating that the warranty was only for the remediation work already done. 7. In June 2010, Choby filed his ROC complaint against Windsor for nonpayment. Windsor claims that it was not a party to the agreement and that, alternatively, it has a legal excuse for nonpayment because Choby did not honor the warranty and thereby breached the contract. 8. In August 2010, Windsor filed an ROC complaint against Choby for failure to perform the additional work under the written bid/agreement.[5] Windsor’s claim is that the additional area is covered under the warranty and that it should have been done as part of the remediation done in the adjacent upstairs area. Choby has maintained that he has fulfilled the agreement and that the warranty did not cover the entire house, only the areas of remediation. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[6] Further, the standard of proof at hearing is by preponderance of the evidence.[7] This matter contains cross-complaints. Therefore, both parties bear burdens of showing, by a preponderance of the evidence, that the other party has violated the statutes cited in the Citation and Complaint issued in each case respectively.[8] While Choby has met his burden on the nonpayment complaint, Windsor has not met its burden. 2. The Citation and Complaint issued against Windsor cites only the “no pay” provision found in Arizona Revised Statutes (A.R.S.) § 32- 1154(A)(11) that prohibits the failure of a licensee to pay monies in excess of $750 “when due for materials or services” when the licensee has the capacity to pay or when the licensee has been paid for the project. 3. Taking all the evidence into consideration, the evidence is sufficient to show that Windsor has violated the no pay provision. First, the evidence shows that Choby reasonably believed that he was dealing with a licensed contractor as he interacted with Sasser. Sasser did nothing to disabuse him of that notion. Most telling is the fact that Windsor had workers on the property doing construction work. 4. Windsor’s defense for not paying is not made in good faith. The terms of the warranty clearly state that it applies to remediation work only and not the entire house. Windsor failed to substantiated the claim that the additional area should have been remediated as part of the adjacent upstairs area. Neither Choby nor Dr. Leathers agreed that such additional work was required by the applicable standards. 5. The evidence shows that Windsor owes Choby $3,480.00. 6. A review of Windsor’s license history shows that the license is current and in good standing. Therefore, Windsor should be given an opportunity to pay Choby the money owed. 7. As for Windsor’s complaint against Choby, the Citation and Complaint cites allegations of violation of provisions found in A.R.S. § 32- 1154(A)(1) and (A)(9). Subsection (A)(1) prohibits contractors from abandoning a project or failing to complete it without legal excuse. Subsection (A)(9) prohibits contractors from failing to complete a project for the price stated in the contract. 8. As found above, Choby has not violated either of these provisions. Choby completed the work called for in the agreement and is entitled to the price stated in the agreement. The warranty does not apply to the additional area of mold found much later after Choby completed the work. 9. The complaint against Choby should be dismissed. RECOMMENDED ORDER IT IS RECOMMENDED that license B.176900-R, held by Windsor Partners, Inc., be suspended on the effective date of the Registrar’s Order unless the Registrar of Contractors receives written proof of payment to Daryl Robert Choby dba Moldex the Mold Experts of the sum of $3,480.00, and the Registrar accepts such written proof. IT IS FURTHER RECOMMENDED that if Windsor Partners, Inc. provides such written proof, on or before the effective date of the Registrar’s Order, the license suspension shall not take place and case 2010-[number redacted] shall be closed. IT IS FURTHER RECOMMENDED that that the Citation and Complaint against Daryl Robert Choby dba Moldex the Mold Experts in case 2010- [number redacted] be dismissed.

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, March 16, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Choby’s complaint (2010-[number redacted]) was filed June 8, 2010. [2] Windsor’s complaint (2010-[number redacted]) was filed August 18, 2010. [3] Hereinafter, both the company and Sasser will be referred to as “Windsor.” [4] Windsor relies on the warranty language in the written bid for a defense to the no pay claim and as a basis for the claim that Choby breached the warranty agreement. [5] On the complaint form, Sasser listed “JAS Management LLC/Windsor Partners, Inc.” as the complainant. [6] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [7] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [8] See Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996) (moving party bears burden of proof by preponderance of evidence in an administrative hearing).

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