ALJDEC decisions subject to certification as final

2010A-308475948-ROC · Registrar of Contractors · 2011-10-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 15, 2011 (record held open to September 16, 2011)

APPEARANCES: Complainant appeared on his own behalf; no one appeared on behalf of Respondent.

WITNESSES: Gerald Rosenblum

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action alleging abandonment, poor workmanship, failure to pay subcontractors, and failure to comply with a Corrective Work Order against Respondent regarding a remodeling project for which Respondent was the general contractor. As noted above, Respondent did not appear at the hearing; therefore, Complainant’s evidence is uncontested. At hearing, credible evidence revealed that Respondent had filed for bankruptcy in April 2011. Hearing was held on June 15, but the record was held open for Complainant to obtain a lifting of the Bankruptcy Court’s automatic stay that would authorize a decision in this matter. Complainant obtained such an order[1] on September 14, 2011, and the order is now part of the file for this matter. This matter may now move forward. This tribunal entered the complaint file received from the Registrar of Contractors into the record, as well as marked Exhibit A, a packet submitted by Complainant that contains documentation relating to each of the items in his complaint.[2] Complainant presented evidence and testimony. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Decision finding violations of Arizona contracting law and recommending revocation of the license. FINDINGS OF FACT 1. Respondent is the holder of license B.099022-R, a general residential contracting license issued by the Registrar of Contractors (“ROC”). The license authorized Respondent to operate as a general contractor for residential projects. Richard James Fisch is the Qualifying Party on the license. The license was revoked on June 24, 2011. 2. In July 2009, Complainant and Respondent entered into a contract for a major remodel of Complainant’s home. Complainant paid Respondent over $260,000.00 toward work under the contract, which had a “cost plus 20%” contract price. In September 2010, Complainant filed an ROC complaint stating that Respondent had last performed work in August 2010 and listing six items of complaint against Respondent. The complaint was later amended to include more items, bringing the total number of complaint items to eleven. 3. In October 2010, the parties submitted their contractual dispute to arbitration. According to Complainant, he submitted the same items to arbitration that are in his ROC complaint. By an award dated January 31, 2011 (issued without specific findings of fact), Complainant prevailed as to eight of the eleven complaint items. The items named in the arbitration award track the items in the ROC complaint. Complainant testified at hearing that he considers the arbitration award to be support for his ROC complaint. The arbitration award was confirmed by order of the Maricopa County Superior Court on April 26, 2011. 4. On October 12, 2010, after inspecting the jobsite, ROC Inspector Jeff Fleetham issued a Corrective Work Order (“CWO”) that ordered Respondent to complete the job per the contract and found a workmanship violation with regard to one complaint item concerning dining room ceiling beams (CWO item 7). Respondent did nothing. 5. Complainant reviewed the complaint items at hearing in the order that they are listed in his amended complaint. Complaint item 1 alleges that Respondent received a $40,000.00 deposit for work that was never done. The deposit was not returned. The arbitration award found this item in Complainant’s favor and awarded him $40,000.00. 6. Complaint item 2 alleges that Respondent did not fully pay its plumbing subcontractor W. J. Maloney Plumbing. The documentation supports that allegation, and the arbitration award found in favor of Complainant, awarding him $4,387.75. 7. Complainant item 3 alleges that Respondent did not fully pay a plumbing material supplier, Ferguson Enterprises, Inc. Complainant’s documentation shows that he had to pay Ferguson out of his pocket and that the arbitration award found in his favor for $4,951.37. 8. Complaint item 4 alleges that Respondent failed to pay another material supplier, Facings of America, Inc., for a custom stone fireplace. The arbitration award awarded Complainant $3,937.50 for that item, and the documentation supports it. 9. Complaint item 5 alleges that Respondent poorly installed backer board in the bathroom and caused remedial work to be necessary to correct Respondent’s poor work. The work had been done before the ROC inspection, but the arbitration award agreed with Complainant and awarded him $2,699.32 for that item. 10. Complainant items 6, 8, and 9 were not found in Complainant’s favor in the arbitration award. They allege fraud, failure to pay sales tax, and forgery of a signature. The evidence submitted on these items is not sufficient to support them.[3] 11. Complaint item 7 alleges poor workmanship regarding dining room ceiling beams. Inspector Fleetham ordered Respondent to correct the beams in the CWO. Complainant testified at hearing that Respondent did not correct them. The arbitration award found this item in Complainant’s favor and awarded him $2,526.00. 12. Complaint item 10 alleges that Respondent failed to pay its supplier of portable toilets for workers on the jobsite and that Complainant had to pay the supplier, United Site Services, directly in the amount of $843.76. The arbitration award agreed with Complainant and awarded him that amount. 13. Complaint item 11, the last item, alleges that Respondent poorly installed a bathroom pipe that had to be corrected by others. This item was added after Inspector Fleetham’s inspection, so he did not observe it, but the documentation submitted by Complainant and the arbitration award support it in the amount of $330.00. 14. Complainant’s evidence is uncontested. 15. The evidence shows that Respondent abandoned the project, built with poor workmanship, failed to pay subcontractors and suppliers, and failed to comply with a CWO. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[4] Further, the standard of proof at hearing is by preponderance of the evidence.[5] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint.[6] Complainant has met that burden. 2. The Citation and Complaint alleges violations of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(1)(prohibits abandonment without legal excuse), (A)(3) by way of ROC Rule R4-9-108 (prohibits poor workmanship), (A)(7) (prohibits fraud), (A)(11) (prohibits failure to pay subcontractors and suppliers), and (A)(23) (requires compliance with a CWO). The evidence shows that Respondent has violated each of those provisions, except (A)(7) because the evidence does not support a finding of fraud. 3. A review of current ROC records shows that Respondent’s license is revoked. Pursuant to A.R.S. § 32-1154(C), the revocation of a license does not deprive the ROC or this tribunal of jurisdiction and does not render the Registrar powerless to discipline the license further. 4. The appropriate sanction in this matter is revocation of the license. RECOMMENDED ORDER IT IS RECOMMENDED that license B.099022-R, held by Mountain Shadows Custom Homes Lc be revoked.

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, October 3, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Order Approving Stipulation for Relief from Automatic Stay issued September 14, 2011 by the United States Bankruptcy Court, District of Arizona, Case No. 2:11-bk-10717-CGC. [2] All documents named below are in the packet that is marked Exhibit A. [3] In addition, failure to pay taxes under A.R.S. § 32-1154(A)(5) was not cited in the Citation and Complaint. [4] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [5] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [6] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826