ALJDEC decisions subject to certification as final

2010A-308477161-ROC · Registrar of Contractors · 2011-06-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 22, 2011 APPEARANCES: Complainant Alan R. Rose appeared on his own behalf. Thomas May appeared on behalf of Respondent Urban Ease Development, Inc. ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella _____________________________________________________________________ The question presented by this matter is whether Respondent Urban Ease Development, Inc. (“Urban Ease”) is subject to discipline for acts or omissions in violation of A.R.S. § 32-1154(A). Based on the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order: FINDINGS OF FACT 1. Urban Ease is the holder of a Class KB-2 license (No. 250461) issued by the Registrar of Contractors (“ROC”). Thomas May is Urban Ease’s qualifying party and corporate officer. According to the ROC’s official records, Urban Ease’s license is current. 2. On November 9, 2009, Complainant Alan Rose and his wife, Ruth, contracted with Urban Ease to construct a second floor addition to their home located at 4233 West Yucca Street, in Phoenix, Arizona. The contract price was $30,200.00. The Roses have paid Urban Ease $24,800.00. 3. On November 17, 2010, Mr. Rose filed a complaint against Urban Ease with the ROC generally alleging that the project was not complete and that Urban Ease had abandoned the project. 4. ROC Inspector Phil Coscia investigated Mr. Rose’s complaint. 5. On December 7, 2010, Inspector Coscia conducted a jobsite inspection. Mr. and Mrs. Rose, Mr. May, and Urban Ease’s foreman for the project were present for the inspection. 6. On December 8, 2010, Inspector Coscia issued a Corrective Work Order (“CWO”) under which the ROC gave Urban Ease 30 days to take corrective action as follows: Contractor should complete the project per the original written agreement, and properly executed change orders, or verbal agreements, and local building codes. All necessary work should be completed meeting compliance with industry standards and any applicable workmanship standards of the Registrar of Contractors’ [sic].

7. Inspector Coscia testified that at the jobsite inspection, Mr. May had mentioned that he underbid the project and that Urban Ease was experiencing financial problems. Inspector Coscia did not perform a pre- hearing inspection because the project remains incomplete. 8. At hearing, Mr. Rose testified that Urban Ease began its work in November 2009, and that as of the hearing date, the project remains incomplete. Mr. Rose expressed his frustration with Urban Ease, testifying that the progress of the project has been slow and lengthy without results, and that Urban Ease has not contacted him since the jobsite inspection. 9. Mr. May testified that the parties executed the contract for a second story addition on November 9, 2009, that the plans for the addition were submitted to the City of Phoenix in January 2010, that there were two and a half months of “red-lines,” that demolition started in March 2010, and that construction began in April 2010. Mr. May acknowledged full responsibility for underbidding the project, and testified that subcontractors are unwilling to perform work for the amounts that he is able to pay. Mr. May testified that Urban Ease is in a dire financial situation, having sustained two large losses this year. Mr. May testified that it is financially impossible to complete the job. Mr. May submitted into evidence a check dated May 6, 2011, in the amount of $21,000.00, as well as a check dated August 26, 2010, in the amount of $17,000.00, as payments from other projects. See Exhibits C and D. However, Urban Ease has been unable to use those funds because the checks will not clear the bank due to insufficient funds. Mr. May testified that he had intended to use those funds and the funds remaining due on the project to complete the project. CONCLUSIONS OF LAW In this proceeding, Mr. Rose bears the burden to prove, by a preponderance of the evidence, that Urban Ease is subject to discipline for violations of A.R.S. § 32-1154(A)(1) and/or (A)(23) as charged by the ROC in its March 30, 2011 Citation and Complaint. See Arizona Administrative Code R2-19-119. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). The Administrative Law Judge concludes that Mr. Rose met his burden of proof as to both of the ROC’s charges. Under A.R.S. § 32-1154(A)(1), a contractor is subject to discipline for “abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” The evidence of record established that Urban Ease abandoned its contract with the Roses without legal excuse. The fact that Urban Ease underbid the project is an error solely attributable to Urban Ease, as acknowledged by Mr. May. Therefore, the Administrative Law Judge concludes that Urban Ease violated A.R.S. § 32-1154(A)(1). Under A.R.S. § 32-1154(A)(23), a contractor is subject to discipline for “failure to take appropriate corrective action . . . without valid justification within a reasonable period of time after receiving a written directive from the registrar.” The evidence demonstrated that a jobsite inspection by the appointed inspector for the ROC was held, pursuant to which the ROC issued a CWO to Urban Ease directing it to complete construction of the project within 30 days. The evidence of record established that Urban Ease failed to do so without valid justification. Therefore, the Administrative Law Judge concludes that Urban Ease violated A.R.S. § 32-1154(A)(23). 6. Based on the foregoing, it is appropriate for the ROC to impose discipline against Urban Ease’s Class KB-2 license. 7. Upon consideration of all of the facts and circumstances presented by this case, the Administrative Law Judge concludes that the ROC should revoke Urban Ease’s Class KB-2 license. 8. The ROC’s authority in disciplinary matters such as the one presented herein includes the ability to impose reasonable conditions that allow the disciplined contractor to reduce the scope of the disciplinary action taken against it. The Administrative Law Judge deems the exercise of such authority to be appropriate in the instant case. Therefore, based upon all of the evidence, a reasonable condition in this case would consist of Urban Ease completing the project for the contract price plus any agreed upon change orders. Imposing such a condition is preferable to imposing disciplinary action against Urban Ease’s license without providing a condition to reduce or eliminate same. RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge makes the following Recommended Order: Urban Ease’s Class KB-2 license shall be revoked on the effective date of the Order entered in this matter. It is further recommended that if Urban Ease files written proof of completion of the project on or before the effective date of the Order entered in this matter, then the above-provided license revocation shall not take place but, instead, Urban Ease’s Class KB-2 license shall be placed on disciplinary probation for a period of one year. This alternative penalty shall commence, if at all, on the effective date of the Order entered in this matter. It is further recommended, in addition to the above-provided penalties, if any, that Urban Ease pay the sum of $500.00 to the ROC by way of a civil penalty pursuant to A.R.S. (32-1154(D). The failure by Urban Ease to pay the entire amount of the aforesaid civil penalty, on or before days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Urban Ease’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Urban Ease, 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 forty (40) days from the date of that certification. Done this day, June 29, 2011.

/s/ Sondra J. Vanella 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