ALJDEC decisions subject to certification as final

2011A-1922-ROC · Registrar of Contractors · 2011-09-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 12, 2011, at 8:00 a.m. APPEARANCES: The Complainants appeared through his attorney, Michael Rich. The Respondent appeared through its authorized representative, Greg Robinson. 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 C-12 (No. 189989) License issued by the Registrar of Contractors. 2. This is a residential matter where the Respondent entered into a contract with the Complainants to install a large elaborate home theater system in the Complainants’ residence for the total sum of $96,097.62. 3. There was no dispute that the Complainants paid the full amount of the construction project ($96,097.62) to the Respondent at the onset of the scheduled construction project. 4. Credible testimony and evidence established that the Respondent supposedly completed construction work on the home theater system and left the Complainants’ residence. 5. The Complainants then became dissatisfied with the fact that several areas of the home theater system failed to operate correctly and complained to the Respondent. 6. When the Respondent failed to return to the Complainants’ residence and properly correct the problems with their new home theater system, the Complainants retained an alternative licensed contractor to properly correct the home theater system. 7. The alternative licensed contractor then examined the new home theater system and informed the Complainants that numerous electronic items that the Complainants had paid for were missing from the home theater system and that several pieces of electronic equipment had been replaced with cheaper items. 8. The Complainants then contacted the Respondent and complained about the problems with the new home theater system. 9. When the Respondent refused to return to the Complainants’ residence and properly correct the new home theater system, the Complainants again retained an alternative licensed contractor to properly correct the new home theater system so that it was operational and filed a formal Complaint against the Respondent with the Registrar of Contractors. 10. Credible testimony and evidence established that after the formal complaint was filed, the parties entered into a Settlement Agreement wherein the Complainant agreed to accept a sum lesser than his actual damages, and the Respondent agreed to make monthly payments to the Complainants. 11. There was no dispute that the Respondent failed to comply with the terms of the parties’ Settlement Agreement. 12. On April 17, 2011, the Complainants requested an administrative hearing. 13. Credible testimony and evidence established that the Respondent knowingly and falsely represented to the Complainants that the new home theater system had been completed in accordance with the terms of the parties’ construction agreement. 14. Credible testimony and evidence established that the new home theater system had not been completed in accordance with the terms of the parties’ written construction agreement. 15. Credible testimony and evidence established that the Respondent knew that the home theater system had not been completed in accordance with the terms of the parties’ construction agreement and that the Respondent knew that it was falsely representing the completion of the new home theater system. 16. Credible testimony and evidence established that the Respondent made the false representation that the home theater system had been completed in accordance with the terms of the parties’ construction agreement with the intention that the Complainants would rely upon the Respondent’s false representation. 17. Credible testimony and evidence established that the Complainants are not an expert in home theater systems and that they reasonably relied upon the Respondent’s representation as a licensed contractor that the Complainants’ home theater system had been properly completed in accordance with the terms of the parties’ written construction agreement. 18. Credible testimony and evidence established that the Complainants were unaware of the undisputed fact that the Respondent had failed to install all of the components of the new home theater system until the new home theater system was inspected by an alternative licensed contractor. 19. Credible testimony and evidence established that the Complainants were unaware of the undisputed fact that the Respondent had installed items of lesser cost and quality in the home theater system until the new home theater system was inspected by an alternative licensed contractor. 20. Credible testimony and evidence established that the Complainants reasonably relied upon the Respondent’s false representation that the new home theater system had been properly completed in accordance with the terms of the parties’ written construction agreement. 21. Credible testimony and evidence established that the value of the missing electronic items and the money saved by the Respondent in the substitution and installation of lower quality and cost electronic items in the Complainants’ home theater system exceeded the sum of $20,000.00.

22. Credible testimony and evidence established that the Respondent’s false representation that the home theater system had been completed in accordance with the terms of the parties’ written construction agreement was material. 23. Credible testimony and evidence established that the Respondent’s construction work in the installation of the new home theater system failed to comply with applicable workmanship and industry standards.

24. Notice is taken of the Respondent’s prior License record with the Registrar of Contractors. CONCLUSIONS OF LAW 1. The Complainants have 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). 3. 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). 4. Credible testimony and evidence supported findings which establish violations by the Respondent of the charged provisions of A.R.S. § 32- 1154 (A) (7) (fraudulent act) 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). RECOMMENDed order In view of the foregoing, it is recommended that the Respondent’s License be revoked on the effective date of this Order. 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, September 15, 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