ALJDEC decisions subject to certification as final

2011A-2283-ROC · Registrar of Contractors · 2011-08-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 4, 2011, at 10:00 a.m. APPEARANCES: The Complainants appeared through Robert Drew. The Respondent appeared through its authorized representative, Daniel Hunt. 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’s Class B (No. 253321) License was issued by the Registrar of Contractors on March 2, 2009, and voluntarily cancelled by the Respondent on March 17, 2011. 2. The Respondent’s Class KB-2 (No. 215455) License was issued by the Registrar of Contractors on January 18, 2006. 3. There was no dispute that the Class KB-2 License issued to the Respondent was administratively suspended by the Registrar of Contractors for non-renewal on February 1, 2008, and that the Respondent’s Class KB-2 License then expired on February 1, 2009. 4. Credible testimony and evidence established that on August 6, 2008, the Respondent entered into a written construction agreement with the Complainants to perform extensive home repair and restoration work, including roofing, exterior stucco, and exterior painting work on the Complainants’ residence for the total sum of $59,650.00. 5. Undisputed credible testimony and evidence established that the Respondent then began construction work on the Complainants’ residence and that all of the initial construction work on the Complainants’ residence was completed during the time period from August 6, 2008, through December, 2008. 6. Undisputed credible testimony and evidence established that the Respondent was fully aware of the fact that the Respondent’s KB-2 License had been administratively suspended by the Registrar of Contractors on February 1, 2008 for non-renewal. 7. The Respondent’s authorized representative admitted that he had failed to renew the Respondent’s Class KB-2 License because of the expense involved in renewing the license. 8. Undisputed credible testimony and evidence established that the Respondent continued to utilize the suspended KB-2 License to solicit and perform construction work in the State of Arizona despite the admitted fact that the Respondent knew that its Class KB-2 License had been administratively suspended for nonrenewal. 9. There was no dispute that the parties’ written construction agreement specifically provides that all work on the Complainants’ residence was to be performed by properly licensed contractors. 10. Credible testimony and evidence established that the Respondent falsely represented itself as being a properly licensed contractor to the Complainants throughout the construction work that was performed on the Complainants’ residence. 11. Credible testimony and evidence established that the paint and exterior stucco on the Complainants’ residence continued to peel and flake despite the Respondent’s repeated corrective attempts to resolve the problems with the exterior paint and stucco on the Complainants’ residence. 12. Credible testimony and evidence established that the Complainants’ roof continued to peel and flake despite the Respondent’s repeated corrective attempts. 13. The Complainants then insisted that the Respondent retain a properly licensed engineer to examine their residence and determine the cause of the problems with the exterior of the Complainants’ residence. 14. There was no dispute that the Respondent then retained a forensic engineer to inspect the Complainants’ residence. 15. There was no dispute that the Respondent’s selected forensic engineer then inspected the Complainants’ residence and issued a written report with recommendations for the proper correction of the problems on the Complainants’ residence. 16. There was no dispute that the Respondent declined to comply with the forensic engineer’s recommendations on the basis that the recommended corrections would be too expensive and that instead the Respondent performed patch and painting work on the exterior of the Complainants’ residence. 17. The Complainants were dissatisfied with the Respondent’s decision to not follow the recommendations of the forensic engineer and filed a formal Complaint against the Respondent with the Registrar of Contractors. 18. Pursuant to the filing of the formal Complaint, an assigned Agency Inspector conducted an on-site inspection and on November 10, 2010, issued a written Corrective Work Order directing the Respondent to perform designated corrective work on the Complainants’ residence. 19. The assigned Agency Inspector testified that he performed a pre-hearing inspection and found that the Respondent had fully complied with the terms of the written Corrective Work Order. 20. Credible testimony and evidence established that the exterior paint and stucco on the Complainants’ residence continued to deteriorate after the Inspector’s pre-hearing inspection. 21. Credible testimony and evidence established that a significant portion of the corrective work performed by the Respondent on the Complainants’ residence took place after the Respondent’s Class B License was voluntarily canceled by the Respondent on March 17, 2011. 22. The credible testimony and evidence of record is insufficient and fails to support a finding of abandonment in this matter. 23. The credible testimony and evidence of record is insufficient and fails to support a finding that the Respondent committed a fraudulent act in this matter. 24. Credible testimony and evidence, presented at hearing, established that the Respondent failed to fully comply with the terms of the Corrective Work Order issued in this matter. 25. Credible testimony and evidence, presented at hearing, established that the Respondent’s workmanship on the Complainants’ residence failed to comply with applicable industry and workmanship standards. 26. Credible testimony and evidence established that the Respondent knowingly offered to contract and knowingly performed contracting work on the Complainant’s residence while the Respondent’s KB-2 License was under suspension. 27. Credible testimony and evidence established that the Respondent performed construction work on the Complainants’ residence after the Respondent’s Class B License had been voluntarily canceled by the Respondent. 28. Credible testimony and evidence established that the Respondent performed construction work on the Complainants’ residence during the time period from February 1, 2009, when the Respondent’s Class KB-2 License expired through March 2, 2009 when the Respondent Class B License was first issued. 29. There was no dispute that the Respondent did not have a contractor’s license in the State of Arizona from February 1, 2009 through March 2, 2009. 30. 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. The Complainants failed to sustain their burden of proof to establish that the Respondent violated the charged provisions of A.R.S. § 32-1154 (A) (1) (abandonment), and A.R.S. § 32-1154 (A) (7) (fraudulent act), as charged in the Citation and Complaint. 5. Credible testimony and evidence supported findings which establish violations by the Respondent of the charged provisions of A.R.S. § 32- 1154 (A) (18) (contracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status), A.R.S. § 32-1154 (A) (23) (failure to take appropriate corrective action), 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 of Revocation. It is further recommended, in addition to the above-provided penalties, if any, that the Respondent pay the sum of $500.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. §32- 1154D. The failure by the Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of the Respondent’s contractor’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with the Respondent, as defined in A.R.S. §32-1101A (5), unless payment of any outstanding prior civil penalty is tendered. 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, August 17, 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