ALJDEC decisions subject to certification as final

2011A-4527-ROC · Registrar of Contractors · 2012-01-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 15, 2011 APPEARANCES: Princess Ann Poole appeared personally. Design Builders West, L.L.C. was represented by its authorized representative, Herbert Shepard. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order: FINDINGS OF FACT 1. Design Builders West, L.L.C. is the holder of License No. 173328, a Class KB-1 contracting license issued by the Registrar of Contractors (“Registrar”). 2. On August 8, 2011, Princess Ann Poole (“Complainant”) filed a written Complaint with the Registrar alleging that a contractor named “Free Roof Phoenix.com Evolution Restoration Services (“Evolution”),” the holder of License No. 173328 issued by the Registrar, had abandoned her roofing project after the contractor received payment in the amount of $7,880.87 from Complainant’s insurance carrier. The Registrar designated the Complaint as Case No. 2011-4527. 3. After investigating the Complaint, the Registrar issued a Citation and Complaint in Case No. 2011-4527 charging Respondent, the actual holder of License No. 173328, with violating the provisions of A.R.S. § 32- 1154(A) (1), (10), (13), specifically A.R.S. § 32-1124(B), and (15). 4. The Registrar forwarded Case No. 2011-4527 to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. 5. In October 2010, a hailstorm occurred in the Phoenix metropolitan area. Complainant’s residence sustained roof damage from the storm. 6. Complainant made a claim for the roof damage to her insurance carrier. 7. Complainant’s insurance carrier issued a check dated April 25, 2011, payable in the amount of $7,880.87 to BAC Home Loans Servicing, L.P.,[1] Complainant, and her husband, Eric Poole, for the hail damage. 8. On May 3, 2011, Complainant executed a written contract with Evolution for the repair of her storm-damaged roof. The contract did not list a Registrar-issued contracting license number. 9. On May 3, 2011, Complainant also executed another contract with “Evolution Restoration Services…a D.B.A. For Design Builders West Arizona [sic].” That document listed license number “ROC#510686.”[2] The contract also contains a handwritten notation reading “# 173328,” but it was unclear who made the notation or when the notation was made. The top of this contract contains the following language: “FREEROOFPHOENIX.COM.” 10. During negotiations for the roof repairs, Complainant was given an Evolution business card for Eddie Bosworth, an Evolution “Claims Specialist.” The business card listed Respondent’s contracting license number. 11. The insurance check endorsed by Complainant and her husband was given to representatives of Evolution. The check was then deposited into a bank account for “BFE Properties LLC DBA Evolution Repairs & Maint.” 12. Complainant tried unsuccessfully to contact Evolution after repeated attempts. Evolution did not perform any of the roof repairs. 13. There is credible evidence that Respondent entered into an agreement with Evolution for Evolution to contract in the name “Evolution Restoration Services DBA for Design Builders West” and using [Respondent’s] ROC number in conjunction with Evolution Restoration Services. 14. By letter dated March 31, 2011, Respondent gave a 15-day written notice to Evolution to stop using the name “Evolution Restoration Services DBA for Design Builders West” and Respondent’s contracting number. 15. By letter dated June 15, 2011, Respondent informed Evolution that Respondent had received a complaint from the Registrar concerning the use of Evolution’s name with Respondent’s contracting license. Pursuant to the agreement between Respondent and Evolution, Respondent exercised another 15-day written notice to Evolution to cease the use of the name with Respondent’s contracting license number. The letter also informed Evolution that “[y]ou need to satisfactory complete any work in progress and not start any new jobs,” despite the fact that Evolution did not possess its own contracting license. 16. The defense made at hearing by Respondent’s qualifying party and member, Herb Shepard, that the agreement made on behalf of Respondent by Respondent’s other member, Robert Kay, and Evolution violated the operating agreement between Respondent’s members is not a valid defense to Respondent’s conduct in this matter. 17. At the time and date of the hearing, Respondent’s License No. 173328 had been suspended by operation of law for lack of bond as of October 30, 2011. There were seven open complaints and two resolved/settled/withdrawn complaints against the license. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over Respondent and the subject matter in this case. 2. Pursuant to A.R.S. § 32-1154(C), the suspension of Respondent’s contracting license does not deprive the Registrar of the authority to impose discipline against that license for proven statutory violations in this matter. 3. Pursuant to A.A.C. R2-19-119(B), Complainant has the burden of proof in this matter. The standard of proof is by a preponderance of the evidence. A.A.C. R2-19-119(A). 4. Respondent violated the provisions of A.R.S. § 32-1154(A) (1), as charged in the Citation and Complaint issued by the Registrar. Respondent abandoned Complainant’s project under a contract with Respondent’s contracting number and name listed with its permission. No work was performed despite payment by Complainant. 5. Respondent violated the provisions of A.R.S. § 32-1154(A) (10), as charged in the Citation and Complaint issued by the Registrar. Respondent aided and abetted the unlicensed contracting activity of Evolution, even after receiving a complaint from the Registrar about such conduct. 6. Respondent violated the provisions of A.R.S. § 32-1154(A) (13), specifically A.R.S. § 32-1124(B), as charged in the Citation and Complaint issued by the Registrar. The two contracts signed by Complainant failed to properly list Respondent’s contracting license number, as required by statute. One of the documents listed a fictitious Registrar contracting license number. 7. Respondent violated the provisions of A.R.S. § 32-1154(A) (15), as charged in the Citation and Complaint issued by the Registrar. Respondent contractually agreed with Evolution to conduct business using Respondent’s contracting license number with a name not appearing on that license. 8. Pursuant to A.R.S. § 32-1156.01, Complainant established an entitlement to restitution from Respondent in the amount of $7,880.87 paid by Complainant for roof work that has never been performed. RECOMMENDED ORDER Respondent’s License No. 173328 shall be revoked on the effective date of the Order entered in Case No. 2011-4527. If Respondent presents written proof to the Registrar that Respondent has paid restitution to Complainant in the amount of $7,880.87 by certified check or cashier’s check on or before the effective date of the Order entered in Case No. 2011-4527, then the above-provided license revocation shall not take place, but instead Respondent’s License No. 173328 shall be suspended for a period of 60 days, followed immediately by a period of disciplinary probation for one year. This alternative penalty shall commence, if at all, on the effective date of the Order entered in Case No. 2011-4527. 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, January 4, 2012.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The check does not appear to have been endorsed by BAC Home Loans Servicing, L.P.; however, the check was honored by the financial institutions. [2] A review of the Registrar’s official public electronic licensing records reveals that there is no contracting license number “ROC#510686” issued by the Registrar.

-----------------------

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