ALJDEC decisions subject to certification as final

2011A-4801-ROC · Registrar of Contractors · 2012-01-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 16, 2011, at 8:00 a.m. APPEARANCES: Complainant Donald Homsey appeared on his own behalf; Respondent Hi Tech Roofing, L.L.C. did not appear. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In August 2000, the Arizona Registrar of Contractors (“the Registrar”) issued License No. L-42.157777-C for commercial roofing to Hi Tech Roofing, L.L.C. (“Respondent”). According to the Registrar’s electronic record, it also issued License No. C-42.157778-R for residential roofing to Hi Tech Roofing, L.L.C. Respondent’s address of record is 1834 East Baseline Road, Suite 104, Tempe, Arizona 85283-1508. On August 18, 2011, the Registrar received a complaint from Donald Homsey (“Complainant”) against Respondent regarding its repair of the roof of a condominium that Complainant owned at 3314 West Tangerine in Phoenix, Arizona. According to the complaint, Respondent had been paid $5,752.50 and was owed $1,059.91 for the repair. Complainant stated as the desired outcome of the complaint that he wanted Respondent to “to quit billing for work [it] did not complete or wasn’t authorized to complete” and threatening to place a lien on Complainant’s property if Respondent was not paid for “multiple incorrectly billed amounts.” On October 5, 2011, the Registrar issued a Citation and Complaint against Respondent, charging violations of A.R.S. § 32-1154(A)(9) and (17). The Registrar mailed a copy of the Citation and Complaint to Respondent at its address of record. Respondent filed a timely written answer to the Citation and Complaint, denying any statutory violations. Respondent’s address of record was on its letterhead. The Registrar referred the matter to the Office of Administrative Hearings (“the OAH”), an independent state agency, for an evidentiary hearing. On October 8, 2011, the Registrar issued a Notice of Hearing, setting a hearing on December 16, 2011, at 8:00 a.m. at the OAH. The Registrar sent a copy of the Notice of Hearing to Respondent at its address of record. A hearing was held on December 16, 2011. Complainant testified and submitted nine exhibits. Respondent did not request to appear telephonically at the hearing and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed fifteen minutes to allow Respondent additional travel time, Respondent did not appear through an authorized member, employee, or attorney, and did not contact the OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend its license. According to the Registrar’s electronic record, Respondent’s L-42 license is current and in good standing. Complainant’s complaint appears to be the only one pending against Respondent. Additional Evidence The condominium that Complainant owns on West Tangerine is a rental. In October 2010, the roof and air conditioning unit were damaged in a hailstorm. On or about April 26, 2011, Complainant, Respondent’s sales representative, Steve Pless, and an adjuster from Complainant’s insurer, Farmers Insurance (“Farmers”), met at the condominium to determine necessary repairs. On or about April 27, 2011, Respondent submitted an estimate to Farmers for various work, including sealing and painting wood siding, door and window openings, replacing the HVAC unit, replacing the air compressor in an air conditioning unit, as well as replacing the roof on the condominium.

Mr. Pless told Complainant that if Respondent undertook to perform the work of more than one trade, it could add overhead and profit on its bills to Farmers. Farmers did not approve Respondent’s proposals to replace the HVAC unit, to replace the air compressor, to perform painting, to replace the roof over the carport, or to replace the gutter and downspout. On or about May 9, 2011, Farmers paid Respondent $5,752.50 for work that it had approved, leaving a remaining balance due of $1,059.91. On or about June 6, 2011, Maville Mechanical, Inc., License No. K- 39.158019-D (“Maville”), replaced the HVAC unit on Complainant’s condominium on West Tangerine. Complainant paid Maville directly. On or about August 3, 2011, Respondent submitted its final invoice to Farmers and Complainant in the total amount of $7,810.11, with a balance due of $2,057.61. Respondent billed for replacing gutters, reroofing the carport, and replacing the air conditioner compressor, although Farmers had not authorized and Respondent had not performed the work. Respondent’s final invoice stated that if the balance due was not paid, it would file a lien against Complainant’s condominium to protect its rights. As of the date of the hearing, Complainant had not received notice that Respondent had filed a lien against his condominium. CONCLUSIONS OF LAW This charged statutory violations lie within the Registrar’s jurisdiction.[1] The issue of whether Respondent can file a lien against Complainant’s condominium must be decided in a court of competent jurisdiction.[2] The Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable, and Respondent is deemed to have received notice of the hearing.[3] Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence.[4] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] Hi Tech Roofing, L.L.C.’s residential C-42 license allowed it to perform residential roofing. However, Complainant established that Respondent contracted beyond the scope of its C-42 and L-42 licenses when it submitted a proposal to Farmers to perform painting and HVAC work.[6] Therefore, Complainant established that Respondent violated A.R.S. § 32- 1154(A)(17).[7] Complainant established that Respondent billed Farmers and Complainant for work that it was not authorized to perform and that it did not actually perform. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(9).[8] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s order in this matter, the Registrar suspend Respondent Hi Tech Roofing, L.L.C.’s License No. L-42.157777-C until Respondent provides proof that it has remedied its violation of A.R.S. § 32-1154(A)(9) and (17). It is further recommended that the Registrar not suspend Respondent’s license but, instead, close Case No. 2011-4801 if on or before the effective date of the Registrar’s order, Respondent provides written proof that is satisfactory to the Registrar that it has taken both of the following actions to remedy the statutory violations that Complainant Donald Homsey established: 1) Respondent has notified Farmers and Complainant that it is no longer seeking payment for work that was not authorized or performed; and 2) Respondent has obtained license(s) that allow it to submit proposals to perform HVAC and painting or that it has taken specific steps to avoid future violations of A.R.S. § 32- 1154(A)(17). It is further recommended that in addition to any license suspension that may result from this matter, Respondent’s Class L-42 license be placed on disciplinary probation for a period of 180 days, commencing on the effective date of the Registrar’s order or the date on which Respondent files notice of compliance, whichever is later. 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 5, 2012.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See A.R.S. § 32-1101 et seq. [2] See A.R.S. §§ 33-981 to 33-1008 (authorizing courts to enforce mechanics’ and materialmen’s liens). [3] See A.R.S. §§ 41-1092.04; 41-1092.05(D). [4] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] A.R.S. § 32-1101(3) provides that "‘Contractor’ is synonymous with the term ‘builder’ and means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that . . . undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others” to perform construction. (Emphasis added.) [7] A.R.S. § 32-1154(A)(17) includes among the grounds for suspension, revocation, and other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.” [8] A.R.S. § 32-1154(A)(9) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.”

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