ALJDEC decisions subject to certification as final

2012A-118-ROC · Registrar of Contractors · 2012-06-01

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 14, 2012

APPEARANCES: Complainant appeared on her own behalf; Respondent was represented by its Managing Member and Qualifying Party Clint Hyman.

WITNESSES: Judith Young Clint Hyman

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming that Respondent Foresight Roofing LLC dba Countrywide Shingle, without legal excuse, abandoned the project for which Respondent had been hired. Respondent denies that it entered into a contract with Complainant.[1] This tribunal entered the complaint file received from the Registrar of Contractors (“Registrar” or “ROC”) into the record, along with Respondent’s Exhibits 1 and 2.[2] The parties presented evidence and testimony from the witnesses listed above. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding that Respondent is responsible for the abandonment of Complainant’s job. FINDINGS OF FACT 1. Respondent is the holder of License No. K-42.265407-D, a specialty dual residential and commercial contractor’s license issued by the ROC. The license authorizes Respondent to perform roofing work for both residential and commercial projects. Clinton Shawn Hyman is the Qualifying Party. 2. Complainant testified that she entered into a contract in August 2011 with “Countrywide Shingle & Siding LLC” to repair her roof. That written contract is part of the complaint file and reflects a “Repair Work Order/Invoice” signed by Complainant and “Marc Sutton” for the contractor, which is identified as “Countrywide Shingle & Siding LLC.” The Repair Work Order/Invoice is a form document with the details filled in by hand that show that the work included materials and installation for replacing roof shingles. The form is printed with a heading containing a logo, “Countrywide Shingle,” and below that “ROC: 265407,” which is Respondent’s license number. Complainant testified that she dealt with a man named Marc Sutton and that she paid $4,933.97 as a down payment, or approximately 67% of the contract price. The money Complainant used consisted of insurance proceeds paid to her and her husband. Because her husband was deceased at that time, she opened a separate account at the bank, deposited the insurance proceeds into that account, and wrote a check from that account to “Countrywide Shingle” to make the down payment. Attached to the complaint is a photocopy of the check with the notation signed by Marc Sutton stating that he received the check. She testified that the check was cashed. 3. No work was done on Complainant’s roof. Complainant was in contact with Countrywide Shingle at the telephone number listed on the contract, but there was always some problem or another that prevented the work from commencing. She spoke on the telephone at various times to “Nicole,” “Alyssa,” and “Tammy.” The record contains a copy of a business card for Marc Sutton that shows the following information after his name at the top: Countrywide Shingle, ROC: 265407, 2916 N. 35th Ave. #4, Phoenix, AZ 85017, www.countrywideshingle.com, [email redacted], Toll Free # 877.411.3070, Phone # 602.484.9000, and Cell # 480.269.1166. 4. Clint Hyman, Respondent’s Managing Member, testified that he was not aware of Complainant’s project until Complainant filed the ROC complaint in January 2012. Respondent introduced into evidence a written agreement between Respondent Foresight Roofing, LLC and Countrywide Shingle & Siding LLC (hereinafter “Countrywide LLC”), dated January 1, 2011.[3] The agreement is entitled “Fee Agreement” and called for Countrywide LLC to provide customer referrals to Respondent and for Respondent to enter into contracts with customers for roofing repair and replacement. Countrywide LLC was to provide materials and delivery of those materials, and Respondent was to provide labor and supervision for completion of the work. The Fee Agreement called for Respondent to do business as “Countrywide Shingle & Siding.” It also provided that Countrywide LLC would take all money received from homeowners and put it into a bank account opened and controlled by Countrywide LLC, which would then pay Respondent a fee according to a fee schedule in the Fee Agreement. 5. Respondent also introduced into evidence a License Agreement between Respondent and Countrywide LLC.[4] That agreement allows Respondent to use the trade name “Countrywide Shingle” for $100 per year. Both agreements are signed by Jack Jones for Countrywide LLC. 6. Clint Hyman testified that at about the same time he entered the Fee Agreement and License Agreement, he requested and received from the Registrar the name, “Countrywide Shingle,” for use in conducting business. Clint Hyman also testified that he understood the arrangement was for Countrywide LLC to bring in customers and for Respondent to enter into contracts with the customers. Obviously, that did not happen in Complainant’s case. 7. The evidence shows that Respondent entered into agreements with an unlicensed entity using the same name, “Countrywide Shingle,” that Respondent then began using. Respondent knowingly and recklessly entered into the agreements with that unlicensed entity, Countrywide LLC, which aided and abetted Countrywide LLC’s unlicensed activity in such a way as to confuse the public. Respondent agreed to combine with Countrywide LLC for the purpose of contracting with homeowners for roof repair and agreed to let Countrywide LLC control the money. In addition, Respondent changed its name to that used by the unlicensed entity. This arrangement further facilitated Countrywide LLC’s unlicensed conduct. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[5] Further, the standard of proof at hearing is by preponderance of the evidence.[6] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint.[7] Complainant has met that burden. 2. As noted above, the hearing in this case addressed an allegation of violation of A.R.S. § 32-1154(A)(1) (prohibiting abandonment of a project). There is no question that the project was abandoned. The question to be determined is whether Respondent is to be held accountable for that abandonment, given the testimony that Clint Hyman was not aware of the project. 3. This tribunal finds that Respondent is accountable for the abandonment because Respondent set up a situation that was ripe for abuse in its arrangement with Countrywide LLC. The arrangement that Respondent apparently intended, as expressed in Clint Hyman’s testimony, was for Countrywide LLC to make customer referrals and sell Respondent materials for installation. Such an arrangement, however, did not require Respondent to change its name to “Countrywide Shingle,” which could only serve to confuse the public and blur the lines between the licensed and unlicensed entities. Respondent’s action of knowingly and recklessly combining with unlicensed Countrywide LLC in the above-described business venture is the basis for holding Respondent responsible for the abandonment of Complainant’s project. 4. Respondent is found to have violated A.R.S. § 32-1154(A)(1) (prohibiting abandonment of a project). 5. Administrative notice is hereby taken of Respondent’s prior license record as reflected on the Registrar’s public website on May 31, 2012. That record shows that Respondent’s license was revoked multiples times in February 2012 and May 2012. Pursuant to A.R.S. § 32-1154(C), the revocation of a license does not deprive the ROC or this tribunal of jurisdiction and does not render the Registrar powerless to further discipline the license. 6. Respondent’s license should be revoked in this matter.[8] RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that License No. K- 42.265407-D held by Respondent Foresight Roofing, LLC dba Countrywide Shingle be revoked.

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, June 4, 2012.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The Citation and Complaint issued by the Registrar of Contractors cites A.R.S. § 32-1154(A)(11) as the potential violation in this matter. That provision, which prohibits failing to pay for materials and services under specific circumstances, is not in any way related to the substance of the complaint filed by Complainant. During the hearing, the parties and the Administrative Law Judge all agreed that the citation to A.R.S. § 32- 1154(A)(11) was a typographical error that should have been a citation to A.R.S. § 32-1154(A)(1), which prohibits abandonment of a project without legal excuse. Complainant agreed that her complaint is about abandonment, and Respondent had no objection to that modification. Thus, the case proceeded as an abandonment case. [2] The audio record from the hearing reflects only admission of a document designated as Exhibit 1, which was handed to the Administrative Law Judge as a group of four pages stapled together and treated during the hearing as Exhibit 1. Upon closer inspection after the hearing, the Administrative Law Judge discovered that the four pages are actually two documents, one a Fee Agreement and one a separate License Agreement. These documents have been separated and now form two exhibits for purposes of clarity. Exhibit is the two-page Fee Agreement and Exhibit 2 is the two-page License Agreement. [3] Exhibit 1. [4] Exhibit 2. [5] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [6] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [7] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). [8] It is recommended that the Registrar begin investigations for unlicensed contracting by Countrywide Shingle & Siding LLC, Marc Sutton, and Jack Jones.

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

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