ALJDEC decisions subject to certification as final

2012A-1250-ROC · Registrar of Contractors · 2012-10-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 24, 2012, at 1:00 p.m. APPEARANCES: Christopher D. Lee (hereinafter “Complainant”) appeared on his own behalf. Arizona New Image Contractors LLC (hereinafter “New Image”) appeared through its attorney, Charles D. Onofry, Esq., Schneider, Onofry, P.C. 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. New Image is the holder of License No. KB-1.239066-D issued by the Registrar of Contractors. 2. This is a residential matter where Complainant entered into a construction agreement with an individual, identified as Ronald Leland Benson (hereinafter “Ron Benson”) who represented that he was a partner in New Image on or about May 21, 2011. Complainant paid Ron Benson a total of $48,972.94 to construct a large awning structure for Complainant at 4452 W. 15th Place, Yuma, Arizona. 3. Ron Benson ordered construction materials and began construction of the agreed upon awning structure. Ron Benson then abandoned the construction project leaving Complainant with a partially finished structure. 4. Complainant contacted New Image and demanded that it complete the construction project. When New Image refused responsibility and declined to complete the construction project, Complainant filed a formal Complaint against New Image with the Registrar of Contractors. 5. The parties were unable to resolve their differences, and a formal Citation and Complaint was issued charging New Image with an alleged violation of A.R.S. § 32-1154(A)(1). 6. Inspector Darryl McCloskey (hereinafter “Inspector McCloskey”) testified that on March 9, 2012, Complainant filed formal Complaints against New Image and Benson Home Repair Inc.,[1] for the same construction project at Complainant’s residence. Inspector McCloskey stated that both complaints were moved forward because the permits for Complainant’s construction project were pulled under New Image’s name and license number and the contracts were written under Benson Home Repair Inc.[2] 7. Inspector McCloskey testified that he received a telephone call from Ms. Rico, an employee of the City of Yuma in May 2011, asking who would be able to sign for a permit under New Image’s contractor’s license. Inspector McCloskey stated that he informed Ms. Rico that the only people who could sign for a construction permit would be a corporate member or a bona fide employee.[3] 8. Inspector McCloskey testified that Ms. Rico specifically mentioned Ron Benson’s name and stated that Ron Benson was applying for a construction project under New Image’s name and license number. Inspector McCloskey stated that this conversation took place approximately a year before Complainant’s permit was pulled and that he believed it was for a different construction project. Inspector McCloskey testified that he defined a bona fide employee as an employee that was issued W-2s and covered with workmen’s compensation.[4] 9. Donna Rico (hereinafter “Ms.Rico”) stated that she has known Ron Benson for six or seven years. Ms. Rico stated that there was no written authorization letter from New Image authorizing Ron Benson to pull permits under New Image’s name. Ms. Rico testified that another man was with Ron Benson when he came into the office and that the second man stated that Ron Benson would be representing New Image in the Yuma area. Ms. Rico stated that she would not be able to recognize that person today and did not remember his name.[5] 10. Ms. Rico testified that the City of Yuma issued a letter (Exhibit No. C- 17) notifying New Image of areas of concern that would require correction. Ms. Rico stated that the same letter was also sent to the engineer for the construction project, Ron Benson and Complainant. Ms. Rico testified that she did not receive any communication from New Image stating that it was not involved in the construction project at that time. Ms. Rico acknowledged that someone else in the department may have received a telephone call from New Image.[6] 11. Allen Kircher (hereinafter “Mr. Kircher”) testified that he is the deputy Building Official for the City of Yuma. Mr. Kircher stated that the City of Yuma relies on the representations of the person making the permit application. Mr. Kircher stated that the permit application for Complainant’s construction project was signed by Ron Benson. Mr. Kircher stated that there were two plan review/correction letters mailed to New Image for Complainant’s construction project. Mr. Kircher testified that City of Yuma would have shut down the construction project if the City of Yuma had received a telephone call from New Image stating that it was not involved in Complainant’s construction project.[7] 12. Mr. Kircher testified that Complainant submitted the plans for his construction project and that the plans were approved following a discussion directly with the engineer shown on the plans. Mr. Kircher stated that the City of Yuma relied upon the information provided by Ron Benson for issuing Complainant’s construction permit.[8] 13. Mr. Kircher testified that the City of Yuma allows licensed contractors’ employees to pull construction permits relying upon the employees’ representations that they are bona fide employees of the licensed contractor. Mr. Kircher testified that the normal response to the issuance of plan review/correction letters was the resubmission of the plans with corrections and that Complainant’s plans were resubmitted after the issuance of the letters.[9] 14. Mark Oligschlaeger (hereinafter “Mr. Oligschlaeger”) testified he was an employee of Ron Benson and that he worked at Complainant’s construction project. Mr. Oligschlaeger stated that he saw the original permit and noticed that the permit was issued in New Image’s name rather than Ron Benson’s name. Mr. Oligschlaeger testified that he worked for Ron Benson for three weeks without pay and left the job. Mr. Oligschlaeger was then contacted by Complainant and completed the construction project as an employee of Complainant.[10] 15. Mr. Oligschlaeger testified that he and Complainant had a luncheon with Ron Benson to see if Ron Benson would return and complete the construction project. Ron Benson acknowledged that he had “absconded” with Complainant’s money and that the only way Complainant was going to retrieve the money was by filing a complaint with the Registrar of Contractors against New Image. Mr. Oligschlaeger stated that he had a cell phone conversation with an individual he believed was Tim Spradley. Mr. Oligschlaeger stated that the individual he believed to be Tim Spradley offered to help complete the construction project.[11] 16. Mr. Oligschlaeger testified that Complainant’s construction project is now completed.[12] 17. Complainant testified that he discussed his construction project with Ron Benson in May 2011. Complainant stated that Ron Benson acknowledged that his contractor’s license was no longer good but stated that he could pull the required permit with New Image’s license because he was working with New Image.[13] 18. Complainant testified that he asked for confirmation and Ron Benson called someone on a cell phone and handed Complainant the cell phone. Complainant stated that he then had a conversation with Tim Spradley and that during the conversation Tim Spradley acknowledged that Ron Benson was working for New Image. Complainant testified that Tim Spradley directed him to write the checks for the construction project directly to Ron Benson.[14] 19. Complainant testified that he paid Ron Benson $10,000.00 with a check made out to Ron Benson and himself.[15] Complainant then cashed the joint check and gave the $10,000.00 in cash to Ron Benson to start the construction project.[16] 20. Complainant testified that Ron Benson experienced money problems during the course of the construction project and Complainant contacted an attorney. Complainant’s attorney informed Ron Benson that future payments would be paid directly to suppliers. Complainant stated that Ron Benson then abandoned the construction project. Complainant testified that he completed the construction project as an owner-builder and paid Ron Benson’s employees directly.[17] 21. Complainant stated that when Ron Benson abandoned the construction project, he contacted Tim Spradley directly. Complainant stated that Tim Spradley stated that he “would do whatever he could to help.”[18] 22. Complainant testified that Tim Spradley failed to do anything and he contacted Tim Spradley a second time. Complainant stated that in the second conversation Tim Spradley denied any responsibility for the construction project and refused to do anything. Complainant then filed his complaint against New Image with the Registrar of Contractors.[19] 23. Complainant testified that Ron Benson “walked [away] with $30,000.00.” Complainant stated that the cost of completing the construction project exceeded the original contract amount for the construction project by $65,141.34, and that he was seeking restitution.[20] 24. Complainant acknowledged that all money for the construction project was paid directly to Ron Benson. Complainant stated that Tim Spradley had informed him to do this. Complainant testified that he did not find this to be “out-of-the-ordinary.”[21] 25. Complainant testified that he had several cell phone conversations with Mr. Spradley. Complainant stated that his first conversation with Tim Spradley occurred sometime in May 2011, and that a second cell phone conversation occurred on March 29, 2012. Complainant testified that he had another cell phone conversation with Tim Spradley on April 9, 2012.[22] 26. Timothy Scott Spradley (hereinafter “Mr. Spradley”) testified that he is the owner of New Image. Mr. Spradley stated that that he knew Ron Benson from two commercial projects that Mr. Spradley hired him to do in 2006 when Mr. Spradley was working as a construction manger for another contractor. Mr. Spradley testified that Ron Benson would contact him once or twice a year looking for work.[23] 27. Mr. Spradley testified he never gave Ron Benson authority to act on New Image’s behalf. Mr. Spradley stated that Ron Benson was never an employee of New Image and that there was never a business relationship between Ron Benson and New Image. Mr. Spradley denied that he had a cell phone conversation with Complainant in May 2011.[24] 28. Mr. Spradley testified that he did not remember receiving any mail from the City of Yuma regarding Complainant’s construction project. Mr. Spradley stated that he received a lot of mail. Mr. Spradley denied any type of contact with the City of Yuma.[25] 29. Mr. Spradley testified that the first time he had any knowledge of Complainant’s construction project was when he received a letter from the Registrar of Contractors. Complainant then called him three or four days later. Mr. Spradley testified that he was “totally blown away.” Mr. Spradley stated that he informed Complainant that he did not know what was going on, but that he would do anything he could to help the Complainant.[26] 30. Mr. Spradley testified that he did not accompany Ron Benson to the City of Yuma Building Department and denied ever giving any authorization for Ron Benson to act on behalf of New Image to the City of Yuma. Mr. Spradley stated that he would never provide that type of authorization to anyone.[27] 31. Mr. Spradley testified that he had not seen the building permit issued by the City of Yuma to Ron Benson allegedly acting for New Image until the permit was provided to him as a result of his public records request in April 2012.[28] 32. Mr. Spradley testified that he did not have a cell phone conversation with Complainant in 2011.[29] 33. Mr. Spradley’s testimony is found to be credible. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119. 2. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 3. Complainant is seeking restitution from New Image for money that he paid directly to Ron Benson. The construction agreement at issue was prepared by Ron Benson on behalf of Benson’s Home Repair Inc. The only documented involvement of New Image in this matter was two written review/correction notices issued by City of Yuma to all of the parties including New Image. The review/correction notices issued by the City of Yuma were resolved without the involvement of New Image. This Tribunal concludes that Complainant failed to meet his burden of proof to establish a violation by New Image of the charged provision of A.R.S. § 32-1154(A)(1).[30] RECOMMENDed order In view of the foregoing, it is recommended that that this Citation, together with the Complaint upon which it is based, be dismissed. 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, October 4, 2012.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] Administrative notice is taken of Benson Home Repair Inc.’s prior license records as reflected on the Registrar of Contractors’ public website on October 4, 2012. Such prior license records reflect that Benson Home Repair Inc.’s License No. L-37.219478-C was suspended by the Registrar of Contractors for lack of bond on April 4, 2011, and suspended until compliance on September 2, 2011. Benson Home Repair Inc.’s License No. C37R-246588 was suspended until compliance on January 19, 2011, suspended for lack of bond on August 8, 2011, and suspended for non-renewal on July 1, 2012. [2] 9/19/12 Hearing Record (hereinafter “H.R.”) at 9:46-10:22. [3] H.R. at 10:23-11:35. [4] H.R. at 11:37-18:37. [5] H.R. at 19:45-25:24. [6] H.R. at 25:40-29:05. [7] H.R. at 29:09-31:30. [8] H.R. at 31:31-37:09. [9] H.R. at 37:10-42:00. [10] H.R. at 44:45-47:34. [11] H.R. at 47:35-50:12. [12] H.R. at 55:14-57:20. [13] H.R. at 59:20-1:01:07. [14]H.R. at 1:01:08-1:02:31. [15] Complainant testified that he obtained a check made out to himself and Ron Benson so that he would have a paper trail for the $10,000.00 in cash that he was paying to Ron Benson. [16] H.R. at 1:02:32-1:04:18. [17] H.R. at 1:04:19-1:08:14. [18] H.R. at 1:08:15-1:08:23. [19] H.R. at 1:08:24-1:09:03. [20] H.R. at 1:09:04-1:12:31. [21] H.R. at 1:18:03-1.19:04. [22] H.R. at 1:19:05-1:30:55. [23] H.R. at 1:37:25-1:40:15. [24] H.R. at 1:45:00-1:46:37. [25] H.R. at 1:46:38-1:50:32. [26] H.R. at 1:47:59-1:49:37. [27] H.R. at 1:49:38-1:51:39. [28] H.R. at 1:52:20-1:52:25. [29] H.R. at 1:55:20-1:55:38. [30] A.R.S. § 32-1154(A)(1) includes among the grounds for disciplinary action against a contractor’s license, abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

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