ALJDEC decisions subject to certification as final

2012A-2514-ROC · Registrar of Contractors · 2012-12-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 20, 2012, at 8:15 a.m. APPEARANCES: Edwin Yazzie, Sr. and Susan Reeser-Yazzie (hereinafter “Complainants”) appeared through Susan Reeser-Yazzie. Truth Construction LLC (hereinafter “Truth”) appeared through its qualifying party and member, Bradley Terrell Jones. 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. Truth is the holder of License No. C-61.254041-R issued by the Registrar of Contractors. 2. This is a residential matter where Complainants entered into agreements with Truth for the construction of a new log-sided hogan[1] for Complainants. The agreed-upon cost of the total construction project totaled $26,696.16. Complainants paid Truth a total of $32,184.54. 3. Truth’s written contracts memorializing the parties’ construction agreements did not contain Truth’s contractor’s license number and did not inform Complainants that they had a right to file a written Complaint with the Registrar for an alleged violation of A.R.S. § 32-1154(A). 4. At the onset of the construction, Truth informed Complainants that it would take several weeks for Complainants’ credit card checks to clear and requested an additional sum of money equal to the first credit card check so that Truth could start the construction project immediately. Complainants then paid Truth an extra $8,000.00 with the understanding that Truth would return the $8,000.00 as soon as the credit card check cleared Truth’s bank account. 5. Several weeks after the credit card check cleared Truth’s bank account, Truth issued a check to Complainants for the $8,000.00 that was returned for insufficient funds. 6. Complainants then repeatedly requested that Truth return to the construction project and complete the construction of their new residence and return their $8,000.00 to them. Finally, after nearly two years of repeated requests, Complainants filed a formal Complaint against Truth with the Registrar of Contractors. 7. After the formal Complaint was filed with the Registrar of Contractors, Truth finally returned Complainants’ $8,000.00. 8. Edwin Yazzie, Sr. (hereinafter “Mr. Yazzie”) testified that Truth abandoned the construction project. Mr. Yazzie stated that Truth did not contact Complainants until they filed a formal complaint against Truth with the Registrar of Contractors.[2] 9. Mr. Yazzie testified that the contract for the construction of the new residence was entered into during February 2011. Mr. Yazzie stated that the exterior of the residence was to be completed within 30 days. Mr. Yazzie testified that Truth started work in March 2011, and worked intermittingly through May 2011. Mr. Yazzie stated that Truth abandoned the construction project in June 2011. Mr. Yazzie testified that there was no response from Truth until the formal Complaint was filed with the Registrar of Contractors.[3] 10. Mr. Yazzie testified that the new residence was off the power grid and that Complainants had always specified that the new residence was to be solar powered and to be connected to the power grid once electrical lines were installed within connecting distance of the new residence.[4] 11. Mr. Yazzie testified that Truth’s check for $8,000.00 bounced in June 2011, and that Truth failed to actually return the $8,000.00 to Complainants until July 2012. Mr. Yazzie stated that Complainants gave Truth repeated chances to respond to their emails and phone calls, to return to the construction project, and to complete the new residence. Mr. Yazzie testified that he was tired of “begging” Truth to complete the construction project.[5] 12. Susan Marie Reeser-Yazzie (hereinafter “Ms. Reeser-Yazzie”) testified that Truth represented that it was a licensed general contractor rather than a remodeling contractor. Ms. Reeser-Yazzie stated that Complainants had paid Truth in full for the construction of the exterior of their new residence despite the fact that the exterior of the new residence was not fully completed. Ms. Reeser-Yazzie testified that Complainants then entered into a second agreement with Truth for the completion of the interior of their new residence.[6] 13. Ms. Reeser-Yazzie testified that the log siding on the new residence has not been sealed and that the log siding is deteriorating rapidly. Ms. Reeser-Yazzie stated that Complainants have sealed one exterior wall in an attempt to prevent further damage to the exterior of the residence.[7] 14. Ms. Reeser-Yazzie testified that Complainants paid Truth the additional $8,000.00 because Truth informed them that credit card checks take a long time to clear. Complainants then paid the extra $8,000.00 to Truth based upon Truth’s representation that it would return the additional $8,000.00 to Complainants as soon as the credit card check cleared its bank account. Ms. Reeser-Yazzie stated that it took one and one-half years for Truth to return the $8,000.00 to Complainants.[8] 15. Ms. Reeser-Yazzie testified that Truth made “almost no attempt” to contact Complainants until Complainants filed a formal complaint against Truth with the Registrar of Contractors.[9] 16. Ms. Reeser-Yazzie testified that Complainants “missed out” out on a solar grant because their residence was not completed on time.[10] 17. Ms. Reeser-Yazzie testified that Truth finally returned the extra $8,000.00 to Complainants on July 23, 2012. Ms. Reeser-Yazzie stated that Truth had a key to the unfinished residence and has had months since the formal Complaint was filed to complete the construction of the unfinished residence. Ms. Reeser-Yazzie stated that Complainants had required both solar and the possibility of power from the public electric utility from the beginning of the construction project. Ms. Reeser- Yazzie testified that Complainants wanted solar power because of the high cost of connecting to the power grid. Ms. Reeser-Yazzie acknowledged that there were no building plans or blueprints for the construction of the residence. Ms. Reeser-Yazzie testified that Truth informed Complainants that specifications and blueprints were not required due to the small size of the construction project. Ms. Reeser-Yazzie stated that Truth always had access to the construction project.[11] 18. Truth’s owner and qualifying party, Bradley Terrell Jones (hereinafter “Mr. Jones”), testified that Truth possessed a C-61 License that allowed Truth to perform unlimited framing. Mr. Jones stated that Truth’s bid was initially just for the shell of the new residence.[12] 19. Mr. Jones testified that his wife and mother-in-law know Complainants and that Truth became involved in the construction project for that reason. Mr. Jones stated that there were no plans and specifications and that everything was constantly changing. Mr. Jones testified that Complainants would supply the material and Truth would perform the construction. Mr. Jones stated that Truth did not intend to defraud, steal, or take money from Complainants without providing agreed-upon services.[13] 20. Mr. Jones testified that all work performed by Truth met applicable industry standards. Mr. Jones stated that Truth performed electrical work in the construction of the new residence. Mr. Jones stated that Truth attempted to provide Complainants with a good product for as little money as possible. Mr. Jones testified that the project site was isolated and expensive to reach. Mr. Jones stated that the delay in the completion of the residence was caused by his desire to reach a consensus with Complainants on what Complainants wanted to actually construct.[14] 21. Mr. Jones testified that Truth requested to be paid in cash because Truth and Complainants utilized different banks and that due to high gas prices, traveling from Complainant’s bank to Truth’s bank was not feasible. Mr. Jones stated that the construction materials obtained from Home Depot were not the correct size and required extra work by Truth that contributed to the delay in construction.[15] 22. Mr. Jones acknowledged that Truth had received the extra $8,000.00 from Complainants. Mr. Jones stated that his bank will not honor checks drawn on an account with insufficient funds “even if it is just one dollar short.” Mr. Jones testified that it took “quite a bit” of time to pay the $8,000.00 back to Complainants. Mr. Jones stated Truth paid the money back to Complainants as quickly as it could. Mr. Jones testified that the delay in repaying Complainants was due to a combination of economic circumstances and Complainants’ indecisiveness.[16] 23. Mr. Jones acknowledged that Truth installed the rough-in electrical wiring for the new residence.[17] 24. Mr. Jones acknowledged that the completion date for the exterior of the new residence was to be within 30 days from February 18, 2011. Mr. Jones testified that the project was delayed because “one thing led to another.” Mr. Jones stated that he knew that there were no plans and specifications for the construction project when Truth prepared and signed the construction contracts.[18] 25. Mr. Jones testified that Complainants paid the additional $8,000.00 to Truth because of the delay involved in processing Complainants’ credit card check. Mr. Jones acknowledged that the $8,000.00 was not returned to Complainants when the credit card check cleared Truth’s bank account. Mr. Jones testified that the $8,000.00 was not returned to Complainants because Truth was short a few hundred dollars. Mr. Jones stated that in retrospect, Truth should have returned as much of the $8,000.00 as was available.[19] 26. Truth’s actions in utilizing the extra $8,000.00 paid by Complainants as a personal loan and in failing to return the $8,000.00 to Complainants until they filed a formal Complaint against Truth with the Registrar of Contractors are found to be a factor in aggravation of the penalty. 27. Administrative notice is taken of Truth’s prior license record as reflected on the Registrar of Contractors’ public website on December 4, 2012. Such prior license record reflects that License No. C-61.254041-R of Truth is current with one open Complaint. 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. Truth started the construction of Complainants’ residence in February 2011. Truth then abandoned the construction project, leaving Complainants with an unfinished residence. Truth failed to respond to Complainants’ repeated requests to return to the construction project and to complete the construction of the new residence. Truth treated the extra $8,000.00 that Complainants paid to it as a personal loan that Truth failed to repay until Complainants filed a formal Complaint against Truth with the Registrar of Contractors. This Tribunal concludes that Truth violated the charged provision of A.R.S. § 32-1154(A)(1).[20] 4. The written contracts provided by Truth did not contain Truth’s contractor’s license number and did not inform Complainants that they had a right to file a written Complaint with the Registrar for an alleged violation of A.R.S. § 32-1154(A). This Tribunal concludes that Truth violated the charged provision of A.R.S. § 32-1154(A)(13),[21] namely A.R.S. § 32-1158.[22] 5. The scope of License No. C-61.254041-R (C-61 Limited Remodeling and Repair) of Truth is as follows: Remodeling or repairs to existing structures or appurtenances, excluding swimming pools or spas, not to exceed $25,000 per project per dwelling. Work on electrical, plumbing, air conditioning systems, or boilers that require a building permit must be subcontracted to an appropriately licensed contractor. The scope of work allowed under the C-7 carpentry classification is included.[23]

6. Truth knowingly contracted beyond the scope its License No. C-61.254041- R by entering into a construction project that exceeded the $25,000.00 limit of Truth’s C-61 License and by performing electrical work on the new residence. This Tribunal concludes that Truth violated the charged provision of A.R.S. § 32-1154(A)(17).[24] RECOMMENDed order In view of the foregoing, it is recommended that License No. C- 61.254041-R of Truth shall be revoked on the effective date of this Order. 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, December 6, 2012.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] A hogan is a traditional home of the Navajo people. [2] 11/20/12 Hearing Record (hereinafter “H.R.”) at 8:34-10:15. [3] H.R. at 11:20-18:03. [4] H.R. at 18:04-19:15. [5] H.R. at 19:16-25:21. [6] H.R. at 26:00-31:25. [7] H.R. at 31:26-33:24. [8] H.R. at 33:25-34:13. [9] H.R. at 34:14-57:52. [10] H.R. at 57:53-1:00:43. [11] H.R. at 1:00:44-1:19:25. [12] H.R. at 1:23:40-1:24:24. [13] H.R. at 1:24:25-1:26:11. [14] H.R. at 1:26:12-1:30:13. [15] H.R. at 1:30:14-1:33:22. [16] H.R. at 1:33:23-1:35:15. [17] H.R. at 1:35:16-1:36:06. [18] H.R. at 1:36:07-1:37:45. [19] H.R. at 1:37:46-1:40:18. [20] 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. [21] A.R.S. § 32-1154(A)(13) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” [22] A.R.S. § 32-1158 provides, in pertinent part, as follows: B. From and after December 31, 2007, any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information: 1. The name of the contractor and the contractor's business address and license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract. 9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1155, subsection A. The information in this paragraph must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative. This paragraph does not apply to a person who is subject to and complies with section 12-1365.

[23] A.A.C. R4-9-103. [24] A.R.S. § 32-1154(A)(17) includes among the grounds for disciplinary action against a contractor’s license, knowingly contracting beyond the scope of the license or licenses of the licensee.

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