ALJDEC decisions subject to certification as final

2012A-3993-ROC · Registrar of Contractors · 2013-04-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 14, 2013

APPEARANCES: Complainant appeared on her own behalf; Respondent, a sole proprietor, is recently deceased.[1]

WITNESSES: Debra Cross Heidi Cross Craig Cross Emanuel Scarpinato, Hayloft Construction, LLC

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action alleging wrongdoing by Respondent The Citation and Complaint alleges violation of A.R.S. § 32-1154(A)(9): “Failure 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.” Respondent denied the charge in his Written Answer to Citation and Complaint, filed with the Registrar of Contractors (“ROC” or “Registrar”) on November 19, 2012. This tribunal entered the complaint file received from the Registrar of Contractors into the record. Complainant presented testimony at the hearing. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order finding no violation. FINDINGS OF FACT 1. Respondent was a sole proprietor who held License No. B.103960-R, a general residential contracting licensed issued by the ROC. 2. In December 2010, Complainant hired Respondent to perform substantial remodeling work at a house she owned. By her testimony, the agreement was verbal and was to pay Respondent $100 per hour for labor, plus materials. She testified that he “estimated” that the entire job would cost “roughly” $250,000 to complete. It is clear from the evidence that the agreement was a time and materials agreement that was a pay-as-you- go arrangement.[2] 3. The record contains handwritten invoices from Respondent to Complainant that describes the weekly hours Respondent worked from January 2011 through early June 2011.[3] The invoices also contain lists of materials and equipment rental costs that went into the project during the stated time periods. Complainant paid all of the invoices without dispute. However, by June 2011 she was not happy with the lack progress made compared to the amount she had paid, and she requested a bid from Respondent for completion of the project. He submitted a bid, but it was not accepted. Eventually, the project was taken over by Emanuel Scarpinato of Hayloft Construction, LLC. 4. At hearing, Complainant submitted Exhibit A, which is a general accounting of all costs Complainant paid for the project while Respondent was working. The exhibit lacks supporting documentation (invoices, receipts, proof of payment) and cannot be given much weight. According to Exhibit A and the testimony presented at hearing, the entire amount paid to Respondent, including materials, was $221,170.37. 5. The Administrative Law Judge reviewed and considered the Written Answer to Citation and Complaint filed by Respondent. It confirms the verbal time and materials agreement at $100 per hour, but does not mention an estimate of the total cost. 6. The evidence shows, at best, a verbal agreement to pay Respondent $100 per hour plus materials to perform substantial remodeling work that was determined as the project went along. There was a rough estimate, but no specific agreement, that it would cost $250,000 to complete the project. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[4] Further, the standard of proof at hearing is by preponderance of the evidence.[5] 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.[6] Complainant has not met that burden. 2. The issue in this matter is whether Respondent has violated A.R.S. § 32-1154(A)(9) that prohibits the material failure of a licensee to complete a job for the price stated in the contract or any modification of the contract. Here, the evidence does not show a violation. The best that can be determined is that there was a verbal agreement to pay time and materials on an open-ended basis, with an estimate of a total of $250,000 for the project. Thus, the agreement made between the parties did not have a stated contract price, which is a necessary element of the violation. In addition, even if the $250,000 estimate was deemed the contract price and Exhibit A is given adequate weight, the total Complainant paid does not exceed the $250,000 estimate. 3. This matter should be dismissed. RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that Citation and Complaint 2012-3993 against Respondent Richard Floyd Williams dba Construction and Remodeling by Rick Williams be dismissed.

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, April 3, 2013.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Respondent passed away in late January 2013 from terminal cancer. His wife and adult son appeared at the hearing. When asked, they stated that Respondent did not have a will and that neither of them had been appointed as personal representative of the estate. The Administrative Law Judge considered postponing the hearing to allow time for one of them to seek appointment as personal representative to act on behalf of Respondent’s estate (see A.R.S. § 14-3103), but they stated that they had no evidence to offer in any event. The Administrative Law Judge determined to proceed and told those present at the hearing that Respondent’s Written Answer to Citation and Complaint, filed in November 2012, would be considered as part of the record. [2] At the time of the agreement, Complainant’s husband had recently been killed in a motorcycle accident. Complainant’s husband and Respondent were both in construction and had worked together. Thus, Complainant was initially comfortable with the time and materials agreement with Respondent. [3] These invoices are attached to the complaint. [4] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [5] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [6] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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