ALJDEC decisions subject to certification as final

2012A-5721-ROC · Registrar of Contractors · 2013-07-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 19, 2013, at 8:00 a.m. APPEARANCES: Shane Carter (hereinafter “Complainant”) appeared on his own behalf. Northrop Development LLC (hereinafter “Northrop”) was represented by its attorney, Brian DiPietro, Esq., Brian DiPietro Law Office. 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 Northrop is the holder of License No. B.279988-R issued by the Registrar of Contractors. Complainant experienced an electrical problem in one of his residential rental properties located at 12227 N. 30th Ave., Phoenix, Arizona.[1] Complainant contacted an individual identified as Rafael Vera (hereinafter “Mr. Vera”) and requested Mr. Vera to provide a bid for the requested construction work. Northrop provided Complainant with a written proposal and Complainant entered into a construction agreement with Mr. Vera for the performance of construction work at the rental property. Mr. Vera then began working at the rental property. While Mr. Vera was working at the rental property, the tenant asked Mr. Vera for proof of licensure and identification. When Mr. Vera failed to provide the requested proof of licensure and identification, the tenant denied Mr. Vera further access to her residence. Complainant and Mr. Vera then engaged in unsuccessful negotiations to complete the construction project. When the negotiations failed, Complainant contacted Northrop and demanded that Northrop complete the construction work set forth in Northrop’s proposal. Northrop asserted that it did not have a contract with Complainant and declined to comply with Complainant’s demand. Complainant then filed a formal Complaint against Northrop with the Registrar of Contractors. Pursuant to the filing of the formal Complaint, the Registrar of Contractors issued a Citation and Complaint charging Northrop with possible violations of A.R.S. § 32-1154(A)(1)[2] and A.R.S. § 32-1154(A)(13),[3] namely, A.R.S. § 32-1158(B)(1), (2), (4), (8), and (9).[4] Complainant’s testimony Complainant testified that he informed Mr. Vera that Complainant would have to have a written contract before he could pay Mr. Vera any money. Complainant stated that Mr. Vera stated that he would call “Mike.” Complainant testified that shortly thereafter, he received a written proposal from Northrop’s qualifying party, Michael Alan Fleeman (hereinafter “Mr. Fleeman”), for the requested construction work.[5] Complainant testified that he informed Mr. Vera that the contract submitted by Northrop was acceptable and that Mr. Vera could “come by and pick-up some money.” Complainant stated that he signed a modified version of the written proposal previously provided by Northrop and paid Mr. Vera the sum of $1,000.00 in cash as a down payment. [6] Complainant acknowledged that he did not get a receipt for the $1,000.00 that he paid Mr. Vera on October 25, 2012. Complainant testified that on the morning the work started at the rental property, he received a call from his tenant asking if Mr. Vera was a licensed contractor. Complainant stated that he assured the tenant that Mr. Vera was a licensed contractor. Complainant testified that the tenant informed him that the licensing information provided by Mr. Vera did not “check out.” Complainant stated that the local building authority provided him with a check list for the non-permitted construction that had been performed at the rental residence by Mr. Vera and notified him that construction permits were required for the construction project. [7] Complainant testified that he discussed the permit requirement with Mr. Vera. Complainant stated that his tenant refused to allow Mr. Vera to perform further construction work at the rental property without a permit and that “everything came to a halt.” Complainant testified that he asked Mr. Vera for his money back. Complainant testified that when Mr. Vera refused to return the $1,000.00, he emailed Mr. Fleeman. Complainant stated that Mr. Fleeman denied that Northrop was involved in the construction project at the rental property. Complainant testified that he knew that Mr. Fleeman was involved in the construction project because he had personally discussed the construction project with Mr. Fleeman at Complainant’s residence. Complainant stated that he met with Pavel Omar Rosas-Vera (hereinafter “Mr. Rosas”), Mr. Vera, and Mr. Fleeman on October 29, 2012, to try and resolve the matter. Complainant stated that the three men represented themselves as being partners in Northrop. Complainant produced a video recording of the meeting that took place at his residence.[8] Complainant acknowledged that there is no garbage disposal listed on Northrop’s bid for the construction project. Complainant stated that construction work was to be started on October 25, 2012. Complainant testified that Mr. Vera walked off the job on October 28, 2012, and refused to return because of the behavior of the tenant. Complainant stated that Mr. Fleeman was present at the rental property on October 29, 2012. Complainant testified that his tenant had obtained copies of Mr. Fleeman’s driver’s license and Mr. Rosas’ identification card while they were at the rental property on October 29, 2012.[9] Testimony of Evette Schulter Evette Schulter (hereinafter “Ms. Schulter”) testified that she observed Mr. Fleeman, Mr. Rosas, and Mr. Vera arrive at Complainant’s residence on October 29, 2012, at the same time. Ms. Schulter stated that when the three men left Complainant’s residence, Mr. Rosas left with Mr. Fleeman in Mr. Fleeman’s truck. Ms. Schulter testified that based on the behavior of the three men at Complainant’s residence, she assumed that Mr. Fleeman, Mr. Vera, and Mr. Rosas were partners in Northrop. Testimony of Pavel Omar Rosas-Vera Mr. Rosas testified that he was present at Complainant’s residence on October 29, 2012, when Mr. Vera and Complainant discussed the construction project. Mr. Rosas stated that he was present because he “flipped” houses and was hopeful that Complainant might be interested in buying a house. Mr. Rosas testified that he was not a partner, employee, or salesman for Northrop. Mr. Rosas testified that he had no ownership interest in Northrop. Testimony of Rafael Vera Mr. Vera testified that Complainant contacted him about performing construction work on the rental property on October 9, 2012. Mr. Vera stated that he contacted Mr. Fleeman and Mr. Rosas because “there was some type of business we could get into.” Mr. Vera denied that he ever represented himself to be a partner or owner of Northrop. Mr. Vera testified that he gave his own “All in One” business card to Complainant. Mr. Vera denied that he was an employee or agent of Northrop. Mr. Vera testified that he met with Complainant in the driveway of the rental property on October 9, 2012. Mr. Vera stated that there was no discussion of cost at that time. Mr. Vera testified that after he examined the rental property, he offered to perform the requested construction work.

Mr. Vera testified that he had no written agreement with Complainant. Mr. Vera acknowledged that he received $1,000.00 from Complainant for the agreed-upon construction work. Mr. Vera stated that the $1,000.00 payment was for him to determine the scope of the construction project and to serve as a down payment once the scope was determined. Mr. Vera testified that he repaired a door, performed some drywall work, and replaced the garbage disposal in the rental property. Mr. Vera stated that he did inform Northrop that he was performing work on the rental property. Mr. Vera testified that Mr. Fleeman and Northrop had nothing to do with Mr. Vera’s agreement with Complainant. Mr. Vera testified that after he gained entrance to the rental property, he informed Complainant that he could not perform all of the construction work necessary in the rental property for the $1,000.00 that Complainant had paid him. Mr. Vera stated that he informed Complainant that he was keeping $250.00 for the construction work he had performed at the rental property. Mr. Vera testified that he offered to return the remaining $750.00 to Complainant. Mr. Vera testified that Complainant refused to take the $750.00 back. Mr. Vera stated that Complainant demanded that Mr. Vera complete the construction project for the $1,000.00 that had been paid to Mr. Vera. Mr. Vera testified that he refused to complete the construction project. Mr. Vera acknowledged that Complainant asked if he was a licensed and bonded electrical contractor. Mr. Vera testified that he informed Complainant that “every job under $750.00” did not require a contractor’s license. Mr. Vera testified that he replaced the garbage disposal because he could “do that.” Mr. Vera denied that he introduced Mr. Fleeman as his partner on October 9, 2012. Mr. Vera acknowledged that he informed Complainant that “me and my partner will meet with you.” Mr. Vera denied that he gave information to Mr. Fleeman to prepare a bid for the construction project. Mr. Vera denied that he gave Complainant’s email address to Mr. Fleeman. Mr. Vera testified that Complainant gave Mr. Fleeman the address of the rental property on October 8, 2012. Mr. Vera stated that he did not want to work in the rental property because he was unwilling to be around the tenant. Mr. Vera acknowledged that he was not a licensed contractor. Mr. Vera testified that he owns a handyman service that he calls “All in One Contracting.”[10] Mr. Vera stated that he had never been an employee of Norhrop. Mr. Vera testified that he shared no business interests with Northrop or Mr. Fleeman. Testimony of Michael Alan Fleeman Mr. Fleeman testified that he had been a licensed contractor in the State of Arizona for fourteen years and that he had been in the construction industry for thirty years. Mr. Fleeman stated that Northrop specializes in “high-end” residential and commercial work. Mr. Fleeman testified that on October 9, 2012, he received a telephone call from Mr. Vera about a potential remodeling contract. Mr. Fleeman testified that Mr. Vera informed him that they would meet with Complainant at Complainant’s residence Mr. Fleeman testified that he had been told it was a major remodeling job but, when he “got there,” he found out that it was “just some electrical stuff.” Mr. Fleeman acknowledged that electrical work is currently a major portion of Northrop’s business. Mr. Fleeman testified that he was disappointed about the small scope of the construction project. Mr. Fleeman acknowledged that he submitted a bid for the construction project. Mr. Fleeman stated that he submitted the bid because he was repeatedly asked to submit a bid for the construction project. Mr. Fleeman testified that he was present when Mr. Rosas and Mr. Vera were discussing other properties with Complainant on October 9, 2012. Mr. Fleeman stated that he had no interest in the other properties that were being discussed. Mr. Fleeman testified that after the October 9, 2012 meeting, he received multiple calls and emails from Complainant and Complainant’s business partner, identified as “Harry,” requesting that Northrop submit a bid for the construction project. Mr. Fleeman testified that he “eventually” emailed a copy of the requested bid to Complainant’s business partner on October 25, 2012. Mr. Fleeman stated that he received no response to the bid. Mr. Fleeman testified that on October 29, 2012, he received a series of telephone calls and emails from Complainant informing him that there were problems at the construction site. Mr. Fleeman stated that it was confusing to him because he did not have a signed proposal. Mr. Fleeman testified that he received a signed proposal in the evening of October 29, 2012, from Complainant that was dated the day before he submitted the proposal. Mr. Fleeman stated that his proposal had been altered by Complainant.[11] Mr. Fleeman testified that Northrop performed no work at Complainant’s rental property. Mr. Fleeman stated that Complainant’s agreement with Mr. Vera had nothing to do with Northrop or Mr. Fleeman. Mr. Fleeman testified that he was unhappy with the altered proposal because the amount of the original proposal had been reduced to $2,800.00 and the altered proposal indicated that Complainant had already paid $1,000.00 of the altered proposal price to Mr. Vera. Mr. Fleeman testified that he then drove over to the rental property to see what was going on. Mr. Fleeman stated that he met with the tenant of the rental property on October 29, 2012. Mr. Fleeman stated that he gave the tenant a copy of his driver’s license because she asked for it. Mr. Fleeman testified that Complainant threatened to sue him and that Complainant’s partner threatened physical violence against him if he did not agree to complete the construction project that Mr. Vera started. Mr. Fleeman stated that his sole involvement with the construction project was the proposal for electrical work on the rental residence that he submitted to Complainant on October 25, 2012. Mr. Fleeman denied that Mr. Vera introduced him to Complainant as Mr. Vera’s business partner on October 9, 2012. Mr. Fleeman stated that he introduced himself as the owner of Northrop. Mr. Fleeman testified that he had not been in the rental property before he prepared the proposal. Mr. Fleeman stated that the scope of the written proposal was based on the information provided to him by Complainant on October 9, 2012, and on the multiple telephone calls he had with Complainant and Complainant’s business partner. Mr. Fleeman testified that Northrop did not receive any money from Mr. Vera or Complainant for the construction project at Complainant’s rental property. Mr. Fleeman denied that he had any type of business relationship with Mr. Vera. Mr. Fleeman acknowledged that Northrop’s contractor’s license number was not on the written proposal provided by Northrop in this matter. Mr. Fleeman testified that the failure to include Northrop’s contractor’s license number on the written proposal was a mistake on his part. The written proposal prepared and submitted by Northrop failed to contain the name and mailing address of the owner and the jobsite address or legal description. The written proposal prepared and submitted by Northrop did not contain the estimated date of completion of all work to be performed under the contract. The written proposal prepared and submitted by Northrop did not contain 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. Administrative notice is taken of Northrop’s prior license record as reflected on the Registrar of Contractors’ public website on July 25, 2013. Such prior license record reflects that License No. B.279988-R of Northrop is current. 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 paid Mr. Vera $1,000.00 in cash to perform construction work on Complainant’s rental property. Mr. Vera performed drywall work and replaced a garbage disposal at the rental property. The written proposal prepared by Northrop only lists electrical work. 4. Complainant altered the written proposal that had been submitted by Northrop and demanded that Northrop reduce the proposal by the money that had been paid to Mr. Vera. There was no evidence that Northrop received any money from Mr. Vera for this construction project. There was no evidence that Northrop contracted to perform or performed any construction work at Complainant’s rental property. This Tribunal concludes that Complainant failed to meet his burden of proving by a preponderance of the evidence that Northrop violated the charged provision of A.R.S. § 32-1154(A)(1). 5. The written proposal prepared and submitted by Northrop failed to contain Northrop’s contractor’s license number, failed to contain the name and mailing address of the owner and the jobsite address or legal description, failed to contain the estimated date of completion of all work to be performed under the contract, and failed to contain the dollar amount of any progress payment and the stage of construction at which the contractor was to be entitled to collect progress payments during the course of construction under the contract. This Tribunal concludes that Northrop violated the charged provision of A.R.S. § 32-1154(A)(13), namely, A.R.S. § 32-1158(B)(1), (2), (4), (8), and (9). RECOMMENDed order In view of the foregoing, it is recommended, commencing on the effective date of the Registrar’s Order, that License No. B.279988-R of Northrop shall be suspended until the Registrar of Contractors receives and accepts written proof that Northrop has brought all of its written proposals and contracts to within full compliance with the provisions of A.R.S. § 32-1158. It is further recommended that if on or before the effective date of this Order, Northrop provides acceptable written proof that Northrop has brought all of its written proposals and contracts to within full compliance with the provisions of A.R.S. § 32-1158, then the above- provided License suspension shall not take place and this matter shall be closed. 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, July 29, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] Complainant testified that he owned 281 houses. [2] 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.

[3] 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.”

[4] A.R.S. § 32-1158(B) 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. 4. The estimated date of completion of all work to be performed under the contract. 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.

[5] See Exhibit No. C-2 (Northrop Proposal). [6] See Exhibit No. R-1 (Modified Northrop Proposal). [7] See Exhibit No. Ct-6 (10/29/12 City of Phoenix Checklist). [8] See Exhibit No. C-3 (SanDisk Card)(There is no sound for the video recording).. [9] See Exhibit No. C-5 (Copy of Mr. Fleeman’s driver’s license and Pavel. Rosa’s identification card). [10] Administrative notice is taken of a search conducted on the Registrar of Contractors’ public website on July 29, 2013. This Tribunal was unable to find any licensing information that Rafael Vera or All in One Contracting was a licensed contractor. [11] See Exhibit No. R-1 (Modified Northrop Proposal).

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