ALJDEC decisions subject to certification as final

2014A-14-ROC · Registrar of Contractors · 2015-12-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 19, 2015 APPEARANCES: Complainant Francis Cronin appeared on his own behalf. Michael Kay appeared on behalf of Respondent Mountain Ridge Builders LLC. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT Respondent Mountain Ridge Builders LLC (“Respondent”) is the holder of License No. 263143 issued by the Arizona Registrar of Contractors (“Registrar”). On or about January 6, 2012, Complainant Francis Cronin (“Complainant”) entered into a contract with Respondent to build a new 2 car garage, remove the existing concrete driveway, patio, porch, walkway, and install a new driveway, patio, porch, walkway, retaining wall with pavers, concrete, and versa-lok for a total contract price of $100,827.00. The contract included a provision that “[a]ny changes are 45.00 per hour plus materials.” During the course of the project, several changes occurred, both as a result of Complainant’s choice and of Respondent’s inability to perform the work agreed upon. For instance, the original contract called for the installation of lighted pavers along the driveway, but after Respondent installed some lighted pavers near the house, Complainant was not happy with the installation and agreed that Respondent should not install any more. Instead, Respondent was to install alternate lighting. No written change orders were executed during the course of the project. Complainant paid over $128,000 toward the contract based on the original contract and agreed upon changes. However, at some point, Respondent stopped working on the project. On or about June 21, 2013, Respondent sent Complainant a notice of unpaid charges totaling $21,600.00 resulting from changes including the materials and $45.00 per hour labor. On or about October 11, 2013, Respondent sent Complainant an updated notice of unpaid charges totaling $36,012.18 resulting from changes including the materials and 673 hours of additional labor at $45.00 per hour, or $30,285.00 for labor. On or about January 2, 2014, the Registrar received a Complaint against Respondent from Complainant alleging Respondent had failed to complete the project. The Registrar assigned the complaint to Investigator Jim Dimond. On or about January 9, 2015, after a jobsite inspection, Investigator Dimond issued a written directive to Respondent that provided as follows: After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). You are hereby directed to remedy the following violations by the appropriate means:

1- The respondent failed to complete the installation of the attic scuttle at the new detached garage. The contractor is to resolve this condition in an appropriate manner. 2- The respondent failed to secure a final inspection at the new detached garage. This resulted in the complainants having to schedule and attend the final inspection on their own as the permit was due to expire. The contractor is to issue any credits due in an appropriate manner. 3- The caps on the versa-lok retaining walls are not completed. The respondent is to correct this condition in an appropriate manner. 4- The columns and lighting fixtures are not installed at the both ends of the driveway. The respondent is to correct the condition in an appropriate manner. 5- The lamp posts are not completed. The respondent is to correct the condition in an appropriate manner. 6- Rip rap is not completed at the south driveway entrance. The respondent is to correct the condition in an appropriate manner. 7- Pavers are not ‘tight’ at the north driveway and are experiencing movement. The respondent is to correct the condition in an appropriate manner. 8- Pavers are stained with mortar. The respondent is to correct the condition in an appropriate manner. 9- The respondent miscalculated the elevation for the pavers on the main drive and without an executed change order, raised the driveway to an elevation that now required engineering and permitting. Due to the respondent’s refusal to return, the complainants acquired the necessary engineering and permitting at an additional cost to the project. The respondent is to resolve this issue in an appropriate manner.

The remaining items of the complaint (post work change orders, added costs to garage and regulatory violations) are not workmanship items and will be reviewed by the ROC Legal department.

Following the issuance of the written directive, Respondent did not make any attempts to do any corrective work. The Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(1); A.A.C. R4-9-108, and thereby A.R.S. § 32-1154(A)(3); and A.R.S. § 32-1154(A)(22). Complainant testified that Respondent miscalculated the width of the driveway and other parts of the project that meant Respondent did not properly quote the cost to perform the job, but that the error was not Complainant’s fault. Further, Complainant noted that Respondent tried to charge Complainant for “extras” during the project when changes were made, but did not make any reductions when Complainant eliminated part of the project, such as the lighted pavers in the driveway. According to Complainant, part of the project was changed from concrete to pavers based on Respondent’s representation that they were “virtually the same cost.” As previously stated, no written change order reflecting this change was executed to detail the exact amount the change would cost. Mr. Kay testified that when he told Complainant that concrete and pavers were “virtually the same cost,” he was referring to the material cost and did not include the labor necessary to install the pavers. Mr. Kay testified that the 673 hours of labor indicated in the October 11, 2013 notice were attributable to this change. When questioned, Mr. Kay was persistent that a written change order was not necessary because the original contract included the language regarding $45.00 per hour for labor plus materials for any changes even though the change at issue resulted in an additional cost of more than $30,000.00. Mr. Kay asserted that Respondent stopped work on the project as a result of Complainant’s non- payment. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on December 9, 2015. Such prior License record reflects that Respondent’s License No. 263143 was first issued on February 22, 2010, and was suspended on March 3, 2015, for non-renewal and on April 7, 2015, for lack of bond. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32- 1101 et seq. 2. Respondent’s administratively suspended license does not deprive Complainant of his right to prosecute this complaint or prevent the Registrar from determining the merits of the complaint. See A.R.S. § 32-1154(C). 3. Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “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). 4. The evidence established that Respondent did not complete the installation of the attic scuttle, secure a final inspection, complete the caps on the versa-lok retaining wall, install the columns and lighting fixtures, complete the lamp posts, or install the rip rap. Without any written change orders, additional funds due cannot be determined. As a result, Respondent’s assertion that its failure to complete the project was due to non-payment is not supported. Therefore, Complainant established that Respondent abandoned the contract or refused to perform after submitting a bid on work without legal excuse for the abandonment or refusal in violation of A.R.S. § 32-1154(A)(1).[1] 5. The evidence established that the paver installation by Respondent was not in compliance with the Registrar’s workmanship standards, Therefore, Complainant established that Respondent did not complete perform the work in a professional and workmanlike manner in violation of A.A.C. R4-9-108, and thereby of A.R.S. § 32-1154(A)(3).[2] 6. The undisputed credible testimony established that Respondent did not make any attempt to comply with the written directive from the Registrar. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(22).[3] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall revoke Respondent Mountain Ridge Builders, LLC’s License No: 263143. It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(D). It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty. 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, December 9, 2015.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] A.R.S. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” [2] A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” A.R.S. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[v]iolation of any rule adopted by the registrar.” [3] A.R.S. § 32-1154(A)(22) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure to take appropriate corrective action to comply with this chapter or with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar.”

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