ALJDEC decisions subject to certification as final

2014A-2189-ROC · Registrar of Contractors · 2015-11-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 20, 2015, at 10:00 a.m. APPEARANCES: Younghee Kim (“Complainant”) appeared on her own behalf; Summer Heating and Air LLC (“Respondent”) appeared through Vincent Raul Sandoval, a member (“Mr. Sandoval”). ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT The Arizona Registrar of Contractors (“the Registrar”) issued License No. C- 39.244553-C to Respondent on or about May 27, 2008. On or about June 2, 2014, Complainant filed a Complaint with the Registrar that alleged seven specifically enumerated deficiencies in Respondent’s installation of an evaporative cooler at her business, Joy Cleaners at 4302 E. Ray Rd. #100, Phoenix, Arizona 85044. Complainant alleged that although Respondent performed some work on the project, the work that it had performed was deficient and that Respondent was not even close to finishing the project. Complainant stated that she had paid Respondent $2,300.00 on a contract price of $3,500.00. The complaint was assigned to the Registrar’s Investigator Matt Gunstra for investigation. Investigator Gunstra performed an onsite inspection and on September 15, 2014, issued a Directive that noted that Respondent’s commercial license was inactive, required Respondent by September 30, 2014, to “complete project per original contractor agreement, properly executed change orders, verbal agreements, local building codes and manufacturer’s installation instructions,” and stated that “Respondent is responsible for reimbursement to Complainant for any remedial action in areas damaged by water that entered building due to his poor work.” After Respondent failed to resolve the complaint to Complainant’s satisfaction, she requested a hearing. The Registrar issued a Citation that alleged cause to suspend or revoke Respondent’s license under A.R.S. § 32-1154(A)(1) and A.R.S. § 32-1154(A)(3), namely, A.A.C. R4-9-109. After Respondent filed a timely written answer, the Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on November 20, 2015. Investigator Gunstra clarified the record and was available to answer the parties’ and the Administrative Law Judge’s (“ALJ’s”) questions. Mr. Sandoval acknowledged that Respondent had abandoned the project and had not performed its contract with Complainant in a professional and workmanlike manner. Mr. Sandoval testified that the $2,300.00 that Complainant had paid for the project should be returned to her. Mr. Sandoval testified that Respondent would not be able to return Complainant’s money until sometime in January 2016. This delay was not acceptable to Complainant. Complainant testified that she had contacted the Registrar to obtain information about recovering against Respondent’s bond and had been informed that she needed to obtain a judgment against Respondent. Complainant felt she should recover more than the $2,300.00 that she had paid to Respondent for the job. Administrative notice is taken of the Registrar’s public website on November 20, 2015, which showed Respondent had a $2,500.00 cash bond, all of which was available. According to the Registrar’s public website, to recover against the cash bond, Complainant must take the following actions: If the contractor has posted a cash bond or a certificate of deposit, only the contractor has to be sued. You must send written notice to the Registrar of Contractors of any lawsuit you may file to collect from a contractor's cash bond or certificate of deposit. This will prevent the bond from being refunded to the contractor pending resolution of the claim. Civil judgments must specify that claim can be paid from the cash bond or certificate of deposit assigned to the Registrar of Contractors. . . .

CONCLUSIONS OF LAW 1. The Registrar has jurisdiction to determine whether cause exists to discipline Respondent’s license under the charged subsections of A.R.S. § 32-1154(A). 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s license by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] 3. Mr. Sandoval admitted that Respondent had abandoned the project, furnishing cause to discipline Respondent’s license under A.R.S. § 32- 1154(A)(1),[4] and had not performed its contract with Complainant in a professional and workmanlike manner, furnishing additional cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108.[5] 4. With respect to Complainant’s stated desire to recover against Respondent’s bond in light of the recommended disciplinary suspension of Respondent’s inactive license, such discipline is the functional equivalent of a civil judgment.[6] Both parties anticipated that the Registrar’s final decision in this matter would allow the Registrar to also order or approve a payment from Respondent’s cash bond. Mr. Sandoval acknowledged that Complainant’s damages were at least $2,300.00. 5. Because the Registrar referred only the issue of discipline under the cited statutes to the Office of Administrative Hearings, the ALJ did not attempt to fully liquidate Complainant’s damages. The ALJ notes that the September 15, 2014 Directive stated that Respondent was responsible for reimbursing Complainant for any remedial action in areas damaged by water that entered the business due to Respondent’s poor work. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final Order, Respondent Summer Heating and Air LLC’s License No. C- 39.244553-C shall be suspended for five business days. 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 five days from the date of that certification. Done this day, November 20, 2015.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] At the hearing, the Registrar of Contractors’ Investigator Matt Gunstra stated that Respondent’s residential License No. R39R.243191-R had been cited in error. Because the parties agreed that the job at issue was a commercial project, the Administrative Law Judge amended the caption to show the correct license.

[2] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] 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.” [5] The Registrar’s statutes do not require a civil judgment as a condition precedent to recovery against a cash bond. 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.” 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.” [6] A.R.S. § 32-1152(E), which concerns bond requirements, provides in relevant part as follows: The bond or deposit required by subsection B, paragraphs 1, 2 and 3 of this section is for the benefit of and subject to claims by [an] . . . owner or co-owner of nonresidential real property . . . who has a direct contract with the licensee against whose bond or deposit the claim is made and who is damaged by the failure of the licensee to build or improve a structure or appurtenance on that real property at the time the work was performed in a manner not in compliance with the requirements of any building or construction code applicable to the construction work under the laws of this state or any political subdivision, or if no such code was applicable, in accordance with the standards of construction work approved by the registrar.

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