ALJDEC decisions subject to certification as final

2014A-4449-ROC · Registrar of Contractors · 2016-01-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 15, 2015, at 1:00 p.m. APPEARANCES: Dana Rae Schimek (hereinafter “Ms. Schimek” or “Complainant”) appeared on her own behalf. J. DiGuiseppe Investments LLC (hereinafter “Respondent”) was represented by its attorney, Matt Pierce, Esq. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________ The hearing was convened to determine whether Respondent violated the charged provisions A.R.S. §§ 32-1154(A)(1) and 32-1154(A)(22) as alleged by Complainant and as cited by the Registrar of Contractors (hereinafter “Registrar”). Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT Background and Procedure Respondent is the holder of License Nos. B.219115-R and R37R.270711-R issued by the Registrar. Respondent’s B.219115-R License is current. Respondent’s R37R.270711-R License was suspended for non-renewal on February 1, 2015. This is a residential matter in which on or about June 7, 2013, Complainant entered into an agreement with Respondent for the performance of extensive remodeling work on a residence located at 8332 East Clarendon Avenue, Scottsdale, Arizona (hereinafter the “residence”). During the course of construction the Complainant became increasingly dissatisfied with Respondent’s lack of progress at the construction project. On or about October 29, 2014, Complainant filed a Complaint against Respondent with the Registrar. The Complaint alleged that Complainant had paid Respondent $134,727.66 and that “…. 7. Joe told this author that he does not have any funds to pay the framers to finish….9. Joe took our money under false pretense and has embezzled it for his own use.” Pursuant to the filing of the formal Complaint, an assigned agency Investigator conducted an onsite inspection at the residence. At the onset inspection the Respondent agreed to complete the construction project. On January 26, 2015, a written Directive was issued by the Registrar. The written Directive provided, in relevant part, 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:

Contractor is to complete the following project as agreed to by Complainant and Respondent at the jobsite inspection including the interior gas lines, all at no additional cost to the Complainant:

The following shall be completed per this Written Directive:

1) Framing. 2) A/C, plumbing, and electrical rough-ins. 3) Have all exterior windows and doors, including the garage overhead door installed. (This does not include the front entry door). 4) The roof papered and dried in with the asphalt shingles loaded onto the roof. 5) Paper and lath on the exterior walls. (Does not include stucco). 6) All fire sprinkler rough-ins installed. 7) Interior gas lines run to the kitchen range and water heater locations and stubbed to the proper exterior wall of the house. (Does not include exterior gas line run from utility origin).

Contractor to have all necessary local building department inspections conducted and passed regarding the above mentioned work.

Complainant alleged that Respondent failed to comply with the terms of the written Directive and requested that a citation be issued against Respondent’s licenses. On January 26, 2015, the Registrar issued a Citation for Alleged Violations of A.R.S. § 32-1154 and rules adopted by the Registrar. That Citation contained two charges: 1: A violation of A.R.S. § 32-1154(A)(1) (“Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.”). 2: A violation of A.R.S. § 32-1154(A)(22) (“Failure to take appropriate corrective action to comply with rules adopted pursuant to this chapter without valid justification within a reasonable period of time after receiving a written directive from the registrar. The written directive shall set forth the time within which the contractor is to complete the remedial action. The time permitted for compliance shall not be less than fifteen days from the date of issuance of the directive.”).

Testimony The assigned Registrar Investigator, Ted Gerold (hereinafter “Investigator Gerold”), testified that he had performed the initial onsite inspection. Investigator Gerold stated that there were no real workmanship issues at the jobsite because the project was unfinished. Investigator Gerold said that the residence was almost ready for rough-in work. Investigator Gerold said that the Respondent agreed to complete the construction project during the onsite inspection and that the Respondent specifically agreed to the items set forth in the written directive. Investigator Gerold said that he believed that the Respondent had abandoned the jobsite. Investigator Gerold said that he performed a prehearing inspection on December 14, 2015, and found that the residence had been sold to others and that the new owners had completed the construction project. Investigator Gerold’s testimony is found to be credible. Ms. Schimek testified that Respondent had taken her money and had failed to perform construction work in accordance with the parties’ construction agreement. Complainant asserted that Respondent had abandoned the construction project. Ms. Schimek acknowledged that she had terminated the Respondent from the construction project. Ms. Schimek testified that she had not terminated the Respondent from the construction project until the time period set forth in the written Directive had expired. Ms. Schimek acknowledged that the residence had been sold to another owner. Ms. Schimek testified that she was unable to complete the construction project because Respondent failed to comply with the terms of the written Directive. Ms. Schimek said that the residence was sold to the new owners in an unfinished state and that the new owners essentially removed Respondent’s work and started over. Ms. Schimek’s testimony is found to be credible. Joseph DiGuiseppe (hereinafter “Mr. DiGuiseppe”) testified that the Complainant was not ready with her financing when she signed the construction agreement with Respondent. Mr. DiGuiseppe said that the main service gas line had to be abandoned and a new one installed. Mr. DiGuiseppe said that Complainant had agreed to change orders totaling $29,500.00 and that Complainant had failed to fully pay Respondent for its work. Mr. DiGuiseppe opined that Complainant filed the complaint in order to avoid paying Respondent for its work. Mr. DiGuiseppe said that the residence was in far worse shape than originally thought when Respondent entered into the construction project. Mr. DiGuiseppe said that the parties had a very poor personal relationship. Mr. DiGuiseppe acknowledged that he had agreed to complete the items set forth in the written Directive. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[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.[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] The suspended status of Respondent’s R37R.270711-R License does not deprive Complainant of her right to prosecute her complaint against Respondent or prevent the Registrar from determining the merits of Complainant’s complaint.[4] Investigator Gerold credibly testified that the Respondent agreed to complete the construction project during the onsite inspection and that the Respondent specifically agreed to the items set forth in the written directive. Investigator Gerold said that the Respondent had abandoned the jobsite. Complainant credibly testified that she was unable to complete the construction project because of Respondent’s failure to comply with the written Directive. Ms. Schimek said that the residence was sold to the new owners in an unfinished state and that the new owners essentially removed Respondent’s work and started over Complainant established by a preponderance of the evidence that Respondent abandoned the construction project at issue and that Respondent failed to comply with the terms of the Registrar’s written Directive. This Tribunal concludes that Respondent violated the charged provisions of A.R.S. § 32- 1154(A)(1) and A.R.S. § 32-1154(A)(22). RECOMMENDed order In view of the foregoing, it is recommended that License Nos. B.219115-R and R37R.270711-R of Respondent shall be revoked. It is further recommended that Respondent pay the sum of $500.00 to the Registrar of Contractors by way of a civil penalty pursuant to A.R.S. § 32-1154(E). The failure by Respondent to pay the entire amount of the aforesaid civil penalty, on or before 30 days following the effective date of the Order entered in this matter, shall result in the automatic revocation of Respondent’s contractors’ licenses 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 payment of any outstanding prior civil penalty is tendered. 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 five days from the date of the certification. Done this day, January 4, 2016.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] A.R.S. § 32-1154(A). [2] A.A.C. R2-19-119. [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] A.R.S. § 32-1154(C).

-----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826