ALJDEC decisions subject to certification as final

2015A-2789-ROC · Registrar of Contractors · 2016-02-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 27, 2016 APPEARANCES: Complainant Eron L. Carlston appeared on his own behalf. Earth Sone Water LLC did not appear. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ FINDINGS OF FACT The Arizona Registrar of Contractors (“the Registrar”) first issued License No. 265235, to Earth Stone Water LLC (“Respondent”) on May 26, 2010. This license was class CR21 for Landscaping and Irrigation Systems.[1] Respondent also held a swimming pool contractor’s license, License No. 279568. Both of these licenses were revoked on August 5, 2015. On June 26, 2015, the Registrar received a Complaint against Respondent from Eron L. Carlton (“Complainant”) alleging that Respondent had failed to complete construction of an outdoor barbeque station, pergola and serving counter with appliances for which it had contracted and been paid a $9,314.71 deposit. The Registrar assigned Matt Gunstra to investigate that Complaint. On July 27, 2015, Gunstra conducted a jobsite inspection. Respondent did not attend, despite being notified of the inspection. Gunstra observed that partial work had been done on various outdoor structures that were not within the scope of a landscaping and irrigation systems contractor’s license. He also indicated that while textured stucco had been applied to the pergola columns, a stone veneer had not been applied as the parties’ contract specified. On July 29, 2015, Gunstra issued a Directive requiring Respondent to complete the work in a timely manner and apply the stone veneer to the pergola columns. Gunstra noted in the Directive that because Respondent’s license had been suspended for lack of bond on July 10, 2015, it could not do the work, but instead had to hire a licensed contractor to do so or reach a financial settlement with Complainant. Based on a telephone conversation with Respondent in which Respondent told Gunstra it could not complete work on the project due to insolvency and the fact that Respondent had a large number of complaints pending against its license, Gunstra did not want for the time specified in the Directive to expire before forwarding the matter to the Registrar’s Legal Department. On August 21, 2015, the Legal Department verified with Complainant that Respondent had not complied with the Directive. The Registrar issued a Citation and Complaint against Respondent, charging possible violations of A.R.S. § 32-1154(A)(1), A.R.S. § 32-1154(A)(2), A.R.S. § 32-1154(A)(16), and A.R.S. § 32-1154(A)(22). Respondent filed a timely written answer to the Citation and Complaint, claiming that Complainant had denied it access to complete the work and that it had attempted to reach Complainant without success. The Registrar referred the matter to the Office of Administrative Hearings (OAH), an independent state agency, for an evidentiary hearing. The Registrar issued a Notice of Hearing, setting a hearing at 10:00 a.m. on January 27, 2016, at the OAH. The Registrar mailed a copy of the Notice of Hearing to Respondent at its address of record. The Notice of Hearing informed the parties that “[f]ailure to attend the scheduled hearing is likely to result in an adverse ruling against you.” A hearing was held on January 27, 2016. Complainant testified along with Gunstra. Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the hearing was delayed 20 minutes, Respondent did not appear, through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence to defend its license. Hearing Evidence On or about January 28, 2015, Complainant entered into a contract with Respondent to construct a barbeque island, manor-style fire place and pergola for a total contract price of $18,628.71. At that time he accepted the contract, Complainant paid Respondent $9,314.71 as a deposit. Complainant indicated Respondent cashed his check the next day, but did not begin work until April 1, 2015. Complainant noted that Respondent last worked at his home at the end of May 2015, and had never returned to complete the project. Gunstra testified that Respondent’s license permitted it to do landscaping and irrigation work only and did not authorize it to build structures such as a barbeque island or pergola. Gunstra indicated that the columns of the pergola appeared finished with textured stucco without the stone veneer referenced in the parties’ contract. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on January 27, 2016. Such prior License record reflects that there are eleven open complaints against Respondent and six prior complaints against Respondent that resulted in discipline of Respondent’s license. The record reflects that Respondent’s License No. 274132 was revoked on August 5, 2015. Its Swimming Pool Contracting License, was revoked the same date and had previously been revoked numerous times for failing to pay both civil penalties and recovery fund payouts. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq. 2. Respondent’s revoked licenses does not deprive Complainant of its right to prosecute his complaint or prevent the Registrar from determining the merits of the complaint. See A.R.S. § 32-1154(D). 3. The copies of the Notice of Hearing that the Registrar mailed to Respondent at its address of record was reasonable and Respondent is deemed to have received notice of the hearing. A.R.S. §§ 41-1092.04 and 41- 1092.05(D). 4. 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). 5. 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).[2] 6. Complainant proved that Respondent departed from the parties’ contract by failing to apply a stone veneer to the pillars of the pergola that had been finished in textured stucco instead. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(2).[3] 7. The undisputed evidence at hearing established that Respondent contracted to build structures in Complainant’s backyard that was beyond the scope of its landscaping and irrigation systems license. Therefore, Complainant established that Respondent violated A.R.S. § 32- 1154(A)(16).[4] 8. No evidence suggested that Respondent was ever denied access to complete its work. The evidence showed that Respondent had no contact with Complainant after abandoning the project and never attempted to comply with the Directive in violation of A.R.S. § 32-1154(A)(22).[5] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall revoke Respondent Earth Stone Water LLC’s License Nos. 265235, 279568. 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, February 16, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] Administrative notice is taken of Respondent’s licensing history, available on the Registrar’s website and reviewed on January 27, 2016. [2] 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.” [3] A.R.S. § 32-1154(A)(2) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[d]eparture from or disregard of plans or specifications or any building codes of the state or any political subdivision of the state in any material respect that is prejudicial to another without consent of the owner or the owner's duly authorized representative and without the consent of the person entitled to have the particular construction project or operation completed in accordance with such plans and specifications and code.” [4] A.R.S. § 32-1154(A)(16) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[k]nowingly contracting beyond the scope of the license or licenses of the licensee.” [5] A.R.S. § 32-1154(A)(22) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “Failure 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. 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.”

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

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