ALJDEC decisions subject to certification as final

2016A-374-ROC · Registrar of Contractors · 2016-08-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 25, 2016, at 1:00 p.m. APPEARANCES: Sam Lutrin (“Complainant”) appeared on his own behalf; Tycor Construction, LLC (“Respondent”) appeared through its employee, Greg Keenan (“Mr. Keenan”). ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT The Arizona Registrar of Contractors (“the Registrar”) referred this matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing on the issues of whether caused existed under the statutes charged in the Arizona Registrar of Contractors’ (“the Registrar’s”) April 13, 2016 Citation to revoke, suspend or otherwise discipline Respondent’s contractor’s license. The Citation charged three violations: (1) Abandonment in violation of A.R.S. § 32-1154(A)(1)[1]; (2) Failing to include in its contract with Complainant all nine elements that A.R.S. § 32-1158(B) requires,[2] in violation of A.R.S. 32-1154(A)(12);[3] and (3) Contracting or offering to contract while its license was suspended in violation of A.R.S. § 32- 1154(A)(17).[4] A hearing was held on July 25, 2016. Complainant testified and submitted four exhibits. Respondent presented the testimony of Mr. Keenan, its project manager on Complainant’s job. The Registrar’s Investigator, Timothy Pennington (“Investigator Pennington”), also testified and provided photographs that he had taken at his jobsite inspection. According to the Registrar’s public website, on or about November 1, 2012, License No. KB-2.281873-D for dual residential and small commercial contracting was issued to Respondent. License No. KB-2.281873-D was suspended between December 16, 2015, and December 31, 2015, for a recovery fund payout credential. On or about February 1, 2016, Complainant filed a complaint with the Registrar alleging that Complainant had paid Respondent $3,000.00 for certain remodeling at Complainant’s property at 4233 E. Cheery Lynn Rd., Phoenix, AZ 85018. Complainant attached to the complaint Respondent’s quote dated December 30, 2015, to install a gas fireplace insert, a French door, a custom built-in cabinet/entertainment center, two glass shower/tub sliding doors, and two driveway lights, including wiring to home outdoor lighting switch, for a total contract price of $9,482.02. Complainant had signed the quote to accept it on December 31, 2015.[5] The quote provided an estimated date of completion of “1/20/15” and required a deposit in the amount of $3,000.00. The quote included Respondent’s name and license number, preceded by the acronym “ROC,” the address of the job, apprised Complainant of his right to file a complaint against Respondent for an alleged violation of A.R.S. § 32- 1154(A) within two years of the completion date, and provided the Registrar’s telephone number and website address. Complainant attached to his complaint a copy of his $3,000.00 check made payable to Respondent dated December 31, 2015. Complainant explained the circumstances that led him to file a complaint with the Registrar in relevant part as follows: The job was to build several things that would have been a 3-4 week job. January 8, 2016 [Complainant] received a text that material were all available to install, but then Jan. 15, 2016 [Complainant] was informed that all materials were back-logged. At this point, with only 5 days to the estimated completion date, [Complainant] dismissed [Respondent] since no work had been done and [Respondent] abandoned their contract.[6]

Complainant testified consistently with the complaint that he filed with the Registrar. Complainant testified that because on January 16, 2016, Respondent had not done anything on the job, he terminated the contract because he had lost trust in Respondent. Complainant testified that Respondent had not performed any work and refused to return the $3,000.00. Mr. Keenan testified that Complainant moved from a house in Chandler to a house in the Arcadia area of Phoenix. Mr. Keenan testified that Respondent had its electrical and glazing subcontractors to look at the Arcadia house to prepare the December 30, 2016 proposal. Mr. Keenan testified that Complainant wanted Respondent to perform other work immediately to that he could move because his general contractor for renovation of the Arcadia house had quit. Mr. Keenan testified that at Complainant’s request, Respondent moved at least two 60’ fans from the Chandler house to the Arcadia house. Mr. Keenan testified that at Complainant’s request, Respondent also wired the posts at the end of the driveway. Mr. Keenan testified that Respondent’s electrician spent two days working at Complainant’s Arcadia house. Mr. Keenan testified that due to the New Year’s holiday, Respondent did not perform any work on the job until after January 1, 2016. Mr. Keenan testified that on January 2, 2016, Complainant wanted to cancel the contract because he was having financial difficulties. Mr. Keenan testified that Respondent had spent more than $3,000.00 performing work for Complainant. Investigator Pennington performed a jobsite inspection on April 7, 2016. Investigator Pennington testified that Complainant hired another contractor, who installed the fireplace insert. Investigator Pennington testified that the French doors and shower doors had not been installed. Investigator Pennington testified that Complainant acknowledged at the jobsite inspection that Respondent had installed ceiling fans and worked on the pedestal lights. Complainant submitted an invoice from CZR Electric dated January 18, 2016, in the amount of $150.00 for “[m]ounting two coach lights and adding outlet, finished run in wall for coach light” and a bid dated January 18, 2016, in the amount of $300.00 for removing and replacing two fans in two different locations.[7] Complainant also submitted his email to Respondent dated January 16, 2016, voiding the contract because Respondent had not completed the job. Complainant stated that the ceiling fans and electrical wiring “were not included in the contract and therefore are a separate issue,” that “I have requested three different estimates from electrical companies,” and that once the estimates were received, “we can discuss a fair price for payment of the installation you have done.”[8] Investigator Pennington testified that it appeared that Respondent’s license was current when the contract was entered. Investigator Pennington testified that he recommended that the Registrar cite a violation of A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158(B), because the estimated completion date on Respondent’s quote was January 20, 2015, not January 20, 2016. CONCLUSIONS OF LAW This dispute lies within the Registrar’s jurisdiction to resolve.[9] Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s license by a preponderance of the evidence.[10] Respondent bears the burden of proof to establish affirmative defenses by the same evidentiary standard.[11] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[12] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[13] “Contracting” is defined in relevant part as anyone who, “for compensation, undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others to” perform construction work.[14] Respondent violated A.R.S. § 32-1154(A)(17) because it submitted the quote to Complainant on December 30, 2015, and Complainant accepted the quote on December 31, 2015, when Respondent’s license was suspended. Respondent did not perform any work until after its license had been reinstated. Respondent put the wrong year on the estimated completion date on the December 30, 2015 quote because the year was about to change. This is a common error before and after a New Year. It is a hyper-technical error that is unlikely to result in injury because no one would expect work under a contract to be completed nearly a year before the contract was entered. However, Respondent failed to memorialize the contract to move the ceiling fans and install electrical wiring in the posts at the end of the driveway, as A.R.S. § 32-1158 requires. Although the record shows cause to suspend or revoke Respondent’s license under A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158(B), Respondent includes all nine statutorily required contract terms in written contracts when homeowners do not insist that it perform work outside the scope of the original engagement on a tight schedule. Complainant did not establish that Respondent abandoned the contract in violation of A.R.S. § 32-1154(A)(1). Instead, Complainant terminated the contract four days before the estimated completion date. In addition, it appears that Respondent informed Complainant that work on the project would be delayed because necessary materials would not be available. All that A.R.S. § 32-1158(B)(4) requires is an estimated date of completion; it does not provide for penalties if the contractor does not complete the project by the estimated date. Respondent established that it performed some work at Complainant’s project, but that the parties disagree about the value of the work. Requiring Respondent to return the $3,000.00 that it received from Complainant as a result of the contract the parties made on the last day of Respondent’s license suspension would result in a windfall to Complainant. The parties may resolve their payment dispute in court. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order in this matter, Respondent Tycor Construction LLC’s License No. KB-2.281873-D shall be suspended for a period of three 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, August 4, 2016.

/s/ Diane Mihalsky 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.R.S. § 32-1158(B) provides that 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 after December 31, 2007 must be in writing and must include the following minimum terms: 1. The name of the contractor and the contractor’s business address and the license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 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 ten point bold type. . . .

[3] A.R.S. § 32-1154(A)(12) 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. § 32-1154(A)(17) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[c]ontracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status.” [5] See Complainant’s Exhibit 1. [6] The Registrar’s electronic file at Intake Complaint Submittal1.pdf at 2. [7] See Complainant’s Exhibit 4. [8] Complainant’s Exhibit 3. [9] See A.R.S. § 32-1101 et seq. [10] 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). [11] See A.A.C. R2-19-119(B)(2). [12] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [13] Black’s Law Dictionary at page 1220 (8th ed. 1999). [14] A.R.S. § 32-1101(A)(3) (emphasis added).

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

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