ALJDEC decisions subject to certification as final
2016A-4148-CHC-ROC · Registrar of Contractors · 2017-06-09
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Deborah Jean Graham,
COMPLAINANT,
v.
Global Tile and Stone LLC,
License No. CR48.273900-D,
RESPONDENT.
No. 2016A-4148-CHC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: June 5, 2017, at 1:00 p.m.
APPEARANCES: Deborah Jean Graham (“Complainant”) appeared on her own behalf; Global Tile and Stone LLC (“Respondent”) appeared through James Aldrich, its qualifying party/member.
ADMINISTRATIVE LAW JUDGE: Diane Mihalsky
_____________________________________________________________________
FINDINGS OF FACT
Background and Procedure
According to the Arizona Registrar of Contractors’ (“the Registrar’s”) public website, on July 6, 2011, the Registrar issued License No. CR48.273900-D for dual ceramic, plastic and metal tile to Respondent. James Aldrich is the qualifying party/member on Respondent’s license.
On October 19, 2016, Complainant filed a complaint with the Registrar, alleging that Respondent had abandoned its $14,055.00 contract to perform certain work at Complainant’s property at 2738 Nakai Trail, Flagstaff, Arizona 86001. Complainant alleged that Respondent had contracted to perform unspecified remodeling at Complainant’s property in exchange for rent for Mr. Aldrich and his family and that, although Mr. Aldrich and his family had resided at the property for some time, Respondent refused to complete the agreed-upon remodeling or to refund the amount of unearned rent, which Complainant calculated to be $12,760.00. Complainant also stated that she was losing $1,900.00/month because she was unable to rent her property to another.
The complaint was assigned to the Registrar’s Investigator Steve Philpott for investigation. Investigator Philpott performed two jobsite inspections on November 10, 2016, and November 18, 2016.
On or about November 22, 2016, Investigator Philpott sent Complainant a letter, informing her that he had determined that her complaint against Respondent should be dismissed for the following reason:
During the investigation, the Registrar discovered that you terminated your contract with Respondent on August 31, 2016 upon issuance of a “Notice to Quit (Eviction Notice)”, specifying the Respondent shall vacate the premises by September 30, 2016 @ 11:59PM. Because Respondent was not allowed to complete its work, the Registrar cannot substantiate a violation of §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.”
On or about March 1, 2017, Complainant contacted Investigator Philpott’s supervisor, Steve Nelson, stating that she had a valid contract with Respondent under A.R.S. § 32-1158(D) and that she had a signed construction agreement, estimate, and payment verification from Mr. Aldrich. Her complaint against Respondent was that he abandoned the contract after he was paid to perform work, in violation of A.R.S. § 32-1154(A)(1).
On or about March 1, 2017, Mr. Nelson responded to Complainant’s email, stating that “[a]fter discussion with the Staff Attorney, there appears to be enough of a factual dispute to allow citation. I will have the Investigator issue the citation for abandonment as you requested.”
On March 9, 2017, the Registrar issued a Citation against Respondent’s contractor’s license, charging cause to suspend or revoke its license under A.R.S. § 32-1154(A)(1).
Mr. Aldrich filed a timely written answer to the Citation on Respondent’s behalf, denying that any cause existed to discipline Respondent’s license because “[w]e were given a ‘notice to quit’ along with an ‘eviction notice’ after numerous attempts to find a solution.”
The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.
A telephonic hearing was held on June 5, 2017, from the Registrar’s office in Flagstaff. Complainant testified on her own behalf and submitted fourteen exhibits. Mr. Aldrich testified on Respondent’s behalf and submitted 23 exhibits. Investigator Philpott also testified.
Hearing Evidence
During the summer of 2013, Mr. Aldrich and Complainant discussed a barter agreement under which Respondent would perform remodeling and construction work at the house on Nakai Trail in exchange for Mr. Aldrich and his family being allowed to live in the house. On or about August 6, 2013, Complainant sent Mr. and Mrs. Aldrich a list of repairs that she wished to have performed at the house on Nakai Trail.
On or about September 10, 2013, Complainant and Mr. Aldrich and his wife entered into a Month-to-Month Rental Agreement under which Mr. and Mrs. Aldrich agreed to pay $1,500/month rent plus a $1,500 refundable security/cleaning deposit and Complainant agreed to rent the house, commencing on October 1, 2013.
On September 10, 2013, Complainant and Mr. and Mrs. Aldrich also executed a Month-to-Month Rental Agreement Addendum that provided in relevant part as follows:
OWNER/AGENT: DEBORAH J. GRAHAM agrees to waive all financial obligations for RENTER(S): JAY AND RENE ALDRICH, at 2738 Nakai Trail Flagstaff, AZ 86002, including the deposit amount of $1500.00, monthly rent of $1500.00, and late rent fee of $100.00 in exchange for agreed upon demolition and remodeling duties.
The rental agreement will be reviewed monthly by both OWNER/AGENT and RENTER(S) to determine if the financial obligations for rent will continue to be waived.
If either the OWNER/AGENT or RENTER(S) wish to terminate the demolition and remodel agreement a written notice must be given within 3 days of such decision. Once this agreement has been cancelled the Renters will have 30 days to evacuate the premises or sign a new lease agreement with the OWNER/AGENT.
On or about September 18, 2013, Mr. Aldrich sent via text or email a list of work that Respondent proposed to perform at the house on Nakai Trail with itemized prices, including approximately $7,512.00 for labor to perform work in the bathroom. The cost of the work in the rest of the house, including painting and drywall repair in various areas, was $6,543.00. The total of the work was $14,055.00. Neither party signed the itemized list of proposed work.
On October 1, 2013, Mr. and Mrs. Aldrich and their family moved into Complainant’s rental house on Nakai Trail. Between October 1, 2013, and May 31, 2013, Mr. and Mrs. Aldrich did not pay any rent. Although Respondent performed some work on the list, Mr. Aldrich acknowledged that it did not complete the list and that under the parties’ agreement, Respondent owed some work for the $12,000.00 in rent that Complainant had waived.
On or about March 24, 2014, Complainant sent notice to Mr. and Mrs. Aldrich that she was changing the terms of their agreement, in relevant part as follows:
Per the rental agreement starting October 1, 2013 between you and Deborah Graham, you are being given written notice that as of June 1, 2014 the current rental and repair agreement will be cancelled and void. You will have 30 days from the date this notice was emailed to decide if you wish to sign a new rental agreement or move off the property at 2738 Nakai Tr. Flagstaff, AZ 86001 as per the rental agreement. Additionally, since October 1, 2013 there has been an accumulation of deposit and rental fees waived totaling $13,500.00 in exchange for home repairs. This includes a $1500.00 deposit fee and $1500.00 per month of rent for 8 months (October 1, 2013 through May 31, 2014). If you wish to remain on the property, a new rental agreement will be created starting June 1, 2014. This new agreement will document monthly rental fees due and the cost of home repairs completed since the start of demolition on September 1, 2013 with the difference of the current amount of fees waived in exchange for repairs not yet completed and owed by the tenants, if appropriate. If you decide not to remain on the property, a written agreement will be created to determine how much of the waived fees will be returned to me in cash with a due date or exchanged for home repairs with a completion date, if appropriate.
On or about July 4, 2014, Complainant and Mr. and Mrs. Aldrich executed a Month-to-Month Rental Agreement Addendum that provided as follows:
Starting June 1, 2014 OWNER/AGENT: DEBORAH J. GRAHAM will reinstate all financial obligations for the rental property at 2738 Nakai Trail Flagstaff, AZ 86005 and the month-to-month rental agreement signed on October 1, 2013 for RENTER(S): JAY AND RENE ALDRICH. This includes a deductable [sic] of $1500.00 and $1500.00 per month rental fee due at the 1st of each month and no later than the 3rd of each month with a late fee of $100.00 if paid after the 3rd.
The RENTER(S) JAY AND RENE ALDRICH will complete contractually obligated repairs per the attached repair list by January 1, 2015 totaling in the amount of $13,500.00 with a returnable $1500.00 deposit after a complete walk through of the residence is completed after renter(s) vacate the premises. The accident and waiver release of liability signed on October 1, 2013 will remain in place as written until January 1, 2015 or agreed upon repairs are completed or which ever [sic] occurs first.
Complainant and Mr. and Mrs. Aldrich attached to the July 4, 2014 addendum a document that was based on the list of work that Mr. and Mrs. Aldrich provided on September 18, 2013, with some items marked, “removed” by Complainant and other items marked, “done” by Mr. Aldrich. Mr. Aldrich testified that Complainant wanted him and his wife to pay for the items that she had removed from the list of work.
Mr. and Mrs. Aldrich paid $1,500.00 for rent for June, July, August, and September 2014. Mr. Aldrich testified that Complainant allocated at least some of these payments to her claimed damages for Respondent’s failure to perform all of the work on the list.
On or about July 8, 2014, Complainant sent a new list to Mr. and Mrs. Aldrich of items for Respondent to complete.
Mr. Aldrich testified that he made an agreement with Complainant’s property manager at the time, Jamie Shontz, that Respondent would complete all pending work by the end of September 2014.
In early August 2014, Complainant sent a text to Mr. Aldrich, informing him that the rent was considered late after the 5th of the month and that “I’m done, you’ll have your eviction notice tomorrow.”
On September 1, 2014, Complainant issued a Notice to Quit (Eviction Notice) to Mr. and Mrs. Aldrich, informing them that they were required to vacate the premises at 2738 Nakai Trail within 30 days. Complainant testified that she called the sheriff to help remove Mr. and Mrs. Aldrich from the property but did not submit the sheriff’s report into evidence.
In early September 2014, Complainant sent another text to Mr. Aldrich, stating that “I notice that you deposited money on aug 30th... [I’ll] consider that payment for money owed on damages and breached contract. I am not accepting any rental payments for the cancelled month to month rental agreement. If you remain on the property until Sept 30th, you will owe me back rent for the month of September . . . .”
On or about September 3, 2014, Complainant sent an email to Mr. Aldrich, to which she attached a list of damages totaling $21,766.65 that “will be presented in court” for work required to complete repairs and new repairs allegedly caused by Mr. and Mrs. Aldrich’s tenancy.
In mid-September 2014, Mr. Aldrich sent texts to Complainant indicating Respondent’s willingness to complete repairs and asking if she wanted the repairs done or if he should focus on moving his family to a new house. Complainant indicated that she planned to start showing the house to new prospective tenants.
Mr. Aldrich testified that in September 2014, he allowed Complainant access to show the house to prospective tenants but did not allow access to new contractors that Complainant had hired to work on the house.
Sometime in September 2014, Mr. Aldrich and his family moved out of the house on Nakai Trail.
Investigator Philpott testified that at the November 10, 2016 jobsite inspection, work on the bathroom had been competed by another contractor.
Complainant testified that the only work that was completed by another contractor was in the bathroom because she needed to rent the house to another tenant and that all the other work that Respondent was supposed to perform in exchange for her waiver of Mr. and Mrs. Aldrich’s rent between October 1, 2013, and May 31, 2014, was outstanding. Complainant opined that Respondent had abandoned its contract to perform work on the house on Nakai Trail.
On or about November 17, 2016, Complainant filed an addendum to her complaint enumerating “items listed on the original complaint that were not completed by Mr. Aldrich and NOT completed by anyone else.” On or about November 18, 2016, Investigator Philpott performed a second jobsite inspection and photographed the items of work that Respondent had allegedly contracted to perform that that were still unfinished.
CONCLUSIONS OF LAW
The Registrar has jurisdiction to determine whether cause exists to suspend or revoke a contractor’s license for a violation of A.R.S. § 32-1154(A).
Complainant bears the burden of proof to establish cause to suspend or revoke Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.
“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”
The parties agree that in September 2013, they entered into an oral and written contract for Respondent to perform certain repairs to the house on Nakai Trail and, in consideration for the work, Complainant waived Mr. and Mrs. Aldrich’s payment of the security/cleaning deposit between October 1, 2013, and May 31, 2014. Mr. Aldrich acknowledged that Respondent did not complete the scope of work.
The parties also agree that at the beginning of July 2014, the parties amended the agreement to require Mr. and Mrs. Aldrich to pay rent and to require Respondent to complete the scope of work by January 1, 2015.
The parties also agree that in early September 2014, Complainant evicted Mr. and Mrs. Aldrich and that after the end of September 2014, when Mr. and Mrs. Aldrich moved out of the house and sometime thereafter, when Complainant rented the house to another tenant, Respondent no longer had access to complete the scope of work under the parties’ contract.
Complainant filed the complaint with the Registrar on October 19, 2016. By that time, she had paid another contractor to complete work in the bathroom so that she could rent the house to another tenant. Because Respondent’s work on the bathroom has been modified by another contractor, A.R.S. § 32-1155(C)(2) precludes the Registrar from finding cause to suspend or revoke Respondent’s license based on the work it performed or failed to perform in the bathroom.
Construction is not a perfect art and, generally, after a property owner files a complaint with the Registrar against a contractor’s license for a violation of A.R.S. § 32-1154(A), the contractor must be afforded an opportunity to complete or correct its work before its license may be suspended or revoked. By the time Complainant filed the complaint with the Registrar, she had rented the house on Nakai Trail to another tenant and Respondent did not have access to complete its scope of work under the parties’ contract.
Finally, the legislature has not empowered either the Office of Administrative Hearings or the Registrar to adjudicate or award money damages. Complainant’s exhibits make clear that the remedy that she seeks from this administrative forum is a requirement that Respondent repay the unearned rent that she had waived, as well as alleged collateral damages caused by Mr. and Mrs. Aldrich’s family’s use the house.
Because the bathroom was completed by another contractor before Complainant filed the complaint with the Registrar, Respondent never had access to complete the remainder of its scope of work after Complainant filed the complaint, and the only remedy that remains available at this time is an award of civil damages, Complainant has not established cause to suspend or revoke Respondent’s license under A.R.S. § 32-1154(A)(1).
/ / / /
RECOMMENDED ORDER
Based on the foregoing, it is recommended that on the effective date of the final order in this matter, Complainant Deborah Jean Graham’s complaint in Case No. 2016-4148 against Respondent Global Tile and Stone, LLC’s License No. CR48.273900-D shall be dismissed, without prejudice to Complainant’s right to file an action in a judicial forum of competent jurisdiction to make a claim for civil damages.
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, June 9, 2017.
/s/ Diane Mihalsky
Administrative Law Judge
Transmitted electronically to:
Jeffrey Fleetham, Director
Registrar of Contractors