ALJDEC decisions subject to certification as final

2017A-1618-CHC-ROC · Registrar of Contractors · 2017-11-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Samir Bahnam,

COMPLAINANT,

v.

Ausi's Builders and Construction LLC ,

License No: 228521 and 213459

RESPONDENT.

No. 2017A-1618-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 17, 2017,

APPEARANCES: Nathan Anderson, Esq., on behalf of Complainant; David Appleton, Esq., on behalf of Respondent; Interpreter Rima Potres appeared to translate for Complainant

ADMINISTRATIVE LAW JUDGE: Roger A. Geddes

_____________________________________________________________________

FINDINGS OF FACT

1. Ausi’s Builders and Construction, LLC (Respondent), is the holder of

License Numbers B-2.228521 and 213459 issued by the Registrar of Contractors (Registrar).

2. On or about March 24, 2017, Samir Bahnam (Complainant), filed a Complaint against Respondent with the Registrar for poor work. Complainant alleged that Complainant and Respondent entered into a written contract on or about July 7, 2016, wherein Respondent was tasked to repair a damaged wall and canopy at Complainant’s commercial establishment for the contract price of $55,000.00. He noted in the Complaint that the contract between the parties was both written and oral.

3. After an inspection of the job site on April 13, 2017, the Registrar issued a Directive dated April 17, 2017, requiring Respondent to remedy various alleged violations as follows:

Canopy has yet to pass fire and city inspection. Has no electrical power, no water line, and no compressed air. Complete project per contract and city approved plans. Many items are incomplete and get final approval from City of Glendale.

4. The Registrar issued a Citation to Respondent on May 18, 2017, for the alleged violation of the following:

1. A.R.S. § 32-1154(A)(3) (violation of Arizona Administrative Code Rule 4-9-108 for failure to meet minimum workmanship standards);

2. A.R.S. § 32-1154(A)(22) (failure to perform corrective action).

5. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. The Registrar issued a Notice of Hearing setting a hearing for October 17, 2017, at 1:00 P.M. At the hearing, Complainant testified on his own behalf; Steve Ausi, member and qualifying party, and Fernando Garcia, employee of Respondent, testified on behalf of Respondent. Jack Grimm, the Registrar Investigator (Investigator), testified on behalf of the Registrar.

6. The Investigator on behalf of the Registrar testified as to his communications with Complainant and Respondent, his inspection of the job site, and the Directive issued by the Registrar as a result of his observations from his inspection. Specifically, he testified that the project was not completed as per the contract between the parties. He also testified as to the animosity between the parties and noted at the inspection they were yelling a lot at each other and that he had to warn them to stop yelling otherwise he would stop the inspection and leave. He testified that when it got to the point that they started using the “F” word against each other, he told them he was done and that he was leaving. He noted in his report that a “good portion of the complaint has to deal with money and payments.”

7. Complainant testified that the parties entered into a contract dated July 7, 2016, to repair a damaged wall and canopy at Complainant’s commercial establishment as per plans approved by the city of Glendale for a contract price of $55,000.00. After Respondent was paid $20,000.00 for work performed, the parties entered into a November 10, 2016, contract addendum changing the canopy from metal to wood and adding installation of a concrete pad. The addendum also specified the remaining progress payments to be made as follows: $15,000.00 before ordering wood canopy materials, $10,000.00 before ordering asphalt, and the final payment of $10,000.00 upon receipt of a certificate of completion from the city of Glendale.

He testified the first remaining progress payment of $15,000.00 was paid on November 10, 2016. The next $10,000.00 progress payment was not paid in full. Complainant testified that he paid Respondent $6,000.00 in cash on February 17, 2017, and offered to pay Respondent the additional $4,000.00 but that Respondent never showed up to pick up the $4,000.00. Complainant had paid $41,000.00 on the contract to that point in time. There was no further work performed by Respondent.

Complainant testified he sent a letter to Respondent dated March 14, 2017, directing Respondent to complete the project and that if it did not, Complainant would hire a new contractor to finish the project. When Complainant heard nothing further from Respondent, Complainant entered into a contract with HRH Contractors to complete the project. Complainant contends the project was completed by HRH Contractors on September 29, 2017, at a price $6,850.00 over the contract price with Respondent.

8. Steve Ausi testified that he was constantly concerned about getting paid by Complainant. According to Mr. Ausi, he did show up to collect the remaining $4,000.00 of the $10,000.00 progress payment that Complainant had offered him. Mr. Ausi testified that when he arrived, Complainant refused to pay the $4,000.00 owed and offered to pay only $2,000.00. Mr. Ausi refused to accept the $2,000.00 and demanded that the full remaining amount of the progress payment be made before he would proceed with further work. When Complainant did not make such a payment, Respondent thereafter refused to perform any other work until the entire progress payment was made as well as payment made for other items of work performed over and above the contract. Respondent sent an invoice dated March 11, 2017, to Complainant for these additional items totaling $3,672.00 which included an amount for a concrete pad that was much larger than the concrete pad specified in the contract.

9. Francisco Garcia, an employee of Respondent, testified he has been doing roofing work for 8 years. He testified to performing water testing on the canopy twice with a garden hose and that there were no leaks observed.

CONCLUSIONS OF LAW

1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154.

2. 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 preponderance of the evidence. See Arizona Administrative Code Rule 2-19-119.

3. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994); see also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” BLACK’S LAW DICTIONARY 1182 (Rev. 6th ed. 1990).

4. A.R.S. § 32-1154(A) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license,

3. Violation of any rule adopted by the registrar.

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22. 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. A license shall not be revoked or suspended nor shall any other penalty be imposed for a violation of this paragraph until after a hearing has been held.

5. Arizona Administrative Code Rule 4-9-108(A) provides that “A contractor shall perform all work in a professional manner.”

6. There is no dispute that Respondent did not complete the project per the contract or that Complainant did not effectuate the final inspection by the City of Glendale. It is further not in dispute that Respondent left the project with no electrical power, no water line, and no compressed air and that Complainant hired another contractor to complete all of these items. However, it is further not in dispute that a $10,000.00 progress payment due from Complainant before asphalt was to be ordered was not made. This contentious dispute, as noted by the Inspector, primarily deals with money and payments.

7. Complainant claims he did not pay the full $10,000.00 progress payment due because Respondent did not show up to pick up the remaining $4,000.00. Respondent counters that he did in fact show up but that Complainant attempted to “low ball” him with a $2,000 payment. Given Mr. Ausi’s testimony regarding his concern about getting paid by Complainant, it would seem less than credible that Respondent would not show up or make arrangements to collect the $4,000.00 that Complainant offered to pay. However, even if Respondent did not in fact show up to collect the progress payment, Complainant offered no explanation as to why he did not send the $4,000.00 payment due with his March 14, 2017, letter to Respondent in which he demanded that Respondent complete the contract, or why he did not send it at any other time.

8. Complainant further acknowledged that part of the contract was oral and despite the fact that there were no change orders, he did not dispute that he requested work outside the contract and that such work was in fact performed.

9. As to whether Respondent has violated Arizona Administrative Code Rule 4-9-108(A) by failing to perform all work in a professional manner, this Tribunal finds that Complainant’s failure to make a full progress payment when due (a condition precedent to the ordering of asphalt) and failure to pay for work performed by Respondent outside the contract excused Respondent from proceeding with any further work. Such was also valid justification not to proceed with corrective action.

10. It should be noted that Respondent has not been cited by the Registrar for a violation of A.R.S. § 32-1154(A)(1) for abandonment of a contract or refusal to perform without legal excuse for the abandonment or refusal. While Respondent’s failure to complete the project could support a finding that Respondent has abandoned the contract and refused to perform work, this Tribunal finds that nonpayment or a good faith dispute between the parties as to amounts owed on and outside the contract constitute a legal excuse for any abandonment or refusal to perform.

11. Lastly, although Respondent was not cited for poor workmanship, a great deal of evidence was presented concerning the alleged leaking of the canopy installed by Respondent. While Complainant testified that the canopy was leaking, he has failed to meet his burden to show that there was in fact such a deficiency. The Inspector testified that he was unable to substantiate that leaking, if any, was due to Respondent’s work. Further, Francisco Garcia, employee of Respondent, testified as to the extensive water testing he performed on the canopy that showed that there was no leaking. Noteworthy, there was no mention of leak repair in the bid from HRH Contractors to complete the project. (See Complainant’s Exhibit 2).

12. Accordingly, Complainant has not established that Respondent’s licenses should be disciplined for a violation of A.R.S. § 32-1154(A)(3) and (A)(22).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the final order in this matter, that the Citation and Complaint in Case No. 2017A-1618 shall be dismissed.

. 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, November 6, 2017.

/s/ Roger Geddes________

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors