ALJDEC decisions subject to certification as final

2017A-2148-CHC-ROC · Registrar of Contractors · 2017-08-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Jason Lee Garrett,

COMPLAINANT,

v.

Chitwood's Country Oak Cabinets, Inc.,

License No:

143375

RESPONDENT.

No. 2017A-2148-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 15, 2017, 8:30 A.M.

APPEARANCES: Jason Garrett, Complainant; William Chitwood, President and Owner of Respondent; Chris Allison on behalf of Registrar of Contractors

ADMINISTRATIVE LAW JUDGE: Roger A. Geddes

_____________________________________________________________________

FINDINGS OF FACT

1. Chitwood's Country Oak Cabinets, Inc. (Respondent), is the holder of

License Number 143375 issued by the Registrar of Contractors (Registrar).

2. On or about April 24, 2017, Jason Lee Garrett (Complainant), filed a Complaint against Respondent with the Registrar. Complainant alleged that Complainant and Respondent entered into a contract on February 14, 2017, wherein Respondent was to supply and install cabinets and countertops in Complainant’s residence for the contract price of $52,748.35. Complainant further alleges he paid the sum of $41,300.00 by check dated February 17, 2017, to Respondent but that no work was ever performed or cabinets or countertops supplied by Respondent.

3. After an inspection of the job site on May 23, 2017, by Registrar inspector Chris Allison, the Registrar issued a Directive requiring Respondent to complete the cabinets and countertops in accordance with the contract by June 3, 2017. When no corrective action was performed, on June 13, 2017, the Registrar issued a Citation to Respondent for alleged violation of A.R.S. § 32-1154(A)(1) (abandonment of a contract or refusal to perform work without legal excuse) and of A.R.S. § 32-1154(A)(22) (failure to perform corrective action).

4. 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 August 15, 2017, at 8:30 A.M. Complainant testified and William Chitwood on behalf of Respondent testified. Chris Allison testified on behalf of the Registrar.

5. Chris Allison on behalf of the Registrar testified as to his communications with Complainant and Respondent, his inspections of the job site, and the Directive issued by the Registrar as a result of his observations from his inspection. Specifically, he testified that based on his observations, no work had been performed at the job site.

6. Complainant testified that he visited a showroom of Chitwood’s Cabinets several times to select cabinets and countertops and ultimately entered into a written contract that bears Respondent’s contractor license number. He testified that his primary dealings were with Deborah Morris, who represented herself to be owner/manager of Chitwood’s Cabinets. Upon signing the contract with a contract price of $52,748.35, Complainant testified he wrote an initial check for $41,300.00 to Chitwood’s Cabinets which was thereafter cashed. After making the payment, according to Complainant, no cabinets or countertops were ever supplied or installed and no work was performed under the contract. Complainant testified that although he dealt with various individuals at the showroom, he did not meet or deal with William Chitwood in connection with the contract or otherwise when these events occurred.

7. Complainant further testified that the showroom of Chitwood’s Cabinets apparently was closed down several months after he signed the contract and that he could no longer reach Deborah Morris or anyone else from the company. He further testified that he has come to learn that Ms. Morris has similarly been paid by a large number of other customers and has failed to follow through on contracts with or orders from those customers.

8. William Chitwood on behalf of Respondent testified that he had never met Complainant until after the subject Complaint was filed. He stated that he had nothing whatsoever to do with the transaction or subject contract with Complainant nor did he receive any of the monies paid by Complainant.

9. Mr. Chitwood further testified that he is semi-retired and that on October 1, 2011, he had sold the assets of Respondent to Deborah and Wayne Morris, the latter individual he identified as the son of his girlfriend. According to Mr. Chitwood, he was not involved with the business after the sale. Respondent submitted as Respondent’s Exhibit No. 1 a copy of the purchase and sale agreement reflecting such a sale that included among the assets sold the name “Chitwood’s Cabinets.”

10. Paragraph 6(H) of the agreement further reflects that Mr. Chitwood agreed to be the qualifying party for Deborah and Wayne Morris using Respondent’s contractor’s license number 143375 until they got their own license. Even though Mr. Chitwood admitted that he continued to keep the license current, he further testified that he informed Deborah and Wayne Morris that they would need to acquire their own contractor’s license from the Registrar after the sale of the company assets. He further testified that he never authorized them to display Respondent’s contractor’s license number on their contracts and that when he found out after the subject Complaint was filed that they had been using Respondent’s license, he demanded that they immediately stop. Mr. Chitwood also disclosed that Deborah and Wayne Morris still owe him $40,000.00 under the purchase and sale agreement.

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,

1. Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

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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. Although there is no dispute that there has been abandonment of a contract or refusal to perform without legal excuse for the abandonment or refusal, the evidence presented does not support a finding that it was Respondent that abandoned the contract or refused to perform work. The evidence is uncontradicted that Respondent sold the assets of the business in 2011, including the Chitwood Cabinets name. Mr. Chitwood testified that he was no longer involved with the business after the sale.

6. It is acknowledged that the purchase and sale agreement reflects that Mr. Chitwood agreed to be the qualifying party for Deborah and Wayne Morris using Respondent’s contractor’s license number 143375 until they obtained their own license and that Mr. Chitwood continued to keep the license current. However, there was no evidence presented that Mr. Chitwood would have any reason to believe that Deborah and Wayne Morris would still have failed to obtain their own contractor’s license over five years later. Perhaps Mr. Chitwood should have been more diligent in monitoring whether Deborah and Wayne Morris had been able to obtain their own contractor’s license at some point in time. However, while the Tribunal can certainly sympathize with Complainant’s plight, Mr. Chitwood’s failure to do so does not support a determination that the contract was abandoned by Respondent, rather than by the other individuals or entity with which Complainant dealt.

7. It was undisputed that Mr. Chitwood had no dealings with Complainant prior to the filing of the Complaint. There was further no evidence presented to show that Mr. Chitwood had any business relationship with the individuals or entity that entered into and apparently abandoned the subject contract with Complainant.

8. Accordingly, Complainant has not established that Respondent’s license should be disciplined for a violation of A.R.S. § 32-1154(A)(1) 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-2148 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, August 25, 2017.

/s/ Roger Geddes

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors