ALJDEC decisions subject to certification as final

2017A-4761-CHC-ROC · Registrar of Contractors · 2018-01-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

June K Humphrey,

COMPLAINANT,

v.

R P M Building and Design LLC ,

License No: 227163

RESPONDENT

No. 2017A-4761-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 9, 2018, at 8:30 a.m.

APPEARANCES: David Humphrey (“Mr. Humphrey”, personal representative for the Estate of June K. Humphrey “Complainant”); Marie Humphrey (“Mrs. Humphrey” observer for Complainant); and Arlo Houston (“Investigator Houston” for the Registrar of Contractors “Registrar” or “ROC”).

NON-APPEARANCE: R P M Building and Design LLC (“Respondent”).

ADMINISTRATIVE LAW JUDGE: Linda Marie Brown

_____________________________________________________________________

The hearing convened to determine whether Respondent violated the charged provision of A.R.S. §§ 32-1154(A)(1) as alleged by Complainant and as cited by the Registrar. Complainant entered Exhibits labeled C1 through C18. Testimony and evidence were presented. The following Findings of Fact, Conclusions of Law and Recommended Order are made.

FINDINGS OF FACT

According to the public website of the Registrar of Contractors (“Registrar”), on or about November 24, 2006, License No. 227163 for General Residential Contract contracting was issued to R P M Building and Design, LLC. Respondent’s address of record is 4808 E. Hawthorne St., Tucson, Arizona 85711-1250.

On or about September 14, 2017, David Humphrey (“Mr. Humphrey”) acting under the authority of a Power of Attorney for June K. Humphrey, now acting under the authority of Personal Representative for the Estate of June K. Humphrey (“Complainant”) filed a complaint with the Registrar against Respondent’s license based on its alleged abandonment of its contract to rebuild a custom home that was initially destroyed by fire.

Work was to be performed at the residence address located at 11301 East St. James Road, Tucson, Arizona, 85748. On February 4, 2015, the address was officially changed by the Pima County Development Services from 11301 E. St. James Road to 11240 E. Timrod Street. Complainant alleged that the construction contract was entered into on November 11, 2013, and that an addendum was later executed between the parties on April 13, 2015 to build a garage on the property.

Complainant alleges Respondent was paid $553,987.45 of the $699,484.35 contract price. Complainant further alleges additional charges and cost incurred.

Complainant provided copies of cancelled checks made payable to Respondent, as follows:

Date Check No. Amount

11/05/2013 1404 $198,375.00

05/27/2014 1097 $ 72,750.00

05/27/2014 1098 $ 72,750.00

12/08/2014 2310 $ 72,750.00

04/24/2015 2275 $ 26,453.70

05/01/2015 2276 $ 52,907.40

01/04/2016 3348 $ 30,000.00

04/14/2016 3351 $ 8,126.35

The Registrar assigned the complaint to its Investigator Arlo Houston to investigate the complained of issues. On September 18, 2017, Investigator Houston sent a letter to Complainant and Respondent at its address of record to notify them that he had scheduled a jobsite inspection on October 11, 2017.

On October 2, 2017, Respondent submitted a written response to Complainant’s complaint stating, among other things,

“On or about April 01, 2017 I informed Mr. David Humphrey that I was having financial trouble (as well as dealing with escalating medical issues) and that I could not pay for the next two stages of work needing completion to get through to draw #5 , specifically the installation of the insulation and drywall. In order to achieve the next two steps of work it was necessary to spend $13,300.00 on my part. At the time I had funding available to provide the $3300.00 required for installation of the insulation but I was short the funds for the drywall portion of $10,000.00 an amount for the drywall portion, only for the insulation.”

And further argues that surrounding the addendum for the garage, “A balance of $5907.40 remained from the $52,907.40 deposit collected for construction. That remaining amount was to be used for the concrete slab materials and labor required for the finished garage floor.”

And alleges, “Work on the project was stopped completely by RPM Building & Design llc. as of April 01, 2017 upon notice of Mr. David Humphrey’s intent to hire another contractor to complete the project. Prior to that point in time work on the project had been completed up through the month of February 2017 and for a period of time after the main structures Intermediate inspections had been completed as previously stated.”

The jobsite inspection took place on Octobers 11, 2017. David Humphrey was present on behalf of Complainant, and Robert Murray was present on behalf of Respondent. Investigator Houston noted that at the time of inspection, the Respondent has not completed the agreed upon work. More specifically, he noted, Complaint Item 1, “construction of garage abandoned in March 2017”, Investigator’s Observation: substantiated. At time of jobsite inspection, I observed that work per contract was not completed; and Complaint Item 2, “construction of home abandoned during 2016”, Investigator’s Observation: substantiated. At time of jobsite inspection I observed that work per contact was not completed. Photographs were taken by Investigator Houston at the time of the inspection.

Investigator Houston referred the matter to the Registrar’s Legal Department with the recommendation that Respondent be charged with abandonment.

On October 18, 2017, the Registrar issued a Citation, charging cause to discipline Respondent’s license under A.R.S. § 32-1154(A)(1). The Registrar sent the Citation to Respondent by certified and regular mail at its address of record.

On November 2, 2017, Respondent filed a written answer to the citation, denying that cause existed under the charged statute to discipline his license, and requesting a hearing.

The Registrar referred the matter to the Office of Administrative Hearings (“OAH”), an independent agency, for an evidentiary hearing.

On November 15, 2017, the Registrar issued a Notice of Hearing, setting hearing on January 9, 2018, at 8:30 a.m. The Registrar mailed the Notice of Hearing to Respondent at its address of record.

A hearing was held on January 9, 2018. Investigator Houston testified. Complainant submitted Exhibits C-1 through C-18, and presented testimony.

Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the duly noticed hearing was delayed twenty minutes to allow Respondent additional time to appear, Respondent did not appear through an authorized member, employee, or attorney, and did not contact the OAH to request that the start of the hearing be further delayed. Consequently, Respondent did not present any evidence to defend its license.

Investigator Houston reaffirmed his findings of abandonment and further testified that a prehearing inspection was conducted on January 8, 2018 at 9:00 and that several items were left incomplete, including drywall work, and no concrete slab being poured.

Mr. Humphrey testified as to his involvement in the matter as an agent acting under a Power of Attorney executed by his mother, June K. Humphrey. He stated that his mother has since passed away and he was appointed on November 27, 2017, by the Superior Court of Pima County (PB20171479), to serve as Personal Representative of the Estate of June K. Humphrey.

Mr. Humphrey testified that an informal settlement was scheduled for December 7, 2017, and cancelled by Respondent’s attorney, Udall Law Firm, LLP.

Mr. Humphrey stated that the house is still left unfinished, specifically, no drywall has been installed and the concrete slab has not been poured.

He also entered as Exhibit C-18, a Motion to Dismiss Adversary Proceeding (Case No. 4:17-BK-09025-BMW), filed in the United Bankruptcy Court in and for the District of Arizona, by Respondent’s attorney, and references page 4 of 7, Lines 8 – 11, wherein he asserts that Respondent allegedly admits abandonment, by stating in its Motion that, “In fact, the Contract was entered in November 2013, but the failure to perform did not occur until 2017.”

CONCLUSIONS OF LAW

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.

Complainant bears the burden of proof to establish cause to suspend or revoke Respondent’s license by a preponderance of the evidence. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”

Complainant established that Respondent abandoned performance of its contract with Complainant without legal excuse as it pertains to the contractual installation of drywall and pouring of concrete. Therefore, Complainant 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, R P M Building and Design LLC, License No. 227163 shall be revoked.

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 forty days from the date of that certification.

Done this day, January 29, 2018.

s/ Linda Marie Brown

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors