ALJDEC decisions subject to certification as final

2018A-3272-ROC · Registrar of Contractors · 2019-04-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: March 22, 2019, at 8:30 a.m. APPEARANCES: Pamela Records (“Complainant”) appeared on her own behalf; A 2 Z Garage Door Services LLC (“Respondent) appeared through Katie Daggett, its member, and Lyle Joel Daggett, its qualifying party/member. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. According to the Arizona Registrar of Contractors’ (“the Registrar’s”) public website,[1] on April 3, 2008, the Registrar issued License No. ROC 243721, Class CR-5 for Specialty Dual Garage Walls and Doors As Restricted by the Registrar to Respondent. Respondent’s former address of record was 550 S. Cheery Lynne Drive in Chandler, Arizona. Respondent’s business was servicing garage doors. 2. On July 18, 2018, Complainant filed a complaint with the Registrar, alleging that Respondent had performed poor work at and abandoned a February 17, 2018 contract to convert Complainant’s carport into a garage and related work at Complainant’s residence at 136 West Moon Valley Drive, Phoenix, Arizona 85023, after Complainant had paid Respondent $26,919.00 on a $26,000.00 contract. 3. Complainant attached to her July 18, 2018 complaint checks she had written for the work, as follows: (1) Her personal check dated February 18, 2018, in the amount of $4,800.00, made payable to “A 2 Z Garage Doors or John Lawson”; (2) Her two personal checks, both dated March 3, 2018, in the amounts of $2,000.00 and $2,500.00, which were both made payable to John Lawson; (3) Her personal check dated March 8, 2018, in the amount of $2,500.00 made payable to John Lawson; (4) Her personal check dated March 14, 2018, in the amount of $4,000.00 made payable to John Lawson; (5) Her personal check dated March 28, 2018, in the amount of $2,390.00 made payable to John Lawson; (6) Her personal check dated April 5, 2018, in the amount of $2,500.00 made payable to John Lawson, (7) Her personal check dated April 17, 2018, in the amount of $2,500.00 made payable to John Lawson; (8) Her personal check dated April 24, 2018, in the amount of $1,000.00 made payable to John Lawson; and (9) Her personal check dated May 21, 2018, in the amount of $500.00 made payable to John Lawson. John Lawson signed all ten checks to endorse them. 4. The complaint was assigned to the Registrar’s Investigator Timothy Pennington for investigation. Investigator Pennington performed a jobsite inspection on August 18, 2018. Mr. Lawson attended the jobsite inspection on behalf of Respondent. On August 15, 2018, the Registrar issued a directive to Respondent requiring it to remedy certain deficiencies on or before September 9, 2018, in relevant part as follows: 1. Job is not completed per contract.

2. The Respondent is to ensure that any and all required building permits are obtained from the Local Building Authorities prior to making corrections listed in this Directive.

3. Respondent shall complete project per original contract agreement, properly executed change orders, verbal agreements, local building codes and manufacturer’s installation instructions.

5. On September 27, 2018, Complainant filed an addendum to her complaint, providing additional detail for the alleged workmanship deficiencies. Investigator Pennington performed another jobsite inspection. On November 6, 2018, the Registrar issued a second directive to Respondent that tracked the language of Complainant’s more detailed list of construction deficiencies. 6. On November 27, 2018, Investigator Pennington performed a compliance jobsite inspection. His compliance jobsite inspection notes state that “[w]ork not completed per the Directive sent out in the mail to both parties [o]n 11/6/2018.” 7. Investigator Pennington referred the matter to the Registrar’s Legal Department. On November 28, 2018, the Registrar issued a Citation against Respondent’s contractor’s license, charging cause to suspend or revoke the license under A.R.S. § 32-1154(A)(1), A.R.S. § 32- 1154(A)(3), namely A.A.C. R4-9-108, and 32-1154(A)(22).[2] 8. Mrs. Daggett filed a written answer to the Citation that stated in relevant part as follows: We beg for your understanding that [Respondent] is not liable for this Complaint. John Lawson used our license in measures that he had no permission to do. These are not the actions of [Respondent]. All the monies were made payable to John Lawson and [Respondent] received no money from [Complainant]. You can see this by viewing the checks attached to the Citation. The Checks were made payable directly to John Lawson. The checks were also cashed by John Lawson.

Also, attached to the Citation it shows the invoice provided to [Complainant]. The invoice is not an invoice of [Respondent]. We have used the same invoices for over 10 years. . . .

9. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 10. A hearing was held on March 22, 2019. Complainant submitted twelve exhibits, testified on her own behalf, and presented the testimony of her daughter, Mikki Records Owens. Respondent submitted fourteen exhibits and presented the testimony of its principals, Mrs. and Mr. Daggett. Because Investigator Pennington had left the Registrar’s employment, Investigator Jim Dimond testified about the Registrar’s investigation. Additional Hearing Evidence 11. Complainant’s husband of 46 years died recently. She and her husband and discussed turning their carport into a garage before he died. After his death, she decided to go forward with the project because she would feel more secure if passersby could not see the number of vehicles at her house. 12. Complainant testified that a neighbor had hired John Lawson to enclose his carport. The neighbor said that Mr. Lawson did good work, but did not meet deadlines. Complainant testified that before she hired Mr. Lawson, she called the Registrar and that Jack Grimm informed her that the contractor’s license number that Mr. Lawson provided was current and in good standing. 13. Mrs. Daggett testified that Mr. Lawson is her father. Until she and her husband recently moved to Colorado with their children, she would see her father from time to time. When she was 21, he went to prison for five years for defrauding 32 elderly investors. Her relationship with her father has been toxic, although she acknowledged that she does talk to her father on occasion and, in 2018, and celebrated her 40th birthday with her husband, children, and her father on a river cruise. 14. Mrs. Daggett testified that her brother, his wife, their four children, and Mrs. Daggett’s mother lived with her father at 11603 San Tan Court and that he is the sole support of the family. Her father used to have two contractor’s licenses but lost them. Mrs. Daggett testified that since early 2018, her father has been using Respondent’s license without Mrs. and Mr. Daggett’s consent. Mrs. Daggett testified that Mr. Lawson uses a different invoice than Respondent’s invoice and submitted samples of both invoices.[3] 15. Mrs. Daggett pointed out that Mr. Lawson used Respondent’s address on S. Cheery Lynn and Respondent’s license number on the invoices, but used his own mobile number and email address. Mrs. Daggett testified that Mr. Lawson never lived with her family at the S. Cheery Lynn address, but resided with his family on San Tan Court a few miles away. 16. Mrs. Daggett testified that three property owners and one material supplier have filed complaints with the Registrar against Respondent based on Mr. Lawson’s unauthorized actions. Mrs. Daggett testified that she and her husband have tried to resolve the complaints. 17. Mrs. Daggett testified that Respondent would never have undertaken Complainant’s project because it is beyond the scope of Respondent’s license. Most of the service work that Respondent performed was for less than $100. If it replaced a garage door, it might cost $400 or $500. 18. Mr. Daggett testified that he first heard about the work that Mr. Lawson did for Complainant when her daughter Mrs. Owens called Respondent on June 13, 2018. Mr. Daggett testified that he was shocked, but told Mrs. Owens that he would call Mr. Lawson. Mr. Lawson denied everything but agreed to send some laborers out to perform repairs. Mr. Daggett testified that Respondent does not employ laborers. Mr. Daggett testified that he called Mrs. Owens back and told her that Mr. Lawson would send some laborers to finish the job. 19. Mr. Daggett acknowledged that he did not tell Mrs. Owens on June 13, 2018, that Mr. Lawson was not working for Respondent and that Respondent was not responsible for his work. 20. Mrs. Daggett testified that personnel at the Registrar told her to file an unlicensed contractor complaint against Mr. Lawson for using Respondent’s license. Although she felt bad about depriving his family of income if he were convicted of a crime, she filed the complaint and tried to cooperate with the Registrar’s investigator. 21. Investigator Dimond testified that he performed a prehearing inspection on February 25, 2019, and learned that no work had been done. 22. Investigator Dimond testified that the Registrar’s Legal Department closed Mrs. Daggett’s unlicensed complaint against Mr. Lawson because it concluded Mr. Lawson was Respondent’s agent. Investigator Dimond did not disclose the evidence that supported that conclusion. 23. Investigator Dimond testified that he did a Google search on Mr. Lawson and that the results showed both the S. Cheery Lynn address and the San Tan Court address. 24. The Registrar’s public website includes an article for consumers, “Before You Hire A Contractor,” including the following advice: Verify the person you are negotiating your project with is an authorized representative of the licensed contractor by calling the contractor’s number listed on the ROC license record. . . . .

Some payment guidelines to consider: . . . .

[pic]Make checks payable to the name of the company/ contractor listed in your signed contract. [pic]Never make a check payable to individuals or companies not listed in your contract. [pic]Do not allow payments to get ahead of the work.[4]

25. Toward the end of the hearing, after the Administrative Law Judge asked Complainant if she had any contact with Mr. and Mrs. Daggett before she hired or paid Mr. Lawson, Complainant stated that she called Mr. Daggett on April 23, 2018, and that Mr. Daggett told her that Mr. Lawson was Respondent’s employee. 26. Mr. Daggett testified that he remembered his June 13, 2018 conversation with Mrs. Owens, but that he did not remember talking to Complainant in April 2018. 27. The Daily Journal that Complainant attached to her original complaint and submitted into evidence does not shown any call to Mr. Daggett in April 2018.[5] Her exhibits do show Mrs. Owens’ June 13, 2018 call to Mr. Daggett.[6] 28. Mrs. Daggett testified that she and her husband tried to sell Respondent’s business of servicing garage doors before they and their family moved to Colorado to have a nest egg to make a new start. Because Mr. Lawson had performed other jobs using Respondent’s license and Mr. and Mrs. Daggett did not know about, some customers had written angry reviews on Yelp. Mrs. Daggett testified that the any reviews prevented her and her husband from selling their business. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction.[7] 2. Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s license by a preponderance of the evidence.[8] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[9] 3. “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[10] 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.”[11] 4. Mr. and Mrs. Daggett credibly denied that Mr. Lawson was ever authorized to act for Respondent, that they did not know that Mr. Lawson had undertaken Complainant’s project until June 13, 2018, well after he started the project and after he had been paid in full for the project, and that they never told Complainant or Mrs. Owens that Mr. Lawson was Respondent’s employee. Complainant’s testimony that Mr. Daggett told her on April 23, 2018, that Mr. Lawson was Respondent’s employee is not credible in light of the other evidence in this case. The results of Investigator Dimond’s Google search does not indicate that Mr. and Mrs. Daggett, as opposed to Mr. Lawson, disseminated information that connected Mr. Lawson to Respondent’s address on S. Cheery Lynn or to Respondent. 5. There is no direct evidence that Mr. Lawson worked for or was an agent of Respondent. In such cases, “The ostensible agent is one where the principal has intentionally or inadvertently induced third persons to believe that such a person was its agent although no actual or express authority was conferred on him as an agent.”[12]

Under the circumstances of this case, Complainant did not establish that Respondent’s principals did anything to make Mr. Lawson its ostensible agent. Complainant did not take the steps that the Registrar advises consumers to take to ensure that they are dealing a licensed contractor instead of a person who is using the license without the licensed contractor’s authority. Although the result in this case is unfortunate, Complainant did not establish cause to suspend or revoke Respondent’s contractor’s license under A.R.S. § 32-1154(A)(1),[13] A.R.S. § 32- 1154(A)(3),[14] namely A.A.C. R4-9-108,[15] and 32-1154(A)(22).[16] RECOMMENDED ORDER Based on the foregoing, it is ordered that Complainant Pamela Records’ complaint in Case No. 2018A-3272-ROC against Respondent A 2 Z Garage Door Services LLC’s License No. ROC 243721 shall be dismissed. 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, April 4, 2019.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See A.A.C. R4-9-117 (“In any disciplinary proceeding conducted by the registrar, the licensee’s entire license file including the record of prior citations and decisions may be considered by the registrar in making a decision and order in the case.”). [2] See the Registrar’s electronic file at Rch424 Citation Multiple Charges Workmanship W221.pdf. [3] Compare Respondent’s Exhibit 1, 2, and 3 with Respondent’s Exhibit 4. [4] Respondent’s Exhibit 12. [5] See Complainant’s Exhibit 9 at 12. [6] See Complainant’s Exhibit 8. [7] See A.R.S. § 32-1154(A). [8] 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). [9] See A.A.C. R2-19-119(B)(2). [10] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [11] Black’s Law Dictionary at page 1220 (8th ed. 1999). [12] Gulf Insurance Co. v. Grisham, 126 Ariz. 123, 126, 613 P.2d 283, 286 (1980) (quoting Canyon State Canners v. Hooks, 74 Ariz. 70, 74, 243 P.2d 1023, 1025 (1952)) (emphasis added). [13] A.R.S. § 32-1154(A)(1) includes among the grounds to suspend or revoke 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.” [14] A.R.S. § 32-1154(A)(3) includes among the grounds to suspend or revoke a contractor’s license, “[v]iolation of any rule adopted by the registrar.”

[15] A.A.C. R4-9-108 requires that “[a]ll work shall be performed in a professional and workmanlike manner” and that “[a]ll work shall be performed in accordance with any applicable building codes and professional industry standards.” [16] A.R.S. § 32-1154(A)(22) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure 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.”

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826