ALJDEC decisions subject to certification as final

2019A-01092-CHC-ROC · Registrar of Contractors · 2019-09-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 15, 2019 APPEARANCES: Michael Harman appeared on behalf of Genie Investment Company Inc. (Complainant). Respondent failed to appear. ADMINISTRATIVE LAW JUDGE: Antara Nath Rivera _____________________________________________________________________ FINDINGS OF FACT Timberland Electrical Service LLC (Respondent) is the holder of License No. 240056 issued by the Arizona Registrar of Contractors (ROC). On August 13, 2018, Michael Harman (Mr. Harman), owner of Genie Investment Company Inc., entered into a written contract with Respondent to update electrical service and wiring of two adjacent residential homes. The homes were located at 401 West 5th Street, Tempe, Arizona, 85281 and at 408 South Farner, Tempe, Arizona, 85281. On or about March 5, 2019, the ROC received a Complaint against Respondent from Complainant alleging that Respondent abandoned the project because it never started work on the project after it received a deposit. The ROC assigned the complaint to Investigator Dennis Bierma (Investigator Bierma). On April 26, 2019, Investigator Bierma conducted a jobsite inspection. On May 1, 2019, Investigator Bierma issued a written Directive From the Registrar (Directive) to Respondent that provided as follows: After investigation, the Registrar has substantiated that your work fails to meet minimum workmanship standards (see A.A.C. R4-9-108). Failure to comply with this Directive constitutes a violation of A.R.S. § 32-1154(A)(22) and may result in the issuance of a Citation, discipline of your license and a civil penalty pursuant to A.R.S. § 32-1154(E) of up to $500.00. Failure to comply with this Directive may also be treated as an aggravating factor should the Registrar pursue discipline of your license, You must provide the Registrar with satisfactory written proof of your compliance with this Directive prior to 5:00 p.m. on May 28, 2019. You are hereby directed to remedy the following violations by the appropriate means: Complaint Item #1: “The contractor took $7,000.00 deposit but never started the job.” • Respondent shall complete project per original contract agreement, properly executed change orders, verbal agreements, local building codes and manufacturers installation instructions.

All errors in original.

Following the issuance of the written Directive, Investigator Bierma did not have any contact with Respondent. After the deadline in the directive expired, Complainant notified Investigator Bierma that Respondent did not contact Complainant nor comply with the Directive. On May 29, 2019, the ROC issued a Citation against Respondent, charging possible violation of A.R.S. § 32-1154(A)(1) and A.R.S. §32-1154(A)(22). The ROC referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. The ROC issued a Notice of Hearing, setting a hearing at 8:30 a.m. on August 15, 2019. The ROC mailed a copy of the Notice of Hearing to Respondent at its address of record. The Notice of Hearing informed the parties that “[f]ailure to attend the scheduled hearing is likely to result in an adverse ruling against you.” Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the hearing was delayed 20 minutes, Respondent did not appear through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence to defend its license. Respondent filed its Answer to the Citation on August 6, 2019. In its Answer, Respondent indicated that it went out of business on December 31, 2018. Respondent stated that it filed for bankruptcy, but did not provide any additional information regarding that case. Respondent opined that “[t]his is an unfortunate financial situation for Michael Harmon of untimely circumstances.” At hearing, Investigator Bierma testified that, on April 26, 2019, he observed that the electrical work had not begun. Investigator Bierma stated that Respondent was not present during the inspection. Investigator Bierma testified that there was no corrective work done or settlement reached between the parties. Investigator Bierma stated that the ROC issued a Citation on May 29, 2019 for abandonment and failure to comply with the Directive. Investigator Bierma testified that he had no knowledge that Respondent filed for bankruptcy. At hearing, Mr. Harman testified that, on August 16 2018, the parties negotiated a bid and entered into a written contract, whereby Respondent was hired to update the electrical system for two residential homes. Mr. Harman stated that, on September 4, 2018, he paid Respondent a $7,000.00 deposit. He added that the total amount of the contract was $13,968.00. Mr. Harman stated that after two months, he finally heard from Respondent. He stated that on November 21, 2018, he received an email from Respondent. Respondent informed Mr. Harman that it contacted the Arizona Public Service Company (APS) to perform work. Mr. Harman stated that there was no communication prior to this email and he had no knowledge of Respondent’s contact with APS. Mr. Harman stated that, on November 26, 2018, he went to APS to inquire about his project. He stated that APS informed him of the work that was done at the property and presented him with a work order. Mr. Harman stated that he paid APS $1,744.70 for the work performed by APS. Mr. Harman testified that on December 27, 2018, Respondent informed him that it was going out of business. As a result of Respondent’s abandonment, Mr. Harman suffered financial loss from the monies that he paid as well as loss of rent. Respondent did not request to appear telephonically and did not request that the hearing be continued. Although the start of the hearing was delayed 20 minutes, Respondent did not appear through an authorized member, employee, or attorney. Consequently, Respondent did not present any evidence to defend its license. Administrative notice is taken of Respondent’s License record on September 3, 2019. Such prior License record reflects that Respondent’s License No. 240056 was first issued on December 13, 2007 and is currently active. Such prior License record also reflects that there are two open complaints, one is presumed to be related to this matter. CONCLUSIONS OF LAW 1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32- 1101 et seq. The copy of 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. See A.R.S. §§ 41-1092.04 and 41-1092.05(D). 2. The copy of the Notice of Hearing that the ROC mailed to Respondent Complainant at its address of record and was reasonable and Respondent is deemed to have received notice of the hearing. See A.R.S. §§ 41- 1092.04 and 41-1092.05(D) 3. Complainant bears the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 4. The evidence clearly established that Respondent abandoned the project, by not beginning the project, upon receiving a payment of $7,000.00. Therefore, Complainant proved, by a preponderance of the evidence, that Respondent abandoned the contract without legal excuse for the abandonment in violation of A.R.S. § 32-1154(A)(1).[1] 5. Furthermore, Complainant established that Respondent failed to take appropriate corrective action following a written Directive from the Registrar in violation of A.R.S. § 32-1154(A)(22).[2] 6. A.R.S. § 32-1156.01 provides that “[a]fter a hearing pursuant to this article, an administrative law judge may recommend that a licensee provide restitution to any person who is injured or whose property is damaged by an action of the licensee.” 7. The evidence presented established Complainant paid Respondent a $7,000.00 deposit. Complainant's total damages were $7,000.00. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Order, the ROC shall revoke Respondent’s License No. 240056. It is further recommended that the ROC require Respondent to pay to Complainant the sum of $7,000.00 as restitution pursuant to A.R.S. § 32- 1156.01. It is further recommended that if Respondent fails to pay the entire amount of the restitution on or before thirty days following the effective date of the Registrar’s final order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding restitution. It is further recommended that the Registrar require Respondent to pay the sum of $500.00 as a civil penalty pursuant to A.R.S. § 32-1154(E). It is further recommended that if Respondent fails to pay the entire amount of the civil penalty on or before thirty days following the effective date of the Registrar’s final order, the Registrar revoke Respondent’s license, effective on such deadline date. No future license shall be issued to any entity consisting of persons associated with Respondent, as defined in A.R.S. § 32-1101(A)(5), unless Respondent tenders payment of any outstanding prior civil penalty. 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 40 days from the date of that certification. Done this day, September 3, 2019.

/s/ Antara Nath Rivera Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] A.R.S. § 32-1154(A)(1) includes among the grounds for suspension, revocation, or other disciplinary action against 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.” [2] 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