ALJDEC decisions subject to certification as final

2019A-01368-RFA-ROC-RES · Registrar of Contractors · 2020-07-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Michael Sean Banman,

COMPLAINANT

R & C Development LLC,

License No. ROC 296418,

RESPONDENT

No. 2019A-01368-RFA-ROC-RES

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 22, 2020

APPEARANCES: Complainant Michael Sean Banman appeared on his own behalf. Respondent R & C Development LLC was represented by Justin Gowan. The Arizona Registrar of Contractors was represented by Assistant Attorney General John R. Tellier.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

The Arizona Registrar of Contractors (Registrar) issued License No. 296418 to Respondent.

On or about March 18, 2019, the Registrar received a Complaint against Respondent from Complainant alleging that Respondent abandoned the project and performed poor work (Workmanship Complaint).

On or about May 13, 2019, Investigator Beau Cruz issued a Directive from the Registrar (Written Directive) in which Respondent was instructed to ensure that any and all required building permits were obtained from the Local Building Authorities prior to making the corrections. The items needed to be corrected were listed as follows:

Complaint Item 3: Water leak after water line extended, drywall still not replaced

Repair area of drywall that was removed on east (E) wall of garage.

Complaint Item 8: Pot filler unfinished

Install pot filler faucet over the stove area located, on west (W) wall of the kitchen.

Complaint Item 9: Glass sliding doors never installed

Install glass sliding doors on (E) wall of Great Room as per agreement between the parties.

Complaint Item 11: Painting not completed

Properly reset all hinge pins on the doors and, remove masking tape from door hardware.

Complaint Item 12: Poor workmanship on counters

Correct readily visible seam in the quartz Island countertop of the kitchen and seam is not smooth, correct by appropriate means, the irregular rounded corners on the kitchen quartz countertops.

Complaint Item 13: Shims showing under sink

Wide exposed gap/reveal below the curved apron of the “Farmhouse” style stainless steel kitchen sink and face of base cabinet in the kitchen, with exposed shims also noted.

Complaint Item 17: Never painted garage or patched wall where his plumbing leaked

Repair area of drywall that was removed on east (E) wall of garage.

Complaint Item 23: Bypass closet doors are missing floor guides.

All bypass closet floors are missing floor guides

All errors in original.

On or about July 19, 2019, Investigator Cruz conducted a compliance inspection and made the following relevant observations:

Complaint Item 3: . . . . Respondent repaired area of drywall on the east (E) wall although, failed to paint area of repaired drywall (P-3). Respondent failed to fully comply per directive regarding complaint item 3.

. . . .

Complaint Item 9: . . . . Respondent failed to comply per directive regarding complaint item 9, failed to install glass sliding doors on east (E) wall of Great Room (P-5).

. . . .

Complaint Item 12: . . . . Respondent failed to comply per directive, seam still readily visible and not smoot[h] at the east (E) end of seam and, chipped countertop at edge of seam (P6, 7 & 8).

As a result of the Workmanship Complaint, the Registrar issued a Citation against Respondent charging possible violations of A.R.S. § 32-1154(A)(2); A.R.S. § 32-1154(A)(3), namely A.A.C. R4-9-108; A.R.S. § 32-1154(A)(12), namely A.R.S. § 32-1158; and A.R.S. § 32-1154(A)(22).

Respondent failed to file an answer to the Citation. As a result, the Registrar of Contractors issued a Final Administrative Decision and Order finding that Respondent violated the provisions of A.R.S. § 32-1154(A)(2), (3), (12), and (22) and imposed a four day suspension.

Complainant then filed a claim with the Residential Contractors’ Recovery Fund (the Fund) to recover the cost of completing the project. As part of the claim process, Complainant submitted bids from four different contractors that Complainant had received to complete the project.

The Registrar issued a Notice of Claim for Administrative Payout, finding that Complainant’s actual damages were $15,959.69. Respondent requested a hearing, believing the payout was too high. Complainant did not contest the amount of the administrative payout. The Registrar referred the matter to the Office of Administrative Hearings (OAH) for an evidentiary hearing, which was held on June 22, 2020.

Douglas Ulmer, Legal Assistant II for the Fund, testified that he reviewed the Written Directive from the Registrar, Investigator Cruz’s findings during the compliance inspection, and the bids submitted by Complainant in calculating Complainant’s actual damages. Mr. Ulmer concluded that the total contract price was $39,897.74, of which Complainant had paid a total of $37,781.00, leaving an unpaid balance of $2,116.74. It was noted that two of the payments were made directly to World Class Woodworking LLC in the amounts of $7,900.00 and $5,716.00. The two bids considered to complete the work were from Val West Construction in the amount of $14,377.30 and from Custom Stone Works in the amount of $3,699.13, for a total cost of $18,076.43 to Complainant. Reducing the total cost by the amount still owing on the original contract, $2,116.74, resulted in the proposed payout of $15,959.69.

Respondent argued that the payments Complainant made directly to World Class Woodworking LLC should not have been considered as payments on the underlying contract. Respondent argued the parties never had a contract for the installation of the glass sliding door and, as such, the cost to install the sliding glass door should not have been included in the payout from the Fund.

A number of different invoices were submitted in an attempt to establish the terms of the contract between Complainant and Respondent. A review of all the invoices was not definitive in establishing the terms of the agreement. While the initial invoice dated June 5, 2018, indicated a total cost of $26,270.84, an updated invoice dated September 5, 2018, indicated a total cost of $14,504.24, with a payment of $17,000.00 leaving a balance of $2,495.76 to be applied to the sliding glass door. The invoice for the sliding glass door was $13,000.00. The invoice for the cabinets was $13,626.90, of which, Complainant paid $13,616.00 directly to the cabinet subcontractor.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

A.R.S. § 32-1132(A) provides that “[a]n award from the fund is limited to the actual damages suffered by the claimant as a direct result of the contractor's violation but shall not exceed an amount necessary to complete or repair a residential structure or appurtenance within residential property lines. . . .” Respondent bears the burden of proof to establish that the proposed payout from the Fund is incorrect 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.” 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.”

Respondent had an opportunity to challenge the findings of Investigator Cruz and the Citation from the Registrar. However, because of Respondent’s failure to respond to the Citation, the items identified in the Written Directive as needing to be corrected cannot be contested in this venue. The only question in this matter is the amount of Complainant’s actual damages.

A review of all the invoices submitted leads one to the following understanding of the parties’ agreement: The initial contract for $26,270.84 was amended and reduced to $14,504.24; the cabinet contract was added for $13,626.90; and the sliding glass door contract was added for $13,000.00. This resulted in a total contract price of $41,131.14. Of that, Complainant paid $24,165.00 to Respondent and $13,616.00 to World Class Woodworking LLC. Accordingly, the total contract price was $41,131.14 with total payments of $37,781.00, leaving an unpaid balance of $3,350.14.

The total cost of repairs totaling $18,076.43, less the unpaid balance of $3,350.14 results in Complainant’s actual damages of $14,726.29.

After review of all the evidence, the Tribunal concludes that a payout from the Fund of $14,726.29 accurately reflects Complainant’s actual damages.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, Complainant receive a payout from the Residential Contractors’ Recovery Fund in the amount of $14,726.29.

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.

-54864001

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-137160-45720000Done this day, July 13, 2020.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

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-137160-45720000