ALJDEC decisions subject to certification as final

2020A-02196-CHC-ROC · Registrar of Contractors · 2020-11-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Big Kahuna Construction Corp,

COMPLAINANT

Robert L Stellwagen Jr.,

DBA: Bob Stellwagen Electrical Contractor,

License No. ROC 316432,

RESPONDENT

No. 2020A-02196-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: October 15, 2020

APPEARANCES: Scott Klarkowski for Complainant; Elizabeth Delnegro, Esq. for Respondent

ADMINISTRATIVE LAW JUDGE: Thomas Shedden

FINDINGS OF FACT

On August 28, 2020, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on September 28, 2020 at the Office of Administrative Hearings.

The matter was continued and the hearing was conducted on October 15, 2020.

Through the Notice of Hearing ROC alleges that Respondent Robert L. Stellwagen Jr. d.b.a. Stellwagen Electrical Contractor may have violated Ariz. Rev. Stat. section 32-1154(A)(3). Respondent holds license number 316432 issued by ROC.

Complainant is Big Kahuna Construction Corp. that holds license number 226900. Scott Klarkowski is Complainant’s qualifying party and president; his wife Julie Klarkowski is vice-president.

Complainant hired Respondent to perform electrical work at several properties.

Complainant filed with ROC a complaint against Respondent alleging abandonment of the project located on Lake Forest Drive in Sun City. The Klarkowskis own that property, which they intended to “flip.” The administrative record shows there also was disagreement between the parties at the other projects.

In its complaint, Complainant alleged that Respondent had not completed the electrical “trim out” work.

Complainant acknowledged that it has not fully paid Respondent for the work at issue, but asserted that the remaining balance of $1500 was not due because the work was not finished.

ROC investigator Mike Wiskow conducted a jobsite inspection on June 2, 2020. Mr. Wiskow’s central findings were to the effect that the parties had a contract dispute, that Respondent had not fully completed its work, and that Complainant had been expecting Respondent to perform some work outside the scope of the contract.

On June 2, 2020, ROC issued to Respondent a Directive that provides in part:

....You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on June 23, 2020.

***

DIRECTIVE REQUIREMENTS

You are directed to remedy the following violations by the appropriate means:

Compliance Item: 1 - Contractor will not come out to trim out electrical

Investigator’s Observation: Electrical trim is not finished.

-Contractor should complete the construction project per contract.

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

ROC issued to Respondent a Citation dated July 17, 2020, though which ROC alleges that Respondent may have violated Ariz. Rev. Stat. section 32-1154(A)(3).

ROC alleges that Respondent’s failure to complete its work may be a violation of Ariz. Admin. Code R4-9-108(A). At the hearing, Mr. Wiskow acknowledged that none of the work Respondent had completed was deficient.

Mr. Wiskow determined that the parties had a dispute as to the terms of their contract and that there was disagreement or confusion between the parties as to what was expected under their contract.

Mr. Wiskow found that Respondent had not completed the trim work, but also that Complainant expected Respondent to perform work and/or provide material that was not within the scope of the parties’ contract.

On June 2, 2020, Mr. Wiskow sent Complainant an email that provided in part: “It looks to me like you should add some things to the contract, either change orders or addendums, if you want [Respondent] to finish this project to your aforementioned expectation.”

Through an email dated June 3, 2020, Mr. Wiskow requested the portions of the contract that addressed six items that were in dispute (decora switches, “Should have a change order”; water heater assembly, addendum; smoke detectors, addendum; exterior outlets; doorbell, addendum).

Complainant provided a response that cleared up some, but not all, of Mr. Wiskow’s concerns that Complainant was requesting work from Respondent that was outside the scope of the contract.

Complainant did not prepare any change orders or addenda in response to Mr. Wiskow’s suggestion that it do so.

Respondent prepared a change order/addenda dated June 4, 2020, but Complainant was not willing to sign, with Ms. Klarkowski writing that she would not sign any addenda because “there are NONE on this job.”

Ms. Klarkowski added that they were expecting Respondent to abide by the original contract and that when the work was complete he would be paid the balance due, less credits for material that Respondent was no longer going to provide.

The administrative record shows that the parties also had disputes about the work at their other projects. Complainant informed Respondent that it would be filing three complaints with ROC and that it would be filing civil suits for its costs to hire someone else to complete the projects if Respondent did not complete the work.

On Respondent’s part, he filed with ROC three complaints against Complainant in which he alleged breach of contract or non-payment.

After receiving Respondent’s complaints, Mr. Wiskow requested that Respondent provide information showing that the parties had agreed to change orders on the projects at issue. Respondent replied to Mr. Wiskow stating he was in an awkward position because Complainant was not willing to sign any change orders, but he did have blueprints showing the original work and the extra work.

ROC dismissed Respondent’s complaints because it determined that Respondent did not provide sufficient evidence to show that Complainant had failed to pay him.

The record shows that Complainant was willing let Respondent work without other contractors at the property to accommodate any social-distancing and other concerns related to COVID-19.

CONCLUSIONS OF LAW

Unless otherwise provided by law, a party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

“At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2).

A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

The Administrative Law Judge may consider ROC’s administrative record. See Ariz. Admin. Code § R4-9-118.

Ariz. Rev. Stat. section 32-1154(A) provides that: “The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: .... 3. Violation of any rule adopted by the registrar.”

Ariz. Admin. Code section R49108(A) provides that “A contractor shall perform all work in a professional and workmanlike manner.”

ROC alleges that Respondent may have violated subsection R4-9-108(A) by not finishing its work in accordance with the parties’ contract.

Although Respondent has not finished all the work the contract called for, Respondent’s failure to do so is excused or justified by the fact that Complainant was demanding Respondent perform work outside the scope of the contract. Mr. Wiskow directed Complainant to prepare an addendum to the contract, which it did not do, and Complainant did not agree to the terms set out in the change order/addenda that Respondent prepared.

The preponderance of the evidence shows that the parties, both licensed contractors, did not have a clear agreement as to the scope of the work and that this matter is properly considered a contract dispute rather than a dispute about workmanship.

Because Respondent’s failure to complete its work was justified and not a violation of subsection R4-9-108(A), it has not been shown by a preponderance of the evidence that Respondent violated Ariz. Rev. Stat. section 32-1154(A)(3). Consequently, this matter should be dismissed.

RECOMMENDED ORDER

IT IS ORDERED that case number 2020-02196 is 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 is forty days after the date of that certification.

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-137160-45720000Done this day, November 2, 2020.

/s/ Thomas Shedden

Thomas Shedden

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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