ALJDEC decisions subject to certification as final

2020A-03025-CHC-ROC · Registrar of Contractors · 2020-11-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Malcolm Clinton McPhee,

COMPLAINANT

Brookshire Builders, Inc.,

License No. ROC 164022,

RESPONDENT

No. 2020A-03025-CHC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: October 23, 2020

APPEARANCES: Mark Bainbridge, Esq. represented Complainant Malcolm McPhee, who was also present. Bob Snell appeared on behalf of Respondent Brookshire Builders, Inc. Arizona Registrar of Contractors Investigator Albert Bernal appeared. Neil McPhee and Alan Shelton were witnesses for Complainant Malcolm McPhee.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

Brookshire Builders, Inc. (“Respondent”) is the holder of License No. 164022 issued by the Arizona Registrar of Contractors (“Registrar”). Robert Snell is the qualifying party and owner of Respondent.

On or about June 22, 2020, the Registrar received a Complaint against Respondent from Complainant Malcolm McPhee (“Complainant”) alleging poor work and abandonment of a project consisting of the completion of a 35,000 square foot garage.

The Registrar assigned the Complaint to Investigator Albert Bernal. Investigator Bernal conducted a jobsite inspection on July 10, 2020. In his jobsite inspection notes, Investigator Bernal addressed the sixteen items delineated in Complainant’s Complaint as follows:

Compliance Item: 1 - A) failed to complete prior to license expiring on 4/30/19. Continued contracting without license and bond and did not complete.

B) Did not prepare requested critical pathway for completion of project.

C) Did not prepare estimates sufficient to complete project.

D) Did not prepare schedule as requested to complete project.

E) Did not coordinate subcontractors to complete project.

Investigator’s Observation: A) No written contract was provide to the investigator by the Complainant or the Respondent. The issues listed on this complaint item are out of ROC's jurisdiction. Complaint A-E, the ROC does not have any jurisdiction over those complaint items.

Compliance Item: 2 - Did not get roof framing inspection prior to covering supporting steel.

Investigator’s Observation: I noted the roof structure and metal roof was installed at the time of this JSI. According to the Respondent this work was done prior to his hiring. I am unable to determine who was responsible to call for this inspection or, verified the time frame in which this inspection should off been called in based on the information that I was provided.

Compliance Item: 3 - Substandard concrete finishing around supporting steel.

Investigator’s Observation: Verified: I noted the texture on the concrete was not a close matched to the rest of the concrete floor.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 4 - Did not get inspection for electrical meter.

Investigator’s Observation: Issue resolved prior to jobsite inspection

Compliance Item: 5 - Did not completed plumbing rough-ins ,

Investigator’s Observation: Verified: I noted the plumbing rough ins were not finish in the room shown to me.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 6 - Did not completed required ventilation per plans.

Investigator’s Observation: Unverified: Others did some work in the mechanical room

prior to the jobsite inspection. Complainant stated that he contracted with another entity to complete the work.

Compliance Item: 7 - Did not get engineers approval / stamp on changes made by roofers

Investigator’s Observation: No specification, or properly executed change order were provided at time of inspection therefore, I am unable to verify this complaint item.

Compliance Item: 8 - Southwest retaining wall footing above grade.

Investigator’s Observation: Verified: I noted the footing was above grade on the southwest retaining wall. Correct by the appropriate means.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 9 - Didn't contact designer for RFI (Request for information) when necessary

Investigator’s Observation: This is a statement and not an allegation that implicates poor work that I can inspect and report on.

Compliance Item: 10 - Incomplete porch and fascia & soffits.

Investigator’s Observation: Verified: I noted that the fascia and soffits were place in some of the porches, but not installed or secure to the concrete floor. I also noted that the fascia and soffits were missing in other porches.

Correct by the appropriate means.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

Compliance Item: 11 - Did not replace window broken while installing on wrong location

Investigator’s Observation: Conditions described are present, however; they cannot be verified as the responsibility of this Respondent.

Compliance Item: 12 - Remove in- ground spa and excavated without changes to plans approved

Investigator’s Observation: Verified: I noted that there was a section of the property in between the residence and the garage building that was partially excavated and not completed. Respondent shall complete project per original contract agreement, properly executed change orders, and local building codes.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner

Compliance Item: 13 - Safety railing / barriers not place on excavation area

Investigator’s Observation: Verified: I noted that there were no Safety railing / barriers not place on excavation area. I am unable to determine how is responsible to installed fence/ barriers on job site. Builder should refer to the local municipality to determine what are the safety requirements that need to be implemented to protect [t]he excavation area.

Compliance Item: 14 - defective ceiling material not address.

Investigator’s Observation: This issue may be the responsibility of the product manufacturer. I noted the material was not installed, the material was stoked in the third floor of the garage.

Compliance Item: 15 - electrical boxes low West side 1st , 2nd , 3rd floor .

Investigator’s Observation: I noted that the electrical boxes were installed at approximately 13" from the finish floor to the bottom of the electrical box. Respondent shall correct by the appropriate means.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner

Compliance Item: 16 - Doors are not sealed and secured.

Investigator’s Observation: I noted that doors and windows on the third floor were not sealed and secured. All doors frames were missing screws on the frame and outside light was coming thru the gaps around the doors and windows.

Governing Rule: Violation of any rule adopted by the Registrar; Namely A.A.C. R4-9-108(a): A contractor shall perform all work in a professional and workmanlike manner.

(All errors in original.)

Investigator Bernal did not issue a Written Directive because, at that time, Respondent was no longer actively licensed by the Registrar. Instead, Investigator Bernal referred the case to the Registrar’s Legal Department.

The Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(1) and A.R.S. § 32-1154(A)(17).

The project involved the construction of a 35,000 square foot garage on property owned by Complainant. Complainant’s son, Neil McPhee, served as a conduit between Complainant and Respondent. The project was started several years prior to Complainant’s hiring of Respondent. Another contractor had begun the project but did not complete it. The project remained incomplete for quite a while until Complainant came upon Respondent working at another property in Complainant’s community. The parties discussed the project and Complainant hired Respondent. However, the parties did not have a written contract and the parties differed greatly regarding Respondent’s responsibilities and scope of work on the project. Complainant paid Respondent a total of $50,000.00 in five payments with invoices that indicated the payments were for a “consulting fee” for the months of February 2019 through June 2019. See Administrative Record pages 260-64.

Investigator Bernal testified consistently with his jobsite inspection notes. Investigator Bernal testified that as to Complaint item numbers 3, 5, 8, 10, 12, 15, and 16, there were issues with Respondent’s work not being performed in a professional and workmanlike manner and that the work was partially incomplete, hence the charge of abandonment. Investigator Bernal testified that he could not recall whether he was informed as to whether Respondent actually performed work at the jobsite. However, Investigator Bernal testified that it was his understanding that Respondent was hired as a consultant and to supervise contractors at the jobsite.

Neil McPhee testified that Complainant had seen a sign with Respondent’s business information and contracting license number on a property in Complainant’s neighborhood. Mr. McPhee testified that Complainant hired Respondent expecting the services of a licensed contractor and that the parties had never agreed to Respondent performing “consulting services.” Because of Complainant’s previous experience with the original contractor for the project “diverting funds,” Respondent was not given access to funds to pay subcontractors. Complainant paid all subcontractors directly. Mr. McPhee testified that Complainant agreed to pay Respondent ten percent of the total cost of completion of the project which Complainant had estimated with the assistance of a consultant, to be $450,000.00. As such, Mr. McPhee testified that Respondent would receive $45,000.00 in compensation.

Mr. McPhee testified that Respondent began work on the project in April 2019. Complainant provided numerous text messages beginning on page 154 of Complainant’s exhibits. Those text messages begin on January 9, 2019, and most concern estimates obtained from subcontractors for aspects of the project, as well as requests for payments for individuals who performed work at the property. See Complainant’s Exhibits pages 154-270.

Mr. McPhee contended that many of the text messages evidenced that Respondent was acting as a contractor for the project. Mr. McPhee specifically referenced a text message on page 174 of Complainant’s Exhibits that indicated Respondent was planning to use his saw. Mr. McPhee also referenced a text message on page 175 of Complainant’s Exhibits that stated, “cutting and installing but a slow start.” However, the text did not reference whether it was Respondent or various workers cutting and installing. Mr. McPhee referenced a text on page 190 of Complainant’s Exhibits which was a timesheet for individuals who worked on the project. On page 211 of Complainant’s Exhibits, the text indicated that Respondent met with the fire marshal. On page 213 of Complainant’s Exhibits, there was another text about another individual’s hours on the project.

Mr. McPhee testified that Complainant and Respondent’s relationship “terminated” because Mr. Snell stated that he would be leaving the job and wanted to collect his tools from the jobsite. Mr. McPhee advised Mr. Snell that he would gather the tools for him and asked him not to return to the property. However, Mr. Snell retrieved his tools himself. The texts between Mr. McPhee and Mr. Snell continued until February 2020 and encompassed over 100 pages of Complainant’s exhibits. Notwithstanding Respondent’s continued involvement with the project through February 2020, Complainant ceased paying Respondent in June 2019.

Mr. McPhee referenced a June 3, 2020 letter to Complainant from an attorney on Respondent’s behalf. See Complainant’s Exhibits page 271. That letter read, in pertinent part, as follows:

As you know, at your request, [Respondent] provided consulting services regarding the construction of your garage from February 2019 through February 2020. You agreed to pay [Respondent] $10,000.00 per month for such services. Although you paid [Respondent] for five months, you failed to pay for [Respondent’s] consulting services from July 2019 until February 2020. The total sum due for consulting services is $70,000.00.

In addition, throughout this timeframe [Respondent] also paid for materials, supplies, diesel fuel, and backhoe repairs. All such payments were made on your behalf and with the expectation of reimbursement. . . .

Alan Shelton, a forensic consultant and owner of Shelton Consulting, testified about his experience in the construction industry. Mr. Shelton also testified regarding the project and the fact that it was only partially complete, including the windows and doors, the sliding glass doors were installed out of sequence, there were issues with the waterproofing of the deck, the aluminum frame on the windows was not installed correctly and all needed to be removed and re-installed, among other items of concern, including the roof. Mr. Shelton opined that Respondent’s work on the project fell below industry standards and did not comply with building codes. Mr. Shelton testified that when a contractor takes over a project from another contractor, the new contractor has a duty to inspect the previous work and accepts the surface upon which the contractor is working. Mr. Shelton also testified regarding the definition of “contractor.” Mr. Shelton testified that a contractor must be licensed in order to obtain bids, manage, schedule, and supervise contractors.

Mr. Snell testified that he was hired as a consultant to assist Complainant with the process of completing and repairing the construction of the garage. Mr. Snell testified that much of the work that had previously been completed was improper, not to code, and that he “found a lot of issues.” Mr. Snell insisted that he was not hired as a general contractor. Mr. Snell contended that he would not assume that responsibility due to the fact that another contractor had begun the project. Further, Respondent was not named on the permit as the permit identified Complainant as the owner/builder. Mr. Snell testified that he changed his license status to “inactive” because he had decided to retire from the business of building.

All of Respondent’s invoices specify that they were for consulting, for a fee of $10,000.00 per month. Mr. Snell testified that his agreement with Complainant was on a month to month basis. The invoices and payments thereon evidence that Respondent did not agree to a fee of 10% of the project total as asserted by Mr. McPhee. Respondent had no control over funds and did not pay contractors for work on the project. Mr. Snell testified that he recommended subcontractors to Complainant and Complainant made the ultimate decision about which ones to hire. Mr. Snell testified that he did not hire anyone to work on the project. Mr. Snell met with subcontractors to discuss the project and forwarded bids to Complainant. Mr. Snell testified that he showed contractors how to accomplish certain tasks and assisted in installing the doors.

Mr. Snell testified that he offered to operate his personal backhoe in order to save Complainant money and that Complainant did not reimburse him for the fuel used for this purpose. Mr. Snell also testified that he purchased materials and supplies for Complainant to save Complainant time and money as Mr. Snell had ready access to suppliers and that Complainant did not reimburse him for such purchases.

Mr. Snell testified that he felt he could not stay on the project any longer and requested that he be able to pick up his tools and equipment. Mr. McPhee responded via a March 23, 2020 text in pertinent part, “Stay off the property and provide a list of your tools and I will gather them up for you.” See Respondent’s Exhibit 2. In a subsequent text that same day, Mr. McPhee reiterated in pertinent part, “Again, stay off the property and provide a list of your tools and I will gather them up for you.” See Respondent’s Exhibit 4.

Administrative notice is taken of Respondent’s prior License record on October 30, 2020. Such prior License record reflects that Respondent’s License No. 164022 was first issued on April 11, 2001, was renewed through April 30, 2019, and is currently inactive. Such prior License record also reflects that there are no other open complaints, no previous discipline, and no resolved/settled complaints against Respondent’s license.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

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).

A.R.S. § 32-1101(3) defines "Contractor" as follows:

(a) Is synonymous with the term "builder" and means any person, firm, partnership, corporation, association or other organization, or a combination of any of them, that, for compensation, undertakes to or offers to undertake to, purports to have the capacity to undertake to, submits a bid or responds to a request for qualification or a request for proposals for construction services to, does himself or by or through others, or directly or indirectly supervises others to:

(i) Construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or any other structure or work in connection with the construction.

(ii) Connect such a structure or improvements to utility service lines and metering devices and the sewer line.

(iii) Provide mechanical or structural service for any such structure or improvements.

(b) Includes subcontractors, specialty contractors, floor covering contractors, hardscape contractors and consultants who represent that they are able to supervise or manage a construction project for the property owner's benefit, including hiring and firing specialty contractors, scheduling work on the project and selecting and purchasing construction material.

(Emphasis added.)

The evidence established that there was no written contract between the parties and that Respondent was paid a consulting fee of $10,000.00 per month. The Administrative Law Judge concludes that Mr. Snell’s testimony was credible regarding the fact that the parties’ agreement was on a month by month basis. Moreover, in March 2020, Mr. McPhee instructed Mr. Snell not to return to the property. Therefore, Complainant failed to establish that Respondent abandoned the project or refused to perform in violation of A.R.S. § 32-1154(A)(1).

The evidence established that there was no written contract between the parties, and that Complainant had agreed to pay Respondent $10,000.00 per month as a consulting fee as evidenced by the invoices paid. Further, Complainant paid all subcontractors and had the ultimate decision making authority for the hiring and firing of contractors. The undisputed evidence further established that Mr. Snell performed consulting work on the project. Pursuant to A.R.S. § 32-1101(3)(b), a “contractor” includes “consultants who represent that they are able to supervise or manage a construction project for the property owner’s benefit, including . . . scheduling work on the project and selecting and purchasing construction material.” The evidence established that Respondent was a consultant on the project and as such, was a contractor, requiring proper licensure by the Registrar. Respondent was properly licensed through April 30, 2019, however, thereafter, Respondent lacked a valid contracting license, yet continued to consult on the project through February 2020. Therefore, Complainant established that Respondent contracted while the license was on inactive status in violation of A.R.S. § 32-1154(A)(17).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall suspend Respondent’s License No. 164022 for a period of two (2) days.

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.

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-137160-45720000Done this day, November 6, 2020.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000