ALJDEC - Licensing

2022A-09197-CHC-ROC · Registrar of Contractors · 2023-04-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

George Boley,

COMPLAINANT

v.

Zest Design and Construction Inc.

License No. ROC 214923,

RESPONDENT

No. 2022A-09197-CHC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 27, 2023

APPEARANCES: Complainant George Boley appeared via Google Meet on his own behalf. Scott Woodward appeared via Google Meet on behalf of Respondent Zest Design and Construction Inc. Registrar of Contractors Investigator Cliff Corlett appeared via Google Meet.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

_____________________________________________________________________

FINDINGS OF FACT

Zest Design and Construction, Inc. (Respondent) is the holder of License No. 214923 issued by the Arizona Registrar of Contractors (Registrar).

On or about March 18, 2020, George Boley (Complainant) agreed to have Respondent construct an RV garage on his property. The total contracted price was $72,500.00.

On or about October 11, 2022, the Registrar received a Complaint against Respondent from Complainant alleging poor work and failure to finish the project.

The Registrar assigned the complaint to Investigator Cliff Corlett. The jobsite inspection was performed on November 1, 2022.

Investigator Corlett then issued a written directive on or about November 16, 2022, to Respondent that provided as follows:

After investigation, the Registrar determined that you failed to meet the requirements of A.R.S. § 32-1154(A), and now issues this Directive requiring you to take appropriate corrective action. 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.

You must notify the Registrar’s assigned Investigator of your compliance with this Directive prior to 5:00 p.m. on or before December 15, 2022.

. . .

DIRECTIVE REQUIREMENTS

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

Compliance Item: 1 - As of 10/11/22 this project is still not complete; Contractor (Mr. Woodward) does not show up to work on the project for months at a time.

Investigator’s Observation: 32-1154. Grounds for suspension or revocation of license; continuing jurisdiction; civil penalty

A. The holder of a license or any person named on a license pursuant to this chapter may not commit any of the following acts or omissions:

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

RESPONDENT SHOULD PROPERLY COMPLETE CONTRACTED PROJECT

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

Compliance Item: 4 - Mr. Woodward has asked (on a few occasions) for more money beyond agreed upon price.

Investigator’s Observation: Grounds for suspension or Revocation of license.

It is a violation of A.R.S. 32-1154-A, 8 . "Failure in a material respect by a licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.

RESPONDENT SHOULD PROPERLY COMPLETE CONTRACTED PROJECT

Governing Rule: Failure in a material respect by the licensee to complete a construction project or operation for the price stated in the contract, or in any modification of the contract.

Compliance Item: 5 - Mr. Woodward has not provided any bills or receipts for additional costs, even though they have been requested.

Investigator’s Observation: Grounds for suspension or Revocation of license.

32-1158. Contract requirements; provision of documents and receipt at contract signing

A. Any contract in an amount of more than $1,000 entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information:

1. The name of the contractor and the contractor's business address and license number.

2. The name and mailing address of the owner and the jobsite address or legal description.

3. The date the parties entered into the contract.

4. The estimated date of completion of all work to be performed under the contract.

5. A description of the work to be performed under the contract.

6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.

7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.

8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.

9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32-1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32-1162, subsection A. The information in this paragraph must be prominently displayed in the contract in at least ten-point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative. This paragraph does not apply to a person who is subject to and complies with section 12-1365.

B. When a contractor and an owner sign a contract, the contractor shall provide the owner with a legible copy of all documents signed and a written and signed receipt for and in the true amount of any cash paid to the contractor by the owner.

C. The requirements of this section are not prerequisites to the formation or enforcement of a contract. Failure to comply with the requirements of this section does not constitute a defense by either party to an action for compensation, damages, breach, enforcement or other cause of action based on the 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.

(All errors contained in the original)

On January 4, 2023, Investigator Corlett issued his Compliance Jobsite General Notes as follows:

Compliance Jobsite General Notes: On November 16, 2022 the ROC issued a Written Directive instructing the Respondent to:

Properly complete this R/V garage project at 3988 Breakwater Pl. Lake Havasu Cith, AZ. A.R.S. § 32-1154(A)(1)

Respondent was also advised the failure, in a material aspect to complete a construction project for the price stated in the contract or any modification of the contract is grounds for Revocation. A.R.S. § 32-1154(A)(8).

Respondent was also advised that failure to comply with the Minimun Requirements of a Construction Contract is grounds for Revocation. A.R.S. § 32-1154(A)(12) namely, A.R.S. § 32-1158.

On January 4, 2023 the ROC contacted the Complainant by phone and Mr. Boley stated that no work now any settlement had occurred.

(All errors contained in the original).

On January 12, 2023, the Registrar issued a Citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(1); A.R.S. § 32-1154(A)(8); A.R.S. § 32-1154(A)(12) - A.R.S. § 32-1158; and A.R.S. § 32-1154(A)(22).

On or about January 3, 2023, Respondent e-mailed an Answer to the Registrar.

On or about February 17, 2023, a Notice of Hearing was issued setting a hearing on March 27, 2023, at the Office of Administrative Hearings, an independent state agency.

At hearing, Investigator Corlett testified as to the Registrar’s involvement and the above timeline.

Investigator Corlett testified that Respondent failed to finish the project for the contracted price, and that there were no change orders or other provisions to allow Respondent to unilaterally change the price.

Further, Investigator Corlett testified that the contract between the parties did not meet the Registrar’s requirements as there was no “Right to File” language provided in the contract.

Finally, because the project was in an incomplete state and no other agreement has been reached, Respondent had failed to take appropriate action following the issuance of a Written Directive.

George Boley testified on his own behalf. He testified that the project was not supposed to take three years but it is still unfinished.

Mr. Boley testified further that Mr. Woodward always had an excuse for the delays and there are still no garage doors or stucco completed.

Further, Mr. Boley testified that he has paid over $79,000.00 for the job and Respondent wants him to pay another $30,000.00-40,000.00 to complete the garage.

Scott Woodward, Respondent’s Qualifying Party, testified that he had never experienced a project like this. Because the project commenced in March 2020, just as the COVID-19 pandemic was starting, he faced numerous delays from the City of Lake Havasu permitting department, labor and material shortages, and price increases. Further, during the project, Mr. Woodward had to stop working for a time to attend to his father who had fallen, as well as his own bout with COVID. Mr. Woodward also testified that he had now been diagnosed with colon cancer, and that, physically he was “done”.

Further, Mr. Woodward testified that he communicated frequently with Mr. Boley as to the status of the project whether it was good or bad. Mr. Woodward also testified that he performed most of the work himself in 124 degree heat, due to the labor shortage.

Mr. Woodward acknowledged that the project still was incomplete because the prices for the garage door and insulation costs increased so much that there was no way he could continue with the project at the agreed upon contract price. Also, Mr. Woodward testified that he was “vapored” and cannot complete the job and has not been to the jobsite since early November 2022.

Administrative notice was taken of Respondent’s prior License record on April 7, 2023. Such prior License record reflected that Respondent’s License No. 214923 was first issued on December 18, 2005, and reflected that there was one open complaint, namely the present complaint.

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 Vazzano 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).

The preponderance of the evidence established that Respondent abandoned the project in violation of A.R.S. § 32-1154(A)(1), as well as failing to complete the project for the contracted price in violation of A.R.S. § 32-1154(A)(8). There was no legal excuse for Mr. Woodward to stop working in November 2022. While the tribunal is certainly sympathetic to the effects of the pandemic, there was no legal justification for the project to not be completed three years later. There was also no evidence presented that there were valid written change orders allowing for the increased costs or some other agreement between the parties.

The preponderance of the evidence established, that the invoices presented did not meet the minimum elements of a contract for this project as it did not contain the “right to file” language, in violation of A.R.S. § 32-1154(A)(12) - A.R.S. § 32-1158.

The evidence established Respondent failed to complete the corrective work following the Directive being issued. Mr. Woodward testified that he had not been to the jobsite since November 2022. Further, he testified that he cannot continue on the job. While Mr. Woodward’s health concerns are valid, there was also no evidence provided that he tried to settle or refund any of Mr. Boley’s money to him. Therefore, 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).

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. 214923 for a period of thirty days.

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)(7), unless Respondent tenders payment of any outstanding prior civil penalty.

It is further recommended that Respondent provide an updated sample contract which complies with A.R.S. § 32-1158, to the Registrar within thirty days following the effective date of the Registrar’s final order. If Respondent fails to do so, then the Registrar may revoke Respondent’s license, effective on such deadline date.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

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 forty (40) days from the date of that certification.

Done this day, April 7, 2023.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Martín Quezada, Director

Registrar of Contractors

Zest Design and Construction Inc.

[email redacted]

George Boley

[email redacted]

By: OAH Staff