ALJDEC

97F-2743-ROC · Registrar of Contractors · 1997-11-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

CONSOLIDATED HEARING: November 13, 1997. APPEARANCES: Distinct Homes by T. Bodle Inc. (“Distinct Homes”) appeared through its president and qualifying party, Thomas Leonard Bodle. Arizona Wall Systems, Inc. (“Arizona Wall”), appeared through its president and qualifying party, Ronald Walter Prychodnik. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ The above matters were consolidated for the purposes of hearing, since both involved the same basic issues of law and fact, and both entailed the use of the same evidence and witnesses. Evidence and testimony were presented and, base upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT

1. Distinct Homes was the general contractor for the construction of a custom home located at 37436 North 14th Street, Phoenix, Arizona. 2. Distinct Homes and Arizona Wall entered into an agreement dated February 6, 1997. Arizona Wall agreed to perform specified dry wall for the price of $5,490.00 and exterior stucco work for the sum of $3,975.00. The total contract price was $9,465.00. 3. The terms of the parties written agreement provided for the following payment schedule for the drywall work: one-half payable at completion of drywall hanging, remainder due at completion of drywall texture. 4. The contract further provided for the following payment schedule for the exterior stucco work: one-half payable at completion of lathing, remainder due at completion of stucco texture. 5. The Registrar of Contractors issued a Corrective Work Order dated July 18, 1997, directing Arizona Wall “…to complete stucco repairs at the garage and form door by painting them”. 6. The weight of credible and reliable evidence of record supports a finding that Arizona Wall completed the exterior stucco scope of work to minimum workmanship standards. 7. Arizona Wall is deemed to have complied with the Registrar’s corrective work order to repair portions of its stucco work. 8. Distinct Homes failed to pay Arizona Wall for the stucco work pursuant to the terms of the agreement . 9. It is determined that Distinct Homes was paid sufficient funds from the homeowner to pay for the stucco work. 10. Distinct Homes’ failure to timely pay Arizona Wall for the stucco work is deemed a wrongful act which has substantially injured Arizona Wall. 11. Arizona Wall is found to have failed to perform its contractual drywall work to minimum workmanship standards. Arizona Wall concedes that it took too much time to perform the drywall hanging. Arizona Wall’s delayed work schedule resulted in Distinct Homes hiring another drywall subcontractor to complete the unfinished drywall work. 12. Arizona Wall’s failure to timely perform the drywall scope of work is deemed a wrongful act which substantially injured Distinct Homes. Distinct Homes is found to have been justified in its hiring of the second drywall subcontractor, at an expense of $1,750.00, to mitigate the damage caused by the project’s delay resulting from Arizona Wall’s failure to properly and timely complete the drywall portion of the contract. 13. It is determined that a bona fide dispute exists between the parties as to Arizona Wall’s entitlement, if any, to payment for drywall work and Distinct Homes’ entitlement, if any, to any offset or damages resulting from the failure of Arizona Wall to properly and timely perform the drywall work. That dispute should properly be resolved by a civil court of competent jurisdiction. 14. The official records of the Registrar of Contractors indicates that Distinctive Homes’ Class B license has been suspended by operation of law for lack of bond.

CONCLUSIONS OF LAW

1. The evidence of record is adequate to establish that Distinct Homes has violated the provisions of A.R.S. ( 32-1154 (A) (7) and (11). 2. There is insufficient evidence of record to establish that Distinct Homes has violated the provisions of A.R.S. ( 32-1154 (A) (23). 3. The evidence of record is adequate to establish that Arizona Wall has violated the provisions of A.R.S. ( 32-1154 (A) (7) and (3); namely Rule R4-9-108. 4. There is insufficient evidence of record to establish that Arizona Wall has violated the provisions of A.R.S. ( 32-1154 (A) (23).

RECOMMENDED ORDER: DISTINCT HOMES BY T. BODLE INC.

In view of the foregoing, it is recommended that Distinct Homes’ Class B license be revoked on the effective date of the Order entered in this matter.

It is further recommended that if Distinct Homes pays or tenders the sum of $3,975.00 for the stucco work to Arizona Wall on or before the effective date of the Order entered in this matter, then the above-provided license revocation shall not take place, but instead that Distinct Homes’ Class B license shall be placed on suspension for a period of seven days followed immediately by a period of disciplinary probation for one hundred eighty days. This alternative penalty shall commence, if at all, on the effective date of the Order entered in this matter.

It is further recommended, if the alternative penalty is applicable and in addition to the above-provided alternative disciplinary penalties, that any restoration of Distinct Homes’ rights to resume contracting, whether or not probationary, shall be subject to a condition that Distinct Homes first post an additional surety bond, cash deposit or alternative deposit for a period of twenty-four months, including future renewal periods, in the amount of $4,000.00, such bond or deposit to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. ( 32-1152. Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above-provided twenty-four month period and only if no claims are then pending.

RECOMMENDED ORDER: ARIZONA WALL SYSTEMS, INC.

In view of the foregoing, it is recommended commencing on the effective date of the Order entered in this matter that Arizona Wall’s Class B license shall be placed on disciplinary probation for a period of ninety days.

It is further recommended, in addition to the above-provided probationary penalty, that any restoration of Arizona Wall’s rights to resume contracting, whether or not probationary, shall be subject to a condition that Arizona Wall first post an additional surety bond, cash deposit or alternative deposit for a period of twenty-four months, including future renewal periods, in the amount of $1,000.00, such bond or deposit to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. ( 32-1152. Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above-provided twenty-four month period and only if no claims are then pending. Done this day, December 2, 1997.

______________________________________ BRIAN BRENDAN TULLY Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1997, to:

Mr. Michael P. Goldwater, Director Registrar of Contractors 800 West Washington, 6th Floor Phoenix, AZ 85007

ATTN: Joyce Armijo

By ___________________________ -----------------------

Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 (602) 542-9826