ALJDEC

97F-H0191-ROC · Registrar of Contractors · 1998-01-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 13, 1998

APPEARANCES: -Keith Julle appeared on behalf of Mohave Oil Co. -No person appeared on behalf of the Registrar of Contractors (the “ROC”). -No person appeared on behalf of the Respondent.

ADMINISTRATIVE LAW JUDGE: Casey J. Newcomb _____________________________________________________________________

On January 13,1998, a hearing was held to determine if the Respondent violated A.R.S. §32-1154(A). Keith Julle, President and Owner of Mohave Oil Co., appeared on behalf of the Complainant Mohave Oil Co. No person appeared on behalf of the Registrar of Contractors. No person appeared on behalf of the Respondent. Evidence and testimony were presented by the Complainant Mohave Oil Co. After a review of the entire record, the following Findings of Fact, Conclusions of Law and Recommended Decision and Order are made.

FINDINGS OF FACTS

1. Keith Julle is the President and Owner of Mohave Oil Company. Keith Julle’s son, Kevin Julle, is the Vice President of Mohave Oil Company.

2. D.M. Grove is an employee or agent for the Respondent. The Qualifying Partner for the Respondent is David Paul Guiliani. Mr. Grove and Mr. Guilini failed to appear for the hearing scheduled for January 13, 1998.

3. On July 11, 1996, the Complainant and the Respondent entered into a contract (the “Contract”) for $360,000.00 to construct a convenience store and gasoline facility (the “Project”) located at 3260 N. Highway 66, Kingman, Arizona. See Complainant’s Exhibit 1.

4. Keith L. Julle signed the Contract on behalf of the Complainant. D.M. Grove signed the Contract on behalf of the Respondent. The Contract is a one page document with the Respondent’s name and Mr. Grove’s name in the letterhead. The letterhead also includes the Respondent’s Contractor’s License Number 109428. On May 12, 1997, this license was suspended until compliance with an order in a separate matter.

5. Keith L. Julle testified that he entered into the Contract with D.M. Grove (on behalf of the Respondent) because D.M. Grove was a family friend and had successfully completed two prior projects for Mr. Julle.

6. Keith L. Julle testified that he had a verbal contract with the Respondent to complete the Project within 120 days for a planned opening date of December 15, 1996. However, in November of 1996, Mr. Keith noticed that the Project was “bogged down” and not moving along as expected. Furthermore, the subcontractors were directly contacting Mr. Julle for payment.

7. Keith Julle testified that he approached D.M. Grove about the delays. Mr. Julle testified that Mr. Grove admitted that he was at fault for the delays and that he understood that time was of the essence to get the Project done.

8. Keith and Kevin Julle testified that in February of 1997, Mr. Grove finally admitted that he could not complete the Project because he could not pay the subcontractors.

9. Keith Julle testified that Mr. Grove abandoned the Project in March of 1997.

10. Keith Julle testified that the quality of work performed by the Respondent was satisfactory. However, the work was not timely performed and the Project was never completed by the Respondent.

11. Keith and Kevin Julle testified that they had paid $259,568.25 to Mr. Grove pursuant to the written Contract. As of February of 1997, this amount should have been sufficient to pay the subcontractors. The Julles testified that they ultimately had to pay almost $500,000.00 to complete the Project after Mr. Grove’s departure.

12. The Julles further testified that they lost additional money because the opening date of their convenience/gasoline store was delayed several months because of Mr. Grove’s actions. The Julles were required to obtain a $95,000.00 loan from Shell Oil Company to cover working cash shortages. See Complainant’s Complaint.

13. Keith Julle testified that some of the subcontractors hired by the Respondent were unlicensed.

14. Keith Julle testified that during the construction of the Project, Mr. Grove built a residential home at 3945 Lomita, Kingman, Arizona. Mr. Julle testified that the same subcontractors who worked on the Project also worked on Mr. Grove’s new residential home. Furthermore, the subcontractors were timely paid on the residential home.

15. Keith Julle testified that during the construction of the Project, Mr. Grove also purchased a lot in Colorado, remodeled his mother’s mobile home, and purchased or leased a new GMC pick-up truck. Keith Julle testified that Mr. Grove was a man of modest means prior to this spending spree.

16. Keith Julle testified that he repeatedly asked Mr. Grove for a cost breakdown on the $259,568.23 already paid to Mr. Grove. Mr. Julle never received the breakdown.

17. The Notice of Hearing accurately stated the time, date and location of this disciplinary hearing. The Notice of Hearing was sent to three separate addresses.

18. On May 1, 1997, the Registrar of Contractors (the “ROC”) issued a Citation and Complaint to the Respondent alleging violations of A.R.S. 32- 1154(A). The ROC and the Complainant received an unsigned letter from the Respondent’s Qualifying Partner, David Guiliani, requesting that the Complaint be dismissed. It should be noted that the Notice of Hearing was sent to the address at the top of this letter. See Respondent’s letter, dated May 10, 1997.

CONCLUSIONS OF LAW

1. The Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). 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). It "is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not." Black's Law Dictionary, 1182 (6th ed. 1990).

2. The undersigned Administrative Law Judge finds that D.M. Grove is the Respondent’s agent or employee and that he had the authority to enter into the Contract with Keith Julle thereby binding the Respondent.

3. The undersigned Administrative Law Judge finds that the Complainant has presented a prima facie case showing that the Respondent violated A.R.S. §32-1154(A) (1), (7), (9) & (10).

4. The undersigned Administrative Law Judge finds that the Complainant has not presented a prima facie case showing that the Respondent violated A.R.S. §32-1154(A) (2), (3), (5), (12), (17) & R4-9-108.

5. The undersigned Administrative Law Judge finds that the Respondent has failed to appear and has failed to present evidence overcoming the Complainant’s prima facie case.

6. The undersigned Administrative Law Judge finds that the preponderance of the evidence shows that the Respondent has violated A.R.S. §32-1154(A) (1), (7), (9) & (10).

7. The undersigned Administrative Law Judge finds that the Respondent’s Class B-02 License No. 109428 should be revoked.

RECOMMENDED DECISION AND ORDER

In view of the foregoing, it is recommended that the Respondent’s Class B-02 License No. 109428 be revoked on the effective date of this Order (thirty-five days after the date of mailing by the Registrar).

Done this day, January 22, 1998.

______________________________________ Casey J. Newcomb Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1998, 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