ALJDEC

97F-P0255-ROC · Registrar of Contractors · 1997-12-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

|STANLEY AND MARYANN BUONAGURIO, |(| | | |(|Case No.: P97-0255 | |Complainants, |(| | | |(|Docket No.: 97F-P0255-ROC | |vs. |(| | | |(| | |License No. 109971, Class B of |(| | |Stephen Paul King, d.b.a. |(|Recommended | |PRECISE CONSTRUCTION (IND.), |(|Decision and Order | | |(| | |Respondent. |(| | | |(| | | |(| | | |(| | | |(| |

HEARING: December 9th, 1997, at 9:00 a.m. Appearances: The Complainants appeared through Mr. Bradley W. Carlyon, Attorney-at-Law. The Respondent, Mr. Stephen Paul King, d.b.a. Precise Construction, appeared in his own behalf. Administrative Law Judge: Grant Winston

This matter was brought on for administrative hearing on Tuesday, December 9th, 1997. The Complainants appeared through counsel, Mr. Bradley W. Carlyon. The Respondent, Mr. Stephen Paul King, d.b.a. Precise Construction, represented himself. Testimony and other evidence was presented and, based on the record taken as a whole, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACTS

1. The Respondent herein, Mr. Stephen Paul King, is, and at all times material hereto was, a contractor licensed in the State of Arizona, holding Class B License Number 109971.

2. The Complainants, Stanley and Maryann Buonagurio, are a married couple residing in Newtown, Connecticut, which is approximately 2,300 miles from Overgaard, Arizona, the location of the job site in this case. This is important to note because the great distance between the Complainants and the job site accentuates the helpless condition of the Complainants while they were being victimized by the Respondent herein.

3. The Complainants contracted with the Respondent on or about April 2nd, 1996, for the Respondent to construct a hangar on the Complainants property in Overgaard, for the price of $63,167.00. They then contracted with the Respondent on or about July 26th, 1996, for the Respondent to construct a home for them on the same property for the price of $173,686.00. No estimated completion date was written into the contracts, however, the Respondent verbally assured the Complainants that they would be able to move into their new home in December of 1996. Early on, the construction and progress of the job went acceptably; however, it was not long before problems arose with the construction of both the house and hangar.

4. A building permit was issued in September of 1996, and work by the Respondent began. However, late in October of that year, the progress on Complainants’ job slowed considerably. After then, virtually no work was done. Respondent notified the Complainants that it would be January of 1997, before the house and hangar would be completed; then he told them February, then the Spring, then by the Summer, etc. During this same time frame, the Respondent commenced construction of his own personal residence. The Respondent’s residence was sufficiently completed in a timely manner to a point where he was able to take up residence there, and lives there now.

5. In April of 1997, Ms. Buonagurio made a surprise visit form Connecticut to Overgaard to investigate the problem of the construction. She was there four days, and while there the Complainant visited the job site and discovered that the Respondent had been misrepresenting the actual state of the construction progress. He had told the Complainants that the roof was up, but it was not. During her visit, Ms. Buonagurio was told by the Respondent that the roofers would be on site finishing the roof the next day. That next day Ms. Buonagurio went to the job site to find that no roofers ever showed up. It was not until the middle of that month that the roofing was finally completed.

6. During a telephone call from Ms. Buonagurio to Respondent, placed from Connecticut, in May of 1997, the Respondent told the Complainants that he was “out of money” for work on their house and hangar. This despite the fact that the Complainants had been paying in full and in timely manner all the scheduled payments for the construction of their home. The Complainants requested an accounting of the money spent to date, and Respondent assured them he would provide that. He never did.

7. Around May 17th, 1997, the Complainants appointed Michael and Barby Bryant, who lived in the area of the construction and who were acquaintances of Complainants, to be their attorneys-in-fact for all purposes related to the construction of their home. Respondent was instructed to deal with the Bryants. Respondent unreasonably refused to in any way cooperate with the Bryants. Respondent deemed the action of the Buonagurios giving the Bryants a power of attorney to somehow be a material alteration of the contract, adding a party, or some such nonsense.

8. Despite repeated requests by the Complainants of Respondent for him to give them an estimated completion date, he refused to even discuss the matter with them. Complainants requested to be supplied a list of Respondent’s subcontractors, a list of lien releases, and a complete duplicate of their file so that they could begin to understand where all their money had gone. Respondent agreed to provide some of this, but never did.

9. In mid-February, 1997, Respondent notified Complainants that they would have to pay an additional $4,200.00 for electrical work in the project due to the cost going over the Respondent’s bid amount. Complainants paid that sum to the Respondent, but were never told, again despite having asked, what that money was used to do.

10. As of the date of the administrative hearing of this matter the house and hangar projects have still not been completed, and have deteriorated to the point where, based on the estimates of other contractors, between $15,000.00 and $20,000.00 would be required even to put the house and hangar in a condition of being fit to be completed. To date, the Complainants have paid the Respondent $56,851.00 (90%) of the contract price of the hangar, $63,167.00. They have paid the Respondent more than $150,000.00 toward the contract price of the house; that is, all but the final contractually scheduled payment of $18,686.00, which was to be due upon completion. Thus the Complainants have paid the Respondent well over $200,000.00 and have nothing to show for it but a house and hangar that are worse than merely incomplete. This money that the Complainants have paid the Respondent is their entire life savings for their dream of retirement. The subject structures are worse than incomplete because owing to their having been left uncompleted for so many months they have serious structural flaws in them now, which will require expenditure of even more thousands of dollars to rectify before any further progress can be made toward completion of the house and hangar.

11. The Buonagurios filed this complaint in June of 1997. A job site inspection was conducted on July 2nd, 1997. At that time the Registrar of Contractors’ Inspector assigned to the case was Mr. Buddy Brown. During the July 2nd, 1997 job site inspection the Buonagurios made an offer to the Respondent. They proposed to put another $30,000.00 into a special bank account, to be matched by the Respondent’s $30,000.00, all to be $60,000.00 for completion of the project. The Respondent never responded to this proposal, and thereafter the Bryants communicated its withdrawal. The Respondent without any basis in fact regarded the withdrawal of the offer as a renunciation of the contract, which it clearly was not.

12. Pursuant to the job site inspection a Corrective Work Order was issued directing the Respondent to correct several items within fifteen days. Most of the items on the Corrective Work Order were not corrected by the Respondent, including Items A-D. 13. The Buonagurios, through the Bryants, requested an administrative hearing on July 28th, 1997.

14. It was proved at the hearing through the uncontradicted testimony of Mr. Bob McClanahan, Chief Building Inspector for Navajo County, that literally scores of code violations exist in the hangar and house in their present state. Mr. McClanahan did testify that some, but not of all, of these violations exist simply because the projects are in a state of partial completion. Some of the code violations are safety hazards. It was also adduced through the testimony of Mr. McClanahan that the present condition of the hangar is so bad that it verges on being condemned by Navajo County.

15. Mr. Jeff Betts, Registrar of Contractors’ Inspector and successor to Mr. Brown in this case, inspected the job site just a week prior to this hearing. His testimony established that the electrical corrections had been made, but other than that nothing had been corrected. There were several safety hazards in the Respondent’s work, and not merely because the work was incomplete.

16. In sum, it is found that the Complainants, a married couple planning for their retirement in the Overgaard area, gave over to the Respondent their entire life savings of nearly a quarter of a million dollars for him to construct their retirement home and hangar. They were trusting him with their money and their retirement dream while they were 2,300 miles away. As opposed to his living up to his contractual obligations, the Respondent took the Complainants’ money, started construction, then abandoned construction, leaving the house and hangar exposed to the elements which resulted in their significant deterioration. He broke promises made to the Complainants, and lied to them about the status of the construction. He unreasonably and without justification or excuse, refused to work with the Bryants, as if he had some sort of veto power over the matter. The work he has done is in violation of Navajo County Codes and the Uniform Building Code, and is not within minimum workmanship standards, and in some instances presents safety hazards. He has failed to comply with the Registrar of Contractors’ Inspector’s Corrective Work Order. The Respondent at no time during his testimony appeared to be a credible witness. He has defrauded the Complainants and has been caught.

17. Notice is taken of the Respondent’s prior license record with the Registrar of Contractors.

Conclusions of Law

1. This hearing was held under authority of and pursuant to A.R.S. §32- 1156 and A.R.S. §41-1092.

2. The Respondent herein is charged with possible violations of A.R.S. §32-1154.A.2., 3. (namely A.A.C. R4-9-108 Poor Workmanship), 7., and 23.

3. The preponderance of evidence in the record taken as a whole establishes that the Respondent did violate A.R.S. §32-1154.A.2., 3. (namely A.A.C. R4-9-108 Poor Workmanship), 7. (Wrongful and fraudulent), and 23.

Recommended Order

In view of the foregoing it is hereby recommended that Respondent’s Class B License Number 109971 be revoked, and that pursuant to A.R.S. §32- 1154.D. Respondent be required to pay a civil penalty in the amount of $500.00.

In the alternative it is recommended that if, on or before the effective date of this order, the Respondent (1) rectifies the existing deficiencies in the house and hangar, thereby putting them in a condition where they can be appropriately completed, as approved in writing by an appropriately licensed structural engineer (cost to Respondent), and (2) continues to completion the construction of the two structures, and further obtains all applicable passing inspections from the local authorities, and a second and final passing inspection from an appropriately licensed structural engineer at the completion of the construction (cost to Respondent), and (3) obtains a passing inspection by the assigned agency inspector in regards to all Corrective Work Order Items, then in lieu of revocation, the subject license be suspended for a period of seven days, and Respondent be required to pay the same $500.00 as a civil penalty provided at A.R.S. §32-1154.D.

Dated this 15th day of December, 1997.

OFFICE OF ADMINISTRATIVE HEARINGS

_________________________________ Grant Winston Administrative Law Judge

Original mailed this 15th day of December, 1997, to:

Michael P. Goldwater, Director Attn: Joyce Armijo Registrar of Contractors 800 W. Washington, 6th Floor Phoenix, AZ 85007

Transmitted by:

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