ALJDEC

98F-0824-ROC · Registrar of Contractors · 1998-04-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 7, 1998 APPEARANCES: Complainant appeared through its president, Dorothy Veatch, and Respondent appeared through its owner and qualifying party, Reynaldo Lugo. ADMINISTRATIVE LAW JUDGE: Mark Silver _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made:

FINDINGS OF FACT

1. Pursuant to contract, Complainant retained the services of Respondent to install Complainant’s name and address on a new commercial building. Complainant alleges certain deficiencies in the work performed by Respondent and same are discussed in the findings below. 2. The following salient facts were adduced at the hearing and are important to note: a. Although Respondent submitted a written proposal to Complainant, indicating the price for the contract and certain other terms, including the layout of the lettering and address numbers, there was nothing in writing regarding where the name and address information was to be placed on the building. Nevertheless, evidence of record was sufficient to support a finding that the parties had verbally agreed to center the sign, in a vertical and horizontal manner, over specified windows and beneath a brick overhang on the building. b. At the initial installation, the sign letters were installed too close to the brick overhang of the building and thus, the sign was not centered vertically, as specified in the original verbal portion of the contract between the parties. Although Respondent contends that Complainant advised the installer to place the original sign in the method shown by the original installation, the weight of the credible evidence of record was sufficient to support a finding that the installer commenced the installation of the sign off vertical center and when Complainant objected to the way the initial lettering was being installed, the installer advised that he knew what he was doing, that the placement used was the only possible method due to the size of the lettering, and if Complainant was not satisfied after he was done, he would remove and re-install the sign. c. Upon the completion of the sign installation, Complainant and her interior designer objected to the sign installation, due to the fact that same was off-vertical center and thus, from a purely aesthetic viewpoint, was thereby unacceptable. Upon contacting Respondent with her objection that the sign was not installed in the agreed manner, Respondent advised that he would charge a fee to remove and re-install the sign in the original agreed manner. d. There is some disagreement referable to whether Complainant ever agreed to an additional fee for the removal and proper reinstallation of the sign, however, it was demonstrated that Respondent sent the same installer out to Complainant’s property and the sign was reinstalled. On the second installation, the address numbers were transposed and required a third appearance by Respondent on the project in order to correct the error referable to the address numbers. Complainant has not paid any “re- installation fee” and Respondent continues to claim entitlement to such a fee. e. Complainant apparently filed the instant complaint with the Registrar of Contractors after Respondent continued to claim entitlement to a re-installation fee which Complainant refused to pay. 3. Evidence of record established that the installer on the project at issue herein was not an employee of Respondent but was, in fact, a subcontractor hired by Respondent. The total cost for this project was $1,415.00 (including the cost for the required permit). Uncontroverted evidence presented at the hearing established that the installer utilized by Respondent was not a licensed contractor. Thus, Respondent is found to have aided and abetted the unlicensed activity of said individual and, as such, Respondent’s conduct constitutes a serious wrongful act within the meaning of the charged section of the State’s Contracting laws. 4. Notwithstanding the fact that Complainant paid Respondent a down- payment on the project before work began and that said down-payment included the fee to obtain the required permit, evidence of record established that Respondent failed to obtain a permit from the local building authority prior to commencing work on the project. In fact, Respondent did not obtain the permit until after the project was completed (subsequent to correcting the transposed address numbers from the second installation). Respondent’s failure to obtain the required permit before commencing work on the project is found to also constitute a wrongful act within the meaning of the applicable charged section of the State’s Contracting laws. 5. Respondent has not been paid in full for the project. When Complainant realized that Respondent had not obtained the permit for the project, she stopped payment on the final draw and ultimately paid Respondent for his work, minus the $300.00 cost for the permit. As aforementioned, the permit was ultimately obtained by Respondent. Nevertheless, Complainant continues to refuse to pay for said permit. 6. In addition to the cost of the permit, Respondent continues to claim entitlement to a specified additional charge to Complainant for re- installing the sign after the initial installation. Complainant seeks a ruling from the Registrar of Contractors indicating that she has paid Respondent “in full.” 7. The facts and circumstances presented herein support a finding that Complainant owes Respondent the cost for the issuance of the permit, despite the fact that same was belatedly obtained. However, under all of the salient facts and circumstances found herein, Complainant is not liable for the costs involved in Respondent’s failure to install the sign in the agreed manner at the initial installation. A property owner is not responsible to pay any costs for remedial work that is due to errors in construction which are determined to be attributable to a contractor’s failure to follow plans and specifications. In addition, it was also demonstrated that Respondent owes Complainant a credit for certain interior office plaques which were not provided and installed as required by the applicable contract. 8. The Registrar of Contractors does not have the authority to order Complainant to pay any money to Respondent. Thus, under all of the salient facts and circumstances presented herein it is held that the Registrar of Contractors is not the proper forum to resolve the money dispute between these parties. 9. As set forth in the Citation and Complaint issued by the Registrar of Contractors, Respondent was advised that in the event of a finding of a violation against Respondent, Respondent’s prior disciplinary record of final Registrar of Contractors’ orders may be considered in mitigation or aggravation. Accordingly, subsequent to conclusion of the instant hearing, notice was taken of official records of the Registrar of Contractors regarding any prior final disciplinary orders against Respondent and said notice revealed that the instant complaint was the only complaint on the Registrar of Contractors’ current hearing record regarding Respondent. Therefore, Respondent’s prior record is properly deemed to be good and thus, is viewed as a matter in mitigation for any disciplinary penalties to be imposed as a direct result of this case.

CONCLUSIONS OF LAW

1. Respondent violated the provisions of A.R.S. § 32-1154A (7) due to utilizing an unlicensed subcontractor and for failing to obtain a permit prior to commencing work on the project.

RECOMMENDED ORDER

In view of the foregoing it is recommended, commencing on the effective date of the Order entered in this matter, that Respondent’s Class L-38 license shall be placed on a period of disciplinary probation for forty-five (45) days. It is further recommended, in addition to the above provided penalties that any restoration of Respondent’s rights to continue contracting, whether or not probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of twenty-four (24) months, including future renewal periods, in the amount of $1,500.00, such bond or deposit to be in addition to the required surety bond or cash deposit. Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year

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… period following the above-provided twenty-four (24) month period and only if no claims are then pending.

Done this day, April 13, 1998.

_______________________________ MARK SILVER Administrative Law Judge

Original transmitted by mail this ____ day of April, 1998, to:

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

By _______________________________

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