ALJDEC

98F-1275-ROC · Registrar of Contractors · 1998-05-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

On May 26, 1998, a hearing was held to determine if the Respondent had violated provisions of A.R.S. §32-1154(A). Attorney Claudio Iannitelli represented the Complainant. Dean Peyton appeared on behalf of the Respondent. Evidence and testimony were presented. Based upon a review of the entire record, the following Findings of Fact, Conclusions of Law and Recommended Decision are made.

FINDINGS OF FACT

1. Jeff Shapiro is the president of Shapiro Builders, Inc. (the "Complainant").

2. Dean Peyton (the "Respondent") is the owner and qualifying party of Peyton's Quality Painting & Creative Coatings.

3. Larry Apodaca is an Investigator for the Registrar of Contractors (the “ROC”). Mr. Apodaca testified that on February 24, 1993, the Respondent (d.b.a. Payton Quality Painting) was issued a Class C-34 License No. 096471. Mr. Apodaca also testified that on January 31, 1995, the Respondent failed to renew this license. Mr. Apocada further testified that on January 31, 1996, this license expired by operation of law.

4. Dean Peyton testified that the failure to renew License No. 096471 was a simple oversight. On or about May 20, 1997, the Respondent was issued a new Class C-34 License No. 123783.

5. On or about February 20, 1997, the parties entered into a contract (the "Contract") in the amount of $10,930.00 to prepare and paint the interior and exterior walls of a home located at 1513 W. Caribbean, Phoenix, Arizona (the "Lot 120"). See Complainant's Exhibit 1. This Contract also included the completion of work to be performed at a second jobsite located at 40740 N. 90th Way, Scottsdale, Arizona (the "Lot 7B"). Id. The Contract was prepared by the Respondent with the Respondent’s Residential License Number (#096471) clearly displayed on the Contract. Id.

6. On or about April 24, 1997, the Complainant sent a letter to the Respondent prohibiting the Respondent from working at the two jobsites because the Respondent was unlicensed. See Complainant's Exhibit 8. This letter was sent by certified mail to the Respondent at 1420 E. Edgewood, Mesa, Arizona (the Respondent’s business address on the Contract). The letter was returned to the Complainant “unclaimed.” See Complainant’s Exhibit 9. Mr. Peyton testified that he moved his business and never received this letter.

7. Jeff Shapiro testified that approximately $9,760.00 was paid to the Respondent. See Complainant's Exhibits 2, 3, 4, 5, 6 & 7 (Invoices, cashier’s checks and lien releases). Mr. Shapiro testified that $1,000.00 was paid on Invoice #033. See Complainant’s Exhibit 7. However, Mr. Shapiro could provide no documented proof (i.e. copy of a cashier’s check or lien release) showing this payment. Mr. Shapiro did provide documented proof that $8,760.00 was paid to the Respondent. Mr. Shapiro testified that the Contract’s balance (approximately $1,170.00) was withheld because the Complainant learned that the Respondent was unlicensed.

8. Mr. Shapiro testified that the Respondent disappeared after receiving a $2,355.00 payment on or about April 22, 1997. See Complainant's Exhibit 2.

9. Jeff Shapiro testified that the Complainant had to complete the Respondent's work at Lot 120 at a cost of $5,213.78 for materials and labor. See Complainant's Exhibit 11. Mr. Shapiro testified that (1) all of the base boards required a final coat of paint; (2) the interior doors required a finishing coat; and (3) the interior walls required two coats of paint.

10. Jeff Shapiro testified that the Complainant had to complete the Respondent's work at Lot 7B at a cost of $2,718.53 for materials and labor. See Complainant's Exhibit 12. Mr. Shapiro testified that (1) the interior doors needed touching up; (2) the exterior needed touching up; and (3) the front door was never stained or varnished.

11. Jeff Shapiro testified that the Complainant was forced to use its own employees to finish the two projects because other contractors were not available on such short notice. Mr. Shapiro further testified that the Complainant used its own employees because sub-contractors generally charge more when they know that the general contractor is “over a barrel” trying to complete a home on time. It should be noted that some of this corrective work was performed by the Complainant after the Respondent became properly licensed.

12. Mr. Peyton testified that Lots 120 and 7B were 98% complete when he stopped working on the projects. Mr. Peyton testified that he stopped working because he feared that he would not receive his final payment from the Complainant. Mr. Peyton based this fear on the fact that another subcontractor was having difficulty getting paid by the Complainant.

13. Mr. Peyton testified that the 40% of the walls at Lot 7B had been altered or sanded by the Complainant. Mr. Peyton testified that he was not responsible for touching up the sanded or altered walls. Mr. Peyton further testified that the exterior walls of lot 7B were inspected and approved by the homeowners.

14. Mr. Peyton testified that he disputed the amount of paint purchased by the Complainant to complete the projects. Mr. Peyton testified that the Complainant did not need that much paint to complete the projects. However, Mr. Peyton failed to produce documented proof showing the materials that he purchased and applied to the projects.

15. On or about November 26, 1997, the Complainant filed a Complaint with the ROC. On or about December 4, 1997, the Complainant filed an Addendum to the original Complaint. On or about February 11, 1998, the ROC issued a Citation and Complaint against the Respondent alleging violations of A.R.S. §32-1154(A)(7) & (11). The ROC did not cite the Respondent for a violation of A.R.S. §32-1154(A)(1) or (20).

16. The undersigned Administrative Law Judge finds that the Respondent committed a wrongful act by (1) representing himself as a licensed residential contractor; (2) submitting a bid or offering to contract when his license was expired; (3) performing work for the Complainant while unlicensed; and (4) abandoning the two jobsites prior to their completion.

17. The undersigned Administrative Law Judge finds that the Respondent’s wrongful act resulted in the Complainant being substantially injured as demonstrated by the amount that the Complainant had to pay to finish the two projects.

18. The Complainant requested that the Respondent’s license be revoked.

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 the preponderance of the evidence shows that the Respondent has violated A.R.S. §32- 1154(A)(7) as set forth in Findings of Fact #16 & 17.

3. The undersigned Administrative Law Judge finds that the Respondent has not violated A.R.S. §32-1154(A)(11) because the Respondent was not obligated to pay an amount in excess of $750.00 when due for materials or services rendered in connection with these two projects.

4. The undersigned Administrative Law Judge finds that grounds exist to revoke or suspend the Respondent’s Class C-34 license pursuant to A.R.S. §32-1154(A).

RECOMMENDED DECISION

Based upon the foregoing, the undersigned Administrative Law Judge recommends that the Respondent’s current Class C-34 license be suspended for a period of 10 days and that this license also be placed on 30 days disciplinary probation immediately following the suspension.

The undersigned Administrative Law Judge further recommends that the Respondent post an additional surety bond, cash deposit or alternative deposit in the amount of $1,000.00 for a period of 24 months. Respondent must post this additional surety bond, cash alternative or deposit before the Registrar restores Respondent’s contracting rights. Respondent shall post this bond or deposit in addition to the required surety bond, cash deposit or alternative deposit otherwise required for the Respondent’s volume of business. The Registrar shall return the cash deposit or alternative deposit to the Respondent two years following this Order’s effective date only if there are no claims pending against the Respondent’s license.

Done this day, June 9, 1998.

______________________________________ Casey J. Newcomb Administrative Law Judge

Original transmitted by mail this ____ day of June, 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