ALJDEC

98F-2783-ROC · Registrar of Contractors · 1998-11-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 8, 1998

APPEARANCES: Complainant was represented by attorney Richard Gramlich; no one appeared on behalf of Respondent RRL Studios, Inc.; Respondent Sunline Design was represented by its owner and Qualifying Party, Forrest Fielder.

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

This consolidated matter concerns cabinet construction and installation that was subcontracted for but not provided during the building of Complainant Stephen Ketterer’s house. By order dated August 5, 1998, this tribunal consolidated complaints by Complainant in 98F-1032-ROC against RRL Studios, Inc. and in 98F-2783-ROC against Sunline Design. On October 5, 1998, the Registrar of Contractors issued an order closing 98F- 1032-ROC because RRL Studios’ license had been revoked in another matter. The hearing in 98F-2783-ROC, however, went forward. The parties presented evidence and testimony at the hearing and, based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order of dismissal. FINDINGS OF FACT 1. In 1996, Richard Lundine and James A. Carpenter (hereinafter “Lundine” and “Carpenter”) were officers and operators of Arizona Custom Doors, Inc. (“AzCD”), which was not licensed as a contractor. Before it collapsed, AzCD entered into several subcontract agreements to provide cabinets, doors, and installation to general contractors who were building residential homes. AzCD provided finished materials but retained a licensed contractor to perform installation. 2. In 1995 and early 1996, Respondent had an active class B license, which allowed Respondent to do general residential construction. At about the same time, AzCD asked Respondent if Respondent wanted to perform cabinet and door installation as part of a cabinet/millwork subcontract that AzCD was bidding for. That bid was not for Complainant’s house, but was prior to when Complainant’s house was built. Respondent acknowledged that he would be interested, but did not hear from AzCD further. Respondent never did any installation work on any project for AzCD. 3. In February 1996, AzCD bid for the cabinet/millwork subcontract on Complainant’s house that was being built by Smith Custom Homes, Inc. (“Smith”). (Exhibit 1.) The bid was for materials and installation. At the bottom of the bid it stated that “installation is by licensed Arizona contractor [sic].” Smith accepted the bid and entered into a Subcontract Agreement with AzCD in May 1996. Smith paid about $16,000 to AzCD on the subcontract before AzCD fell apart. 4. The Subcontract Agreement between Smith and AzCD is signed by Lundine on behalf of AzCD. (Exhibit 2.) It names AzCD as the subcontractor. In one section, there is handwritten information concerning the subcontractor. Written in the spaces is “corporation," referring to AzCD; a federal tax ID number, ostensibly AzCD’s; and Respondent’s license number with “Sunline Design.” Neither Fielder’s name nor signature appears on the document. 5. At the hearing, Respondent credibly testified that he had absolutely no knowledge of Exhibit 2 or the construction of Complainant’s house. He also stated, and the evidence supports, that he had not agreed to perform all installations for AzCD, but only to consider them on a case by case basis. He was never approached about installation for Complainant’s house. 6. Sometime in the summer of 1996, after AzCD had received partial payment on the subcontract but had performed no work, Lundine and Carpenter had a falling out and it became clear that AzCD was not going to fulfill its obligations. In August 1996, Lundine offered to take over the AzCD subcontract through his new corporation, RRL Studios, Inc. (“RRL”). RRL was not licensed as a contractor at that time. Smith conditionally agreed to the subcontract modification if certain documentation about RRL was provided. (Letter of 8/2/96 from Smith to Lundine; part of ROC complaint file in 98F-1032-ROC.) There is no evidence that this offer was ever accepted by Smith. In September 1996, Smith subcontracted with another licensed contractor, Kiesler Enterprises, to perform the work. (Exhibit 5.) The work is complete at this time. 7. Several things should be noted about the evidence in this case. First, Complainant has never made any payments to or had any contracts with AzCD, RRL, or Respondent. Smith made subcontract agreements and payments to AzCD and Kiesler only. The evidence does not support Complainant’s claim that there was an agreement between Smith and RRL in August 1996. Moreover, RRL was not licensed by the ROC until July 1997, so even if Smith had a contract with RRL in August 1996, the contract was with an unlicensed entity. Finally, there is no evidence that Complainant has been damaged. Complainant paid Smith for a house. Complainant has the house. Smith may have been damaged by AzCD, but not Complainant. There is no evidence that Complainant paid more for his home than he would have if not for AzCD’s default. CONCLUSIONS OF LAW 1. Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint. Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). Complainant has not met that burden. 2. The evidence clearly shows that Respondent had no knowledge of the Smith-AzCD subcontract and was not a party to it. 3. The evidence does not sufficiently sustain a conclusion that Respondent violated any provision of A.R.S. § 32-1154(A) as charged in the Citation and Complaint.

. . .

RECOMMENDED ORDER Based on the above findings and conclusions, it is hereby recommended that the Citation and Complaint in Case No. 98-2783 against Forrest Fielder dba Sunline Design be dismissed.

Done this 19th day of November 1998.

OFFICE OF ADMINISTRATIVE HEARINGS

_________________________________ Eric A. Bryant Administrative Law Judge

Original mailed this ___ day of November 1998, to:

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

By _______________________________

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