ALJDEC

98F-525-ROC · Registrar of Contractors · 1999-01-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 4, 1999 APPEARANCES: Plaintiff was represented by her attorney, Kevin Koelbel and although Defendant failed to personally appear and testify at the hearing, he was represented by his attorney, Roger Foote. ADMINISTRATIVE LAW JUDGE: Mark A. 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. Defendant's contracting license has been previously revoked by final Order of the Registrar of Contractors. The revocation in question occurred as a direct result of a complaint filed by Plaintiff against Defendant (Registrar of Contractors’ case no. M97-1599). Such revocation is determined to render this Defendant unable to remedy the violation of the State's contracting laws, which gave rise to the instant claim for damages.

2. The Registrar of Contractors has received advance notification of the existence and amount of the above named Plaintiff’s claim for an administrative payout from the Contractors' Recovery Fund. 3. This hearing was convened following Defendant’s express request therefor, following Defendant’s receipt of notification that Plaintiff had made a claim for a payout from the Contractors' Recovery Fund. 4. Plaintiff seeks to recover the sum of $17,890.00 from the Contractors' Recovery Fund. 5. The prior disciplinary order of the Registrar, in case no. M97- 1599, indicates that Defendant was retained by Plaintiff to construct a specified addition onto her home. Although Defendant commenced work on said addition, he did not complete the project due to Plaintiff’s action in terminating Defendant from working on the project. Plaintiff was found to have properly terminated Defendant due to the substandard and unacceptable nature of the work that he had performed and the resultant damage sustained by specified areas of the home. Plaintiff had paid Defendant a total of $7,600.00 against the total contract price of approximately $21,000.00. 6. The Registrar’s order in case no. M97-1599 further indicated that Defendant’s work on the project was so poor that the structure built by Defendant required a complete demolition and that subsequent to said demolition, the project would need to be re-commenced. Under these facts and circumstances, the Registrar determined that Plaintiff did not receive the benefit of her bargain for the $7,600.00 paid to Defendant and thus, ordered that Defendant pay Plaintiff $7,600.00 as a condition to avoid a revocation of his license. Defendant failed to pay Plaintiff the ordered restitution. 7. The Registrar further noted in the order issued in case no. M97- 1599 that the mere payment of $7,600.00 would not be adequate to make Plaintiff “whole” for the damages caused by Defendant, in light of the fact that she would need to incur costs to have the structure torn down and specified areas of the home that were damaged by Defendant would require an appropriate repair. 8. Plaintiff received several bids, from properly licensed contractors, to demolish the work completed by Defendant, to repair the damage caused by Defendant and to complete the project. Evidence of record demonstrated that the Contractors’ Recovery Fund sent an assigned Agency inspector to Plaintiff’s home to view the actual damages and to review the bids submitted by Plaintiff. Based on said inspection and the review of the bids, including the bid submitted by John Henry Builders (“Henry”) which itemized all of the work involved, the Contractors’ Recovery Fund made a determination that the cost to properly and completely demolish Defendant’s work would be $8,590.00 and the required repairs to the damaged areas of Plaintiff’s home would cost $1,700.00. In addition, the above- described restitution of $7,600 (the sums paid to Defendant by Plaintiff) was factored into the award, thereby bringing the total damages sustained by Plaintiff to $17,890.00. The Contractors’ Recovery Fund agreed to pay this sum and Plaintiff agreed to accept same as payment on her claim against Defendant. 9. Defendant objects to several aspects of the costs set forth in Henry’s bid. Defendant contends that the cost to repair the ceiling ($1,450.00) was excessive because said bid called for repairing the existing plaster ceiling with installation of new plaster work in the damaged areas. Defendant contends that the work could be done at a much cheaper price if drywall materials were used instead of plaster. 10. Although drywall materials may be one method to repair a plaster ceiling, it is determined and held that Plaintiff’s original ceiling utilized plaster and regardless of the fact that less expensive materials may be available for ceiling construction, Plaintiff is not required to use less expensive materials to repair an existing plaster ceiling. Henry’s costs to repair and paint the plaster ceiling are not shown to be excessive for plaster repair. The evidence of record supports a finding that the total ceiling repair cost of $1,450.00 (which included paint work) is a reasonable sum to be paid from the Contractors’ Recovery Fund. 11. Defendant submitted a letter from a licensed contractor, Skill Construction & Development (“Skill”) purporting to show that said company would perform the demolition of the structure and repair of the block fence for a total of $3,975.00. However, it is not clear that said letter is to be considered a binding bid to Plaintiff representing that Skill would perform the necessary demolition and repair work. Furthermore, it is unclear as to whether or not the scope of work set forth in the letter includes all of the necessary demolition related work including, but not limited to, demolition of the footings, removal of the underground plumbing, and removal of the sewer lines. Absent such detail and any testimony regarding what Skill intended for the letter to represent (Skill did not appear at the hearing), this Tribunal is unable to assess any significant weight to said document as a reliable indicator to discredit or discount the costs set forth in the demolition and repair section of the Henry bid. Therefore, it is determined that the weight of the credible evidence of record was sufficient to support a finding that the cost of $8,590.00 was a reasonable sum to accomplish all required demolition work.

12. Defendant argues that he is willing to raze the addition work at no charge to Plaintiff and therefore, Plaintiff should not be entitled to any award from the Contractors’ Recovery Fund for the required demolition work. Although a contractor is normally allowed a reasonable opportunity to return to a jobsite and perform any ordered corrective work in a timely fashion and in a manner of his choice, provided that such choice is reasonably calculated to achieve acceptable results according to industry standards, the facts surrounding the instant case militate for the conclusion that Defendant’s workmanship on the project was so abysmal that under no circumstance should he be allowed to return to Plaintiff’s property and wreak further havoc on her life. Defendant’s offer to perform the demolition of his woefully substandard work is found to be an offer that is too little and too late. There must be a finality to proceedings and for Defendant in this matter, that day has arrived. 13. Defendant did not object to the $250.00 sum allocated to repair the block wall. 14. Plaintiff attempted to argue that the sum claimed in the instant claim for a payout from the Contractors’ Recovery Fund is actually not adequate to compensate her for specified repairs to the roof, in the event that the project is not re-built by the subsequent contractor. It was clear that this issue was not part of the original claim and based upon basic principles of due process under the law, Plaintiff is prevented from increasing the amount of her claim in the instant action. Nevertheless, nothing in this ruling would prevent Plaintiff from making a future supplemental claim for a payout from the Contractors’ Recovery Fund. 15. Based upon all of the evidence and testimony presented it is adjudicated and determined that $17,890 represents a reasonable and proper sum to paid from the Contractors' Recovery Fund.

CONCLUSIONS OF LAW

1. Plaintiff is determined to be injured person as that term is defined in A.R.S. § 32-1131(3). 2. Under the facts and circumstances of this case, the Registrar of Contractors is empowered to determine and award proper payment to Plaintiff from the Contractors' Recovery Fund pursuant to A.R.S. § 32-1154(E). 3. The within record supports an award to Plaintiff in the amount of $17,890.00, all of which shall be appropriately chargeable against Defendant and/or persons on the license as set forth in A.R.S. § 32- 1139(B).

RECOMMENDED ORDER

In view of the foregoing, it is recommended on the effective date of the Order entered in this matter that the Registrar of Contractors shall commence and finalize payment procedures from the Contractors' Recovery Fund to Plaintiff in the amount of $17,890.00.

Done this day, January 8, 1999

_________________________________ Mark A. Silver Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1999, 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