ALJDEC

99F-1210-ROC · Registrar of Contractors · 1999-09-21

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Pursuant to notice, a formal hearing was held in this case on July 8, 1999 with a further hearing held on September 21, 1999, in Phoenix, Arizona, before Neal H. Jordan, Administrative Law Judge of the Office of Administrative Hearings.

APPEARANCES For Complainant: Joy Kufahl, pro se For Respondent: Attorney Mark Huges, Esq.

FINDINGS OF FACT Based upon all the evidence of record, the following findings of fact are determined: Joy Kufahl is added as a Co-Complainant, being a party in interest. Pursuant to an agreement (the “Contract”) dated January 30, 1997, Respondent agreed to provide the materials and labor for the construction and installation of waterfall features for the front and rear yards of Complainants home, to provide and spread 50 tons of granite stone, and to install front and rear yard walkways, for a total contract price of $14,992.00. Complainants Ex. A. On February 11, 1997, handwritten items were added to the backside of the Contract and signed by Respondent. Id. Although the evidence is controverted, the credibility of Complainants evidence supports a finding that these items were added for the purpose of inducing Complainants to contract with Respondent and are therefore found to be an integrated part of the Contract. On March 18, 1997 agreed in another writing (the “Addendum”) to further additional items to be added to the Contract, thereby adjusting the contract price to a new total amount of $27,865.00. Id. The Contract included an item described as “Fiber optic light in front,” which was part of the original contract price, and the Addendum included an item described as “fiber optic lights” with a charge of $1,000.00. The fiber optic light for the front was never installed and the “lights” (sic) for the rear were installed and paid for by Complainants. The testimony establishes that Complainants decided to not have the front fiber optic light installed and opted for it to be installed in the rear yard. The record establishes that Complainants did not receive an appropriate credit for the light not installed in the front yard. The Addendum is unclear when it sets forth the sum of $2,000 for “granite labor (backyard)” when read in conjunction with the Contract provision calling for “50 - tones of ¾” sized madison gold granite” for a price of $2,100.00, including labor. Complainants contend this is a double charge for the same contract item. However, the evidence also establishes that the design for rear yard water fall was constantly being changed requiring a greater quantity of granite stone to be provided and installed. Since Complainants paid this sum without restriction or protest, a reasonable inference is that it was a proper charge for additional granite stone for the waterfall and, without credible independent evidence to the contrary, it cannot be stated with any degree of certainty that it was a double billing. The evidence establishes that within a period of approximately three months the waterfalls began to leak and, with particular regard to the front yard, caused a severe damp condition. Further, the complaint was made that the waterfall stone, pools, concrete mortar and other areas had not been properly sealed in a good and workmanlike manner. Respondent made continuing efforts to correct or remediate the ongoing problems with the waterfalls to the point where the parties became confrontational and argumentative leading to a breach of any relationship that may have previously existed. Because of the parties inability to resolve differences relating to alleged workmanship and artistic dilemmas, Complainants filed the complaint in this matter. As a result of the complaint being filed in this matter, an on-site inspection was conducted by an assigned inspector for the Registrar of Contractors, which led to the issuance of a corrective work order letter (“CWO”) being sent to Respondent requiring that certain corrective or remedial work to be performed within a stated period of time. The evidence establishes that, although Respondent has complied with this directive, such compliance was not timely. As a result of vague and ambiguous contract language, the agency assigned inspector was unable to make a determination on a number of complaint items and left these items to be resolved by the parties themselves or through the hearing process. Since the date of the CWO, Complainants have hired another licensed contractor by the name of Gary Hines, dba Arizona Rainfall, (“Hines”) to complete any remedial or corrective work Hines determined was necessary to correct the waterfalls from leaking. Complainants have testified that all corrective work has now been completed and that as of the date of the hearing no further water leaks are occurring. Part of the remedial work performed by Hines included removal of a portion of concrete walkway that had existing acrylic flagstone installed, which now required the entire walkway to have new acrylic flagstone installed because the color could not be matched. Complainants are seeking restitution of the cost for this installation in the amount of $5,245.00. The evidence is not sufficient, or, at best, not persuasive that such work was entirely necessary or that the cost thereof was reasonable under all the circumstances given the extensive nature of the subsequent work performed. Since all repairs and remedial work have been performed and completed by another contractor to the present satisfaction of Complainants, the Kufahl’s now seek restitutionary damages by way of reimbursement from Respondent for the total cost of the waterfalls under the Contract, or, in the alternative, for the cost incurred to Hines to correct the alleged deficiencies of Respondent’s work. Such alleged costs are in excess of $5,000.00 and would be in addition to the costs referred to in Finding No. above.

CONCLUSIONS OF LAW The Office of Administrative Hearings has jurisdiction over the subject matter and the parties hereto pursuant to A.R.S. §41-1092 - 1092.12 (1998). The Complainant has brought this complaint and accordingly bears the burden of proving by a preponderance of the evidence that the allegations contained therein are true. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (Ct. App. 1996). Further, the standard of proof is that of the “preponderance of evidence.” Smith v. Arizona Department of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). The preponderance of all the evidence establishes that Respondent has violated A.R.S. §32-1154 A (7), (23), and (3), namely Rule R4-9-108, as charged in the Citation and Complaint in each respect as set forth below. By a preponderance of the evidence, Complainant has established that Respondent has committed a wrongful act by failing to provide proper credits when due for the fiber optic light in the front yard, all in violation of A.R.S. §32-1154 A (7). Further, and notwithstanding any perceived difficulties in working with the Co-Complainant, Joy Kufahl, Respondent failed to adequately draft a contract that properly spelled out with appropriate detail and design the precise understanding and intent of the parties. While it is true that parties are free to contract in whatever form and style they choose, it is a burden reposed in Respondent to exercise due care in drafting an understandable and complete contract capable of discernment by and between the respective parties in interest. The very fact that amicable working relations between the parties failed is precisely due to an inartfully drawn contract. By a preponderance of the evidence, Complainant has established that Respondent failed to timely comply with the Corrective Work Order issued by the Registrar of Contractors in violation of A.R.S. §32-1154 A (23). By a preponderance of the evidence taken as a whole, Complainant has established that Respondent has failed to perform the work undertaken pursuant to the Contract in a professional and workmanlike manner in violation of A.R.S. §32-1154 A (3), namely Rule R4-9-108. The very fact that plumbers and another contractor had to be retained to make corrections and repairs to the waterfalls and associated accessories is indicative of Respondent’s failure to comply with minimal industry standards. This conclusion is not in the least ameliorated because Respondent found he could no longer effectively work with Co-Complainant, Joy Kufahl. There is no evidence that points to a breach of contract on the part of Complainants, but, quite to the contrary, all of the evidence evinces that Respondent breached the Contract, which in a proper case would have been the basis for an award of restitutionary damages. The resulting order issued in cases such as presented herein typically involves a requirement that the Respondent return to the scene of the work and make corrective and remedial repairs to meet contractual and minimum workmanship requirements. However, in this case, Complainants have already attended to such repairs through the efforts of other contractors, thereby forcing the conclusion that there is no work remaining to be attended to by Respondent. Complainants recognize this fact and are seeking, in the alternative, restitutionary damages and attempted to introduce and present evidence to that end. When a complainant intends to seek restitutionary damages from a licensed contractor, it is incumbent on that complainant to present credible and adequate evidence to establish that firstly, the contractor in no longer able, financially or by reason of competence, to perform any work of the nature contracted for, and, secondly, that all costs being sought are a reasonable and necessary consequence of that contractor’s breach of contract. In this latter regard, it must be proven that the costs are only for remedial or corrective work and do not embellish, enhance, modify or change the intent and design of the work already completed. Such evidence may include testimony and written estimates from more than one contractor as to the costs associated with the corrective work, testimony from experts as to the exact nature of the problems involved and the corrective measures that are recommended, and testimony from suppliers of materials to be incorporated into the work. This is not to suggest that all of the above is necessary, but to submit by way of quality the nature of evidence that is required to meet the burden of proof when restitutionary damages are sought. It must be concluded as a matter of law that Complainants have failed to establish by a preponderance of all the evidence that the costs they have incurred are proper damages that would, perhaps, have been otherwise compensable had a more appropriate case with sufficient and admissible evidence is presented. When a party chooses self-represention, that party undertakes a burden that is sometimes not easily understood. While such representation is, indeed, not discouraged, the requirements necessary to fairly establish a proper case for monetary damages cannot be lessened merely because a complainant chooses to be self-represented.

RECOMMENDED ORDER In view of the foregoing, it is recommended, commencing on the effective date of the Order entered in this matter, that the Class C-21 license of Respondent be suspended until the Registrar of Contractors receives credible written proof that Respondent has reimbursed Complainants the $1,000.00 charged for the front fiber optic light not installed but included in the Contract price. It is further recommended that if Respondent pays or tenders the foregoing amount on or before the effective date of the Order entered in this matter, then the above license suspension shall not take place. It is further recommended, in addition to the foregoing license suspension, if any, that Respondent’s Class C-21 license be placed on a period of 90 days disciplinary probation. This additional disciplinary penalty shall commence on the effective date of the Order entered in this matter or the date on which notice of Respondent’s compliance with the terms of this Order is filed with the Registrar, whichever is later.

DONE AND ENTERED this day, September 21, 1999

______________________________________ Neal H. Jordan Administrative Law Judge

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

Registrar of Contractors Mr. Michael P. Goldwater 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