ALJDEC

99F-1863-ROC · Registrar of Contractors · 1999-08-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 10, 1999 at 9:00 a.m. APPEARANCES: Kevin Carr, Manager of United Tile Company, appeared on behalf of Complainant. Lynn Tenney, President of Red Sky Development, appeared on behalf of Respondent. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang _____________________________________________________________________ Having heard the testimony of the witnesses and having read and considered the entire record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Decision to the Registrar of Contractors. FINDINGS OF FACT 1. Complainant, United Tile Company, subcontracted under Respondent, Red Sky Development, to install tile in the home of a customer of Respondent’s. Complainant completed the work, including some extra work which was done to appease the customer, who was very difficult by all accounts. 2. The home owner has stated that he is now satisfied with the work performed by Complainant except that he is unhappy with the way the water drains in one of his bathrooms. It is undisputed that the difficulty with the water drainage is due to the structure of the shower stall and not due to poor workmanship by Complainant. Nevertheless, the home owner has refused to sign a release stating that he is satisfied with the work. The home owner wants Complainant to install some glass block around his shower to correct the design defect which was causing the drainage problem. Complainant has not agreed to perform the extra work. Both parties stated at hearing that the home owner is withholding payment and withholding the signing of a release in order to have additional work done for him for free. 3. Complainant filed a Complaint in this matter stating that he has not received the final $2,500.00 due to him under his contract with Respondent. Respondent disputed the amount due, stating that it is closer to $1,700.00. Otherwise, Respondent stated that he does not want to pay Complainant until he is sure he is going to be paid by the home owner (with whom he is now in litigation) and until he is sure that the home owner will not file a complaint against him with the Registrar of Contractors based on the drainage in the bathroom. 4. The Respondent stated that if he is required to hire someone to fix the shower stall, it could easily cost him $1,700.00. He also stated that Complainant should bear the cost of some of the improvements because he (the contractor) doubts he will ever collect his money and the subcontractor, he argued, should share in his loss. He stated that he does not dispute that change orders were made and additional work done, but he argues that the extra work was done to appease the home owner, and, as such, should not be paid for by him. 5. Complainant submitted into evidence a packet of change orders and payment receipts along with the contract, which, along with his testimony, established that he had not yet been paid at least $2,500.00 for completed work which he had contracted to do. CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§32-1104(A)(4) and 32-1156. 2. Respondent’s Citation and Complaint in this case cites potential violations of A.R.S. §32-1154(a)(7) and (11). A.R.S. §32-1154(A)(7) prohibits “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” 3. A.R.S. §32-1154(A)(11) prohibits “[f]ailure by a licensee or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay…” 4. Pursuant to A.R.S. §32-1140, the Registrar of Contractors has the authority to take disciplinary action against any licensed contractor for a violation of the above statutes. 5. The burden of proof at an administrative hearing is generally upon the Complainant. Utah Construction Company v. Berg at al, 68 Ariz. 285, 205 P.2d 367 (1949). Further, the standard of proof at hearing is a “preponderance of the evidence”. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). 6. It is undisputed in this case that the Complainant completed the contracted work in a workmanlike manner and that the home owner’s dissatisfaction arises out of questionable motives on his part. The weight of the evidence has established that the unpaid portion of the contract is $2,500.00. No evidence was submitted to establish that the Respondent is unable to pay the remainder of the contract. Further, Respondent’s arguments against payment and in favor of at least waiting until the Respondent is assured of no further troubles with the home owner are irrelevant. The Respondent contracted with the home owner and cannot pass his problems on to the subcontractor in this case. 7. The Respondent has harmed the Complainant in this case by his failure to pay the remaining money due on the contract. Further, he has failed to make payment for materials and services on a contract in excess of seven hundred fifty dollars as required by statute. 8. Therefore, the weight of the evidence adduced at hearing has established that Respondent has violated subsections (7) and (11) of A.R.S. §32-1154(A) as cited in the Citation and Complaint. RECOMMENDATION In view of the foregoing, it is recommended, commencing on the effective date of the Registrar’s Order, (thirty-five [35] days after the date of mailing by the Registrar of Contractors) that Respondent’s Class B license be temporarily and actively suspended until the Registrar receives proof that Respondent has paid Complainant $2,500.00 for his work performed on this contract.

It is further recommended, in addition to the foregoing indefinite license suspension, if any, that Respondent’s Class B license be placed on active suspension for a period of seven (7) days, followed immediately by a period of l80 days disciplinary probation. This additional disciplinary penalty shall commence on the effective date of the Registrar’s Order or the date on which notice of Respondent’s compliance with the terms of this Order is filed with the Registrar, whichever is later.

It is further recommended, in addition to the above provided penalties, if any, that any continuation or restoration of Respondent’s contracting rights, 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 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, cash deposit or recovery fund participation set forth in A.R.S. §32-1152. Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above-provided 24 month period and only if no claims are then pending. Such bond shall be posted on or before the effective date of this Order or prior to the last day of any applicable active license suspension, whichever is later. Failure to timely post such bond shall result in the immediate or continued suspension of Respondent’s license.

Done this day, August 18, 1999.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang 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 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826