ALJDEC

99F-2091-ROC · Registrar of Contractors · 1999-08-02

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Pursuant to notice, a formal hearing was held in this case on July 26, 1999, in Phoenix, Arizona, before Neal H. Jordan, Administrative Law Judge of the Office of Administrative Hearings. APPEARANCES For Complainant: Sharon Walton, pro se For Respondent: Timothy D. Ducar, Esq. FINDINGS OF FACT Based upon all the evidence of record, the following findings of fact are determined: The named Complainant was unable to attend the hearing for employment related reasons, a prior requested continuance having been denied, and Sharon Walton, his wife, appeared pro se. Without objection, Sharon Walton was added to the case as a Co-Complainant and the above entitled caption will be amended accordingly. The complaint filed in this matter, dated December 29, 1998, was made more specific by an attachment dated January 12, 1999, which listed in greater detail a number of items claimed by Complainants to be the result of poor and substandard workmanship on the part of Respondent. This case in reality began when the Complainants hired one David Stamps, an unlicensed contractor, to construct an intricate and complex custom home in accordance with plans and specifications prepared by Complainants architect. David Stamps appeared as a witness and admitted to being an unlicensed contractor, then and now, and that he hired the Respondent by accepting two separate proposals for the plumbing work, the first dated July 29, 1998 regarding the plumbing work necessary for the construction of the custom home, and the second dated August 25, 1998 for plumbing work to be installed in a horse barn. Only the proposal dated July 29, 1998, involving plumbing work for the custom home, is the subject of this hearing. The construction work progressed through the foundation, rough plumbing and framing stages during the summer and fall of 1998. In early December, 1998, Respondent received a phone call from Complainants informing him that certain supplies had not arrived, but more importantly, informing him that David Stamps, the general contractor, had been terminated. Complainants indicated they wanted to directly assume responsibility for the plumbing contracts and have Respondent continue to work towards completion, with no mention being made at this time of any deficiencies in Respondent’s performance. Approximately one week after that phone call, Respondent received a fax letter from Complainants, dated December 15, 1998, informing him that his contract had been terminated “effective immediately for numerous breaches of contract and substandard performance….” Respondent’s Ex. A. The complaint was filed on December 29, 1998, a period slightly more than two weeks thereafter. According to usual procedures, the Registrar of Contractors, by its assigned inspector, scheduled a job site visit for February 17, 1999 to conduct an inspection for the purpose of determining if a corrective work order directive should be issued to Respondent. The evidence establishes that this job site inspection was canceled at the end of January, 1999 upon word that Complainants’ had hired another contractor to rectify the problems alleged to have resulted from Respondent’s workmanship. The photographic exhibits submitted into evidence by Complainants, plus the testimony of witnesses testifying on behalf of Complainants, purportedly establish that certain elements of Respondent’s work may not have been accomplished in the best workmanlike manner; however, when the crux of Complainants evidence is juxtaposed against that of Respondent’s, there is insufficient grounds upon which to base any supportable finding of fact that would hold Respondent culpable for the matters alleged in the complaint. The Respondent was not given an opportunity to return and make any necessary repairs and corrections or to finish his work under the contract. While this fact alone does not preclude a finding of culpability on the part of a respondent, it does increase the burden upon a complainant to present sufficient evidence to establish that the contract was breached along with evidence sufficient to support the complainant’s request for claim for relief. Since Complainants have hired other contractors to remedy any alleged problems caused by Respondent’s workmanship, there remains nothing for this Respondent to do relative to any final performance under the contract. The Complainants have purportedly presented evidence to establish the financial cost they have incurred as a result of this complaint, however, such evidence does not rise to the level of proof necessary to support a finding of fact that would justify an order of financial restitution. The costs listed in Complainants’ Exhibit 9 are not supported by any credible evidence as to actuality or relevancy. Respondent’s conduct in contracting with an unlicensed contractor raises serious concerns about his willingness to skirt the rule of law in the interest of gaining a contract. Admittedly, the witness David Stamps was acting as the general contractor on this construction project as an unlicensed contractor, and the contracts written by Respondent were in the name of David Stamps as the general contractor.

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 (App. 1996). The Citation and Complaint alleges that Respondent: (a) violated A.R.S. §32-1154 A (1), (7), and (3), namely Rule R4-9-108. These provisions provide for disciplinary action to be taken against a licensee for: 14) Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.

(7) The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

(3) Violation of any rule adopted by the registrar, namely Rule R4-9-108 which details and establishes the workmanship and professional standards to be used in determining whether a violation of this subsection has occurred.

The foregoing findings of fact determined that before Respondent had completed performance of his obligations under the contracts, he was formally terminated. Finding No. 5. This fact alone gives rise to a number of legal issues (most of which will not be necessary to address for purposes of this decision) the most salient being that Complainants conduct could be construed as unilateral breach of contract by Complainants for the reason that no prior notice regarding deficiencies in performance was given, and no opportunity to repair or correct was afforded Respondent. To summarily terminate a contract in such a manner forces a recission to effectively take place, thereby giving rise to the remedy of quantum meriut in favor of Respondent. Conversely, in order for Complainants to terminate such a contract unilaterally, and without notice or opportunity to repair or correct, they would need to establish by sufficient and credible evidence that the workmanship of Respondent was so deficient that it was beyond his apparent ability or talent to make or even cause repairs to be made. Such evidence was not forthcoming and, therefore, it must be concluded, as a matter of law, that Complainants have failed to sustain the requisite burden of proof necessary to sustain a recommendation in their favor. As to the alleged violation of A.R.S. §32-1154 A (1), the evidence of record does not support the conclusion that Respondent abandoned the contract or refused to perform in the face of a formal written termination of contract on the part of Complainants. As to the alleged violation of A.R.S. §32-1154 A (7), the findings based upon the evidence of record fails to provide sufficient basis upon which such a violation can be found. As to the alleged violation of A.R.S. §32-1154 A (3), it is possible that the workmanship of Respondent may have been deficient taking Complainants evidence of record at face value, however, a violation of this section cannot be sustained when it is concluded that the termination of contract was not predicated upon any prior notice of deficiency or with an opportunity being afforded to make repairs or corrections. Accordingly, no violation of this section of the statutes can be sustained. It is concluded, as a matter of law, that Complainants, by the weight and sufficiency of all the evidence of record, have failed to sustain the burden of proof necessary so as to provide a basis upon which the claim for relief could be entertained. At the very least, the evidence supports a finding that Respondent is guilty of aiding or abetting an unlicensed person and knowingly entering into a contract with an unlicensed person, both violations of A.R.S. §32 –1154 A (10) and (14), respectively. However, since no charges has been made regarding these violations, no recommendation will be made as to any disciplinary penalties that would otherwise have been appropriate under the circumstances.

RECOMMENDED ORDER Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Citation and Complaint issued in Case No. 99-209 be dismissed. DONE AND ENTERED this day, August 2, 1999.

______________________________________ Neal H. Jordan Administrative Law Judge

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

Registrar of Contractors Michael Goldwater, Director ATTN: Joyce Armijo 800 W. 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