ALJDEC

99F-2542-ROC · Registrar of Contractors · 1999-09-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 17, 1999 APPEARANCES: Sam Whatcott, in his own behalf Alex Davies, Superintendent, on behalf of the Respondent ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings Of Fact 1. On March 12, 1998, the Complainant received a facsimile of a diagram for a retaining wall to be built in the pool area of a home in Fountain Hills. 2. The diagram had been sent to the Complainant by the Respondent’s Superintendent (Jeff) who requested the Complainant submit a bid to the Respondent. 3. Over the next few days the Complainant and Jeff discussed the job, and on or about March 15, 1998, the Complainant and Jeff were at the job site. The Complainant quoted the Respondent a price of $2,700.00 for building the wall which represented a cost of $52.00 a linear foot. 4. The trench for the footer for the wall had been dug by someone other than the Complainant. Jeff told the Complainant the trench indicated the placement of the wall. According to the Complainant, he never received any plan other than a rough diagram from the Respondent, for the construction of the wall. 5. In April 1998, the Complainant and his crew poured the footer and built the wall. The Complainant ran short of grout for the interior of the wall and had to obtain extra grout. The Complainant believed the entire wall had the necessary grout and that the job was completed. Approximately three lineal feet of wall did not have grout. 6. In mid June 1998, the Respondent sent the Complainant a check for $1,200.00 as complete payment for the job. The Respondent stated he was withholding the remaining $1,500.00 because a portion of the wall was not built to plan. According to the Respondent it cost $750.00 to rebuild that portion of the wall, $375.00 to finish pouring grout and $375.00 to clean up a mess left by the Complainant. 7. The Complainant filed a claim against the Respondent in the Small Claims Division of Scottsdale Justice Court. On October 14, 1998, a Default Judgment in the amount of $1,500.00 plus costs was entered against the Respondent, Case No. CV 98-03829 SC. 8. The Respondent has not paid on the judgment and the Complainant filed the instant complaint with the Registrar of Contractors (Registrar), on January 10, 1999. A Citation and Complaint was issued on April 23, 1999, and a Decision and Order was entered on May 20, 1999, after the allegations were deemed admitted for failure of the Respondent to answer the Citation and Complaint. 9. On June 16, 1999, the Registrar granted the Respondent’s motion for re- hearing. Conclusions Of Law The Citation and Complaint allege violation of A.R.S. 32-1154(A)(7), wrongful or fraudulent conduct resulting in substantial injury to another and (A)(11) failure to pay for materials or services. 1. The judgment entered in Small Claims Court is a final judgment and absent a sound legal reason to the contrary the principles of res adjudicata apply to that decision. 2. The purpose of the doctrine of res adjudicata is to encourage finality and discourage forum shopping. Such finality requires the similarity of the claim, parties and cause of action and should, in the opinion of this Administrative Law Judge, be based on some type of evidentiary determination of the issues. Collateral estoppel and issue preclusion are often related to matters of res adjudicata. In the small claims default judgment against the Respondent there is no determination of any issue on the merits. No competent evidence was submitted to establish the facts of that case. 3. The Complainant’s small claims action is a civil matter for money damages. The administrative action, particularly the disciplinary process, cannot overturn or otherwise impact on the small claims final decision. However, to the extent that the administrative action concerns itself with legal issues aside from the question of money damages, the nature of the respective actions are not the same even though the underlying basis for the respective actions may be the same. An unpaid contract debt with a civil judgment does not necessarily constitute a violation of (A)(7) or (A)(11), because the potential defense of inability to pay is not available in the civil case. 4. Since the instant case is a disciplinary case and is not in all respects the same cause of action as the small claims case, it is appropriate even in light of the doctrine of res adjudicata, to make inquiry in order to determine the basis of the claim and whether there has been a violation of specific statutes which would subject the Respondent to discipline and which were not at issue in the civil case. To do otherwise in this case would cause the Registrar to be nothing more than a potential collection agency on the small claims judgment and to allow said judgment to dictate disciplinary action by the Registrar. This is inappropriate in the regulatory scheme of things, and therefore the facts of the case are considered by the Administrative Law Judge. 5. Based on the most credible evidence presented in this case, it is concluded that any deviation from the plan for the wall is attributable to the Respondent. The evidence was that the Respondent had dug the trench for the footer and the Respondent’s superintendent told the Complainant that the trench is where the fence was to go. 6. The fact that the Complainant failed to satisfactorily complete that portion of the wall that did not have grout, could be considered in the context of a possible defense on behalf of the Respondent. However, according to the Complainant, in the instant case the Respondent never informed the Complainant of any problems with the fence until two months after the job was presumed to be completed. At that time the Respondent informed the Complainant it would not pay the remaining $1,500.00 for the job because of corrective work which another company had done. As a general rule and absent some appreciable reason to do otherwise, a contractor is given an opportunity to correct problems with their work in order to mitigate any damages. No sound reason to justify a contrary conclusion was presented in this case. 7. Based on the above, it is concluded that the Respondent has committed the violations as charged in the Citation and Complaint. It is also concluded that based on those violations, the Respondent is liable to the Complainant for the unpaid amount of $1,500.00. However, it should be understood that although the small claims civil judgment constitutes a separate avenue of collection, the Complainant can only collect one time on the above claim. Recommended Order In view of the foregoing, it is recommended that commencing on the effective date of the Order entered in this matter that the Class B-05 license of the Respondent shall be suspended until the Registrar of Contractors receives written proof that the Respondent has paid or tendered payment to the Complainant in the amount of $1,500.00; It is further recommended that if the Respondent pays or tenders payment as set forth in the Order entered in this matter, then the aforementioned license suspension shall not take place and the Citation and Complaint upon which it is based shall be closed. Done this day, September 20, 1999

______________________________________ Allen Reed 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