ALJDEC

99F-2630-ROC · Registrar of Contractors · 1999-12-15

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Pursuant to notice, a formal hearing was held in this case on December 14, 1999, in Phoenix, Arizona, before Neal H. Jordan, Administrative Law Judge of the Office of Administrative Hearings. APPEARANCES For Complainant: Angelo Fuciarelli, pro se. For Respondent: Anthony Davis, President.

FINDINGS OF FACT Based upon all the evidence of record, the following findings of fact are determined: Pursuant to a completed form “Repair Agreement” (the “Contract”) dated January 11, 1999, Respondent agreed with Complainant to provide materials and labor to finish and “top-out” the installation of rough plumbing in a custom home being constructed to Complainant’s specifications. Respondent’s Ex. A. The Contract price for this work was $10,700.00 of which $6,000.00 has been paid to date. Installation of the plumbing work progressed until a dispute arose over the timing and receipt of the next installment of $2,000.00 called for by the Contract that was payable on February 15, 1999. On March 2, 1999, Respondent ceased work on the project due to Complainant’s failure to make payment of the next installment amount. Mechanics Liens were filed by Respondent and a plumbing materials supplier. On March 3, 1999, Complainant called for a City of Scottsdale building inspection of the plumbing work to date. This inspection resulted in a seventeen item correction notice indicating that corrections must be made within ten days and that a reinspection must be performed. Respondent’s Ex. B. Respondent, on March 23, 1999, returned to the jobsite and performed the work necessary to make the corrections called for on the inspection report shown on Respondent’s Exhibit B. When the dispute over payment and the filing of liens could not be resolved and Respondent refused to return to complete the Contract, Complainant formally terminated the Contract with Respondent on April 5, 1999. Thereafter, Respondent never returned to the jobsite or was provided with any opportunity to return to make any additional corrections or repairs that may have been required. Complainant has since hired a journeyman plumber (albeit an unlicensed contractor) to perform work allegedly required under the Contract. In addition, this plumber also performed work that allegedly was necessary to correct and/or repair defective or deficient work performed by Respondent. Such work included re-working all the copper hot and cold water lines, sewer lines, and other items listed on Complainant’s Exhibit 12. Complainant asserts that the work performed by Respondent was seriously deficient and below acceptable minimum workmanship standards in that copper water lines were crossed, water lines were heated and bent rather than jointed, water closets were not placed properly, shower valves not correctly installed, and other items listed on Complainant’s Exhibit B. See also Complainant’s Ex. 1 through 11. The testimony in support of Complainant’s assertion that Respondent’s workmanship was substandard was given by an unlicensed plumber who performed the corrective work for Complainant, presumably an employee, and by a licensed residential general contractor who stated that “if the plumbing were installed in his house, he would not accept it.” Respondent maintains that the Contract was breached by Respondent by his failure to make a timely scheduled payment, and, further, that if the plumbing work was defective Respondent was not provided with the opportunity to return to make any and all necessary corrections in order to meet minimum workmanship standards. At the very least, Respondent did return and made the necessary corrections to address the correction notice issued by the City of Scottsdale. While these findings do not preclude a conclusion of culpability on the part of Respondent, they do require that Complainant carry the burden of presenting sufficient evidence to establish that he is entitled to restitutionary damages as claimed. It is undisputed that Respondent hired an unlicensed plumbing contractor to perform the major portion of the work called for under the Contract. The fact that a civil suit was filed and dismissed in Justice Court, Scottsdale Precinct, is of no moment to this proceeding other than to lend credence to the testimony that the parties have not been able to resolve their differences. Whether the mechanics liens have been legally filed and should be released is not properly before this tribunal and, accordingly, no findings will be made for that purpose. Complainant purportedly is seeking restitutionary damages from Respondent. However, credible evidence was not admitted to support any claim for such damages. Respondent’s objection to admitting written proposals from other contractors offered for that purpose was sustained for the reason that such proposals were not probative since Respondent was not afforded the opportunity to cross examine the contractors who prepared the proposals.

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); Smith v. Arizona Department of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985), (the standard of proof is that of the “preponderance of evidence.”) The Citation and Complaint alleges that Respondent: (a) violated A.R.S. §32-1154 A (7), (10) and (3), namely Rule R4-9-108. These provisions provide for disciplinary action to be taken against a licensee for:

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

(10) Aiding or abetting an unlicensed person to evade the provisions of this chapter, knowingly combining or conspiring with an unlicensed person, allowing one's license to be used by an unlicensed person or acting as agent, partner, associate or otherwise of an unlicensed person with intent to evade provisions of this chapter.

(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 Contract, it was formally terminated. 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 Complainant’s conduct could be construed as a unilateral breach of contract by Complainants for the reason that the second installment due under the Contract was not made, 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 rescission 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 Complainant has 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 (7), the findings based upon the evidence of record fails to provide sufficient basis upon which such a violation can be found. The evidence is persuasive that Respondent remained ready at all times to complete the Contract according to its terms and to correct or remedy any deficiencies that may have existed. The termination of the Contract by Complainant short circuited a claim of wrongful act when Respondent was not afforded the opportunity to complete the Contract and to make corrections or repairs. Regarding the allegation of violation of A.R.S. §32-1154(A)(10), it is clear that Respondent hired an unlicensed plumbing contractor. In mitigation of such violation, the testimony of Respondent is undisputed that upon learning this contractor was unlicensed he was summarily terminated. This does not lessen the fact a violation existed for which appropriate disciplinary action must be considered. 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 Complainant’s 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. However, a preponderance of the evidence establishes that Respondent was in violation of A.R.S. §32-1154(A)(10) for aiding and abetting an unlicensed contractor. A review of the officials complaint records of the Registrar of Contractors reveals that the instant complaint is the only one filed against this Respondent, a matter to be considered when determining appropriate disciplinary penalties to be imposed.

RECOMMENDED ORDER In view of the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent’s Class C-37R license be placed on disciplinary probation for a period of 90 days. This disciplinary penalty shall commence on the effective date of the Order entered in this matter. ENTERED this day, December 15, 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 ___________________________ -----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826