ALJDEC

99F-3247-ROC · Registrar of Contractors · 1999-10-15

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 5, 1999. APPEARANCES: James W. and Beth Cole, Complainants, and Larry Kush, 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. On July 30, 1997, Complainants and Respondent contracted for Respondent to build a home for Complainants. Pursuant to the terms of the contract, the home was to be finished within one year of Complainants’ qualification for mortgage. On August 14, 1997, Complainants qualified for their mortgage. However, as of the date of the hearing, October 5, 1999, the home had not been completed. Complainants have filed a complaint with the Registrar of Contractors regarding the timeliness of completion of the contract. 2. Respondent’s representative admitted that the contract has not been completed within the agreed-upon time frames. He testified that shortly after the contract was made, the company which had contracted with Respondent to provide the cash for building quit supplying the money. Respondent took over the complete responsibility of building the remaining homes in the subdivision but has had to slow down due to cash flow problems. It is unable to pay subcontractors in a timely manner and this has caused additional problems with completing the work. 3. Respondent’s representative stated that Respondent has made advances in completing the home in the last few weeks and are ready to do the framing inspection. He also stated that he has agreed to reduce the final cost of the home in order to reimburse Complainants for the additional rent they have incurred while waiting for the completion of the home. Regarding Complainants’ complaints that their interest rates have been affected by the delay, Respondent relies on the contract provision which states that interest rates are of no concern to the builder. 4. Complainants had some complaints regarding the building of the home and concerns about how it would work out when finished. However, the home is unfinished and there is insufficient evidence to make findings regarding the workmanlike manner in which it is being done. Complainants stated at hearing that their intention in filing the Complaint in this matter was to prompt Respondent to complete the home faster. 5. Records with the Registrar of Contractors indicate that Respondent’s license was suspended for expiration of bond from May 1, 1999 to May 26, 1999. It was also suspended from October 21, 1997 to October 28, 1999 for disciplinary reasons. 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. The Citation and Complaint issued in this matter cites potential violations of A.R.S. §32-1154(A)(1), (7), and (18). 3. A.R.S. §32-1154(A)(1) prohibits licensed contractors from “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal”. 4. A.R.S. §32-1154(A)(7) prohibits licensed contractors from “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured”. 5. A.R.S. §32-1154(A)(18) prohibits licensed contractors from “[c]ontracting or offering to contract or submitting a bid while the license is under suspension or while the license is on inactive status”. 6. 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). 7. In this case, Complainants have established that Respondent contracted to complete the home construction within one year of the contract which has not been done. The evidence has also established that Respondent performed some contract work during the suspension for lack of bond in May 1999, though Respondent’s representative testified that Respondent was unaware of the suspension at that time. The failure to complete the home has caused substantial injury to Complainants in that they have had to make alternate living arrangements, have not had the enjoyment of their home, and are now subject to higher interest rates. On the other hand, Respondent’s good faith attempts to complete the contract despite its grave financial difficulties must be considered a factor in mitigation in the imposition of discipline in this matter. 8. Complainants have established that Respondent has violated A.R.S. §32-1154(A)(7) and (18). However, Complainants have not established that Respondent has abandoned the contract. Rather, Respondent is attempting to complete the contract as best he can under the circumstances. Therefore, Complainants have not established a violation of A.R.S. §32-1154(A)(1).

RECOMMENDATION In view of the foregoing, it is recommended, commencing 90 days from the effective date of the Registrar’s Order, (a total of 125 days after the date of mailing by the Registrar of Contractors) that Respondent’s Class B license be suspended until the Registrar receives proof that Respondent has completed, or caused to be completed by a licensed contractor, Respondent’s home to the point of completion of all final inspections by local authorities. THIS ORDER SHOULD BE SELF-OPERATIVE WITH RESPECT TO THE SUSPENSION IMPOSED, IF ANY. It should be the responsibility of the Respondent to file with the Registrar of Contractors’ office, written confirmation that Respondent has properly and completely complied with the requirements of the Order. It is further recommended in addition to the foregoing indefinite license suspension, if any, that Respondent’s Class B license be placed on disciplinary probation for a period of 120 days commencing on the effective date of the Order entered in this matter or the date on which notice of Respondent’s proper compliance with the terms of the Order is filed with the Registrar of Contractors, whichever is later. Done this day, October 19, 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 ___________________________

-----------------------

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