ALJDEC

99F-F0017-ROC · Registrar of Contractors · 1999-02-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 22, 1999, at 1:30 p.m. APPEARANCES: Complainants appeared on their own behalf; Respondent appeared through its qualifying party, William Gregory Miller. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

The parties presented evidence and testimony and, based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order. FINDINGS OF FACT The Registrar of Contractors has issued License No. 099670, Class B to Respondent, an individual. Respondent does business in Northern Arizona. Complainant Eugene Tschumy is a licensed electrical contractor who does business in the Phoenix metropolitan area. Complainants decided to build a summer residence on land they owned in Northern Arizona from logs milled in Idaho. Before contracting with Respondent, Complainants had installed a septic system on the land and had erected a 40' by 60' metal shed for a shop and storage for vehicles and other personal property. Because Mr. Tschumy was not familiar with contractors in Northern Arizona, he decided to hire a manager for the project. Mr. Tschumy’s mechanic referred him to Respondent. Mr. Tschumy intended to contract directly with subcontractors and apparently envisioned Respondent’s role to be that of carpenter and consultant, rather than general contractor. After Mr. Tschumy met and discussed the project with Respondent at a Flagstaff restaurant, Respondent contracted to be Complainants’ construction manager. Complainants agreed to pay Respondent $30 per hour for any work he performed on the project. Because Respondent had to delay or forego other jobs to work on Complainants’ project, he required a $2,000 retainer, which Complainants paid. Respondent testified that he or his wife told Complainants the retainer was nonrefundable, but the parties did not reduce the terms of any mutual understanding they may have had to writing. Respondent subsequently reviewed plans, discussed the project with Complainants, visited the job site two or three times, provided names of subcontractors to Complainants and did other preparatory work for construction of the residence. Complainants asked Respondent to frame out walls for a 6' by 6' restroom in the metal building. Complainants did not provide any plans to Respondent, other than oral instructions and lines marked on the floor to show where the walls should be. Respondent purchased materials, which Complainants paid for directly, and subsequently spent about a day putting up OSB chipboard walls on studs constructed 2' on center. The plans Mr. Tschumy had drawn, which he used to obtain county approval, required 16" on center studs and walls consisting of “inside & outside ½” good one side plywood.” Although Complainants testified that the plans that Mr. Tschumy had drawn were on a clipboard in the metal building and may have been given to Respondent, Respondent credibly testified that no such plans were given to him or called to his attention. After Complainants saw Respondent’s work on the frame-out of the restroom walls, they told him that his workmanship was substandard and they could not allow him to work on their residence. Complainants demanded that Respondent refund the full $2,000, which demand they had reduced to $1,500 by the time of hearing. Complainants were willing to allow Respondent to keep $500 for the frame-out work, even though they planned to tear it out and replace it. Respondent offered to remedy and complete the frame-out, at his own cost for additional materials and labor. Complainants refused his offer, however, because they felt that construction should be perfect the first time and, if it is not, the builder should not be a licensed contractor. Before the hearing, Respondent offered to return to Complainants $500 and, at the hearing, to return $1,000, which they refused. At the administrative law judge’s request, the Registrar’s inspector Mark G. Schweiger examined Complainants’ photographs of the frame-out and rendered an opinion on the workmanship. Inspector Schweiger testified that 2' on center studs complied with applicable codes for commercial construction, which would apply to a metal shop building, and that the frame-out did not appear to be complete. In Inspector Schweiger’s opinion, all of the items about which Complainants expressed concern could have been remedied in completion of the frame-out. CONCLUSIONS OF LAW In this administrative proceeding, Complainants bear the burden of proof and must establish statutory violations by a preponderance of the evidence. See A.A.C. R2-19-119; see also Culpepper v. State, 187 Ariz. 431, 438, 930 P.2d 508, 515 (App. 1996). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). A preponderance of the evidence is “evidence which is of greater weight or more convincing than evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary at page 1064 (6th ed. 1990). The record does not support any finding that Respondent has violated the provisions of A.R.S. § 32-1154(A)(2),[1] (7),[2] or (11).[3] Although Respondent may owe a portion of the unearned retainer to Complainants, the parties’ dispute primarily involves a contractual common- law question of quantum meruit.[4] Because the Arizona legislature has not empowered the Registrar of Contractors to resolve contractual disputes between contractors or to award contract damages, see, e.g., Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 441, 803 P.2d 430, 434 (App. 1990), review denied (1991), if the parties cannot agree to a mutually acceptable settlement, they must resolve their dispute in a judicial forum, not an administrative licensing proceeding.

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/ / / / RECOMMENDED ORDER In view of the foregoing, it is recommended that the entire Citation and Complaint in Case No. 98-0875 be dismissed. Done this day, March 1, 1999.

______________________________________ Diane Mihalsky Administrative Law Judge

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

Registrar of Contractors Michael P. Goldwater 800 West Washington, 6th Floor Phoenix, AZ 85007

ATTN: Joyce Armijo

By ___________________________

----------------------- [1] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[d]eparture from or disregard of plans or specifications . . . in any material respect . . . .” Because Complainants never showed Respondent the plans, he should not be penalized for departing from them, especially since the evidence showed that his workmanship on the project was otherwise adequate.

[2] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.” Complainants presented no evidence at the hearing that Respondent meant to defraud or that his workmanship otherwise injured them.

[3] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure by 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 . . . .” (Emphasis added.) Complainants do not allege that they rendered services or provided materials to Respondent.

[4] “’Quantum meruit’ as amount of recovery means ‘as much as deserved,’ and measures recovery under implied contract to pay compensation as reasonable value of services rendered. . . . An equitable doctrine, based on the concept that no one who benefits by the labor and materials of another should be unjustly enriched thereby; under those circumstances, the law implies a promise to pay a reasonable amount for the labor and materials furnished, even absent a specific contract therefor. . . .” Black’s Law Dictionary at 1243 (6th ed. 1990) (citations omitted).

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