ALJDEC

99F-F0272-ROC · Registrar of Contractors · 1999-10-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 19, 1999. APPEARANCES: COMPLAINANT: Raymond Hostenske. RESPONDENT: by Ted Tonkinson, president and authorized representative.

ADMINISTRATIVE LAW JUDGE: Anthony Halas _____________________________________________________________________ This matter proceeded to hearing on October 19, 1999, to determine whether Respondent violated state law as alleged by Complainant and as cited by the Registrar of Contractors (Registrar). Based on the testimony and evidence of record, and administrative notice of documents contained in the file relative to the procedural history of the case, the following Findings of Fact, Conclusions of Law, and Recommended Decision are made and submitted to the Registrar of Contractors:

FINDINGS OF FACT 1. Complainant Raymond Hostenske (Hostenske) is a homeowner residing at Rim Trail Drive in Sedona, Arizona. 2. Respondent Jackson Landscaping, Inc., (Jackson Landscaping), with a business address in Sedona, Arizona, is a corporation licensed by the Registrar of Contractors to hold License No. 141011, Class K-21. Ted Tonkinson (Tonkinson) is president of the company and the authorized representative. 3. This matter arises out of a complaint dated February 27, 1999, and filed by Hostenske with the Registrar of Contractors on March 3, 1999. Based on documentation he included with the complaint, and as later clarified in subsequent filings with the Registrar, as well as his testimony at hearing, Hostenske raised four particular issues, among a number of concerns, which he alleged had resulted in actual or estimated additional costs of $776.00 to complete or repair, relative to landscaping work done at Hostenske’s residence by Jackson Landscaping. Those issues were: First, that Jackson Landscaping’s crew had not returned two shovels valued at $20.00 which Hostenske had provided for their use (along with other hand tools) when they had first appeared on the jobsite on February 3, 1999, without the equipment necessary to begin; Second, that Jackson Landscaping's crew had damaged a river rock drain culvert on the east perimeter of Hostenske’s property by running two backhoes over the river rock (to get to the excavation site at the back of the house), and by dragging the first backhoe used through the rocks (after it broke down on its first load and could not be restarted), which damage would require a cubic yard of river rock to be delivered and laid at an estimated cost of $195.00; Third, that Jackson Landscaping had failed to complete the excavation contracted for with regard to the removal of the dirt from the rear of the house to the front, such that Hostenske had to hire additional bobcat rental and operator time from a separate source to complete the excavation to the specified depth of 18” ; Fourth, that Jackson Landscaping had failed to complete the contracted-for straightening of a boulder wall left strewn about in disarray and rubble when built on the south side of the property by the original home-builder, which straightening also required use of the additional bobcat rental and operator, and additional labor help, such that the added costs to complete the excavation and straightening were $561.00. 4. Administrative notice is taken of various documents produced by the parties and contained in the Registrar’s file between the date the complaint was filed (March 3, 1999) and the date the Registrar issued CITATION AND COMPLAINT in Case No. F99-0272 on June 24, 1999. Those documents contain, among other assertions and information, unaccepted offers made by Hostenske and Tonkinson (on behalf of Jackson Landscaping) to each other to resolve the disputed issues. 5. The CITATION AND COMPLAINT charged Respondent with possible violation of A.R.S. § 32-1154.A.7, and was timely answered by Tonkinson on July 6, 1999. 6. At hearing, Complainant Hostenske testified on his own behalf, and offered Exhibit A, a statement by his neighbor Jerry McClary (undated); and photographic Exhibits B/1-4, C/1-2, D/1-3, E/1-3/ F/1, and G/1, all of which were marked and admitted over limited objections by Respondent, which the undersigned determined went to the weight to be given such evidence, rather than its admissibility. 7. Tonkinson testified on behalf of Respondent, and offered Exhibit 1, a statement by Ron Puchi, owner of Village Ace Hardware, dated October 18, 1999; and Exhibit 2, a photographic reproduction, both of which were marked and admitted without objection. Tonkinson also offered the testimony of Bob Rogers (Rogers), foreman and equipment operator for Jackson Landscaping. 8. Upon consideration of that testimony and evidence, and the entire record, the following is found: A. In January, 1999, Hostenske entered into an agreement with Ken Morrow (Morrow), then Respondent's sales agent, for Jackson Landscaping to perform limited landscaping of his residence, because the initial landscaping had been left incomplete by the original builder. B. Administrative notice is taken of the “ESTIMATE” on Respondent's letterhead as signed by Morrow, for Jackson Landscaping, and Hostenske, both on January 28, 1999, the cryptic terms of which were not disputed by the parties at hearing in terms of the essential work to be done. The document provided for:

Approx. 60’ Rock dry stack 3’ – 1’ height 1000.00

Bobcat with operator $55 per

Remove dirt from 250 [square foot] area 18” deep and use to fill in wells in front behind walls

Straighten wall at side of yard (south side) Rock material for walls to be taken from site

Approx. labor 500.00 $1500.00

C. The parties confirmed at hearing that the price term of $1500.00 was to be, at the suggestion of Morrow, an estimate – and not a fixed sum - of the labor necessary, which was to include hand labor at $20.00 per hour, and use of a “Bobcat” backhoe/loader and operator at $55.00 per hour. D. The contract did not require any fill material to be brought from off-site. Rather, dirt was to be excavated 18 inches deep from an area totaling 250 square feet to the rear and adjacent to the house (with that area subsequently made into a patio, level with the main floor of the house, but sunken below the surrounding ground level), to then be used to fill in around retaining walls built into two tree wells in the front area of the house. Also, rock material for the retaining walls was to be taken from other areas of the property. E. Although titled as “ESTIMATE”, the undersigned notes that the parties themselves considered the agreement therein to be binding, with the only intended uncertainty that of the actual price term for the labor to be required and then calculated. For that reason, and because the agreement is found to meet the minimum elements of a contract, it is found that the parties entered into a binding and enforceable contract. F. Administrative notice is taken that the contract was then modified in a handwritten document signed by Morrow and Hostenske on February 19, 1999, in a manner found by the undersigned to be binding on the parties. G. That modification was premised on discussions between Morrow and Hostenske, and indicated that 49 hours of hand labor at $20.00 per hour had been done to date, and 6 hours skid and bobcat work, at $35.00 per hour, for a total of $1190.00, with the further indication that $1000.00 had been paid (in two $500.00 payments, the most recent on February 19, 1999); that $190.00 was due at completion; and with the notation that “balance [of $190.00] paid on 2/22/99”. The modification further stated: Customer wants back patio finished at his expense. Says Bob could do it in an hour or so with his backhoe. And customer wants Bob and backhoe to remove rubble from front wall at his expense. Balance of $1190 plus extra backhoe work to be paid at completion. Needs river rock for front where Bobcat entered property.

H. The testimony of Hostenske, Tonkinson, and Rogers confirms that Hostenske did pay Jackson Landscaping the total of $1190.00, and that no further work was done on site by Jackson Landscaping at any time after the contract modification on February 19, 1999. I. This is so although the backhoe operator, Bob [Rogers], was apparently on site for perhaps a half-hour on either February 19, 1999, or a few days later, to discuss with Hostenske possible additional work - a scenario the undersigned finds consistent with the language of the contract modification. At that time Rogers recommended that further work could be done by laborers with shovels, at less expense than a backhoe and operator, such that he and Hostenske did not reach any further agreement for backhoe work to be done by Rogers and/or Jackson Landscaping. J. Hostenske asserts that although he paid the agreed-upon contract price of $1190.00, as modified (after it became apparent to him that the company was not accurately recording its laborers’ time), Jackson Landscaping did not complete the terms of the contract, primarily because the company did not finish the 250 s. f. (25’ by 10’) excavation of the back patio area to the required depth of 18”. He relies on his neighbor’s statement (Exhibit A), and photos to demonstrate the area before excavation; the unfinished excavation left by Jackson Landscaping, and then the excavation as eventually completed by other individuals (see Exhibit B, with five photos; Exhibit C, with 2 photos; and Exhibit F, one photo), and the patio of flagstone eventually laid in the excavated area (see Exhibit G, one photo). K. Hostenske also asserts that Jackson Landscaping failed to complete the repair of boulder wall rubble left unstraightened and in disarray by the original builder. He relies on photos to demonstrate this assertion (Exhibit D, three photos, the first two of which are date-stamped 2/28/99 before straightening of the wall, with the third date-stamped 4/29/99 after straightening by others not associated with Jackson Landscaping). L. Hostenske further asserts that during the course of the work done, the landscaping company’s crew inadvertently (that is, without criminal intent) took – and did not return, despite his requests to Morrow - his two long-handled, pointed shovels, which he valued at $8.00 apiece. M. Hostenske finally asserts that Jackson Landscaping caused damage to the river rock lining the drain culvert on the east side of the residence by driving two backhoes through the river rock, and dragging the first one back (after it broke down). He relies on photos for visual corroboration of the damage and for comparison of this as-yet unrepaired damage to a similar but undamaged section of culvert (see Exhibit E, three photos). N. Contrary to Complainant Hostenske, Tonkinson contends that Jackson Landscaping completed all work contracted for, as modified, with an actual reduction in the contract price from the estimated $1500.00 to the $1190.00 paid after the modification was agreed to. O. Tonkinson relies on the testimony of his company’s foreman and backhoe operator, Rogers, to contend that the excavation work was eventually completed (as shown in the photos of Exhibit C) by Rogers on or about February 12, 1999, rather than by someone else sometime later. P. However, the undersigned finds this particular contention to be inconsistent with the terms and clear implication of the contract modification a week later on February 19, 1999, which confirmed that “Customer wants back patio finished at his expense.” Q. Consideration of that language, in context, results in a finding by the undersigned that when the contract was modified on February 19, 1999, Hostenske was not then satisfied with the extent of the excavation in the area of the back patio, and sought (without success, as it turned out) to arrange for its completion by Rogers in a transaction to be separate from the services provided to that point in time by Jackson Landscaping for $1190.00. There is no doubt that Hostenske later arranged, at additional cost, for other individuals to accomplish the excavation to his satisfaction. R. Tonkinson further contends the boulder wall in question was in fact straightened by his crew sometime after the two photographs (Exhibit D/1 and D/2) were taken on February 28, 1999, and questions the date stamp imprinted on those photos, such that he thought the wall was properly straightened by his company’s crew sometime before leaving the jobsite on February 19, 1999. S. The undersigned rejects this contention, and finds that the straightening of the boulder wall was accomplished sometime after February 28, 1999 (well after the last of the work by Jackson Landscaping), by other individuals at additional cost to Hostenske. T. Tonkinson does not dispute that his crew may have inadvertently taken Hostenske’s two shovels, although he believes there to be other possible explanations. U. Nor does Tonkinson dispute damage by Jackson Landscaping’s backhoe operations to the east side river rock lining the drain culvert. V. Rather, Tonkinson contends that in documented offers of settlement made after Hostenske had filed the complaint, his company had made reasonable and clear efforts to provide Hostenske his choice of shovels, first in the amount of $40.00, and later, $20.00, at the local hardware store, and that Hostenske had initially accepted that offer by making his choice, but had later returned the shovels to the store (see Exhibit 1). W. Tonkinson further contends that with regard to the damage to the river rock, he offered to have Jackson Landscaping pay for and deliver (but not distribute in the culvert) a cubic yard of matching river rock to replace that damaged, but that Hostenske had simply refused, without explanation. X. In rebuttal, Hostenske asserted that he should not be the one to have to go and get replacement shovels, since Jackson Landscaping had been working for him, and not vice versa; and that he did not want Jackson Landscaping to merely deliver river rock he would have to pay to have distributed – although he conceded he had not explained that to Tonkinson.

APPLICABLE LAW

A.R.S. § 32-1154.A provides, in pertinent part, as follows:

A. The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: . . . . . 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

CONCLUSIONS OF LAW

1. To warrant action within the jurisdiction provided the Registrar of Contractors pursuant to A.R.S. § 32-1101, et seq., to impose disciplinary sanctions against licenses for violations of A.R.S. § 32- 1154.A.7, Complainant Hostenske must demonstrate by a preponderance of the evidence that Respondent Jackson Landscaping violated the statutory section cited. Culpepper v. State of Arizona, 187 Ariz. 431, 437-38, 930 P.2d 508 (Ariz. App. 1996). A “preponderance of the evidence” means that the evidence is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). It “is evidence which is of greater weight or more convincing than the 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 1182 (rev. 6th ed. 1990). 2. On the evidence of record, and premised on the original contract, as modified, it is found and concluded that Complainant has failed to demonstrate any fraudulent or wrongful act by Respondent relative to its alleged failure to complete the excavation of the back patio area to Complainant's satisfaction. 3. This is so, given the unambiguous modification of the original contract stating that the back patio was to be finished at “Customer” expense, i.e., in addition to the $1190.00 modified contract price, the consideration for which modification was the reduction to that amount from the original estimated contract price of $1500.00. 4. Similarly, it is found and concluded that the evidence of record does not sustain Complainant's burden of demonstrating any fraudulent or wrongful act by Respondent relative to the straightening of the boulder wall rubble, since this also was subject to the contract modification that such be done at customer expense, as was incurred by Complainant when he later hired additional help after unsuccessful negotiation with Rogers, Respondent’s backhoe operator. 5. Then, the undersigned does not doubt that Respondent’s crew failed to return the two shovels borrowed from Complainant when those workers arrived ill-equipped to begin their labors the first day on site. However, given Respondent’s clear efforts to mitigate that failure by allowing Complainant his choice of comparable tools at the local hardware store, without sufficient basis other than the pendency of this proceeding for Complainant's determination not to avail himself of that choice, it cannot be concluded that Respondent acted fraudulently or wrongfully and should be subject to disciplinary action for loss of the shovels. 6. For that reason, no violation of the statute is proven in regard to the shovel replacement issue, although Complainant should now be provided a reasonable time - that is, through the effective date of the Registrar’s Order in this matter, thirty-five days after it is mailed - to once again choose comparable replacements at Respondent’s expense. 7. The evidence further proves that Respondent has attempted to mitigate its admitted damage to the drain culvert river rock, as acknowledged both in the contract modification (with no indication therein that repair would be at customer expense) and in the testimony of Tonkinson. This damage constitutes a wrongful act in violation of A.R.S. § 32-1154.A.7. 8. However, the landscaping company’s willingness to remedy the damage was limited to replacement and delivery to the site of the necessary cubic yard of river rock, but without the labor necessary to distribute the rock in order to actually correct the problem. The undersigned concludes that such “dump and drive away” mitigation is insufficient to correct this wrong, which Complainant has reasonably estimated would cost $95.00 for the cost of the rock, and $100.00 for the labor to hand lay the replacement rock in the culvert, for a total of $195.00. // // // // // // // // // // // // // //

RECOMMENDED DECISION

In light of the foregoing, IT IS RECOMMENDED that the Registrar of Contractors suspend License No. 141011, Class K-21, of Jackson Landscaping, Inc., on the effective date of the Registrar’s Order, thirty-five (35) days after the date of mailing of that Order. IT IS FURTHER RECOMMENDED that, if on or before the effective date of the Registrar’s Order, Respondent Jackson Landscaping, Inc. furnishes written proof to the Registrar that it has paid Complainant Hostenske the sum of $195.00 as restitution for its wrongful act in violation of contracting laws, as specified hereinabove, then no license suspension shall take place and the CITATION AND COMPLAINT in Case No. F99-0272 shall be closed. Done this day, October 28, 1999.

______________________________________ Anthony Halas 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