ALJDEC

99F-M1449-ROC · Registrar of Contractors · 2000-01-24

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Pursuant to notice, a formal hearing was held in this case on January 19, 2000, in Phoenix, Arizona, before Neal H. Jordan, Administrative Law Judge of the Office of Administrative Hearings. APPEARANCES For Complainant: Virginia Gingras, Pro Se. For Respondent: Pablo Pescador, Qualifying Party.

FINDINGS OF FACT Based upon all the evidence of record, the following findings of fact are determined: By an agreement dated February 25, 1998, (the “Contract”), the Complainant hired Respondent to furnish labor and materials to complete a landscaping project at Complainant’s home. The Contract specified that a pave stone walkway was to be installed; a Rain Dial irrigation system, a number of specific plants, as well as boulders and crushed rock for a ground cover. See Complainant’s Ex. 1. The contract price for the foregoing work was modified on the same date to be $4,551.78. One-half of the contract price was due upon signing the Contract with the remaining one-half due upon completion of the work. The Contract specified that all work was to be completed by March 25, 1998. During the course of completing the requirements set forth in the Contract, Complainant continually advised Respondent that the workmanship was poor and that numerous items needed correction and/or repair. On March 20, 1998, Respondent contacted Complainant to arrange a final completion inspection and to receive the final payment. Complainant refused to make the final payment asserting that the Contract was not complete. Numerous promises were given by representatives of Respondent stating that the items complained about by Complainant would be “fixed”. Minimal efforts were made at that time to satisfy Complainant’s concerns. After conversations with a Kitty, an employee of Respondent, Complainant maintains an agreement was arrived at which would entitle her to retain $1,000.00 of the contract price until all items specified in the Contract had been completed. On April 20, 1998, Complainant asserts that Pablo Pescador came to her home and was given a check less the $1,000.00 retainage and showed him the items in need of attention. Respondent’s Qualifying Party is Pablo Pescador maintains it was not he who visited Complainant’s home on this date. However, it is undisputed that Respondent did receive Complainant’s check bearing that date evidencing a payment under the Contract less the $1,000.00 retainage. Throughout the balance of 1998 no work had been accomplished at Complainant’s home that would justify the payment of the retainage of the $1,000.00. Beginning in December, 1998 and continuing through May, 1999, Complainant received numerous and threatening phone calls from a collection agency demanding payment of the $1,000.00 on Respondent’s account. Notwithstanding their receipt of letters stating clearly that the matter was clearly in dispute premised upon a breach of contract by Respondent, collections efforts continued unabated. Only after Complainant filed the instant complaint with the Registrar of Contractors did the threatening phone calls cease. As a result of the complaint being filed in this matter, an jobsite inspection was conducted by an assigned inspector for the Registrar of Contractors, which led to the issuance of a corrective work order letter (“CWO”) being sent to Respondent requiring that certain corrective or remedial work to be performed within a stated period of time. The CWO stated in part that the paint applied by Respondent should not have failed within two years and that it was necessary for Respondent to return to make appropriate repairs. Respondent has not attended to the corrective issues addressed in the CWO either within the allotted time period or as of the date of the hearing in this matter. Due to Respondent’s failure to complete the Contract and attend to the CWO, Complainant has since made repairs by or through other contractors by replacing a number of dead or diseased plants, repaired the irrigation system and reapplied the required pre-emergent material. As of the date of the hearing in this matter the prickly pear cacti and ocotillo plants were still not properly planted, the citrus trees are still in question as to the proper size, the landscaping crushed rock color has not been corrected to meet the specifications of the Contract.

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 Respondent is found to have violated A.R.S. §32-1154(A)(7), (23), and (3), in this latter citation, namely Rule R4-9-108, as charged in the Citation and Complaint in each respect as set forth below. By a preponderance of the evidence, Complainant has established that Respondent has committed a wrongful act by failing, without legal excuse or defense, to properly and in a workmanlike manner perform completely the terms and provisions of the Contract on Respondent’s part to perform, all in violation of A.R.S. §32-1154 A (7). By a preponderance of the evidence, Complainant has established that Respondent failed to timely comply with the Corrective Work Order issued by the Registrar of Contractors in violation of A.R.S. §32-1154 A (23). By a preponderance of the evidence taken as a whole, Complainant has established that Respondent has failed to perform the work undertaken pursuant to the Contract in a professional and workmanlike manner in violation of A.R.S. §32-1154 A (3), namely Rule R4-9-108. Respondent maintains that all work under the Contract was complete except for a so-called “punchlist”. In making this assertion, Respondent relies upon Complainant’s letters of communication as being the expression of work in need of repair and that all such work had been properly and adequately completed entitling Respondent to the balance due under the Contract. The facts belie the claims of Respondent when it is clearly established from the handwritten notes on these letters and the ongoing pattern of complaints that all work had not been completed or corrected. Even though the CWO was issued more that one year after the plants in question were set in the ground, it nevertheless confirms the continuing and unresponded to complaints advanced by Complainant to Respondent over that one year period. The totality of all the evidence of record is more than adequate to establish that Respondent did commit a breach of contract when it failed to properly respond to the workmanship complaints of Complainant. While it was not legally appropriate for Complainant to retain the $1,000.00 holdback without a contract provision authorizing the same, the fact she has done so only further serves the lend credence to her continuing frustration in attempting to secure Respondent cooperation in completing the Contract. This particularly true when the conclusion is supported by the evidence of record that the work in need of completion and correction was more than just that which is found on a typical punchlist. Complainant has submitted evidence in an attempt to establish that the value of the work remaining to be completed and corrected. However, the credibility of such evidence falls short of that which is necessary and required under the law to prove a claim for damages. Nevertheless, this evidence is sufficient to establish that the value of such work does exceed the sum of $1,000.00, which is the amount of the retainage held by Complainant and since she has completed the majority of remaining work by herself or through other contractors, then it is entirely reasonable to conclude that such amount is appropriate as restitutionary damages. The Registrar of Contractors’ authority, in matters such as presented in this case, includes the power to order remedial restitutive damages in order to compensate an injured party for those amounts of money suffered as a loss due to a respondent’s violation of laws. Based upon the weight and credibility of the evidence of record, it is appropriate and reasonable to render an award of restitutionary damages in this case consisting of an award in favor of Complainant of the sum of $1,000.00. The Registrar may order a “restitutionary remedy … as part of the Registrar’s regulatory authority to take appropriate disciplinary action against those who violate the licensing … “ laws set forth in A.R.S. § 32-1154A (1) through (24), inclusive. An administrative award of damages is not an unconstitutional exercise of administrative authority where due process procedural rights are protected, where the authority to prohibit conduct has been well defined as in A.R.S. § 32-1154, and where judicial review is available as provided in A.R.S. § 12-901 - 914. Sunpower of Arizona v. Arizona State Registrar of Contractors, 166 Ariz. 437, 803 P.2nd 430 (App. 1990). Restitutionary damages are defined as quantifiable amounts of money that may be due an injured party to compensate for pecuniary loss resulting from another person’s violation of laws. Cactus Wren Partners v. Department of Building and Safety, 177 Ariz. 559, 869 P.2d 1212 (App. 1993).

RECOMMENDED ORDER In view of the foregoing, it is recommended, commencing on the effective date of the Order entered in this matter, that the Class C-21 license of Respondent shall be suspended until the Registrar of Contractors receives credible written proof that Respondent has forwarded to Complainant a written document stating that it releases Complainant from further or continuing liability for the balance of $1,000.00 allegedly due to Respondent under the Contract. It is further recommended that if Respondent accomplishes the foregoing on or before the effective date of the Order entered in this matter, then the above license suspension shall not take place.

ENTERED this day, January 24, 2000.

______________________________________ Neal H. Jordan Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2000, to:

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

By ___________________________