ALJDEC

00F-2719-ROC · Registrar of Contractors · 2001-01-22

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 22, 2001

APPEARANCES: Complainant, United Tile Company, L.L.C., appeared through Rita Goldstein, one of its members.

Respondent, Essex Homes, Inc., appeared through its President, Philip Charles Dinaro, Sr.

ADMINISTRATIVE LAW JUDGE: Robert I. Worth _____________________________________________________________________

Evidence and testimony were presented, and based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made.

FINDINGS OF FACT

1. Pursuant to a verbal arrangement, Complainant furnished and installed decorative tile in a residence, placing such tile around a fireplace as well as on the kitchen and bathroom back-splashes.

2. The dwelling in which the above-described work was performed was the existing home of Phil Denaro, Jr., (herein called “Phil Jr.”), an individual who was and is the son of Respondent’s President, Phil Denaro, Sr. (herein called “Phil Sr.”).

3. At all times material to this matter, Phil Jr. continued to be an employee of Respondent’s corporate entity, functioning as a construction superintendent.

4. Both the testimonial and the documentary evidence offered on behalf of the parties was sharply conflicting, with no valid basis found to exist for the disbelief of either party's version. Such conflict centered upon the identity of the actual contracting parties, upon the extent of involvement, if any, of the license holder, as well as upon the operative price terms of any contractual agreement that may have been concluded with respect to the contemplated sale of materials and the installation labor.

5. Complainant’s sales representative, who did not testify at the hearing, had reported to Complainant’s owners that a specified total price of $2,600.00 for the overall specified tile work was mutually agreed upon, with payment of all but $500.00 to be postponed until after a stated time duration. Conversely, the testimony on behalf of Respondent through Phil Jr., its employee and the individual owner of the subject property, tended to indicate that the full amount payable under the concluded verbal agreement for the tile materials, including installation charges, was $500.00. Phil Jr. asserted that the arrangement was initiated by Complainant’s sales representative whose motivation to provide a substantial price benefit for this sale was not only to provide an opportunity for viewing a finished example of Complainant’s work on the actual decorative tile, as installed, but also to serve as an inducement to gain recommendations for future tile work as well as the possible selection of Complainant as a specialty contractor on future construction projects by Respondent.

6. Phil Sr. maintained that the corporate license of Respondent was not involved at all in the arrangements concluded between Phil Jr. and Complainant’s sales representative. However, the course of conduct and actions of Respondent’s employee, Phil Jr., could generate some degree of responsibility based upon possible apparent or ostensible authority, even if actual authority was lacking.

7. After the specified tile work was completed, Phil Jr. was provided with an invoice made out to his own name in the amount of $500.00,[1] which sum was promptly paid by his own personal check. Phil Jr. Had inserted the business name of Respondent, “Essex Homes,” on the face of the check next to his own imprinted individual name and former address, and also, instead of utilizing the street address of the jobsite premises in which he had been residing for a year, he had recorded in the bottom-front memo section of the check that the payment related to “Lot 3.”

8. Respondent, through Phil Jr., readily admitted that the actual tile work performed by Complainant was excellent and that the quality of such work was not in any way the cause or reason for the refusal to transmit additional monies. In point of fact, Respondent denied that an invoice for an amount higher than $500.00 had ever been presented prior to the filing of the within complaint with the Registrar over one year after the work performance by Complainant and the payment given by Phil Jr.

9. Business records maintained by Complainant and introduced at the hearing in support of its claim for non-payment were somewhat confusing and ambiguous. In any event, it was clear that payment of the claimed unpaid balance of $2,100.00 was

requested and demanded, but that neither Respondent nor its employee (the property owner) has paid any portion of such balance.

10. Nothing in the case record serves to dispel that fact that a dispute had existed and still exists between the parties, nor can it be reasonably held or inferred that the grounds for Respondent’s position in disputing its liability for tendering any claimed unpaid balance was arbitrary, unreasonable or asserted other than in good faith on the part of Respondent.

11. The Registrar of Contractors is not statutorily empowered to adjudicate and award money damages for contractual breaches which must more appropriately recovered, if at all, by initiating and pursuing available remedies before a civil court of competent jurisdiction. Based upon the demonstrated bona fide dispute as to the monetary amount claimed past due and owing to Complainant by Respondent, the instant claim filed with the Registrar must be held not to constitute a liquidated sum which is an essential element for any finding that Respondent failed to pay monies when due within the purview of the State’s contracting laws. In the event that the basis of Respondent's dispute is ultimately determined to be without merit and a final judgment for all or part of the $2,100.00 claimed hereunder is obtained in favor of Complainant and is not promptly satisfied by Respondent, another separate disciplinary complaint may properly be filed with the Registrar of Contractors.

12. This decision or ruling is not intended to constitute a determination as to the validity of the Complainant’s claim under the alleged contract arrangements nor as to possibly legitimate defenses assertable by Respondent, by the property owner or by both. These determinations must be made by the civil tribunal as part of a new,

separate civil action commenced by Complainant. Stated alternatively, the termination of this administrative proceeding shall be expressly without prejudice as to the civil pursuit by Complainant of potential rights to recover additional monies or as to the assertion by Respondent of appropriate defenses.

CONCLUSIONS OF LAW

1. The showing that a good faith monetary dispute exists as to the indebtedness of Respondent under the parties’ contractual agreement, if any, precludes the making of any supportable finding that a liquidated sum is past due and owing by Respondent to Complainant. Consequently, the existence of such money dispute in this case results in an inability for Complainant to establish an essential element of the charged contracting law offense. Unless or until the claimed obligation is reduced to judgment by a civil court of competent jurisdiction, no violations by Respondent of any of the charged subsections of A.R.S. §32-1154A can be adequately established. A dismissal of the charges asserted herein is fully warranted at this time.

2. Any dismissal of the instant administrative proceeding must be and is expressly without prejudice to Complainant’s potential rights to pursue available civil remedies for the collection of provable damages for any breach of contract that may be sufficiently established. Any future failure by Respondent to promptly satisfy a court judgment in favor of Complainant for a sum certain, if obtained, would provide a valid basis for a new, separate disciplinary action leading to the potential imposition of penalties against Respondent’s license. ……. …….

RECOMMENDED ORDER

In view of the foregoing, it is recommended that the entire Citation and Complaint in Case Number 00-2719 be dismissed without prejudice to the rights of the named parties to continue to assert and pursue their respective claims and/or defenses in another, more appropriate forum.

Dated: January 30, , 2001.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

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

Attn: Joyce Armijo ----------------------- [1] Another factual dispute was shown to exist as to whether or not there was a simultaneous delivery or presentation by Complainant to Phil Jr. of another separate invoice for the claimed $2,100.00 balance of purportedly agreed monetary consideration for the contemplated tile installation, both such invoices admittedly bearing identical dates and invoice numbers.

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