ALJDEC

00F-A0265-ROC · Registrar of Contractors · 2000-08-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 1, 2000. APPEARANCES: David Snell appeared on behalf of Complainant. Ken C. Johnson represented the Respondent. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________ The issues in the instant case involves whether Respondent has violated A.R.S. § 32-1154(A)(7)( committing a wrongful or fraudulent act that results in substantial to another) or A.R.S. § 32-1154(A)(11)( a licensee’s failure to pay money due and owing to a subcontractor when the licensee has the capacity to pay.) The parties suggest that the resolution of these issues turn on whether the so-called doctrine of “acceptance of the surface” is applicable to the paint job performed by Complainant. It appears to the undersigned, however, after reviewing the contract between the parties, that in this case the matter is one of a breach of contract by Complainant by failing to follow the paint manufacturer’s recommendations. Complainant’s repainting of the home using the recommended sealer was simply proper performance of the original contract and Respondent was not obligated to pay any additional amount. As such, Respondent’s conduct in not paying Complainant an additional amount for repairing the paint does not constitute a violation of either of the above statutory sections. FINDINGS OF FACT 1. Respondent is a duly licensed general contractor in the business of building single family residential homes. Complainant is a duly licensed painting sub-contractor. 2. Complainant and Respondent entered into a contract which called for Complainant to paint the exterior of a home which Respondent had built located at 2240 Desert Willow Drive in Prescott, Arizona. Among other things, the contract between the parties specifically required Complainant’s paint work to be done “in a first -class manner in strict accord with material manufacturer’s recommendations (emphasis added). Respondent paid Complainant the full amount of the contract price. 3. The exterior masonry surface of the home was completed in a “Santa Fe” style stucco, a process where by a two-coat application of stucco is utilized. Complainant painted the stucco surface with two coats of a flat acrylic paint, but did not use a sealer beneath the paint. The Complainant testified that the manufacturer of the paint recommended, but did not require, that the sealer be used beneath the paint. 4. Complainant indicated he did not do anything to test the “pH” of the stucco or determine its suitability for adherence of the paint. 5. The parties agreed that the Complainant waited at least 60 days after the stucco job had been completed to begin the painting of the stucco. According to Complainant’s testimony, the manufacturer of the stucco requires only a 28 day cure time after the stucco has been applied in order for the stucco to be considered to have fully cured. 6. Approximately four months after the painting was completed, the stucco began leaching efflorescence through the paint. The result, both sides agree, was an unsightly paint finish. Complainant was willing to go back and repaint the house, but only if Respondent paid Complainant an additional $1,370.00 over the contract amount. Complainant in fact returned and repainted the house , this time using the recommended sealer. As Complainant candidly stated, the use of the sealer the second time cured the problem. 7. Respondent was unwilling to pay Complainant the additional $1,370.00, believing that the problem with the paint stemmed either from Complainant’s failure to adequately test the stucco surface’s “pH” factor or the failure to follow the recommendations of the manufacturer. 8. As a result of Respondent’s refusal to pay the additional $1370.00, Complainant initiated this complaint. 9. Based on the evidence adduced in this case, the undersigned finds as a matter of fact that Complainant’s failure to use the sealer as recommended by the manufacturer allowed the efflorescence to leak through the paint. Complainant’s failure to follow the manufacturer’s recommended use of the sealer amounted to a material breach of the contract with Respondent and, therefore, was a failure to perform as required by the terms of the contract. Complainant’s subsequent repainting, this time following the manufacturer’s recommendation and using the sealer did not amount to any additional work that would have entitled Complainant to any extra payment. Instead, it was merely a fulfillment of Complainant’s obligation as required by the original contract. CONCLUSIONS OF LAW 1. A.R.S. §32-1154(A) provides in pertinent part: 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. * * * (11). Failure by a licensee . . . to pay monies in excess of seven hundred fifty dollars when due for material or services rendered in connection with his operations as a contractor when he has the capacity to pay . . .(emphasis added). 2. The Complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (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). 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 (6th ed. 1990).

3. It was Complainant’s failure to follow the manufacturer’s recommendations that created the problem with the paint in this case. As much is demonstrated by Complainant’s statement that after application of the sealer, the problem of the efflorescence coming through the paint stopped. Complainant’s failure to follow the manufacturer’s recommendation about using the sealer, as required by his contract with the Respondent, amounted to a failure to perform on the contract. Complainant’s correction of the paint problem by following the manufacturer’s recommendation to use the sealer in fact merely amounted to Complainant’s performance of the original contract. Respondent, was not required to pay Complainant any additional amount over the contract price in order to have Complainant perform its obligation under the original contract. Accordingly, Respondent’s refusal to pay the additional $1370.00 was proper and, therefore, does not amount to a violation of either A.R.S. §32-1154(A)(7) or A.R.S. §32-1154(A)(11). RECOMMENDED DECISION Based on the foregoing, it is recommended that the Director dismiss the instant complaint and citation as Complainant has failed to prove a violation of either of the applicable statutes. Done this day, August 21, 2000

______________________________________ Gregory L. Hanchett 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 ___________________________

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