ALJDEC

00F-F0237-ROC · Registrar of Contractors · 2000-09-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

On September 12, 2000, at 8:30 a.m., a hearing was scheduled to determine if Respondent had violated provisions of A.R.S. §32-1154(A). Complainant was represented by its President, Louie Serna. Respondent was represented by its owner, Martin Vierling. Based upon the entire record in the matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made to the Director of the Arizona Registrar of Contractors. FINDINGS OF FACT Respondent is a general contractor, in the business of constructing new homes and remodeling existing homes. Complainant is a sub-contractor specializing in the installation of heating systems. Complainant installed heating systems and performed work related to such for Respondent on several projects during the time period July 1997 through July 1998. On October 1, 1999, Complainant filed the instant complaint against Respondent with the Registrar of Contractors, alleging non-payment on six of the projects. Respondent contends that no balance is due and owing to Complainant. It is important to note that none of the contracts for the projects were offered into evidence. It is also important to note that Complainant did not provide an itemization for the billings on the projects in dispute. Sunflower Project Complainant charged Respondent $5,600.00 for the installation of a heating system in this home. Respondent testified that it had originally agreed to pay $4,500.00 for the entire project. However, Respondent further testified that it incurred fees in the amount of $1,700.00 as late charges because the work was not completed by the deadline date. Respondent also testified that it incurred expenses in the amount of $6,500.00 on this project due to the unprofessional and improper installation of the heating system by Complainant. Due to the improper work performed by Complainant, the pipes in the home froze causing a leak that ruined the carpet, linoleum, and a sofa in the home. According to Respondent, the duct work was improperly installed so that the heat registers were located in the center of the floor, rather than on the floor where the wall joins the floor. Consequently, Respondent had to replace the carpeting, linoleum, and certain interior furnishings for the homeowner, as well as re-insulate the frozen pipes. It is determined by the evidence presented at the hearing, that Complainant’s failure to install the heating system in a proper workmanlike manner caused significant damage to the home. Consequently, Respondent incurred expenses in the amount of $6,500.00 for the repair and replacement of the heating system and portions of the interior of the home. Therefore, Complainant is not entitled to receive any compensation from Respondent for this project. 581 South 8th Avenue Project Sharply conflicting testimony as to the contract amount agreed upon for the work to be performed by Complainant was presented at the hearing. Complainant charged Respondent $5,100.00 for this project. Respondent testified that it agreed to pay Complainant $2,250.00 for the project. Respondent testified that Complainant did not balance the heating system until fifteen days after the deadline date, causing Respondent to incur late fees in the amount of $1,500.00. The weight of the evidence of record was insufficient to support a finding as to what amount, if any, may be due and owing to Complainant by Respondent. 2734 Juniper Project Complainant charged Respondent $300.00 for the venting of a water heater. Respondent testified that during the vent pipe assembly replacement, the storm collar was installed incorrectly, causing the roof to leak through the ceiling below. Respondent removed the damaged sheet rock and insulation, costing Respondent $600.00 in material, labor, and late fees. The weight of the evidence of record was sufficient to support a finding that Complainant utilized improper and inadequate procedures for the venting of the water heater and installation of the storm collar, as manifested by the leak. Thus, it is determined by the evidence presented at hearing, that Complainant’s failure to comply with minimum workmanship requirements for venting a water heater and installing a storm collar caused the leak, resulted in damage to the home. Therefore, the Administrative Law Judge finds that Complainant is not entitled to receive any compensation for work performed on this project. #4b Lake Mary Pines Project 11. It appears from the evidence and testimony presented, that this project invoice is an error in billing and that Respondent had previously paid Complainant for the work performed. Therefore, Complainant is not entitled to additional compensation for this project. Mohawk Project Complainant charged Respondent $2,750.00 for work it performed on this project. Respondent has not paid Complainant. Respondent testified that it instructed Complainant to deal directly with the homeowner on this project because the homeowner was not paying Respondent. Respondent had advised Complainant to place liens on the home, which Complainant did. Respondent has activated its own liens and has not been paid for this project. The undersigned Administrative Law Judge finds that Complainant failed to demonstrate the existence of a contractual obligation between the parties. Therefore, it is determined that there was insufficient evidence presented regarding what, if any amount may be due and owing to Complainant by Respondent. Sinagua Project Complainant charged Respondent a total of $6,980.00 for work performed on this project. Respondent alleges that Complainant had contracted directly with the homeowner, and Complainant should be seeking compensation from the homeowner. Complainant admitted that it remembers being told by Respondent to deal directly with the homeowner. The undersigned Administrative Law Judge finds that Complainant failed to demonstrate the existence of a contractual obligation between the parties. Therefore, it is determined that there was insufficient evidence presented regarding what, if any amount may be due and owing to Complainant by Respondent. Finance Charges 16. Complainant seeks to recover $5,736.68 in finance charges. The Administrative Law Judge finds that there was insufficient evidence presented at the hearing to determine what, if any finance charges are applicable to Respondent.

17. The evidence of record adequately demonstrated a dispute between the parties regarding what, if any, amount of money is due and owing to Complainant from Respondent. Respondent’s position regarding the Sunflower Project and the 2734 Juniper Project, is found under all of the circumstances to be justified by the poor workmanship performed by Complainant on these projects. It is determined that Respondent has already paid Complainant for the #4b Lake Mary Pines Project. Respondent’s position regarding the 581 South 8th Avenue Project, the Mohawk Project, and the Sinagua Project is found under all of the circumstances to have been asserted in good faith and therefore, precludes a finding that a liquidated sum is owed to Complainant.

CONCLUSIONS OF LAW Complainant bears the burden of proof in this administrative proceeding, 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). The Registrar of Contractors, acting through an administrative disciplinary hearing, is determined to be the inappropriate forum to adjudicate amounts alleged to be due and owing in the face of a good faith dispute on such amounts. The undersigned Administrative Law Judge concludes that a good faith dispute exists concerning amounts alleged to be due and owing pertaining to the 581 South 8th Avenue Project, the Mohawk Project, and the Sinagua Project. Until and unless any claimed obligation is reduced to a judgment by a civil court of competent jurisdiction, no violation by Respondent of the provisions of A.R.S. §32-1154(A) (11) can be supported. The evidence of record was inadequate to support any finding of a violation of A.R.S. §32-1154(A) (11) regarding the Sunflower Project, the 2734 Juniper Project, and the #4b Lake Mary Pines Project. Therefore, Complainant has failed to sustain the burden of proving that Respondent has committed the violations charged herein. 2. The evidence of record was inadequate to support any finding of a violation of A.R.S. §32-1154(A) (7).

RECOMMENDED ORDER In view of the foregoing, it is recommended that this Citation, together with the Complaint upon which it is based shall be dismissed.

Done this day, September 28, 2000.

______________________________________ Sondra J. Vanella Administrative Law Judge

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

Michael P. Goldwater, Director Registrar of Contractors 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