ALJDEC

00F-G0244-ROC · Registrar of Contractors · 2000-05-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 16, 2000. APPEARANCES: Kenneth Shaffer, Complainant; Denise Troy, Respondent’s attorney; and Jeremy Stone, Respondent’s witness. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________ Elite Southwest Construction (“Elite”) has established that Jeff Labriola General Contraction (“Labriola”) failed to pay him money when due on a contract between the parties without legal justification. Therefore, I recommend that the Respondent’s license be suspended until Respondent gives confirmation of payment to Complainant of $1,300 to the Registrar of Contractors. FINDINGS OF FACT 1. In November 1998, Elite contracted to do framework on a construction project at a Burger King for Labriola. Ken Shaffer, Elite’s owner, was uncertain how much the contract was for. He then found invoices that said the contract was for $32,164 for labor and $25,200 for materials. Another invoice stated that the contract was for $31,000 for labor. Shaffer stated that there were additions to the contract which Labriola agreed to pay for including a forklift rental, holddowns, and some changes to the plans (in one case a correction from a previous change to the plans). Unfortunately, Shaffer had no change orders showing that Labriola had agreed to the extra charges or what the price would be. 2. Shaffer also claimed that he was asked to act as superintendent for one week for an extra $800 and to put a roof on a pump house for $500. 3. Shaffer believed that Labriola had changed some waivers he had signed and demanded the originals. Labriola’s attorney provided most of the originals but Shaffer did not agree that they were the originals. Shaffer also wanted a rehearing (more properly it would be a continuance) in order to make Jeff Labriola appear personally and answer his questions. Jeff Labriola had not been subpoenaed and the request for rehearing was denied at hearing. 4. Labriola’s attorney and witness provided checks written by Labriola in payment to Shaffer and Shaffer’s subcontractor who had placed a lien on the project. The checks totaled $32,714. 5. Shaffer agreed that the materials portion of the contract had been paid. 6. Shaffer also complained that Labriola’s actions in the course of their dealing resulted in the loss of his license. He stated that Jeff Labriola had refused to pay him until the lien by the subcontractor was released. In reliance on that statement, Shaffer had written a check to the subcontractor and gotten a release, intending to cover the check when he got paid. Jeff Labriola, for some reason, did not accept the release. He refused to make the payment, so Shaffer had to stop payment on it, causing the subcontractor to file a complaint against him. He failed to appear at the hearing and his license was revoked. Shaffer objects to this and to what Jeff Labriola did next. Shaffer stated that Jeff Labriola went to the subcontractor and paid them a smaller amount and got a lien release himself. Shaffer objects to this because he believes that Jeff Labriola had no right to act on behalf of Elite in getting that release. 7. Shaffer’s last complaint was that Jeff Labriola gave him a check on August 10, 1999 for $1,300 to pay for the superintendent services and for the pump house roof. Shaffer stated that not only did Labriola stop payment on the check but it was drawn on a closed account. Shaffer provided evidence from the bank that the check was stopped. CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§32-1104(A)(4), 32-1154(B) and 32-1156. 2. Licensed contractors in Arizona are prohibited from failing to pay money when due to subcontractors in excess of $750 if they have the funds or if they have been paid on the project. A.R.S. §32-1154(A)(11). The Registrar of Contractors may suspend or revoke the license of a contractor for violating this law. A.R.S. §32-1154(B). 3. The burden of proof at an administrative hearing is generally upon the Complainant. Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). Further, the standard of proof at hearing is a “preponderance of the evidence”. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). 4. In this case, Elite has not established that Labriola agreed to changes and additions to the contract. Unfortunately, Elite did not have change orders to prove its claim. Elite did establish, however, that Labriola did agree to pay $1,300 for superintendent duties and a pump house roof. The stopped check provides sufficient evidence that such an agreement existed and that Labriola refused to pay it. Labriola brought insufficient evidence to establish that this payment was justifiably withheld. Therefore, the weight of the evidence has established that Labriola violated A.R.S. §32-1154(A)(11) and should have his license disciplined accordingly. 5. Labriola’s attorney argued that this was a contract dispute and should be dismissed so that the parties could proceed in superior court. Under that theory, all violations of A.R.S. §32-1154(A)(11) would be heard in superior court rather than through the Registrar of Contractors where jurisdiction specifically lies. The issues presented at hearing were not such that the matter was more properly before the superior court. Therefore, I recommend that the Registrar of Contractors retain jurisdiction over the issue. RECOMMENDED DECISION Because Elite established that $1,300 was owed to it, and that Labriola refused to pay the amount without a legally recognizable reason and because Elite did not meet the standard of proof for establishing any other violation, I recommend that Labriola’s license be suspended until the Registrar of Contractors receives confirmation that $1,300 has been paid to Elite for superintendent services and a pump house roof. Done this day, May 22, 2000. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang 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