ALJDEC

00F-H0210-ROC · Registrar of Contractors · 2000-11-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 24, 2000. APPEARANCES: Cedar Creek Development, Inc., was represented by its president and qualifying party, John Clair Finn. Tri-State Concrete was represented by its attorney, Barry Dale, Esq., and its owner and qualifying party, Steven Dale Griffith. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ 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. The above matters were consolidated for the purposes of hearing, since both involved the same basic issues of law and fact, and both entailed the use of the same evidence and witnesses. 2. Cedar Creek Development, Inc. (“Cedar Creek”), was the general contractor for a commercial project called Upton Plaza II located in Bull Head City, Arizona. The project entailed the construction of a single story building, a two story building and a parking lot. 3. On or about September 29, 1999, Tri-State Concrete submitted a written Project Bid to Cedar Creek for concrete work on the Upton Plaza project. That bid provided, among other things, that the total contract price was $333,000.00. The bid also specified that the first draw in the amount of $75,840.00 was payable to Tri-State Concrete by November 12, 1999. 4. Cedar Creek presented Tri-State Concrete with a formal written Subcontractor Agreement. However, Tri-State Concrete proceeded with work prior to its owner executing that agreement. 5. On or about October 20, 1999, Cedar Creek entered into a written Subcontractor Agreement with Tri-State Concrete for the Upton Plaza II project. Tri-State Concrete’s scope of work included the following:

a) Furnishing all labor, services, materials, installation, cartage, hoisting, supplies, insurance, equipment, scaffolding, tools and facilities of every kind; b) Two Story Building: completed building concrete work including footings, slabs (first and second floors, footings for masonry elevator shaft and related slab, stair towers, stair connecting wall at grid one and thirty one, also footings for grid thirty-two south of end of building; c) Single Story Building: complete building concrete work including footings, slab, footings for masonry stem wall at west elevation and footings for masonry stoop walls; work to include all sidewalks, steps and landings adjacent to buildings, including backfill at stairs and retaining walls; d) Exclusions: no footings for masonry walls at dumpster enclosures or masonry screen or site walls; e) Concrete sidework, curbs, sidewalks to be awarded at a later date.

6. On or about October 20, 1999, the parties executed an amendment to their subcontract agreement. 7. The subcontract agreement, as amended, provides for the following schedule of payments:

a) All of Tri-State Concrete’s scope of work to be done and completed in a good, substantial and workmanlike manner for a total sum of $266,000.00; b) Invoices to be submitted by Tri-State Concrete to Cedar Creek by the 25th of the month; c) Invoices to be paid by Cedar Creek by the 10th of the following month; d) 5% retention until 30 days after Tri-State Concrete’s work is completed; e) Payment does not constitute final acceptance of Tri-State Concrete’s work by Cedar Creek; f) Payment made once a month only; and g) Invoices and properly executed lien releases must be received.

8. Tri-State Concrete’s proposal bid is found not to be a part of the parties’ executed subcontractor agreement. It is determined that the payment schedule and contract price set forth in that agreement, and not the schedule or contract amount described in the bid proposal, controls. 9. Cedar Creek approved Field Change Order No. 001 dated November 8, 1999, at an agreed upon cost of $3,031.08. 10. Cedar Creek approved Field Change Order No. 002 dated December 20, 1999, at an agreed upon cost of $2,325.00. 11. Cedar Creek also hired Zorn Masonry to perform work on this project. Zorn Masonry constructed footings for the two story building, which was back charged to Tri-State Concrete. 12. Tri-State Concrete installed masonry wall footings in the single story building. That work was not performed per plans. The footing elevation was set at 575.00, which is approximately 1.3 feet above the parking lot grade. Cedar Creek had Zorn Masonry remove the rebar, re-excavate the footings, recompact, place rebar and prepare work for pour. That remedial work cost Cedar Creek the sum of $7,081.00. Tri-State Concrete is found to be responsible for that expense. 13. Payments made by Cedar Creek on this project were subject to prior approval by its lending institution. 14. On November 11, 1999, Tri-State Concrete received payment of the first draw from Cedar Creek in the amount of $40,000.00. It is determined that Cedar Creek properly tendered that first draw in that amount rather than the amount of $75,840.00 set forth in Tri-State Concrete’s proposal bid. 15. In January, 2000, Cedar Creek terminated its relationship with Tri- State Concrete due to the latter’s insistence that the parties execute a change order for plan revisions which Cedar Creek believed were included within the original scope of work. 16. It is found that a bona fide dispute exists between the parties on the issues of breach of contract and damages. It is determined that those issues should be resolved in a civil court of competent jurisdiction rather than in these administrative disciplinary proceedings. 17. Tri-State Concrete’s failure to construct the single building’s masonry foundation to the proper elevation required by the plans is a wrongful act which substantially injured Cedar Creek.

CONCLUSIONS OF LAW

Docket No. 00F-H0210-ROC Cedar Creek v. Tri-State Concrete

1. The evidence of record is adequate to establish that Tri-State Concrete has violated the provisions of A.R.S. § 32-1154(A)(2) and (7). 2. The evidence of record is insufficient to establish that Tri-State Concrete has violated the provisions of A.R.S. § 32-1154(A)(1) and (11).

. . . Docket No. 00F-H0242-ROC Tri-State Concrete v. Cedar Creek

1. Although Tri-State Concrete requested that a Citation be issued alleging that Cedar Creek violated the provisions of A.R.S. § 32-1154 (A)(13), the Registrar did not include that statutory charge in the Citation issued. Therefore, any allegations that Cedar Creek violated A.R.S. § 32- 1154(A)(13) are deemed outside the scope of these proceedings. 2. The evidence of record is insufficient to establish that Cedar Creek violated the provisions of A.R.S. § 32-1154(A)(7) and (11) as charged in the Complaint.

RECOMMENDED ORDER

00F-H0210-ROC Cedar Creek v. Tri-State Concrete

In view of the foregoing, it is recommended in Docket No. 00F-H0210- ROC that Tri-State Concrete’s rights to conduct contracting shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of 24 months, including future renewal periods, in the amount of $2,500.00, such bond or deposit to be in addition to the required surety bond, cash deposit or recovery fund participation set forth in A.R.S. § 32-1152(C). Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above- provided 24 month period and only if no claims are then pending. It is further recommended that the Citation and Complaint in Docket No. 00F-H0210-ROC be closed.

. . .

Docket No. 00F-H0242-ROC Tri-State Concrete v. Cedar Creek

In view of the foregoing, it is recommended that the Citation and Complaint in Docket No. 00F-H0242-ROC be dismissed. Done this day, November 13, 2000

______________________________________ Brian Brendan Tully Administrative Law Judge

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

Registrar of Contractors Michael P. Goldwater, Director 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