ALJDEC

00F-M0021-ROC · Registrar of Contractors · 2000-01-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 5, 2000. APPEARANCES: Rodney Ozlanski, Complainant; Glenna Ozlanski, Complainant’s wife; Steven Cheifetz, Respondent’s attorney; John Truax, Respondent’s witness; Nelson Hill, Respondent’s witness. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________ Having heard the testimony of the witnesses and having read and considered the entire record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Registrar of Contractors. FINDINGS OF FACT 1. Complainant, a landowner, contracted with Respondent, a drilling company, for the installation of a well on his property. The contract was signed on May 27, 1998 and provided for completion of a 600 foot well and installation of a pump system with the remainder of the contract price (beyond the deposit) due upon “successful start-up”. The well was to be drilled on Complainant’s one-acre property, though Respondent advised as to where the well should be located upon the property. The contract did not provide any assurances that sufficient water would be found in the well. 2. On the day the parties signed the contract, Complainant paid Respondent $7,250, one half of the contract price of $14,500, per the terms of the contract. At the time of the contract signing, Respondent presented to Complainant a facsimile transmission from the Department of Water Resources showing the results of its report. The transmission stated, “No data available in (A-1-7) sec. 6 This site is within a mile of hard rock outcrop. This site has a high potential for a dry hole!” Though Respondent had attempted to mail the transmission to Complainant earlier, this was the first time Complainant had seen it. Nevertheless, Complainant agreed to continue with the contract, comfortable that since his neighbors had water in their wells, he would have water in his too. 3. Respondent drilled on Complainant’s property 590 or 600 feet with poor results. Complainant did not have enough water in the well to accommodate home use. Respondent was willing, at this point, to cancel the remainder of the contract and forfeit the rest of the payment because installation of the hardware would have been pointless. Complainant was disappointed and felt sure there was sufficient water at a deeper level. The parties discussed more drilling and Respondent calculated the price of an 800 foot well at $16,500. 4. Complainant stated at hearing that Respondent offered to either return $2,250 or drill another 200 feet to see if there was water. Respondent denied that any such agreement had been reached. There was no written agreement on this. Complainant had submitted with his original Complaint a handwritten note purporting to be a telephone message taken from his wife on June 18, 1998 reflecting such an agreement; however, while this may have been proposed by Complainant or his wife in a conversation, there is no evidence to support that there was any agreement by Respondent to these terms. Instead, Respondent’s sales representative approached Complainant, after additional drilling had been undertaken, and asked him to sign an addendum to the contract providing for an additional $1,000 deposit and the new price for the deeper well. Complainant refused to sign this contract. 5. When the drilling reached 790 feet without reaching sufficient water to support home use, and with no contract from Complainant for the additional deposit, the deeper well or for payment for the additional drilling, Respondent stopped drilling and left the site. 6. On July 2, 1999 Complainant filed a Complaint with the Registrar of Contractors. In it he alleged that he had a contract to drill to 800 feet but that Respondent had only drilled to 767 feet. He stated that he wanted the Respondent to complete the drilling to 800 feet which he alleged was agreed upon “and payed for” . 7. At hearing, Complainant reiterated that he wanted the well drilled to 800 feet. He stated that he felt certain there was sufficient water within 30 to 60 feet of the bottom of the well. However, he stated that he had refused to sign the second contract because he felt the parties already had an agreement to drill the extra 200 feet for, what actually amounts to, free. In fact, there was no provision in the contract that Respondent would refund any of the deposit. Therefore, Respondent was under no obligation to return any money, especially after it went to the expense of digging to 600 feet. Even if there had been an agreement to dig an additional 200 feet for nothing more than what was already paid, there was no consideration in the alleged agreement, and consequently no contract for this reason too. 8. Complainant stated at hearing that he had measured the well after Respondents left the site and found that it only reached 767 feet. Though Respondent’s witness testified that this would be due to slough when the drill is removed, the point is irrelevant since it was not established that Respondent was under any duty to drill that deep under any legal contract between the parties. 9. Complainant and his wife testified at hearing that they had the choice to tap into city water for approximately $20,000 or drill a well. They had chosen to drill a well but had not known what would happen if the well was dry, nor did they expect it to be.

REASONING AND 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. The Citation and Complaint issued by the Registrar of Contractors in this matter alleged potential violations of A.R.S. §32-1154(A)(3) and (7) and A.A.C. R4-9-108. 3. The Arizona Revised Statutes at §32-1154(A)(3) provides grounds for suspension or revocation of a contractor’s license for “[v]iolation of any rule adopted by the registrar”. The only applicable rule in the Arizona Administrative Code in this case refers to workmanship standards. A.A.C. R4-9-108. The problem in this case arose out of the fact that there was not sufficient water in the well and no contract to drill any further. Therefore, it has not been established that the Respondent has violated the rule requiring that workmanship standards be met. 4. The Arizona Revised Statutes at §32-1154(A)(7) provides for suspension or revocation of a contractor’s license for the “doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured”. 5. In order for a contract to exist, there must be an offer, acceptance, consideration, and sufficiently specific terms so that the obligations may be ascertained. Rogus v. Lords, 804 P.2d 133, 166 Ariz. 600 (Ariz. App. 1991) Consideration is not found when only one of the parties is obligated to perform. Carroll v. Lee, 712 P.2d 923, 148 Ariz. (Ariz. 1986). There was no contract to drill beyond 600 feet because there was no meeting of the minds in order to create a valid agreement. Even if there had been such an agreement, Respondent was not required under the original contract to return any part of the deposit, so there was no consideration to Respondent for making such an agreement. Respondent did drill 600 feet as required by the first contract, and then drilled beyond that. However, when Complainant refused to sign the revised contract reflecting the higher price for the deeper well and the additional deposit, Respondent was under no obligation to continue drilling. Further, since there was not sufficient water in the well, there was no purpose in continuing anyway. The evidence presented at hearing does not support a finding of any wrongdoing by Respondent. 6. 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). 7. In this case, Complainant has failed to establish, by a preponderance of the evidence, that Respondent violated the above statutes or rule. Therefore, this appeal should be denied and Complainant’s Complaint dismissed as unsubstantiated. RECOMMENDED ORDER Based upon the foregoing, the undersigned Administrative Law Judge hereby recommends to the Registrar of Contractors that this appeal be denied. Done this day, January 11, 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