ALJDEC

00F-M0253-ROC · Registrar of Contractors · 2000-02-16

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Pursuant to notice, a formal hearing was held in this case on February 15, 2000, in Phoenix, Arizona, before Neal H. Jordan, Administrative Law Judge of the Office of Administrative Hearings. APPEARANCES For Complainant: Bobby Bartlett, President For Respondent: Harlan W. Green, Esq., Payson.

FINDINGS OF FACT Based upon all the evidence of record, the following findings of fact are determined: Complainant is in the business of supplying plumbing products, materials and supplies to customers, including plumbing contractors. Respondent is a licensed plumbing contractor holding a current Class C-37R plumbing license number 140288 issued by the Registrar of Contractors. Prior to June 26, 1997 and encompassing that period ending December 29, 1998, Complainant and Respondent had developed an account relationship whereby Respondent would purchase plumbing products, materials and supplies from Complainant on a net price basis as a preferred customer. On June 26, 1997 the accounting software system being utilized by Complainant encountered a limitation that caused the data file account assigned to Respondent to become full. In order for Complainant to continue to track ongoing purchases made by Respondent, Complainant created a new account entry within the accounting software program and entered all new purchases in this new account form on and after June 26, 1997. When the first account data file became full there was a balance then due and owing by Respondent in the amount of $18,152. On July 3, 1997 Complainant made a transactional entry under a dummy invoice, number 52, to transfer the balance due under the full data file to the newly created data file and entered it as a charge in the amount of $18,152. Respondent perceived this transferred amount entered under invoice number to be a double bookkeeping entry and honestly believed it was being charged twice for the same purchases. As of December 29, 1998 the credible evidence establishes that Respondent owes to Complainant the amount of $13,563.97. This amount is derived after all credits, charges and payments have been entered and totaled. Complainant’s Ex. 1. Respondent asserts that if any amounts are owed, than it is Complainant who is indebted to Respondent. In support of this assertion Respondent relies on the premise that many purchase tickets evidencing the materials and supplies invoiced to its account were either not signed or not signed by authorized personnel. The evidence establishes that as a matter of practice there were many occasions when Respondent, by its owner or authorized persons, purchased materials and neglected to sign purchase tickets either because they were in a hurry or just didn’t want to bother doing so. Complainant has made a full audit of Respondent’s account and has verified that all purchases charged to the account of Respondent were accurate and properly invoiced. Respondent also contends that price gouging was occurring with excessive charges being made for certain ticket items versus what competitors were charging for the same products and materials. This allegation was denied by Complainant through testimony that established that pricing was always subject to change based upon incoming shipments and the fluctuating prices of copper and ABS products and that Respondent was only charged according to current pricing lists.

CONCLUSIONS OF LAW The Office of Administrative Hearings has jurisdiction over the subject matter and the parties hereto pursuant to A.R.S. §41-1092 - 1092.12 (1998). The Complainant has brought this complaint and accordingly bears the burden of proving by a preponderance of the evidence that the allegations contained therein are true. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (Ct. App. 1996); Smith v. Arizona Department of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985), (the standard of proof is that of the “preponderance of evidence.”) The Citation and Complaint alleges that Respondent violated A.R.S. §32-1154 A (7), (11). These provisions provide for disciplinary action to be taken against a licensee for:

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 or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee's operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

By a preponderance of all the evidence, Complainant has established that Respondent owes an account balance of $13,563.97, which amount remains unpaid since December 29, 1998. Respondent has apparently misunderstood the accounting transfer that occurred when a new data file was created to accommodate a limitation of the software program being utilized by Complainant. Respondent’s claim that the $18,152 transfer was a double billing is clearly not supported by the evidence. Further, regarding Respondent’s claim that the unsigned purchase tickets should not have been invoiced to its account clearly flies in the face of the common practice, not only of Respondent but also of many contractors, who neglect signing these tickets when purchases are made. If this was a serious concern to Respondent, it should have been raised at the time invoices were generated and paid by Respondent. To raise this issue as a matter of defense at this juncture is just not credible. Respondent’s expressed concern that it was being gouged by Complainant’s pricing of products and materials is just not supported by the evidence. Respondent at all times was free to compare prices with competitors of Complainant and to make purchases of materials and supplies at outlets of those competitors. The fact Respondent actually purchased products and materials from Complainant is the culmination of a contract obligation under the Uniform Commercial Code and, in the absence of a showing of unconsionability, is enforceable according to the then current pricing of Complainant.

RECOMMENDED ORDER In view of the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED commencing on the effective date of the Order entered in this matter, that the Class C-37R license of Respondent shall be suspended until the Registrar of Contractors receives credible written proof that Respondent has paid or tendered the full amount of $13,563.97 to Complainant. It is further recommended that if Respondent pays or tenders said amount on or before the effective date of the Order entered in this matter, then the above license suspension shall not take place. ENTERED this day, February 16, 2000.

______________________________________ Neal H. Jordan 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 ___________________________

-----------------------

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