ALJDEC

00F-M1524-ROC-res · Registrar of Contractors · 2000-10-11

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Pursuant to due notice, this cause came on for a formal hearing on August 15, 2000, in Phoenix, Arizona, before Administrative Law Judge Neal H. Jordan, Office of Administrative Hearings.

APPEARANCES For Complainant: Nancy Stevens, Appearing pro se.

For Respondent: Gregory E. Perkins, Vice President appearing pro se.

FINDINGS OF FACT Based upon all the evidence of record, the following findings of fact are determined: On March 28, 2000, Complainant and Respondent entered into a written contract (the “Contract”) whereby Respondent agreed to install new roofing on two buildings owned by Complainant for a consideration of $4,788.00. The Contract signed by the parties clearly states that the roofing work was to be performed for buildings located at 2019 E. Apache Boulevard, Tempe, Arizona. The two buildings are variously described as the East and West buildings. The work for installing a new roof on the West building has been satisfactorily completed. The work for installing a new roof on the East building located at 2019 E. Apache Blvd. has not been initiated or completed according to the Contract. The evidence establishes that Complainant called Respondent to repair the foam roof on the East building. When Respondent’s estimator arrived and climbed onto the roof he proceeded to examine the adjoining building not owned by Complainant and submitted the estimate based upon that building. The adjoining building has a common rain gutter but is otherwise separated by an air space between separate and distinct walls for each building. The evidence also establishes that the adjoining building maintains a separate and different address from the 2019 E. Apache Blvd. address shown on the Contract and is owned by another party unrelated to Complainant. When Respondent came onto the premises to complete the work, it installed new roofing foam materials on the roof of the adjoining building not owned by Complainant. There is no evidence that Complainant falsely or fraudulently induced Respondent to estimate the cost of a new foam roof for the adjoining building with a hope of gaining some unfair advantage for the pricing of the work for her building. Respondent maintains that the existing roofing material on Complainant’s premises is a built-up material and not one of foam. Complainant, however, has established that although the top surface is patched with a built-up material the overall roof is one of multiple applications of foam. Although Complainant has demanded that Respondent perform according to the Contract, Respondent has failed and refused to complete the work specified for the East building.

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 burden of proof, unless otherwise provided by law, is on the party asserting a claim, right, or entitlement in a contested case or appealable agency action. A.A.C. R2-19-119(B)(1); See also Utah Construction Company v. Berg, 68 Ariz. 285, 205 P.2d 367 (App. 1949). The standard of proof in such matters is that of the preponderance of evidence. A.A.C. R2-19- 119(A); See also Shelby School v. Arizona State Board of Education, 192 Ariz. 156, 962 P.2d 230 (App. 1998); Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is true a contract may be rescinded on the grounds of a mutual mistake provided that the alleged mistake is premised as the basic assumption on which both parties made the contract. Emmons v. Superior Court, 192 Ariz. 509 (App. 1998). It is likewise true that the party seeking to rescind the contract based upon mutual mistake must show by clear and convincing evidence that the agreement should be set aside. Id. at 510. Respondent asserts that a mutual mistake of fact occurred in this case based upon the false assumption that it was the adjoining building with its foam roof that was to be repaired. It is clear that a mistake has been made and it must be determined whether it was a mutual mistake of fact or a unilateral mistake committed by Respondent. If one party is operating under a mistake of fact when it signs an agreement, the agreement is voidable if the other party knew or should have known that the first party was mistaken. Parrish v. United Bank, 164 Ariz. 18, 20, 790 P.2d 304, 306 (App. 1990). Respondent argues that when it completed the estimate and signed the Contract, it was operating under a unilateral mistake of fact. Respondent then argues that if it had known the true facts, it would not have signed the Contract. When Respondent’s employee estimated the adjoining roof assuming that to be the foam roof Complainant wanted repaired, a unilateral mistake of fact occurred. Complainant did not direct this employee to the adjoining roof. In fact, the ladder was placed against the roof line of Complainant’s building and the employee on his own initiative ventured onto the adjoining building. A distinct separation exists between the two buildings which is apparent to a discerning eye and the fact that Respondent indicated in its Contract that the proper address was 2019 E. Apache Blvd. is persuasive that the mistake was unilateral. It is clear from the evidence that Complainant did not know nor should have known that Respondent provided an estimate for a wrong roof. Respondent is the expert in these matters, not Complainant. Respondent has failed to establish that the mistake was a mutual one. The preponderance of evidence is that the mistake was unilateral. This being the case, Respondent has failed to establish by clear and convincing evidence that the Contract should be set aside. A unilateral mistake will rarely provide a basis for the setting aside of an otherwise valid and enforceable agreement.

RECOMMENDED ORDER In view of the foregoing, it is recommended, commencing on the effective date of the Order entered in this matter, that the Class 42 license of Respondent shall be suspended until the Registrar of Contractors receives credible written proof that Respondent has accomplished appropriate and effective work in accordance with the Contract by completing the roofing installation on the East building owned by Complainant. It is further recommended that if Respondent accomplishes the above described corrective work 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, October 11, 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