ALJDEC

00F-M1829X-ROC · Registrar of Contractors · 2000-10-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 19, 2000; 9:30 A.M.; Phoenix, Arizona APPEARANCES: Force Contracting of Arizona Corporation: No Appearance J.A.C., Inc.: Michael A. Georgopapadakos, Corporate Representative ADMINISTRATIVE LAW JUDGE: George A. Schade, Jr.

These consolidated matters are disciplinary proceedings brought pursuant to Arizona Revised Statutes (“A.R.S.”) § 32-1154. Based upon the evidence presented at the hearing, Administrative Law Judge (“ALJ”) George A. Schade, Jr. submits this Recommended Decision and Order to the Arizona Registrar of Contractors (“Registrar”). FINDINGS OF FACT THE PARTIES 1. Force Contracting of Arizona Corporation (“Force”) holds License No. 152614, Class K-02, issued by the Registrar on February 18, 2000, and License No. 151418, Class K-57, issued by the Registrar on December 27, 1999. These licenses were in effect at all times relevant to these cases. 2. J.A.C., Inc. doing business as J.A.C. Construction, Inc. (“J.A.C.”) holds License No. 113259, Class B-01, issued by the Registrar on April 15, 1996. This license was in effect at all times relevant to these cases. Mr. Michael A. Georgopapadakos is the Chief Engineer. CASE NO. 00F-M1727-ROC 3. On June 9, 2000, Force filed a complaint against J.A.C. alleging that J.A.C. owed Force for labor and materials in the amount of $30,693.60. 4. On August 4, 2000, the Registrar issued to J.A.C. Citation and Complaint No. M00-1727 charging violations of A.R.S. §§ 32-1154(A)(7) and -(A)(11). 5. On August 7, 2000, J.A.C. answered the citation and complaint and denied the allegations. 6. On August 20, 2000, the Registrar issued a Notice of Hearing scheduling a hearing on October 19, 2000, before the Office of Administrative Hearings. 7. On August 20, 2000, the Registrar sent Force a copy of the notice of hearing by certified mail return receipt requested to the last known address of Force. There is no evidence showing that Force did not receive the notice of hearing. CASES NO. 00F-M1829-ROC AND 00F-M1829X-ROC 8. On June 30, 2000, J.A.C. filed a complaint against Force alleging that Force had defaulted or abandoned a written contract it had entered into with J.A.C. The amount of the contract was $44,650.00. The Registrar assigned two similar docket numbers to these complaints for Force’s two licenses. 9. On August 3, 2000, the Registrar issued to Force Citations and Complaints No. M00-1829 and M00-1829X charging violations of A.R.S. §§ 32- 1154(A)(1) and -(A)(7). 10. On August 11, 2000, Force timely answered both citations and complaints and denied the allegations. 11. On August 28, 2000, the Registrar issued a Notice of Hearing scheduling a hearing on October 19, 2000, before the Office of Administrative Hearings. 12. On August 28, 2000, the Registrar sent Force a copy of the notice of hearing by certified mail return receipt requested to the last known two addresses of Force. There is no evidence showing that Force did not receive the notice of hearing. 13. On August 31, 2000, ALJ Schade wrote a letter to both Force and J.A.C. The letter, among other items, informed the parties of the date and time of the October 19, 2000, hearing. Neither letter was returned to the Office of Administrative Hearings as being undeliverable. 14. On October 19, 2000, a hearing was held. Force did not appear at the hearing either through a corporate or a legal representative. The start of the hearing was delayed thirty minutes to give Force additional time to travel to the hearing, but it did not appear. The Office of Administrative Hearings did not receive any telephone calls or letters from Force, prior to the hearing, regarding Force’s appearance at the hearing. 15. At the hearing, J.A.C. presented the testimony of Mr. Georgopapadakos and submitted fifteen exhibits which were admitted. Mr. Georgopapadakos submitted a letter from Mrs. Melody L. Reed, President of J.A.C., authorizing Mr. Georgopapadakos to act on behalf of J.A.C. at the hearing. The ALJ took official notice of the files in the possession of the Office of Administrative Hearings and of Force’s prior two-year disciplinary record with the Registrar. THE CONTRACT 16. On May 5, 2000, Force and J.A.C. entered into a written contract for the construction of improvements at Hoops and Shawnee Parks in Chandler, Arizona. The work included removal of existing trees and decomposed granite and the construction of several concrete improvements in both parks. 17. The amount of the contract was $44,650.00 18. Force contracted to start work on May 22, 2000, with a completion date of August 18, 2000. 19. On May 15, 2000, J.A.C. provided Force one set of plans and specifications for the proposed projects. 20. On May 22, 2000, Force asked for a payment of $12,412.00 less the agreed upon 10% retention, for “work completed” through May 31, 2000, although Force had not performed any work pursuant to the contract. 21. The contract provided that Force was to submit its requests for progress payments on the 15th day of the month, and Force would be paid in monthly progress payments. The first request for a progress payment was, therefore, expected on June 15, 2000. 22. On June 1, 2000, Force informed J.A.C. that Force would not be able to commence work for three reasons. The last reason related to “prior invoice payments…gone unpaid,” which Force claimed J.A.C. owed to Force. 23. On June 2, 2000, J.A.C. answered Force’s June 1, 2000, letter indicating that none of the reasons would preclude or prevent Force from commencing work. 24. On June 2, 2000, Force responded to J.A.C.’s June 2, 2000, letter. Force claimed J.A.C. owed it $16,476.40, and implied that Force did not wish to begin working on this contract until satisfactory arrangements were made for payment of this balance. 25. On the same date, J.A.C. responded to Force’s June 2, 2000, letter indicating that Force had remedies, if needed, for nonpayment on the contract. J.A.C. did not address the issue of the claimed balance of $16,476.40 owed to Force. 26. On June 6, 2000, J.A.C. wrote a letter to Force directing Force to commence work pursuant to the parties’ contract or the contract would be deemed breached. 27. Force did not do any work pursuant to the contract. 28. On June 8, 2000, J.A.C. entered into a purchase order with Bowman Brothers Concrete (“Bowman”) to do most of the concrete work which Force had contracted to do for J.A.C. The amount of Bowman’s purchase order was $37,800.00. 29. On June 9, 2000, J.A.C. informed Force that J.A.C. was holding Force in default of the contract, and J.A.C. would make other arrangements to complete the work. 30. On July 5, 2000, J.A.C. entered into a purchase order with Bowman in the amount of $3,674.00 for the construction of the trash rack concrete base (or rip-rap spillway) in Shawnee Park, called for in the contract. 31. J.A.C. paid Bowman a total of $41,474.00 for work directly associated with the contract which J.A.C. had entered into with Force on May 5, 2000. 32. J.A.C. expended the following amounts to complete the demolition/earthwork which it had contracted with Force, but which J.A.C. completed with its personnel and equipment: a.) Labor for two workmen during the weeks $2,749.00 of June 5, June 12, June 19, and June 26 b.) Use of a Bobcat for five days at a daily 835.00 rate of $167.00 Total $3,584.00 33. J.A.C. paid JMB Equipment $4,200.00 for hauling spoils, decomposed granite and one pile of dirt. This earthwork was part of the work Force had contracted to perform. 34. J.A.C. expended $4,608.00 for labor and materials in excess of the contracted amount of $44,650.00 due to Force’s failure to undertake and complete the contracted work. Mr. Georgopapadakos testified that this balance of $4,608.00 does not include costs for administration, expenses or any other type of overhead and profit. CONCLUSIONS OF LAW APPLICABLE STATUTES AND RULES A.R.S. § 32-1154(A) provides in the pertinent subsections: “A. The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions:

1. Abandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal. *** 7. The doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.

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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 operation 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.”

CONCLUSIONS OF LAW

1. Force was notified of the hearing. 2. In these disciplinary proceedings, the complainant has the burden of proof, and the standard of proof on all issues is the preponderance of the evidence.[1] A “preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[2] It “is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.”[3] 3. As Force did not present evidence in support of its complaint, the citation and complaint of Case No. 00F-M1727-ROC must be dismissed. 4. The preponderance of the evidence shows that Force violated A.R.S. § 32-1154(A)(1), as Force abandoned its written contract with J.A.C. “without legal excuse.”[4] It appears that the existence of prior balances - from other contracts and projects - claimed due to Force by J.A.C. were most likely the reason why Force did not proceed with this contract. The existence of outstanding balances from other contracts, as a reason to justify nonperfomance, does not constitute sufficient “legal excuse” to abandon a contract prior to commencing work on the contract. 5. The additional expenses of $4,608.00 which J.A.C. incurred were related to work which Force had contracted to perform under the May 5, 2000, contract. 6. Force violated A.R.S. § 32-1154(A)(7). Its failure to undertake and complete the contract resulted in J.A.C. incurring additional costs, in excess of the contract, for labor and materials. 7. The Registrar “may temporarily suspend, with or without imposition of specific conditions” a contractor’s license for violations, by acts or omissions, of any of the provisions of A.R.S. § 32-1154(A).[5] RECOMMENDED ORDER It is recommended that the Registrar: CASE NO. 00F-M1727-ROC A. Dismiss Citation and Complaint No. 00F-M1727-ROC for lack of prosecution. CASES NO. 00F-M1829-ROC AND 00F-M1829X-ROC A. Suspend Force’s License No. 152614, Class K-02, and License No. 151418, Class K-57, unless and until the Registrar receives written notification, prior to the effective date of the Registrar’s order, stating that Force has tendered payment to J.A.C. of negotiable funds in the amount of $4,608.00. B. Close Citations and Complaints No. M00-1829 and M00-1829X, if this payment is made prior to the effective date of the Registrar’s order. SUBMITTED this 20th day of October, 2000.

George A. Schade, Jr. Administrative Law Judge

The original Recommended Decision and Order of the Administrative Law Judge was mailed on October 20, 2000, for distribution to the parties, to:

Michael P. Goldwater Arizona Registrar of Contractors 800 West Washington, 6th Floor Phoenix, Arizona 85007

George A. Schade, Jr. ----------------------- [1] Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996); Rule R2-19- 119, Ariz. Admin. Code. [2] Morris K. Udall, Arizona Law of Evidence, § 5 (1960). [3] BLACK’S LAW DICTIONARY 1182 (6th ed. 1990). [4] A.R.S. § 32-1154(A)(1). [5] A.R.S. § 32-1154(B).

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