ALJDEC

01F-2096-ROC · Registrar of Contractors · 2001-08-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 16, 2001 APPEARANCES: Michelle Riggan for Complainant; Greg Neises for Respondent ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________ FINDINGS OF FACT At the commencement of the hearing, Greg N. Neises (“Mr. Neises”), representing Cholla Homes, stated that Cholla Homes was a dba for Dicklin- Neises Construction, Inc. The parties stipulated to the caption of this matter being amended to reflect the true name of the Respondent as being Dicklin-Neises Construction, Inc. dba Cholla Homes (“Respondent”) and the Administrative Law Judge hereby amends the caption of this matter accordingly. The hearing of this matter involves allegations made by Marlam Industries, Inc. (“Complainant”) that Respondent owes Complainant the sum of $6,256.00, as reflected in a complaint against Respondent that Complainant filed with the Registrar of Contractors.

At the beginning of the hearing, the parties stipulated that with respect to the amount in dispute, Respondent would tender a check in the sum of $250.00 after the hearing concluded to satisfy Complainant’s claim with respect to work having been performed at Lot 67 of Desert Diamond Estates. Michelle Riggan (“Ms. Riggan”), Complainant’s representative, stated that the amount currently in dispute, excluding the above-mentioned $250.00, was $2,975.00. Complainant and Respondent entered into a written contract (the “Contract”) whereby Complainant was to fabricate and install brushed aluminum countertops at Salon International in Scottsdale, Arizona (the “Salon”) for a cost of $2,155.00. That amount was later verbally amended to be $2,975.00. Respondent did not dispute the verbal amendment to the Contract. At the time when the Contract was entered into, Respondent informed Complainant that brushed aluminum countertops are difficult to maintain and scratch easily. Mr. Neises testified that he disclosed that information to the owner of the salon. However, the Salon owner had a particular look in mind for the Salon and, even with that information, insisted on having brushed aluminum countertops installed in the Salon. On June 8, 2000, Complainant’s installer visited the Salon and installed brushed aluminum countertops. Mr. Neises testified that he was informed by the Salon’s supervisor of construction that the installer had peeled the plastic cover on the countertops before he installed them in the Salon. Mr. Neises also testified that it is industry practice to keep the plastic cover of countertops on until after installation and then remove them. After the June 8, 200 installation, the Salon owner contacted Mr. Neises and was very upset as to how the countertops looked because they contained excessive scratches. According to Mr. Neises, leaving the plastic covering on the countertops would have minimized, if not eliminated, the scratches. Respondent contacted Complainant about the poor installation of the countertops and informed Complainant that the Salon owner was displeased with how the countertops looked. Within three weeks, Complainant sent the original installer back to the Salon to correct the problem. Mr. Neises testified that he assumed Complainant would fabricate and install new countertops given the extent of the scratches and the condition of the countertops. However, when the original installer came back to the Salon, he re-laminated the countertops. Within thirty minutes after such work was performed, the laminate on the countertops began to peel off. Respondent contacted Complainant about the countertop problem and was advised that given the difficulty of the job, Complainant requested that Respondent convince the Salon owner to change the color of the countertops, whereupon Complainant would fabricate and install new countertops. At that time, there was no discussion as to any adjustment to the Contract price. It is undisputed that the Salon owner was displeased with how the countertop job was progressing because the Salon owner anticipated opening the Salon on July 1, 2000. The Salon owner informed Mr. Neises that the problem with the countertops was delaying the opening of the Salon. Mr. Neises spoke with the manager of the Salon, who had authority to act on behalf of the Salon owner, concerning changing the color of the countertops. According to Mr. Neises, the manager informed Mr. Neises to select a color and get the job done. Mr. Neises selected black for the color of the countertops. Mr. Neises informed the Salon manager of the color selection and received the response that the Respondent should get the job done. Mr. Neises informed Complainant of the change of color of the countertops to black. Subsequently, Complainant removed the brushed aluminum countertops from the Salon and replaced them with the black countertops. During the hearing, Mr. Neises acknowledged that Complainant installed black countertops in the Salon and that he had no workmanship issues with respect to those countertops. Two days after the black countertops were installed, Mr. Neises visited the Salon to obtain payment for the job only to find the Salon had been closed by the Federal Bureau of Investigation. Respondent has not paid Complainant the sum of $2,975.00 because Respondent contends that, but for Complainant’s poor workmanship and delay in completing the job, Respondent would have received payment from the Salon. Respondent has not received any payment from the Salon for the job and has been informed that the Salon does not intend to pay Respondent for its work. During the hearing, Mr. Neises acknowledged that the Contract does not provide for Complainant’s work to be performed within a specified time period and does not provide that payment to Complainant is conditioned on when or if Respondent is paid by the Salon. Respondent also asserts that Complainant is not owed the sum of $2,975.00 because that sum was agreed to for the fabrication and installation of brushed aluminum countertops and not black countertops . Mr. Neises testified that the cost of the black countertops that were installed in the Salon was half the price of the aluminum brushed countertops. That testimony was not rebutted or refuted by Complainant. The evidence of record establishes that Respondent requested Complainant to fabricate and install black countertops in the Salon and that Complainant complied with that request. However, the evidence of record also establishes that poor workmanship and improper installation of the brushed aluminum countertops caused the Contract to be amended from brushed aluminum to black countertops. Consequently, it is determined that Complainant is entitled to receive compensation for the work it performed at the Salon equal to the value of the black countertops that were installed. There is credible evidence showing the value of the black countertops installed in the Salon as being approximately one half the value of the Contract price of $2,975.00. Therefore, it is determined that Respondent owes Complainant the sum of $1,487.50 for the work Complainant performed at the Salon. During the hearing, both Ms. Riggan and Mr. Neises testified that Complainant and Respondent had a prior business relationship whereupon the terms of payment were that Complainant would be paid within thirty days of billing for the job upon its completion. Complainant sent a billing statement to Respondent for the sum of $2,975.00 and has not received any payment regarding work it performed at the Salon. The Contract did not specify when Complainant was to be paid. However, based upon the prior course of dealing of the parties and their ongoing relationship at that time, the payment terms that had been previously agreed to the parties on prior projects is imputed to be the payment terms of the Contract. The testimony of Ms. Riggan and Mr. Neises, as set forth above, is determined to be credible. Notice is taken of the Respondent’s licensing record with the Registrar of Contractors which reveals that Respondent’s Class B license was suspended as of July 31, 2001, for non-renewal. Pursuant to A.R.S. §32-1154(C), the Registrar of Contractors has jurisdiction to take disciplinary action against a license that has expired or been cancelled, suspended, or revoked. CONCLUSIONS OF LAW The evidence of record establishes that Respondent violated the provisions of A.R.S. §32-1154(A)(7) and (11). RECOMMENDED ORDER Based on the above, it is recommended that on the effective date of the Order entered in this matter, Respondent’s Class B license be revoked unless on or before the effective date of the Order entered in this matter, Respondent has paid or tendered to Complainant the sum of $1,487.50. It is further recommended that if Respondent complies with the above on or before the effective date of the Order entered in this matter and has provided written proof of such compliance to the Registrar of Contractors, then no license revocation shall take place and this matter shall be closed. Done this day, August 29, 2001.

______________________________________ Lewis D. Kowal Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2001, 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