ALJDEC

01F-2100-ROC · Registrar of Contractors · 2001-11-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 16, 2001. APPEARANCES: Desert Sands was represented its vice-president, Terry Rhoades. Structure Development was represented by Teri Raven, Esq. ADMINISTRATIVE LAW JUDGE: Gregory L. Hanchett _____________________________________________________________________ In this matter, Desert Sands Painting (hereinafter DSP) filed a complaint with the Registrar of Contractors alleging that Structure Development (hereinafter SD) violated A.R.S. §32-1154(A)(7) (committing a wrongful or fraudulent act that results in substantial injury to another) and A.R.S. §32-1154(A)(11) (failure to pay amounts in excess of $750.00 when due and owing). SD then filed a complaint with the Registrar of Contractors alleging that DSP violated A.R.S. §32-1154(A)(3) (violation of any rule adopted by the registrar, namely, the rule requiring workmanlike performance, A.C.C. R4-9-108) and A.R.S. §32-1154(A)(7) (committing a wrongful or fraudulent act that results in substantial injury to another). As these cross allegations arose out of the same incident, the respective complaints were consolidated for hearing. Based on the evidence adduced at the hearing in this matter, the following findings of fact, conclusions of law, and recommended decision are made. FINDINGS OF FACT 1. DSP was at all times material to this matter a licensed painting contractor holding license number 145753, Class K-34. SD was at all times material to this matter a licensed general contractor holding license number 107470, Class B-. 2. The dispute in this matter arose out of a subcontract entered into between DSP and SD. SD hired DSP during the fall of 2000 to complete the painting of a single family residence in Scottsdale, Arizona. As evidenced by an estimate dated September 8, 2000, DSP was hired to complete the interior painting of the home which included painting doors, door casings, base moldings, and the walls and ceilings in a one color semi- gloss. DSP was also to complete exterior painting of the patio entry ceilings, the roof flashing, stem walls and exterior doors. For this work, DSP was to be paid $4,635.00. Of this amount, SD paid to DSP $3,711.00. SD paid the $3,711.00 amount in two installments on September 20, 2000 and October 2, 2000. 3. DSP completed additional work on the home, including the repainting of the interior of the home from a low sheen paint to a flat paint. DSP billed SD for the repainting in the amount of $1,554.00. SD paid that amount. DSP also completed the painting of a fence in the backyard. The cost for this work, according to the invoice which DSP prepared (which was dated 1/11/2001), was $200.00. Apparently, the agreement to paint the fence and some of the flashing was verbal only. SD indicated that there was never a price set for the cost of painting the fence. 4. Though not made clear by the parties, DSP undertook the painting of the home sometime during October, 2000. DSP signed a conditional lien release on November 28, 2000, relating to the original agreement of $4,635.00, indicating that all but $924.00 dollars had been paid to DSP for the work done on the residence. 5. Subsequently, DSP sent an additional invoice to SD requesting payment of $1,989.00. This amount represented the $200.00 sought by DPS for the painting of the fence, the additional $924.00 remaining on the balance of the original $4,365.00 job, and an additional $865.00 for painting drywall repairs, closet poles, and other touch-up items. It was this $1,989.00 amount and SD’s refusal to pay this amount that became the crux of the issues in this case. 6. At the hearing, DSP’s qualifying party, testified that he felt DSP had completed their job in a workmanlike manner. SD strongly contested this point. The homeowner testified at the hearing that both the homeowner and the president of SD, Todd Kessell, had gone through the home several times and had seen numerous workmanship problems with the home. The homeowner, himself a contractor with some twenty-five years’ experience, testified that he saw paint that was too thickly applied in some areas and too thinly applied in other areas. There were texture marks from rollers resulting from touching up with paint in areas that had previously been sprayed. This failure to ensure consistency between the mediums of application resulted in walls in every room that had inconsistent textures. In addition, the homeowner testified that some of the molding had been painted too many times and that some of the doors were chipped by the painters but not properly repaired. There was no consistency between the painting on the interior doors. In addition, closet rods were not stained and shelves in the closets were not properly sanded and painted. Paint drips were left all over the home. . . . 7. The evidence adduced at the hearing demonstrates that DSP had to return to the home many times in order to attempt to fix problem areas with the paint. Indeed, the homeowner’s move in date was delayed as a result of DSP’s need to return to the home in order to complete touch-ups. 8. In January, 2001, after several attempts to repair the issues with the paint, a final walk through was conducted with the Homeowner, representatives of DSP, and a representative of SP present. At this meeting, DSP stated in essence that there was nothing more it could do to repair the paint work and that it felt that the paint work was within the standards set by the workmanship standards of the registrar. The homeowner and SD disagreed, and felt that, based on DSP’s statement that there was nothing more to be done, another contractor should be secured to complete the work. DSP suggested that a courtesy inspection be arranged involving an inspector from the Registrar. This courtesy walk through never occurred. DSP also felt that it had the right to attempt to make any repairs and that it should not have to make any more repairs until apprised by the Registrar that its work was not in compliance with workmanship standards. 9. SD retained a replacement contractor to complete the paint work. That contractor testified that the work and touch-up done by DSP was not in conformity with workmanship standards. He testified that the problems with the paint and a condition known as “flashing” (a situation where a different color or sheen of paint continues to show through subsequent layers of paint) was not the fault of the tradespeople who completed the drywall. The problem in this case, according to the replacement contractor, was directly attributable to DSP’s poor workmanship. As further evidence in this regard, the replacement contractor testified that his company put 110 hours of labor into repainting and repairing DSP’s work. SD’s president testified, and the replacement contractor confirmed, that SD paid the replacement contractor $3,475.00 for the labor and material to repair the painting. 10. DSP’s president, on the other hand, testified that problems on this job stemmed not from any fault of DSP, but rather from changes and damage inflicted upon painted surfaces by other tradespeople in the home that necessitated continual return by DSP to the project to complete touch- ups. DSP’s president contended that all work completed by DSP was done in conformity with workmanlike standards. With respect to the issue of DSP’s workmanship, the undersigned finds that the evidence is evenly matched. That is, SD has failed to demonstrate by a preponderance of the evidence that DSP’s workmanship violated the workmanship requirements of the Registrar. By the same token, because the evidence is equal regarding the question of workmanship, DSP has failed to demonstrate that SP’s refusal to pay the $1,989.00 amount was wrongful. SD’s contention that DSP’s workmanship was poor and resulted in additional costs to SD has been undertaken in good faith and has convinced the undersigned that DSP has failed in its burden of proof to show that the additional $1,989.00 is due and owing. And finally, there has been no suggestion, let alone any production of evidence by either party, that either side has committed a fraudulent act. CONCLUSIONS OF LAW 1. In each of these two cases, the complainant has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (App. 1996). A "preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not." Morris K. Udall, Arizona Law of Evidence, §5 (1960). 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." Black's Law Dictionary, 1182 (6th ed. 1990). 2. A.R.S. § 32-1154(A) provides in pertinent part: 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: * * * (3). Violation of any rule adopted by the registrar. * * * (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 . . . 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 . . . A.A.C. R4-9-108 specifically states that “[a]ll work shall be done in a workmanlike manner.” 3. With respect to DSP’s complaint against SD, the evidence is insufficient to show that SD violated either A.R.S. §32-1154 (A)(7) or A.R.S. §32-1154 (A)(11), as noted in findings of fact Paragraph 9, above. DSP has failed to sustain the burden of proving the existence of a valid liquidated debt properly due and owing by SD and thus has failed to sustain the burden of proving the Respondent committed violated A.R.S. §32- 1154(A)(11). Because DSP has failed to demonstrate that SD has violated A.R.S. §32-1154(A)(11), DSP has necessarily failed to demonstrate a violation of A.R.S. §32-1154(A)(7). There simply is insufficient evidence to show that SD committed any wrongful or fraudulent act in this matter. 4. With respect to SD’s complainant against DSP, as stated in findings of fact Paragraph 9 above, the evidence on the workmanship issue presented by each of the parties is credible and accorded equal weight. The evidence being evenly spilt, SD, therefore, has failed to carry its burden to show the workmanship violation. Further, there is insufficient evidence to show that DSP committed a violation of A.R.S. §32-1154(A)(7). . . . . . . RECOMMENDED DECISION Based on the foregoing, it is recommended to the Director of the Registrar of Contractors that the citation and complaint in each of these cases be dismissed as neither party has carried its burden of proof. Done this day, November 2, 2001.

______________________________________ Gregory L. Hanchett Administrative Law Judge Original transmitted by mail this ____ day of November, 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