ALJDEC

01F-2118-ROC · Registrar of Contractors · 2001-11-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 31, 2001

APPEARANCES: Pavel Farcas, President and Qualifying Party of American Discount Plumbing Service and Drainage, Inc., appeared on behalf of Complainant; Chris Berkshire, President and Qualifying Party of Biltmore Air Systems and Supply, Inc., appeared on behalf of Respondent.

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant American Discount Plumbing Service and Drainage, Inc. brings this “no pay” action against Respondent Biltmore Air Systems and Supply, Inc. claiming that Respondent has wrongfully withheld money owed to Complainant for work done as a subcontractor. The parties presented evidence and testimony at the hearing and, based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order for dismissal. FINDINGS OF FACT 1. Respondent is the holder of a class L-39 specialty commercial license (No. 148563) issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform, for commercial projects, installation and repair of: refrigeration and evaporative cooling systems; “wet,” “dry,” or radiant type of heating systems; ventilation systems including duct work, filtering, water treatment devices, and control piping. (See, Arizona Administrative Code (A.A.C.) R4-9-103.) Chris Berkshire is Respondent’s President and Qualifying Party. “Respondent” hereinafter refers to both the company and Berkshire. 2. Complainant is the holder of a class K-37 dual (commercial and residential) plumbing license. Pavel Farcas is Complainant’s President and Qualifying Party, and “Complainant” will refer to both the company and Farcas. 3. In February 2001, Respondent hired complainant as a subcontractor to perform plumbing work for a job at a Mexican restaurant. The contract was verbal and the parties disagree as to its terms. Based on the evidence and testimony, the contract was for a total of $4200.00, with $2000.00 paid up front by Respondent and $2200.00 due upon completion. Respondent was providing much of the materials, except for ABS pipe and smaller hardware. Complainant was to install a grease trap and underground tank while replacing the sewer line, along with other plumbing work. 4. The plumbing phase of the job was broken into two stages: indoor and outdoor. Timing was important because the restaurant wanted to minimize the time it was closed and could not operate. Respondent alleges that Complainant caused delay and damages to the restaurant by failing to comply with the schedule. Some damage that is alleged by Respondent occurred when Complainant failed to cap a pipe and caused flooding onto newly poured concrete. 5. There are no written change orders, yet Complainant alleges that there was a change order authorized by Respondent. Complainant tried to collect on the change order before the plumbing was completed. Complainant also wanted additional payment before completion. Respondent denied the change order and any additional payment, telling Complainant that there were already offsets. Complainant refused to complete the project and was fired by Respondent. 6. Respondent filed a claim against Complainant in Justice Court at the end of February 2001. (Exhibit 7.) That matter was dismissed without prejudice and without written comment by the Justice of the Peace. 7. During the work, Complainant used an employee named Ken Vasel. Vasel and Complainant got into a dispute about payment of wages for Vasel. The same day that Respondent fired Complainant from the job, Vasel told Respondent that Complainant was not going to pay him his wages. Respondent gave Vasel $850.00 because Respondent felt that Vasel was not being treated fairly by Complainant. There is no evidence that Respondent ever hired Vasel as a subcontractor. 8. Respondent filed a complaint against Complainant with the Registrar of Contractors, Complaint No. 02-0138 in July 2001. It alleges the same facts that Respondent uses in this action as his defense, and the same matters that Respondent used in his Justice Court suit. Complaint 02- 0138 could not be consolidated with this matter because there had not been an OAH hearing requested for complaint 02-0138 at the time of the hearing on complaint 01-2118. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant. Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). Further, the standard of proof at hearing is by preponderance of the evidence. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in each Citation and Complaint. Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). Complainant has not met that burden. 2. The Citation and Complaint alleges violations of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(7) and (11). Subsection (A)(7) prohibits wrongful acts that substantially harm another. Subsection (A)(11) prohibits failure to pay more than $750 when due for materials or services in connection with contracting and when the contractor has the ability to pay or has received payment from another. Complainant has not shown by a preponderance that he is due more than $750.00, or any money at all, from Respondent. Complainant has not offered substantive and credible proof of his version of the terms of the contract or any change orders. Furthermore, there are alleged offsets by Respondent that could total more than Complainant alleges he is owed. These offsets are alleged in good faith and preclude a conclusion that Respondent has wrongfully withheld payment. 3. A good faith dispute exists between the parties regarding Respondent’s liability to Complainant under the verbal contract at issue here. Thus, there has been an insufficient showing in this proceeding that Respondent owes Complainant a sum certain that is past due or that Respondent acted fraudulently or wrongfully. Until Complainant’s claimed rights to payment are reduced to judgment by a civil court, no violations by Respondent are established. 4. Subsection (A)(10) of A.R.S. § 32-1154 was also cited in the Citation and Complaint. It prohibits aiding and abetting an unlicensed person to evade the licensure requirement. The evidence does not show a violation of that provision. Vasel worked as an employee of Complainant, under his license. There is no evidence showing that Vasel worked at any time when he was not under Complainant’s license. 5. The evidence of record does not sufficiently sustain a conclusion of violation by Respondent of the provisions of A.R.S. § 32-1154(A) as charged in each Citation and Complaint. 6. A dismissal of this complaint must be without prejudice. Complainant has the right to pursue available civil remedies for breach of contract. Any future failure by Respondent to promptly satisfy a court judgment in favor of Complainant on the verbal contract in this case would provide a basis for a new complaint against Respondent, which could lead to disciplinary action.

. . .

. . . RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that the Citation and Complaint against Respondent Biltmore Air Systems and Supply, Inc. in case 01-2118 be dismissed without prejudice.

Done this 19th day of November 2001.

OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Eric A. Bryant Administrative Law Judge

Original mailed this ___ day of November 2001, to:

Michael P. Goldwater Registrar of Contractors 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