ALJDEC

01F-2188-ROC · Registrar of Contractors · 2001-11-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 2, 2001 APPEARANCES: William Kollar, Partner, on behalf of the Complainant Fred Gamble, Esq. on behalf of the Respondent ADMINISTRATIVE LAW JUDGE: Allen Reed _____________________________________________________________________ Findings of Fact 1. The Complainant is a detailer of architectural and engineering drawings. Detailing involves refining architectural and engineering drawings for the purpose of precise fabrication of the individual product (in this case steel), which is to be used in construction, and for proper placement of that product in the structure which is being constructed. 2. The Respondent is a steel fabricator with a Class A-11steel erection license. 3. In approximately May 2000, the Respondent was negotiating with a general contractor, Homes & Sons, to furnish and install structural and miscellaneous steel for a Maricopa County building (Project) to be constructed at West Washington and 19th Avenue, in Phoenix, Arizona. The amount of the contract was $109,000.00. The Respondent signed the contract on May 22, 2000, and Homes & Sons signed it on June 15, 2000. 4. The Complainant and Respondent have had prior business dealings which the Respondent found somewhat less than satisfactory. However, in May of 2000, the parties discussed the possibility of the Complainant doing the detailing for the Project. 5. The Respondent gave the Complainant architectural and engineering drawings for the Project and the Complainant submitted a proposal dated June 12, 2000. The Respondent made some modifications to the proposal and returned it to the Complainant on or about June 13, 2000. The Complainant did not object or otherwise indicate that the modifications were unacceptable. However, it must be noted that paragraph 1 of the terms and conditions of the contract provide that no modification is valid unless agreed to in writing by the Complainant. This is relevant because the Respondent deleted a contract provision which limited the Complainant’s liability for costs due to the Complainant’s error to 10% of the contract price. The contract price term is $9,500.00. 6. According to the contract, the Complainant was to prepare and check (detail) anchor bolt plans, erection drawings, shop detail drawings and compile a field bolt summary list. The time frame for the detail work was June 15 for the anchor bolts, plates and embeds, June 22 for columns and beams, and June 29, 2001, for miscellaneous items. 7. The Respondent has paid the Complainant $3,500.00. The Complainant seeks another $7,743.00 which reflects the balance of the contract amount plus claimed additions for design changes minus a credit to the Respondent. Additional amounts for interest on the amounts claimed as owing are not considered in this case because the complaint was not brought under A.R.S. §32-1129 and a bond was not posted under subsection (E) of that statute. 8. Essentially the claims of the parties are elementary. The Complainant asserts it made no mistakes, and any delays in the project were due to mistakes in the architectural or engineering drawings, change orders, or are otherwise attributable to the Respondent. The Respondent asserts that the errors and consequent delays were caused by the Complainant with backcharges in the amount of $36,000.00 caused directly by the detailing errors and delays. The Complainant did not dispute the amounts claimed by the Respondent but denies responsibility for the backcharges. If only 25% of the backcharges are attributable to the Complainant, the Respondent has a justiciable defense to the claim. 9. Based on the evidence it is clear that the Complainant has not been paid the full contract amount. However, the evidence did not firmly establish the responsibility for all the delays and therefore the related costs for the delays. The evidence was such that it presented a defense to the Complainant’s claim. The evidence tended to show that although the Respondent had some responsibility for change orders and clarifications, the more significant mistakes and delays were caused by the Complainant despite its claims of non responsibility. The Complainant’s denial of responsibility was impeached with respect to what is described as beam 10F which was two feet short on a detail drawing. The Complainant was not aware that the opening across which the beam spanned was larger on the second floor than on the first floor. This required having to lengthen the beam by welding another piece to it and then properly testing it. Although the additional cost to the Respondent for this error was only approximately $320.00, the fact that the Complainant did not acknowledge what appears to be a manifest mistake, colored the Complainant’s denial of responsibility for additional delays and costs. Conclusions of Law The allegations of the Citation and Complaint concern A.R.S. §32- 1154(A)(7), a wrongful act with substantial injury, and (A)(11), failure to pay an amount over $750.00 for materials or services. 1. The Complainant has the burden of proof by a preponderance of the evidence Culpepper v State, 187 Ariz. 431 App. 1996. Under A.A.C. R2-19- 119, the party asserting the claim, right or entitlement has the burden of proof.

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. . .. 1. There is no disagreement about the amount that has been paid to the Complainant or the amount of the contract. However, the evidence also shows the Complainant was responsible for some errors and delays although it is unclear as to who bears the major portion of the fault for the increased costs and backcharges to the Respondent. 2. Under the facts of this case, it is concluded that the Complainant has not presented satisfactory evidence to establish an entitlement to the amounts being claimed. This conclusion does not mean that the Respondent has necessarily established a specific amount as justifiable backcharges, but only that the Complainant has not met the burden of proof that it is entitled to some amount in excess of $750.00. The facts show that this is primarily a case which involves a good faith monetary dispute rather than a regulatory issue, and as such, it is better suited for determination in a civil forum. Recommended Order In view of the foregoing it is recommended that the Citation and Complaint upon which it is based, be closed.

Done this day, November 6, 2001

______________________________________ Allen Reed 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