ALJDEC

02F-0184-ROC · Registrar of Contractors · 2002-01-17

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 15, 2002.

APPEARANCES: The Complainants appeared through Steven Miller. The Respondent, Neilsen Custom Painting, appeared through its owner and qualifying party, Noel M. Neilsen.

ADMINISTRATIVE LAW JUDGE: Robert I. Worth _____________________________________________________________________

Evidence and testimony were presented, and based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made.

FINDINGS OF FACT

1. Respondent agreed to and did perform interior painting work on Complainants’ existing residence. The agreed cost price, after adjustments and revisions, primarily deleting the kitchen cabinetry, was a total of $3,620.00, of which the sum of $2,300.00 had been paid in advance by Complainants to Respondent. A further payment of $100.00 was subsequently transmitted by way of a purported final remittance against the contract price.

2. The contractual balance of $1,220.00 was not paid, nor was the painting work fully completed and/or corrected. Although the testimony at the hearing was somewhat conflicting, with little or no valid basis found to exist for the disbelief of either party’s version, it was clear that their relationship and ability to communicate was deteriorating at a growing rate.

3. The underlying agreement contemplated that the Complainants would select and furnish all paint materials that were to be prepared and applied by the Respondent. An oil-based product was obtained by Complainant and applied by Respondent to the woodwork, and a yellowing or darkening of the white color trim was experienced rather soon after such application. The conflicting testimony extended to the fact of whether or not Respondent had expressly communicated advice against use of that type of paint product in advance of Complainants’ purchase. Nevertheless, it was not sufficiently demonstrated that the yellowing or darkening result was proximately attributable to any actions or omissions of Respondent in its work.

4. Apart from the discoloring problem, the evidence revealed that numerous and scattered deficiencies in the painting were evident on a significant portion of the interior wood trim, consisting of poorly sanded and re-finished surface areas on baseboards and door and window casings, numerous gaps or holidays in the paint coverage on many door panels and a failure to properly remove over-spray on adjacent glass surfaces and articles or features in the home.

Complainants had prepared a listing of paint or related problems in identified locations that were observed, and Respondent did attempt to rectify many of such reported deficiencies. It was not effectively disputed that Complainants ultimately informed Respondent of their desire that no workers from Respondent’s company be

sent back to the jobsite, and it was also evident that Respondent had communicated its position that return visits, even for remedial work, would not be made unless and until payment of the outstanding contract balance was made.

6. It is found and determined, based upon all credible evidence and testimony presented at the administrative hearing, that even prior to the filing of the within complaint with the Registrar, the parties had mutually concluded a verbal settlement agreement, essentially resolving their differences. This constituted an agreement of accord with rather uncomplicated terms, pursuant to which Respondent would waive any entitlement to further payments under the applicable contract arrangements and Complainants would discontinue their pursuit of complaints or claims based upon painting and related deficiencies. In effect, the parties had agreed to go their separate ways from that point in time.

7. Irrespective of a degree of reluctance or misgiving on the part of either or both parties at the time, the settlement in this case is further found to have been validly supported by adequate consideration flowing from both sides at the time it was concluded. Any subsequent remorse, change of mind or discovery that the terms produced a bad deal or a good deal would not generate a basis to disavow or cancel the agreement. The entry into the settlement was shown by the evidence to have been voluntary and to have encompassed both monetary and work items that were known or that reasonably should have been known by all parties.

8. The respective prior duties on the part of Respondent to rectify any and all paint problems and on the part of Complainants to pay any monetary balance under the contract became effectively merged into the concluded settlement agreement.

CONCLUSIONS OF LAW

1. The policy of the law favors settlement of pending disputes, and all tribunals should properly recognize the respective rights and liabilities created by such agreements that purport to have embodied the expressed intent of the parties at the time. Moreover, each party gains the right to have the terms of the settlement enforced or to utilize the agreement as a defense in a subsequent judicial or quasi-judicial proceeding.

2. As with all other forms of contractual arrangements, any settlement agreement requires an offer, an acceptance, a meeting of the minds, competent parties and valid consideration. Flagel v. Southwest Clinical Psyiatrists, P.C., 157 Ariz. 196, 735 P.2d 1184 (1988); Max of Switzerland v. Allright Corp., 187 Ariz. 496, 930 P.2d 1010 (1997). Frequently, the resulting settlement terms are products of give and take, and a compromise is reached.

3. Verbal settlements are just as binding and enforceable, as are their written relatives. In this case, the evidence of record fully supports a determination that the dispute between the parties was the subject of a concluded settlement agreement under which Complainants waived any entitlement for performance of additional corrective measures and Respondent relinquished any claim for receipt of the unpaid contractual balance.

4. Accord and satisfaction is a recognized defense to most all civil or administrative claims or complaints. Consequently, no violations by Respondent of the charged provisions of A.R.S. §32-1154(A) were adequately established hereunder.

RECOMMENDED ORDER

In view of the foregoing, it is recommended that the entire Citation and Complaint in Case Number 02-0184 be dismissed.

Dated: January 23, 2002. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

Michael P. Goldwater, Director Registrar of Contractors 800 West Washington Street (6th Floor) Phoenix, AZ 85007

ATTN: Joyce Armijo -----------------------

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