ALJDEC

02F-G0026-ROC · Registrar of Contractors · 2002-03-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 25, 2002 APPEARANCES: Complainant appeared through one of its members and qualifying party, Troy Dudley and Respondent was represented by its attorney, John Acer. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

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

FINDINGS OF FACT

1. Pursuant to oral agreement, Complainant performed specified electrical remodel work on several commercial projects, wherein Respondent was acting in the capacity of general contractor. Complainant contends that he has not been paid for the majority of the work on these projects and said claim is discussed in the findings below.

2. The following salient facts were adduced at the hearing and are important to note:

a. There are four commercial projects at issue in the instant matter. Evidence of record demonstrated that Complainant worked on these projects from approximately January 2001 to June 2001. b. Uncontroverted evidence of record established that there were no written contracts between the parties and no mutual understanding regarding whether Complainant was working on a time and material basis or a flat rate and, if a flat rate, the amount of the flat rate. c. Complainant contends that he was basically working off of a rough estimate of a combination of $1.10 per square foot, along with consideration for the type and nature of the work to be performed. In addition, he also added some form of undetermined discount to Respondent, in the hope of continuing to perform future work for Respondent. Although all of his invoices submitted to Respondent make reference to time and materials, Complainant testified that the jobs were not performed on a strict time and materials basis. d. The first job in question was a tenant improvement for an Edward Jones Investment Co. On this job Complainant testified that among other things he added outlets, re-arranged lighting and re-arranged switches. He worked on this project, on and off, from January 31, 2001 to April 19, 2001. Upon completion, he billed Respondent the sum of $1,200.00. Respondent has not paid this bill. According to Complainant, he contends that Respondent advised that he was not paid by the owner of the project and therefore, he was unable to pay Complainant for his work on said project. e. The second job in issue was a tenant improvement for a Fantastic Sams. According to Complainant, on this job the parties had agreed on a price of $4,050.00 and there was an extra of $1,365.00. On this job Complainant received an advance payment of $1,500.00. In addition, there were other payments made and a specified credit for an omitted water heater, bringing the balance due on this job, according to Complainant, to $2,515.00. Complainant worked on this project from February 26, 2001 through April 12, 2001. He completed the work, submitted a billing for the balance due and was not paid. Complainant testified that Respondent again advised him that he unable to pay for this work, due to a failure of the owner of the project to pay Respondent. f. The third job in question was another tenant improvement for an Edward Jones Investment office. Complainant only worked on this job for one day, on May 4, 2001. He completed the rough-in electrical and since he had not been paid on the other jobs, he decided not to return to finish this job. Complainant contends that he should be paid $600.00 for this work. g. The fourth and final job set forth in the filed complaint and/or amendment to the complaint involved another Fantastic Sams location. Complainant contends that he worked on this project from May 1, 2001 to June 17, 2001, that he completed the work and he billed Respondent the balance due and owing of $3,996.00. He has not been paid this balance and testified that Respondent gave the same excuse regarding not being paid by the owner of the project. h. Based on the foregoing, Complainant claims entitlement to a total sum of $8,311.00. i. At the instant hearing Respondent did not voice any objection to the quality of Complainant’s work. He also did not claim that the owners of the project failed to pay him. Respondent testified that the reason he had not paid Complainant for the above-described billing was due to his belief that he had been over-charged for the work performed. j. Respondent does not dispute the fact that there were no written contracts between the parties, no verbal agreements for a fixed cost, or any agreement as to the method for determining how Complainant would bill for the work. k. Evidence of record showed that there was no detail on Complainant’s billings, showing the man hours and materials utilized for these jobs. l. Respondent contends that based on his experience in the tenant improvement business he believed that the billings were exaggerated. m. Respondent testified that his calculations for what is owed on these jobs would be a sum no greater than $4,375.00.

3. Based on the fact that the parties failed to enter into either written contracts for the work or to make any specific agreements regarding how the jobs were to be billed (i.e. such as a flat rate or time and materials), a good faith dispute is found to exist regarding what total amount is actually due and owing to Complainant. Nevertheless, based on Respondent’s own testimony, there is no dispute referable to the first $4,375.00 claimed due and owing by Complainant.

4. Respondent’s failure to pay the above-described undisputed portion of Complainant’s billings is found to be an amount greater than $750.00 and, as such, constitutes a violation of the applicable charged sections of the State’s Contracting laws. Under the facts and circumstances of the instant matter, the payment by Respondent to Complainant of the $4,375.00 should properly serve as a reasonable condition in the Order entered in this matter, as a means to allow Respondent to avoid the imposition of otherwise appropriate disciplinary sanctions.

5. The good faith dispute between the parties regarding the balance (that sum over $4,375.00) claimed due by Complainant for the electrical work performed precludes any finding by the Registrar of Contractors of a liquidated sum due on the disputed portion of the claim.

CONCLUSIONS OF LAW

1. The Registrar of Contractors, acting through an administrative license disciplinary hearing, is the inappropriate forum to adjudicate amounts alleged to be due and owing in the face of a good faith dispute on such amounts. Although Complainant has proven that Respondent failed to pay him for work performed in an amount greater than $750.00, the exact amount over and above $4,375.00 remains the subject of a good faith dispute, which more appropriately should be litigated before a civil court of competent jurisdiction.

2. Respondent violated the provisions of A.R.S. § 32-1154A (11) and (7) for its failure to pay the undisputed portion of Complainant’s billings.

RECOMMENDED ORDER

In view of the foregoing, it is recommended commencing on the effective date of the Order entered in this matter that the Class B-01 license of Respondent be suspended until the Registrar of Contractors receives written proof that Respondent has paid or tendered the sum of $4,375.00 to Complainant. It is further recommended that if Respondent pays or tenders the above described sum of money on or before the effective date of the Order entered in this matter then the aforementioned indefinite license suspension shall not take place. It is further recommended, in addition to the foregoing indefinite license suspension, if any, that Respondent’s Class B-01 license be placed on a period of 90 days disciplinary probation. This additional disciplinary penalty shall commence on the effective date of the Registrar’s Order or the date on which notice of Respondent’s compliance with the terms of this Order is filed with the Registrar, whichever is later.

Done this day, March 4, 2002

______________________________________ Mark A. Silver Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2002, 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