ALJDEC decisions subject to certification as final

03F-2025-ROC · Registrar of Contractors · 2003-12-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 10, 2003 APPEARANCES: Joseph Hill appeared on behalf of himself and his wife, Jacqueline Hill (“Complainants”). Jack Berrier, Secretary of Berrier and Clerke Construction, Inc. (“Respondent”), appeared on behalf of Respondent. ADMINISTRATIVE LAW JUDGE: Michael L. Barth _____________________________________________________________________ findings of fact 1. The purpose of the hearing was to determine whether Respondent violated A.R.S. § 32-1154(A)(1) and/or (7). 2. It was undisputed that Complainants and Respondent entered into a written contract, Exhibit A, in which Respondent agreed to deliver and install cabinetry for the price of $3,188.00 including a deposit in the amount of $1,594.00 due on execution of the contract, an installment in the amount of $1,116.00 due upon delivery of the cabinetry and a final payment in the amount of $478.00 due upon completion of the contract. It was undisputed that Complainants had paid the initial deposit on signing the contract. 3. Complainants contend that on both occasions that the cabinetry was scheduled to be delivered and installed, April 28, 2003 and May 8, 2003, Respondent did not deliver the cabinetry in breach of the contract, and has refused since May 8, 2003 to complete the contract. 4. Respondent refuses to perform the contract as written. Respondent contends, however, that it was legally excused from performing the contract because it had delivered the cabinetry as contracted on those dates, but that Complainants refused to pay the amount that was due upon delivery of the cabinetry. 5. After arrival at Complainants’ residence on April 28, 2003 to deliver and install the cabinetry, one of Respondent’s installers began to remove the aforementioned audio/media equipment from the wall unit, but discontinued doing so upon being informed by Mr. Hill that the phone service to Complainants’ residence had been interrupted. 6. After being notified that he had interrupted the phone service to the residence, Respondent’s installer called Respondent’s President, William C. Clerke, regarding the occurrence of the purported failure of Complainants’ phone service, and then reinstalled the audio/media equipment he had removed. 7. After Respondent’s installer advised Mr. Clerke of the purported phone service failure, Mr. Hill and Mr. Clerke spoke during that same telephone conversation, and a dispute arose as to who was responsible for removing and reinstalling the audio/media equipment, as well who was responsible for the phone service failure. 8. Mr. Hill and Mrs. Hill credibly testified that the Elan system to which 6 phones and the sound system to the residence were connected had been operating properly prior to Respondent’s installer removing the audio/media equipment, but upon the installer doing so, the phones failed, and remained non-operational until May 5, 2003, when they had the system repaired and the audio/media equipment removed by Bang & Olufsen. 9. Mr. Hill further credibly testified consistent with an invoice from Bang & Olufsen, Exhibit G, that he paid a total of $240.00 for the Elan system to be repaired and the audio/media equipment to be removed. 10. In resolution of the dispute that arose on April 28, 2003 between the parties over which party was responsible for removing and reinstalling the audio/media equipment and damage caused to same on April 28, 2003, the parties entered into an oral agreement. Respondent agreed to reduce the amount of the final payment due on the contract by one half the amount of the aforementioned invoice, and in return Complainants agreed to assume responsibility of removing and reinstalling the audio/media equipment. Having resolved this dispute, the parties scheduled delivery and installment on May 8, 2003, reaffirming that they would comply with their respective obligations under the written contract. 11. This tribunal finds that in order for a delivery to occur, the item to be delivered must be placed in the possession or control of the person to whom the item is to be delivered. 12. For reasons discussed below, this tribunal finds that Respondent failed to place the cabinetry in Complainants’ possession or control as contracted. 13. Respondent retaining possession of the cabinetry, strongly suggests that the cabinetry was never placed in Complainants’ possession. 14. In addition, Mrs. Hill testified that the cabinetry was never presented to her at any time on April 28, 2003, or May 8, 2003. Mrs. Hill denied that the installers requested payment on April 28, 2003, but admitted that the installers had requested payment on May 8, 2003 but did so without presenting her with the cabinetry. 15. Mrs. Hill further admitted that in response to installers’ request for payment on May 8, 2003, she showed them the check and advised them, contrary to the contract, that it would not be given to them until completion of installation. 16. In support of its contention that the cabinetry had been delivered to Complainants, Respondent relies solely on the following hearsay evidence: “To Whom It May Concern Letters” from Respondent’s installers, Michael Ambrose, Exhibit F, and Keith Heifert, Field Supervisor, Exhibit E, regarding the events of May 8, 2003; and the testimony of Respondent’s President, William C. Clerke, regarding the statements made by the installers to him regarding the events of April 28 and May 8, 2003. 17. As will be discussed below the aforementioned installers’ letters which relate the information conveyed by them to Mr. Clerke, are consistent with the testimony of Mrs. Hill and demonstrate that a delivery did not occur on May 8, 2003 and that Mr. Clerke has, on behalf of Respondent, been operating under a mistaken belief as to when a delivery occurs since May 8, 2003. 18. Exhibits E and F reflect that on May 8, 2003, the cabinetry was only partially unloaded, and consistent with the testimony of Mrs. Hill, never presented to Complainants prior to the installers, at Mr. Clerke’s direction, returning to the office. 19. Mr. Clerke testified that he had been informed by the installers that on both April 28, 2003 and May 8, 2003, the cabinetry had been delivered to the Complainants but that their request for the payment due upon delivery was refused by Complainants. This tribunal finds that Mr. Clerke’s testimony that a delivery occurred on May 8, 2003 was made on the basis of a good faith, but mistaken, belief that the arrival of the truck or the unloading of the cabinetry off a truck at a customer’s residence, alone, constitutes a delivery. Otherwise, upon the installers conveying to him that the cabinetry had only been partially unloaded but not presented to the Complainants, Mr. Clerke would not have maintained, on behalf of Respondent, that a delivery had occurred on May 8, 2003. Thus, this tribunal finds that the cabinetry was never placed in the possession or control of Complainants and, therefore, never delivered to them on May 8, 2003. 20. Given Mr. Clerke’s above-described mistaken belief in conjunction with Respondent still retaining possession of the cabinetry, this tribunal finds it is likely that Mr. Clerk was operating under the same mistaken belief on April 28, 2003. Mr. Clerke’s testimony that he was informed by the installers that a delivery had occurred on April 28, 2003, therefore, lacks sufficient reliability for purposes of establishing that a delivery occurred on April 28, 2003. 21. Given Respondent’s failure to controvert the testimony of Mrs. Hill that the cabinetry was never presented to Complainants and the consistency of her testimony with Respondent still retaining possession of the cabinetry, this tribunal finds Mrs. Hill’s testimony to be credible. Based on the credible testimony of Mrs. Hill, this tribunal finds that the cabinetry was never placed in Complainants’ possession or control and, therefore, never delivered to Complainants on April 28, 2003. 22. This tribunal finds, on the basis of the credible testimony of Mr. Hill, that as a result of Respondent’s refusal to perform the contract, Complainants have suffered substantial injury. Complainants have paid a significant portion of the contract price without receiving anything of value in return for same for 8 months. The completion of Complainants’ media room has been delayed 8 months, and they have been inconvenienced by having had to keep their media room in an interrupted state since April 28, 2003. Conclusions of law 1. The term “delivery” is defined as “the act by which the res or substance thereof is placed within the actual or constructive possession or control of another.” Black’s Dictionary 385 (5th Ed. 1979). 2. Having failed to place the cabinetry in the control or possession of Complainants, Respondent failed to deliver the cabinetry. Having failed to deliver the cabinetry to Complainants, Respondent was not entitled to that payment designated by contract as being due on delivery. Therefore, Respondent’s refusal to perform the contract due to non-payment of the amount due on delivery prior to delivery, was without legal excuse in violation of A.R.S. § 32-1154(A)(1). 3. Having refused to perform the contract without legal excuse in violation of A.R.S. § 32-1154(A)(7), Respondent in turn committed a wrongful act causing substantial injury to Complainants in violation of A.R.S. § 32-1154(A)(7). Recommended Order Commencing on the effective date of the Order entered in this matter, Respondent’s license shall be suspended until the Registrar of Contractors receives proof that Respondent has complied with either of the following conditions: 1. Respondent delivers the cabinetry to Complainants, that is, places the cabinetry in the possession or control of Complainants, and upon being paid thereafter but prior to installation, the amount designated as being due upon delivery by Complainants, installs the cabinetry; or 2. Respondent enters into other mutually acceptable arrangements with Complainants to address the issues above. If the Registrar of Contractors receives proof that Respondent has complied with either of the foregoing conditions on or before the deadline identified above, then the above-ordered suspension of Respondent’s Class B license shall not be imposed and Case No. 03-2025 shall be closed. . . .

Done this day, December 26, 2003

______________________________________ Michael L. Barth Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2003, to:

Registrar of Contractors Israel G. Torres ATTN: Jennifer Brown 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