ALJDEC decisions subject to certification as final

06F-M2265-ROC · Registrar of Contractors · 2006-11-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 16, 2006 APPEARANCES: Complainant appeared through its vice-president of construction, Pat Williams (“Williams”) and Respondents appeared through their president and qualifying party, Charles Ferro (“Ferro”). 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 written contract, Complainant retained Respondent to accomplish a slurry seal coating on a shopping center parking lot, as part of a remodel project for said center. Complainant alleges that Respondent has been overpaid for the work performed and this issue is discussed in the findings below.

2. At the outset of the scheduled hearing, both parties indicated that they did not understand why the Class A-05 license of Respondent had been cited. Both parties agreed that the Class A-05 license had no part in the facts surrounding the instant claim. Thus, the Citation against Respondent’s Class A-05 license should be dismissed.

3. During the course of the hearing, Williams indicated that he was not pursuing the claim of abandonment but merely the claim that Respondent had been overpaid for the work performed on the project in question.

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

a. Uncontroverted evidence of record showed that the applicable contract price was $101,000.00. Further uncontroverted evidence of record showed that the parties had agreed on a change order, which was in writing and properly authorized by Complainant, in the amount of $18,442.00. Thereby bringing the total of the contract price to $119.442.00. b. Undisputed evidence of record showed that although Respondent completed a significant portion of the project, a small percentage remained to be completed at the time Respondent terminated work on the project. c. It was undisputed that Respondent has received two payments for their work on the project, one in the amount of $45,481.07 and the second payment for the sum of $61,650.00, thereby making for a total of $107,131.07. d. Williams contends that Respondent only completed 70% of the project and thus, based on said guesstimate of the amount of completion, he believes that Respondent is only entitled to have received 70% of the original contract price, which is $70,700.00, plus the full amount of the agreed change order for $18,442.00, thereby arriving at a total due to Respondent of only $89,142.00, which is $17,989.07 less than the amount actually received by Respondent. Based on these calculation, Williams seeks restitution from Respondent of the claimed overpayment of $17,989.07. e. Farro disagrees with Williams assertions regarding the percentage of the project that had been completed. Complainant’s former project manager, Craig Stewart (“Stewart”) appeared at the instant hearing and presented testimony. f. According to Stewart, the project owner’s representative was very difficult to deal with regarding the issuance of progress payments for the job. At the point wherein the owner’s representative claimed that only 70% of Respondent’s work had been completed, Stewart disagreed and claims that Respondent had more accurately completed 82% of the work on the project. g. Although the issue of abandonment was withdrawn by Complainant, Farro asserts that had he been able to complete work on the project, the issue of overpayment would not have arisen and he would have received all of his money for work on the project. h. Williams testified that the Complainant was terminated from the project before completion and the owner has hired others to complete Respondent’s work. He did not have any evidence to present, regarding whether the owner paid more or less than the balance on the contract with Respondent to have the project completed by others. i. Farro presented three (3) additional change orders into evidence, which Williams was unaware of. He accepted one as being legitimate, because it was signed by Stewart, but he contends that the other two (2) were not properly authorized pursuant to the specific terms of the boilerplate contained in the contract between Complainant and Respondent.

5. Based on the foregoing, it is determined and held that Respondent was unable to establish that the owner of the commercial project suffered any damages due the amount of the payment that Respondent received for its work on slurry coating project. The amount of any overpayment to Respondent, if any, is found to be the subject of a good faith dispute and therefore, prevents the finding of a liquidated sum due and owing to be returned to the owner of the project. Although there may be a money issue that needs to be adjudicated and liquidated before a civil court of competent jurisdiction, the record presented herein is inadequate to support a finding that Respondent did any act which that would constitute a violation of the spirit and intent of the State’s Contracting laws. Thus, Complainant failed to sustain the requisite burden of proof on this issue.

CONCLUSIONS OF LAW

1. Complainant has the burden of proof and must establish statutory violations by a preponderance of the evidence. A.A.C. R2-19-119. Proof by “preponderance of the evidence” means that it is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). It “is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (rev. 6th ed. 1990).

2. Complainant failed to sustain his burden of proof to establish that Respondent violated the applicable charged sections of the State’s Contracting laws. Therefore, the evidence of record did not sufficiently sustain a finding of violations by Respondent of the provisions of A.R.S. §32-1154A, as charged in the Citation.

RECOMMENDED ORDER

Based on the foregoing, it is hereby recommended that these Citations (nos. M06-2265 and M06-2265W), together with the Complaint upon which they are based, be dismissed. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order in this matter will be forty (40) days from the date of that certification.

Done this day, November 16, 2006.

______________________________________ Mark A. Silver Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2006, to:

Registrar of Contractors Fidelis V. Garcia Legal Department 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