ALJDEC decisions subject to certification as final

06F-M2426-ROC · Registrar of Contractors · 2007-01-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 26, 2006

APPEARANCES: Complainant appeared through its owner and qualifying party, Efstratios Madias and Respondent was represented by its attorney, Keven Estevez. 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 contract, Respondent retained Complainant to accomplish painting work on Respondent’s new home construction project. Complainant contends that he has not been paid in full for the work performed and Respondent asserts a specified defense for not paying Complainant. These issues are discussed in the findings below.

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

a. Evidence of record showed that the original contract price for the painting project was $20,000.00. In addition, to the work performed pursuant to the original contract, Complainant claims entitlement to payment on two additional invoices, one for $685.00 and another for $2,456.00. b. According to Complainant, the two additional invoices represent work performed pursuant to direction of Respondent’s superintendent. Complainant testified that the work referenced in these two invoices was for remedial work necessitated by damage to the paint work caused by others. c. Complainant testified that he completed the initial paint project on or about February 2006. He further testified that Complainant has only paid $9,000.00 on the original contract and nothing on the two additional invoices for the remedial work. Thus, he claims that Respondent has failed to pay him over $12,000.00. d. It was undisputed that during the course of painting the exterior of the home, Complainant caused a large mechanized piece of construction equipment, that was being used to paint the exterior of the home, to strike a large decorative fountain on the property. The evidence presented at the hearing showed that the damage to the fountain cannot be repaired and it needs to be replaced. e. Due to the damage caused to the fountain, Complainant turned the issue over to his insurance company. It was undisputed that this insurance claim has not been resolved, as of the date of the instant hearing. f. Respondent’s member, Charlene Davis (“Davis”) appeared at the hearing and presented testimony. According to Davis, the original fountain cost $18,892.80, plus an additional $6,750.00 for installation. She also indicated that the fountain was unique and hand carved in Mexico. She testified that the damage caused to the fountain by Complainant’s negligence was such that it was beyond repair. g. Davis testified that the original company that she purchased the fountain from no longer sells this type of fountain. Thus, she went to another company for a replacement bid and obtained an estimate of $25,775.00 for the removal of the old fountain and replacement with a comparable fountain. h. According to Complainant, his insurance company believes that Respondent’s bid is too high, despite the fact that her bid is comparable to the original cost for the fountain. Complainant’s insurance company has found another company, which has bid to remove and replace the fountain for $21,340.20. i. Davis testified that she knows the owner of the company that gave her the bid for the replacement fountain, since he used to work for the company that sold her the original fountain and she has done business with him over the years. She indicated that she never heard of the company that supplied the bid to Complainant’s insurance company and that said bid is lower than what she originally paid for the fountain. j. Davis and Complainant’s insurance company are currently unable to resolve the insurance claim, since they are about $4,000.00 apart on what they believe the claim is worth. k. Since Davis has not been reimbursed for the damaged fountain, she will not pay the balance of Complainant’s contract claim. She asserts that the damage sustained by her fountain is greater than the balance claimed due by Complainant. l. Davis claims that she has, in fact, paid Complainant the sum of $11,000.00 on the original contract and, in this regard, submitted a billing from Complainant showing the $11,000.00 payment. Davis testified that she does not dispute owing Complainant the sum of $9,000.00 and will pay this balance when the issue with the fountain is properly resolved. m. Regarding the two additional invoices, Davis disputes owing any money on these billings because she has no written contract to pay for said work. She indicates that Respondent only does business via written change orders and since she has no documentation to support these claims, she has refused to pay the billings. Complainant asserts that the work referenced on the two additional billings was authorized by Respondent’s superintendent and thus, should be paid.

3. Respondent does not have any contractual relationship with Complainant’s insurance company. Complainant is responsible for the damage caused to the fountain and the amount of said damage was shown to be greater than the balance due to Complainant on the original contract. It is the responsibility of Complainant to either personally pay for the damage to the fountain or cause his insurance company to pay the reasonable cost for said damage. The fact that his insurance company and Davis have not been able to resolve the claim, does not serve to negate Complainant’s responsibility for ruining the fountain. Unless and until this damage claim is resolved, Respondent may properly continue to withhold the balance due on the original contract. Thus, under the facts and circumstances presented herein Respondent is properly withholding any balance of payment due to Complainant. Complainant has failed to sustain the requisite burden of proof on the issues presented herein.

4. The evidence of record was inadequate to support any finding of a specific agreement regarding the two additional invoices claimed due by Complainant. There was no evidence that the parties had agreed to a specific sum of money to be paid for any remedial work that Complainant performed to correct damage caused by others to the paint job on the project. Respondent’s position on these invoices is found to have been asserted in good faith and prevents the finding that any specific sum of money is due and owing in this regard. In addition, even if Complainant may be entitled to any degree of compensation for performing additional work on the project, pursuant to authorization of Respondent’s agent, the disputed invoices, along with the balance due on the original contract is still much less than the value of the damaged fountain.

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 this Citation (no. M06-2426), together with the Complaint upon which it is based, be dismissed.

Done this day, January 3, 2007.

______________________________________ Mark A. Silver Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2007, 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