ALJDEC decisions subject to certification as final

07F-F0213-ROC · Registrar of Contractors · 2008-02-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 14, 2008

APPEARANCES: Complainant appeared on her own behalf and Respondent was represented by his attorney, Michelle D’Andrea. 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, Complainant retained Respondent to accomplish specified remodeling work on her home. Although Complainant is very satisfied with the work performed by Respondent, she contends that he is attempting to overcharge her for said work. The issues surrounding this claim are discussed in the findings below.

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

a. The applicable contract between the parties is a “cost plus” contract. The contract provides, in pertinent part, that “work is to be billed at cost, plus 25% markup, plus taxes. Total is anticipated to be between $12,500.00 and $15,000.00” (emphasis added). b. Complainant testified that she had never heard of a “cost plus” contract before signing this agreement and that she had advised Respondent of her budget. c. Evidence of record showed that Complainant has paid Respondent $18,000.00 and even though that sum is above the “anticipated” high end of $15,000.00 set forth in the contract, she does not have any problem with the payment to date. Her complaint is that Respondent has billed her for an additional $20,049.87, which she has refused to pay.[1] d. Complainant contends that the final invoice, showing a balance due to Respondent of $20,049.87 constitutes some type of violation of the State’s Contracting laws. e. Respondent testified that he explained to Complainant the concept of a “cost plus” contract. He contends that Complainant is a very savvy person, as manifested by the fact that she is a professor at the local university and she owns several homes. f. According to Respondent, Complainant’s request that he determine the location of a longstanding water leak into her home took much longer than anyone anticipated. It was finally located and an extensive repair was accomplished. g. Respondent testified that his labor and that of his son amounted to much more than he had contemplated when he initially discussed the project with Complainant. A variety of reasons were shown by Respondent for these additional hours of labor.

3. The contract in question is clearly shown to be a “cost plus” contract. The mere fact that it also shows an “anticipated” cost for the project does not serve to change the nature of the contract from a “cost plus” to a fixed price contract.

4. There was no showing that any of Respondent’s billings for work on the project or material costs were inflated or improper. Complainant accepted the “cost plus” terms of the contract, without demanding a fixed price contract. Accordingly, she is bound by said contract terms.

5. Complainant has not paid of the billings over and above the $18,000.00 payment which she is not disputing. Thus, at this point in time the parties have a pure contract dispute, regarding what is properly due and owing to Respondent for Respondent’s work on the project. The Registrar of Contractors, acting through a license disciplinary hearing is the inappropriate forum to resolve such a contract type dispute. Should Respondent continue to seek payment for the unpaid balance of invoice to Complainant, then he will need to bring an action before a civil court of competent jurisdiction.

6. The record presented herein failed to demonstrate any conduct by Respondent on this project which would rise to the level of a violation of the State’s Contracting laws. Thus, Complainant failed to sustain the requisite burden of proof on the issues set forth in the filed Complaint.

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 her 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 (F07-0213), together with the Complaint upon which it is 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, February 18, 2008.

______________________________________ Mark A. Silver Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Registrar of Contractors Fidelis V. Garcia 3838 N. Central Ave., Ste. 400 Phoenix, AZ 85012-1906

By ___________________________

----------------------- [1] As of the date of the instant hearing, Respondent has not commenced any legal action to collect on this billing.

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