Vacate: Settlement Recommendation

07F-H0203-ROC · Registrar of Contractors · 2007-06-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

This matter came on for a video conference hearing as scheduled. The Complainant is seeking payment of $1,100.00 owing for stucco work done on a project for the Respondent. The Respondent does not deny the amount claimed has not been paid but asserts the non payment is because of the Complainant’s failure to complete the work plus charge backs and set offs due the Respondent. A prior case, 07F-H0063-ROC with the role of the parties reversed, resulted in a decision by the Registrar of Contractors (ROC) on or about June 6, 2007, whereby the Respondent (the Complainant in this case) was found in violation of A.R.S. §2-1154(A)(3) A.A.C. R4-9-108, workmanship and (23), failure to take appropriate corrective action. The ROC decision provided: “Commencing the effective date of the Order in this case,[1] it is recommended that Respondent’s Class B license be suspended until Respondent (1) removes the stucco from and repaints the utility boxes on the exterior wall of the residence, and (2) corrects the color variances in the stucco topcoat to make the exterior house color as consistent as reasonably possible. If Respondent completes the corrective work to the Inspector’s satisfaction prior to the effective date of the Order, no suspension should take place and this matter should be closed. Finally, it is recommended (required)[2] that Complainant give reasonable access to Respondent, or a licensed contractor acting on his behalf, to perform the necessary corrective work.

Based on the above decision, the Respondent was asked what the reason was for continuing non payment. The Respondent asserted that aside from the fact that the Order in 07F-H0063-ROC was not yet satisfied, new items had been discovered (problems with stucco on the roof, fog coating issues and additional finish work), which items were not addressed in the 07F-0063-ROC hearing. The status of these new items as a defense in the instant case is problematical because the wrongfulness of the non payment allegation and any (A)(7)[3] violation must be judged on the facts as the Respondent believed them to exist at the time payment was denied. The Respondent’s counsel urged the issue should be judged based on the newly discovered back charges. The Administrative Law Judge (ALJ) did not decide the issue but informed the parties that he would consider both positions once the evidence was presented. The Respondent was informed that the Complainant could not be required to make good on any backcharge in excess of the claimed $1,100.00 as a consequence of the instant hearing and if the backcharges exceeded $1,100.00, the Respondent would most likely have to file another Complaint with the ROC. The parties decided to negotiate off the record. As a consequence the parties agreed to settle the instant case. The Complainants will complete some unidentified minor finishing work and review and discuss the roof stucco issue.[4] The ALJ and the parties are well aware of the vagueness of the settlement. By its terms, the Respondent is obligated to pay the remaining $1,100.00 upon good faith discussion and attempt to resolve the roof stucco issue and completion of some minor finish work. If the roof stucco issue is not resolved the Respondent has the option of filing another Complaint. If the Complainant makes no good faith attempt to discuss and resolve the roof stucco issue, or does not perform any of the minor finish items, without justification, then pursuant to the terms of the settlement the Respondent’s obligation to pay the $1,100.00 under the settlement, is cancelled. In light of the rather unique issues in this case, the parties are best served by attempting to resolve the remaining matters through negotiation and compromise. The parties still have a hearing option (either a compliance hearing with respect to the instant settlement or a new Complaint on matters asserted to be newly discovered workmanship violations)[5]. Conclusions of Law 1. By virtue of the Agreement, all the rights and defenses of the parties are merged therein and if any petition for further hearing or for a rehearing is to be filed and granted, the sole issue for determination will be whether the parties performed their respective obligations under the terms of the Agreement 2. The law favors the settlement of disputes. Adverse parties are free to adjust their differences by entering settlements which should be recognized and given effect by all tribunals. 3. The Agreement as set forth, having been found to be reasonable and voluntary, warrants the termination of the hearing and a closing of the case. Order It Is Ordered that the hearing is vacated and the case is remanded to the Registrar of Contractors for disposition [6].

Done this day, June 8, 2007.

_________________________________ Allen Reed Administrative Law Judge

Copy transmitted by mail this _____ day of _________, 2007 to:

Fidelis V. Garcia, Director Registrar of Contractors Legal Department 800 West Washington, 6th Floor Phoenix, AZ 85007

M and N Contracting Inc. 3059 Saratoga Ave. Lake Havasu City, AZ 86406

Douglas D. Sutherland, Esq. The Sutherland Law Firm 722 East Beale Street Kingman, AZ 86401

By _______________________________

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Done this day, June 8, 2007.

_________________________________ Allen Reed Administrative Law Judge

Copy transmitted by mail this _____ day of _________, 2007 to:

Fidelis V. Garcia, Director Registrar of Contractors Legal Department 800 West Washington, 6th Floor Phoenix, AZ 85007

Douglas D. Sutherland The Sutherland Law Firm 722 East Beale Street Kingman, AZ 86401

By _______________________________

----------------------- [1] Pursuant to A.R.S. §41-1092.08D, failure by the Registrar of Contractors to accept, reject or modify this decision within thirty days of receipt by the agency will result in this Decision being certified by the Office of Administrative Hearings as the final administrative decision. In the event of certification of the Administrative Law Judge Decision by 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. [2] “Recommended” amended to “required” by the Registrar of Contractors. [3] Whether the alleged (A)(11) violation would be judged in the same manner need not be answered. [4] The requirement to do corrective work under the Order in 07F-H0063-ROC stands on its own. However, failure to perform the work would not only result in suspension of the Complainant’s (Respondent in 07F-H0063-ROC) license, but absent explanation, establish a lack of good faith which would breach the instant settlement and cancel the Respondent’s obligation to pay the $1,100.00. [5] The asserted set offs or backcharges. [6] The decision in the case shall be effective forty (40) days from the date of the decision, or if certified by the Director of the Office of Administrative Hearings, forty (40) days from the date of certification.

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