ALJDEC decisions subject to certification as final

07F-M0254-ROC · Registrar of Contractors · 2007-10-16

STATE OF ARIZONA IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 11, 2007.

APPEARANCES: >The complainant appeared through it Operations Manager, Brandon Smith. >The Respondent appeared through its President and qualifying party, Luigi Cala.

ADMINISTRATIVE LAW JUDGE: Robert I. Worth _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law and Recommended Order are made.

FINDINGS OF FACT

1. Complainant is a materials supplier with whom Respondent has been doing business for many years. It was not disputed that Respondent has been continuously operating on a cash basis as a customer of Complainant, thereby being obligated to pay immediately, by cash, check or credit card, for all purchased products that are picked up or delivered

2. Respondent’s principal operating officer became involved on a residential construction project for his cousin, utilizing a significant quantity of materials obtained from Complainant. In this administrative proceeding, Complainant is claiming entitlement to a total monetary amount of $13,182.20 that is asserted to be long past due and owing from Respondent. More specifically, pursuant to quotations given in early November, 2004, Complainant had caused an initial delivery to or on behalf of Complainant in late July, 2005, consisting of products that were primarily bathroom fixtures and components, in the total amount of $2,215.89, for which Respondent admittedly had paid $2,632.39, thereby generating an overpayment credit for Respondent in the sum of $416.50.

3. At some point in time subsequently, Complainant made further deliveries or allowed further pick-ups by Respondent of additional merchandise in the value of $1,961.73. After application of the $416.50 credit and after another received payment from Respondent of $126.97, the adjusted balance invoiced and claimed due and unpaid by Complainant from Respondent was in the sum of $1,418.26.

4. Additionally, Complainant’s records appeared to reflect that over a prolonged time period, additional products were sold by Complainant to Respondent or otherwise furnished to the identified jobsite in the total aggregate monetary amount of $11,763.94. When added to the $1,418.26 adjusted balance set forth in the preceding Finding of Fact, such amount would combine to result in the $13,182.20 figure claimed due hereunder by Complainant.

5. Complainant additionally is claiming entitlement to monthly finance charges of $197.73 per month commencing in June 2006, continuing past the filing date of the within complaint with the Registrar and extending up until the hearing date.(16 monthly finance charges, aggregating $3,163.68). Such an element of claimed entitlement does not constitute an appropriate subject matter for this administrative proceeding based upon a complaint filed with the Registrar of Contractors, especially when such asserted

finance charges are not even based upon provisions of any written contract agreement between the parties.

6. Respondent strongly and consistently has maintained that no open and unpaid balances are owed by Respondent to Complainant, most importantly because Respondent was never on other than a cash or C.O.D. basis with Complainant for purchases of materials. Respondent disputes the picking up or the delivery of any materials that were not promptly paid for.

7. The allowing of an ongoing cash customer to run up a mounting indebtedness exceeding $13,000.00 appears to be rather inexplicable even if triggered by a potential error solely on the part of Complainant with respect to a possibly presumed existence of a larger credit in favor or Respondent. In any event, there was no showing that Respondent had ever asked for or was ever given a credit status for its purchases.

8. The testimonial and documentary evidence presented at the hearing was sharply conflicting, especially with respect to the tender of ongoing payments for every product delivery or pick-up. Little or no valid basis is found to exist for the disbelief of either party’s version. In these administrative disciplinary proceedings, it must be remembered that it is the complaining party that has the burden of proving wrongdoing on the part of the Respondent/contractor. In this regard, it is not incumbent upon Respondent to prove that it transmitted payments to Complainant for the numerous purchased materials. Instead, it is part of Complainant’s burden to demonstrate that payment has not been made. The business records of Complainant did not adequately establish any such non-payment, and in point of fact, Respondent contended that all purchased products had been fully paid for.

9. It must be noted that the business records maintained by both parties were surprisingly far less than clear and accurate, leaving much to be desired especially as to the matters in issue hereunder.

10. Nothing in Complainant’s documentary or testimonial evidence serves to dispel that fact that a monetary dispute had existed and still exists between the parties, nor can it be reasonably held or inferred that Respondent’s position in disputing its liability for all or any portion of the balance claimed due and owing was arbitrary, unreasonable or asserted other than in good faith on the part of Respondent.

11. Notwithstanding the foregoing, the Registrar of Contractors is not the appropriate tribunal before which to seek adjudication and an award of a monetary claim which must more properly be pursued in a civil court. Even if the basis of Respondent's dispute is ultimately determined to be without merit, the existence of the above-described bona fide monetary dispute results in an inability for Complainant to presently establish that a liquidated amount or sum certain remains past due and owing, which is an essential element of the charged contracting law offense.

CONCLUSIONS OF LAW

1. At these administrative hearings, the complaining party generally has the burden of proof, Vazzano v. Superior Court, 74 Ariz. 369, 249 P.2d 837 (1952) and the standard of proof on all issues is by a preponderance of the evidence. Culpepper v. State, 187 Ariz. 431, 930 P.2d 508 (1996). See also Smith v. Arizona Department of Transportation, 146 Ariz. 430, 706 P.2d 756 (1985); Utah Construction Company v. Berg, 68 Ariz. 285, 205 P. 2d 367, (1949); Rule R2-19-119, A.A.C. A "preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not." Morris K. Udall, Arizona Law of Evidence, §5 (1960). 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 (6th ed. 1990).

2. The showing that a good faith dispute exists as to all or a substantial portion of the claimed indebtedness on the part of Respondent under the parties’ ongoing

contractual arrangements prevents any supportable finding of a liquidated sum past due and owing by Respondent. Consequently, unless or until the claimed obligation is reduced to a valid judgment by a civil court of competent jurisdiction, no violations by Respondent of any of the charged subsections of A.R.S. §32-1154A can be adequately established.

3. Any dismissal of the instant administrative proceeding must be and is wholly without prejudice to Complainant’s potential rights to pursue available civil remedies for the collection of provable damages for any breach of contract or for any unjust enrichment that may be sufficiently established. Any future failure by Respondent to promptly satisfy a court judgment in favor of Complainant, if obtained, would provide a valid basis for a new, separate disciplinary action leading to the imposition of potential penalties against the licensee.

RECOMMENDED ORDER

In view of the foregoing, it is recommended on the merits that the entire Citation and Complaint in Case Number M07-0254 be dismissed without prejudice.

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 will be forty (40) days from the date of that certification.

Dated: October 17, 2007. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Robert I. Worth Administrative Law Judge

Original transmitted on _____________________

by: _____________________________ , to:

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

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