ALJDEC decisions subject to certification as final

08F-L0424-ROC · Registrar of Contractors · 2009-05-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 14, 2009 APPEARANCES: Complainant appeared through its general manager, Bruce Collins (“Collins”), and Respondent appeared through its president and qualifying party, Mike McSweeney (“McSweeney”). 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. Complainant contends that Respondent has failed to pay a certain sum of money on an agreement for Complainant to supply Respondent with specified floor tile. Respondent disputes that it owes Complainant any money and the facts surrounding this claim are discussed in the findings below.

2. Evidence of record showed that Respondent placed an order for various flooring materials from Complainant. The total price for the flooring materials was $25,939.27. Apparently the verbal agreement between the parties was made by phone. In this regard, Complainant submitted an invoice to Respondent showing the contract price. The invoice was entered into evidence as Complainant’s exhibit no. 7.

3. Collins testimony included the following:

a. Respondent failed to pay the full amount of a required down- payment; b. Respondent canceled the contract for the floor tile after it had found the tile at a cheaper price from one of Complainant’s competitors, Tile Importers (“Importers”); c. When Respondent canceled the floor tile contract, Complainant assessed a restocking fee of 30% of the contract price. In this regard, an invoice was submitted to Respondent, seeking payment of $4,709.04 for the 30% restocking fee; and d. Although the original invoice for the floor tile contract does not have any information about a restocking penalty, Collins testified that there is a sign in his store which indicates any order cancelations or returns will be subject to a 30% restocking fee. Since the tile order was placed by Respondent over the telephone, Respondent did not have an opportunity to view the sign.

4. Evidence of record demonstrated the following:

a. Complainant ultimately supplied the original ordered tile to Importers, who then in turn sold the tile to Complainant; b. Respondent found the tile to be unacceptable due to the fact that it contained tile from different dye lots. Thus, Respondent returned the tile to Importers, who in turn returned the tile to Complainant; c. Collins admitted that he did not charge a restocking fee to Importers, only to Respondent for canceling the contract; and d. The distributor of the tile did not assess any restocking fee to Complainant when Complainant returned the tile that it had received back from Importers.

5. McSweeney claims that Respondent never agreed to pay any restocking fee and was never placed on notice regarding such a fee, since it was not on the original order invoice. Moreover, since Complainant was not assessed a restocking fee from the distributor, he asserts that it is unfair for Complainant to claim an exorbitant restocking fee against Respondent.

6. The facts presented herein show that the issue between the parties involves nothing more than a dispute on a retail sales contract. Respondent’s position that it never agreed to a restocking fee for contract cancelation is found to be asserted in good faith and, therefore, precludes a finding that a liquidated sum is owed to Complainant.

CONCLUSIONS OF LAW

1. The Registrar of Contractors, acting through an administrative disciplinary hearing, is not empowered by law to adjudicate amounts alleged to be due and owing in the face of a good faith dispute on such amounts. Until and unless any claimed obligation is reduced to judgment by a civil court of competent jurisdiction, no violation by Respondent of the provisions of A.R.S. § 32-1154A (11) can be supported. Complainant failed to sustain the requisite burden of proving the existence of a valid liquidated debt properly due and owing by Respondent and thus, has not sustained the burden of proving that Respondent has committed the violations charged herein.

2. The evidence of record was inadequate to support any finding of a violation of A.R.S. § 32-1154A (7).

RECOMMENDED ORDER

In view of the foregoing, it is recommended that this Citation (no. L08-0424), together with the Complaint upon which it is based, shall 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, May 19, 2009.

______________________________________ Mark A. Silver Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2009, to:

William A. Mundell, Director Registrar of Contractors c/o Legal Department 3838 N. Central Ave. Phoenix, AZ 85012

By ___________________________

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