ALJDEC decisions subject to certification as final

08F-S0244-ROC · Registrar of Contractors · 2009-06-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 8, 2009 at 9:00 a.m. APPEARANCES: The Complainant appeared through its attorney, Corey B. Larson. The Respondent appeared through its attorney, Steven E. Jackson. ADMINISTRATIVE LAW JUDGE: M. Douglas

The following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. The Respondent is the holder of a Class A- and a Class B-01 license issued by the Registrar of Contractors. 2. The Respondent was the general contractor for a reclaimed water pipeline project for the Bisbee Golf Course. The Complainant performed excavation and backfill work for the project as a subcontractor for the construction project. 3. Credible testimony and evidence established that pursuant to the terms of the parties’ written agreement the Respondent was to receive the total sum of $95,200.00 for the construction project. 4. There was no dispute that the parties entered into a modification of their contract for the clarifier clean up increasing the total due to the Complainant by $46,000.00. 5. Credible testimony and evidence established that the Complainant was paid the $141,200.00 due under the parties’ written agreement as modified by the clarifier clean up agreement. 6. After the completion of the construction project, the Complainant submitted a new invoice in the sum of $43,768.00 for extra work performed as a result of alleged oral change orders performed during the construction project. 7. When the Respondent refused to pay requested amount for the alleged oral change orders, the Complainant filed the Complaint at issue. 8. The parties’ written agreement provides as follows: Any additions or reductions to be made to or from the amount of the Subcontract price resulting from changes in work or materials furnished shall be agreed upon in writing by the parties hereto, such agreement shall not being valid unless signed by an authorized representative of the Contractor. In case of disagreement between the parties hereto as to additions or reductions the same shall be determined by the Architect or Engineer by certificate in writing. No addition or reduction in contract price shall be binding upon the Contractor unless agreed upon in writing or determined by the Architect or Engineer by certificate in writing. No addition or reduction in contract price shall be binding upon the Contractor unless agreed upon in writing or determined by the Architect or Engineer as hereinbefore provided for. No change, alteration or modification in the terms and conditions of this Subcontract or in the term or manner of payment shall in any way exonerate or release, in whole or in part, any surety on any bond furnished by or on behalf of the Subcontractor. 9. The credible evidence of record adequately demonstrated a dispute between the parties regarding what, if any, amount of money is due and owing to the Complainant from the Respondent for the alleged oral change orders. The Respondent’s position in this dispute is found under all of the circumstances to have been asserted in good faith and therefore precludes a finding that a liquidated sum is owed to the Complainant. 10. The credible evidence or record is insufficient and fails to support a finding of a wrongful or fraudulent act.

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 the Respondent of the provisions of A.R.S. § 32-1154A (11) can be supported.

2. The Complainant failed to sustain the requisite burden of proving the existence of a valid liquidated debt properly due and owing by the Respondent and thus has not sustained the burden of proving that the Respondent has committed the violations charged herein. 3. The credible 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, together with the Complaint upon which it is based, shall be dismissed. In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of the certification. Done this day, June 22, 2009.

______________________________________ M. Douglas 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 ___________________________ -----------------------

Office of Administrative Hearings 100 N. Stone Avenue, Suite 704 Tucson, AZ 85701 (520) 628-5488 Fax: (520) 628-5575 www.azoah.com