ALJDEC decisions subject to certification as final

09F-1518W-ROC · Registrar of Contractors · 2009-06-04

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 28, 2009 APPEARANCES: Complainant appeared through its president and qualifying party, John Wommer (“Wommer”), and Respondent[1] was represented by its attorney, Ronald Blake. 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 provided specified demolition work on Respondent’s construction project. Complainant alleges a failure by Respondent to pay for these services. Respondent asserts that it has a valid defense for non- payment. The facts surrounding this claim are set forth in the findings below.

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

a. Respondent is the holder of three (3) contractor’s licenses, a Class B-01, a Class K-05, and a Class K-57; b. Evidence of record established that Respondent retained Respondent to accomplish specified demolition work for a Washington Elementary School (“Washington”) site; c. Wommer testified that the original contract price for the Washington demolition was $65,128. In addition, he also asserts that there were change orders in the amount of $16,150, bringing the total job price to $81,278.00; d. It was undisputed that there was no written contract between the parties and also no written change orders; e. According to Wommer, Complainant commenced work on the project in April 2008 and completed the work in May 2008; f. Evidence of record showed that on July 7, 2008, Complainant submitted an invoice to Respondent for the work performed on the Washington project. This invoice shows the base contract amount of $65,128.00, plus the claimed change orders of $16,150.00. The invoice also shows a payment of $20,000.00, leaving a balance due of $61,278.00; g. Wommer testified that Respondent claimed the $20,000.00 was a form of down-payment for Complainant to perform work for Respondent on a project in Yuma, Arizona. John Kealy (“Kealy”), Respondent’s president, testified at the instant hearing and indicated that the $20,000.00 was for the Yuma project, not the Washington project; h. Notwithstanding Respondent’s claim that the $20,000.00 was for the Yuma project, Complainant applied the $20,000.00 to the billing for the Washington project. It should be noted that Complainant never performed any work on the Yuma project; i. It was undisputed that Respondent has not paid any portion of the balance of the July 7, 2008 invoice; j. Kealy testified that Complainant never requested change orders for the Washington project and he has never seen anything in writing regarding change orders. In fact, the first he heard about change orders was when he received the July 7, 2008 invoice from Complainant; k. Kealy testified in regard to a July 16, 2008 letter from Washington which shows that Washington assessed damages of $21,276.00 against Respondent for the work performed by Complainant. Wommer agrees with some but not all of the $21,276.00 deduction applied by Washington in its payment to Respondent; l. In addition to the $21,276.00 deduction that it received from Washington, Respondent also asserts that it paid almost $8,000.00 to other contractors to correct damage attributable to Complainant’s work; m. Kealy also asserts that Complainant’s failure to perform the work on the Yuma project and its failure to complete the work on another project in New Mexico have caused Respondent to sustain monetary damages in excess of what is shown on the July 7, 2008 invoice from Complainant. Thus, Respondent contends that Complainant actually owes it money at this point in time; and n. Wommer disputes that it caused Respondent any monetary damages on the Yuma or New Mexico projects.

3. The evidence of record adequately demonstrated a dispute between the parties regarding what, if any, amount of money is due and owing to Complainant from Respondent. 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 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 (09- 1518/09-1518W/09-1518X), 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, June 4, 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 ___________________________

----------------------- [1] For the purpose of this Decision and Order the term “Respondent” shall be used to refer to all three (3) licenses.

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