ALJDEC decisions subject to certification as final

09F-2647-ROC · Registrar of Contractors · 2009-08-21

STATE OF ARIZONA OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 30, 2009

APPEARANCES: Marcos Concrete was represented by owner and Qualifying Party Marcos Diez; Goldstein and Luera Construction was represented by attorney Kip Micuda, accompanied by Managing Member Arthur Luera.

. . .

WITNESSES: For Marcos: Troy White, CIP Environmental Divisional Manager, Town of Queen Creek Marcos Diez Pam Becerra, accountant for Marcos

For GLC: Arthur Luera

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Marcos Diez doing business as Marcos Concrete (“Marcos”) brings a Registrar of Contractors complaint (09-2016) to force Goldstein and Luera Construction, LLC (“GLC”) to pay money owed for Marcos’ work on a project at Founders Park in Queen Creek, Arizona. The claim is based in part on a written contract and in part on a verbal change order. GLC denies that it owes Marcos any money for the reason that there was no verbal change order between Marcos and GLC (and which would not be not valid anyway unless in writing) and because GLC is owed back charges for making corrections to Marcos’ work. On the other hand, GLC brings a Registrar of Contractors complaint (09-2647) against Marcos, alleging failure to follow plans and specifications on the Founders Park project. Marcos denies these allegations. This tribunal entered both complaint files[1] received from the Registrar of Contractors into the record, with the addition of a notebook prepared by GLC containing Exhibits 1 through 14 and Exhibits A through K.[2] The parties presented evidence and testimony at the hearing. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Decision finding that GLC has failed to pay Marcos in violation of the statutes and that Marcos has failed to complete the project according to plans and specs. It is recommended that both parties correct these conditions or have their licenses suspended. FINDINGS OF FACT 1. Marcos is the holder of a class K-09 specialty dual contracting license (No. 159162) issued by the Registrar of Contractors (“ROC”). That license authorizes Marcos to perform concrete work on both residential and commercial projects.[3] As it is a sole proprietorship, Marcos Diez is the owner and Qualifying Party. 2. GLC is the holder of a class KB-01 license (No. 181357), a dual building contractor’s license issued by the ROC. It authorizes Respondent to perform general residential and general commercial construction.[4] Arthur Luera is GLC’s Managing Member and Qualifying Party. 3. GLC is also the holder of a class A- license (No. 181358), a general engineering contractor’s license issued by the ROC. It authorizes Respondent to perform construction in connection with fixed works such as streets, roads, and bridges.[5] Arthur Luera is the Qualifying Party on this license as well. 4. The Founders Park project involved removal and replacement of concrete for the addition of a pre-fabricated public restroom at the park. The work included a handicap ramp, sidewalk, and concrete pad for the restroom building. On June 24, 2008, Marcos submitted a written proposal (“Proposal”) for the work to GLC, for the price of $3,365.00.[6] The Proposal was not signed by Marcos at that time and has not been signed subsequently. Arthur Luera accepted the Proposal on behalf of GLC, with several handwritten modifications. These modifications included a note initialed by Luera that stated, “Scope of work per drawings and specs and as required.”[7] Luera also modified part of the Proposal, just above his signature, so that it stated that GLC agreed to pay the amount listed in the Proposal according to the terms “of the Goldstein and Luera Construction LLC Agreement.”[8] Luera signed the Proposal on July 1, 2008.[9] 5. Luera testified at hearing that the reference in his modification was to a Standard Short Form Agreement between Contractor and Subcontractor (“Agreement”) that he had prepared on June 24, 2008 for the concrete work that Marcos was proposing to do.[10] Luera signed the Agreement on June 24. Marcos has never signed the Agreement. 6. Nevertheless, Marcos performed the work in July 2008. Troy White, with the Town of Queen Creek, testified that there was a “field change” made after the work started. That change involved extra ABC and concrete to change the slope and radius of part of the sidewalk. From the evidence presented, it appears that this was a verbal change given at the jobsite by a Town employee. The evidence shows that GLC was not informed about this change. Marcos performed that work without a written change order. He billed GLC for that extra work by an invoice dated August 4, 2008. 7. Luera testified that he hand-delivered the Agreement and Proposal to Marcos when Marcos came to Luera’s office. There is also evidence that Luera requested on several occasions that Marcos sign the Agreement.[11] Marcos never did. 8. The Proposal requires that any changes involving extra charges be made by written order. 9. The Agreement states that the concrete work is a “turnkey” project and no change orders above the $3,365.00 contract price were allowed. 10. This tribunals finds that Marcos has not shown he is entitled to payment for the extra work he performed. 11. Regarding the work described both in the Proposal and the Agreement, GLC claims that it has incurred costs to correct Marcos’ work and that these costs reduce GLC’s debt to Marcos under the Agreement. GLC submitted evidence that it informed Marcos by letter dated October 31, 2008 that the work was not correct and needed to be fixed before November 7, 2008. The evidence supports a finding that Marcos received the letter. The evidence does not reveal any response from Marcos. 12. GLC performed the corrections itself on or before November 14, 2008. GLC submitted into evidence an invoice made out to Marcos that lists the costs for the corrective work.[12] That invoice totals $2,495.42, which is $869.58 short of the $3.365.00 that is due to Marcos under the Agreement. 13. Evidence was submitted that shows that in September 2008, GLC offered to pay Marcos $3,365.00, but only on condition that Marcos sign a waiver for any further amounts that Marcos was claiming was owed. Marcos declined to waive his claim to the other amounts he claimed GLC owed him. Therefore, no payment was made. 14. GLC presented sufficient evidence to show its expenses for the corrective work and that it was reasonable for GLC to perform that work. However, that work did not cost GLC more than the amount that GLC admits it owes Marcos under the written Agreement. This leaves a difference of $869.58 that GLC admits is due and owing. 15. The evidence shows that GLC does not dispute that it owes Marcos $869.58. This amount has not been paid. 16. Further, GLC claims that Marcos did not build the sidewalk according to plans and specs. Luera testified at hearing that there were “truncated cones” missing on the sloped sidewalk where they were called for by the plans and specs. This testimony was uncontested by Marcos and is, therefore, found to be credible. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[13] Further, the standard of proof at hearing is by preponderance of the evidence.[14] Therefore, Marcos bears the burden of showing, by a preponderance of the evidence, that GLC has violated the statutes cited in the Citation and Complaint for case 09-2016, and GLC bears the burden of showing, by a preponderance of the evidence, that Marcos has violated the statutes cited in the Citation and Complaint for case 09-2647.[15] Marcos has met his burden and GLC has met its burden. 2. The evidence shows that $869.58 is due and owing to Marcos from GLC, that GLC has failed to pay it and has the ability to pay it, and that this is a violation of Arizona Revised Statutes (A.R.S.) § 32- 1154(A)(11).[16] The offer to pay Marcos in September 2008 was conditioned on waiver of all other claims and, therefore, does not excuse the failure to pay the amount of $869.58 that is unconditionally due and owing. 3. The evidence shows that the work Marcos was required to perform is not completed according to plans and specs and that this is a violation of A.R.S. § 32-1154(A)(2).[17] 4. The proper outcome for the violation by GLC is to order GLC to pay $869.58 to Marcos or have its license suspended if it fails to do so. 5. The proper outcome for the violation by Marcos is to order Marcos to correct the project according to plans and specs or have its license suspended if it fails to do so. RECOMMENDED ORDER IT IS RECOMMENDED that Class KB-01 license ROC181357 and Class A- license ROC181358, both held by Goldstein and Luera Construction, LLC be suspended beginning the effective date of the Registrar’s Order until GLC provides written proof of payment to Complainant in the amount of $869.58 and the Registrar of Contractors accepts such written proof. IT IS FURTHER RECOMMENDED that if GLC provides such written proof on or before the effective date of the Registrar’s Order, the disciplinary license suspension shall not take place.

IT IS ALSO RECOMMENDED that Class K-09 license ROC159162, held by Marcos Daniel Diez doing business as Marcos Concrete be suspended beginning the effective date of the Registrar’s Order until Marcos provides written proof of correction of the project per plans and specs and the Registrar of Contractors accepts such written proof.

. . .

IT IS FURTHER RECOMMENDED that if Marcos provides such written proof on or before the effective date of the Registrar’s Order, the license suspension shall not take place.

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 40 days from the date of that certification.

Done this 21st day of August 2009.

Office of Administrative Hearings

______________________________ Eric A. Bryant Administrative Law Judge

Copy mailed this ___ day of August 2009 to:

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

By ___________________________ ----------------------- [1] Marcos filed its complaint (09-2016) on October 7, 2008. GLC filed its complaint (09-2647) on November 4, 2008. [2] It is noted that all marked Exhibits were offered by GLC (as Respondent for 09F-2016-ROC and as Complainant for 09F-2647-ROC). Marcos relied upon the documentation already in the complaint files. [3] See, Arizona Revised Statutes § 32-1102 and Arizona Administrative Code R4-9-104 for a description of dual license classifications and scope of work. [4] Id. [5] Id. at R4-9-102. [6] Exhibit 6. [7] Id. [8] Id. [9] Luera also added language to the Proposal that gave a sequence for the work that Marcos would do. [10] Id. [11] Id. [12] Exhibit 15. [13] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [14] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [15] See Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996) (moving party bears burden of proof by preponderance of evidence in an administrative hearing). [16] No other violations were shown. [17] No other violations were shown.

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