ALJDEC decisions subject to certification as final

2009A-12732679-ROC · Registrar of Contractors · 2010-10-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 15, 2010

APPEARANCES: Complainant was represented by Jaimee Griffin, Corporate Secretary, and Chantal Hunt, Corporate Treasurer; Respondents were represented by attorney Rich Murphy, accompanied by Howard S Wright Constructors LP Project Executive Stephen Hulston.

WITNESSES: For Complainant: Chantal Hunt Jaimee Griffin John Pettit

For Respondents: Stephen Hulston

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming that it is owed over $96,000 from one of the two Respondents for underground utility work Complainant performed as a subcontractor on a commercial construction project. Payments were made to Complainant; however, Respondents deny that further payment is owed to Complainant. As a pretrial matter, Respondent Howard S Wright Construction Co. moved for dismissal of this matter against the two licenses that it holds, for the reason that Respondent Howard S Wright Construction Co. was not a party to the contract at issue. That motion was taken under advisement at the hearing. After hearing testimony and reviewing the Exhibits admitted, this tribunal finds that the entity that was the general contractor for the project at issue here was not Respondent Howard S Wright Construction Co., but was rather Respondent Howard S Wright Constructors LP.[1] Thus, the complaint against Respondent Howard S Wright Construction Co. and its two licenses should be dismissed. This Administrative Law Judge Decision will only decide if Respondent Howard S Wright Constructors LP has violated the provisions cited in the Citation and Complaint. This tribunal entered the complaint file received from the Registrar of Contractors into the record, with the addition of marked Exhibits 1 through 22 and Complainant’s Exhibit A. 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 the evidence does not show a violation of the law that regulates the conduct of licensed contractors. FINDINGS OF FACT 1. Respondent Howard S Wright Construction Co. (“HSWCC”) is the holder of a class B-1 general commercial contractor license (No. 106490) issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform general construction of a commercial structure or appurtenance, except for certain specialty contracting such as electrical, plumbing, swimming pools, etc. The license is current and active. Kenneth Goldblatt is the Qualifying Party. 2. Respondent HSWCC is also the holder of a class A general engineering contractor license (No. 127846) issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to construct streets, roads, and other fixed works, including excavation and asphalt paving. The license is current and active. 3. Respondent Howard S Wright Constructors LP (“HSWCLP”) is a separate entity (a limited partnership) and is the holder of a class B-1 general commercial contractor license (No. 210904) issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform general construction of a commercial structure or appurtenance, except for certain specialty contracting such as electrical, plumbing, swimming pools, etc. The license does not include the scope of work for underground utilities, which would require a proper class A license.[2] The license is current and active. 4. Complainant is a paving and excavation company that holds a class AE commercial engineering license. 5. In 2006, HSWCLP entered into an agreement to build the Colter Office Commons in Phoenix Arizona. The project was to build professional medical office buildings. In January 2007, HSWCLP entered into a subcontract agreement with Complainant for the building of underground utilities at the site. Complainant finished the work in October 2007. 6. The dispute between the parties revolves around two disputed change orders, identified by Complainant as numbers 7 and 8 and entered into evidence as Exhibits 10 and 21, which are invoices showing the work that was done. There are no written and signed change orders for the work described in the invoices, as required by the contract between the parties. 7. There is also a dispute about whether and when Respondent HSWCLP was required to give Complainant a copy of site plans. Some of the work in the invoices, Complainant alleges, was extra work that was caused by the failure of Respondent HSWCLP to give the proper site plans to Complainant. The evidence Complainant submitted in support of that allegation is not clear and does not sufficiently prove Complainant’s allegation. 8. Another portion of the invoices is for extra work that Complainant alleges was required by the City of Phoenix in order to pass inspection. Even if true, the lack of a written and signed change order creates a cloud over Complainant’s right to be paid. 9. The evidence shows a good faith contractual dispute between the parties. Respondent’s position that it has not breached the contract is held in good faith. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[3] Further, the standard of proof at hearing is by preponderance of the evidence.[4] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent HSWCLP has violated the statutes cited in the Citation and Complaint.[5] Complainant has not met that burden. 2. The Citation and Complaint cites the “no pay’ provision found in Arizona Revised Statutes (A.R.S.) § 32-1154(A)(11) that prohibits the failure of a licensee to pay monies in excess of $750 “when due for materials or services” when the licensee has the capacity to pay or when the licensee has been paid for the project.[6] 3. The evidence is not sufficient to show that Respondent HSWCLP has violated those statutes cited in the Citation and Complaint. Complainant argues that part of the amount due is for verbal change orders. Yet, the contract between the parties requires written and signed changes orders. The other part of the dispute is about the site plans and whether Complainant was given the appropriate copy, a matter which the parties clearly dispute in good faith. The evidence does not, therefore, provide a clear basis for discipline. Parties to a contract may have a good faith dispute about their obligations under a contract that would be appropriate for a civil court action but would not rise to the level of a disciplinary violation on a determination that the amount was due and owing as alleged in the Citation and Complaint. A good faith dispute about payment issues should not result in disciplinary action against a license. Those disputes can be taken to court. If Complainant obtains a court judgment against Respondent HSWCLP that Respondent HSWCLP then fails to pay, discipline may then be warranted. 4. Complainant has failed to show a violation of statutes by Respondent HSWCLP. 5. This matter should be dismissed. RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that the Citation and Complaint against Respondent Howard S Wright Construction Co. in case 2009-12732679 (formerly 09-1273) be dismissed. IT IS FURTHER RECOMMENDED that the Citation and Complaint against Respondent Howard S Wright Construction Co. in case 2010-[number redacted] (formerly 09-1273X) be dismissed. IT IS FURTHER RECOMMENDED that the Citation and Complaint against Respondent Howard S Wright Constructors LP in case 2010-[number redacted] (formerly 09-1273W) 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 will be 40 days from the date of that certification.

Done this day, October 5, 2010.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] There are numerous places in the contract documents that reference the partnership, while there is only one place in the contract documents that clearly references the corporation, which appears to be an error as the signature directly under it is that of the partnership’s representative. [2] This may be grounds for an investigation into whether Respondent HSWCLP was acting outside the scope of its license since it does not hold an A class license. That will be left to the Registrar’s discretion. [3] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [4] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [5] 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). [6] Subsection (A)(7), which prohibits wrongful or fraudulent acts and has since been substantially modified, was also cited, but Complainant advanced only a no-pay complaint.

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