ALJDEC decisions subject to certification as final

2010A-18224847-ROC · Registrar of Contractors · 2011-01-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 5, 2011

APPEARANCES: Complainant appeared on his own behalf; Respondent was represented by attorney Ed Pantiliat, accompanied by corporate representatives Doug Greenwald, President, and Ed Moreau, Qualifying Party.

WITNESSES: Jeff Fleetham, ROC Inspector Alfonso Larriva Doug Greenwald

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming poor workmanship by Respondent and that Respondent owes Complainant a refund of $30,000.00. The claim arises out of Respondent’s performance of pre-wiring, basic trim, and installation of a computerized lighting system in a residence owned by Complainant. Respondent denies all allegations. This tribunal entered the complaint file received from the Registrar of Contractors into the record, along with marked exhibits A, B, and C submitted by Respondent. 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 Recommended Order finding no violation.

FINDINGS OF FACT 1. Respondent is the holder of a license C-12.190554-R, a specialty residential contractor’s license issued by the Registrar of Contractors (“ROC”) that authorizes Respondent to install and repair low voltage communication systems for residential properties. Ed Moreau is Respondent’s Qualifying Party. Doug Greenwald is Respondent’s Vice President. 2. Prior to August 2007, Complainant bought residential property and demolished the existing house on the lot. He intended to build a new house on the lot and put it up for sale.[1] Complainant testified that he hired a licensed general contractor, Phillips Luxury Homes, LLC operated by Tony Ashek (“Ashek”), to act as the “construction manager” for the project. The project then began. Complainant testified that Ashek gathered bids and proposals for the construction work that Complainant would review and reject or approve. Complainant did not submit a copy of the agreement between himself and Phillips Luxury Homes, so the record contains only Complainant’s testimony as to the nature of his contractual relationship with Ashek. 3. In August 2007, Respondent submitted three proposals to Ashek: one for pre-wiring and basic trim for communications systems,[2] a computerized lighting system,[3] and an audio/theater system.[4] Those proposals were accepted by Ashek, who signed them as the “Owner.” In addition, Complainant initialed each page of each proposal and signed and dated the last pages under Ashek’s signature. Complainant’s signatures on all three proposals are dated September 21, 2007. Furthermore, a document listing the amounts for the three proposals, totaling $112,908.94, and which set forth a progress payment schedule for the grand total, was signed by Ashek and initialed by Complainant on September 20, 2007. 4. Respondent performed the work for the pre-wiring and lighting systems (Exhibits A and B) and was paid in full for that portion of the work. Respondent did not perform work on the audio system proposal because the relationship between Complainant and Respondent had broken down when it came time for that work. Complainant hired others to work on his issues with the lighting system and to do the audio system work. 5. On October 20, 2008, before the relationship broke down, Complainant made a payment to Respondent of $30,000.00. Respondent acknowledges receiving that payment, but a dispute arose about what that payment was to be applied to. Complainant claims that the payment was an initial payment on the audio system proposal that Respondent never started. Respondent asserts that the payment was for payments owed by Complainant under the contract. Respondent has retained the $30,000.00 payment. 6. Complainant filed a complaint with the ROC in November 2009, alleging that he is owed a refund of the $30,000.00 and claiming deficient workmanship with regard to Respondent’s work on the programming for the lighting system. An inspection was performed by ROC Inspector Jeff Fleetham in July 2010. The Inspector found no deficiencies and declined to issue a Corrective Work Order. Complainant then requested a hearing. 7. At hearing, Complainant dropped the workmanship claims and focused on his refund claim. Complainant testified that the parties were re-negotiating the audio system portion of the work through 2008. He acknowledged that Respondent did not sign a modification of the agreement after he proposed it. Complainant then bought the equipment for the audio portion of the contract on his own and asked if Respondent would install and program it. Respondent declined. 8. Doug Greenwald testified for Respondent. He stated that he was dealing with Ashek only when the proposals were confirmed in 2007, and he never met Complainant until sometime in 2008 when Complainant informed him that Complainant was the owner of the property and wanted to further negotiate the audio portion of the contract. Greenwald testified that Complainant bought used audio equipment and wanted Respondent to install it, but Respondent was not willing to do so. He noted that Respondent had a contract with Complainant for $112,908.94 and had been paid $70,516.43 of it. When the $30,000.00 payment came to Respondent, Respondent held it for payment on that contract. Respondent’s position is that Complainant breached the contract by buying the used equipment rather than buying new equipment from Respondent as stated in the contract. 9. The parties confirmed that the same events are the subject of a civil court action in Superior Court between the parties. 10. The evidence shows a good faith contractual dispute between the parties. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[5] Further, the standard of proof at hearing is by preponderance of the evidence.[6] Therefore, Complainant bears the burden of showing, by a preponderance of the evidence, that Respondent has violated the statutes cited in the Citation and Complaint.[7] Complainant has not met that burden. 2. The Citation and Complaint alleges violations of Arizona Revised Statutes (A.R.S.) § 32-1154(A)(1), (A)(3) by way of ROC Rule A.A.C. R4-9- 108, and (A)(7). Subsection (A)(1) prohibits abandonment of a contract or refusal to perform without legal excuse. Subsection (A)(3) prohibits violating any ROC rule, namely A.A.C. R4-9-108 which prohibits poor workmanship. Subsection (A)(7) prohibits fraudulent acts that harm another person. 3. The evidence does not show that Respondent abandoned the contract without legal excuse, nor does it show a fraudulent act by Respondent. In addition, Complainant dropped the workmanship claim at hearing. Therefore, no violation has been shown. 4. This tribunal makes no conclusion about the merits of either party’s position with regard to the contractual agreement, only that Respondent holds its position in good faith. The contractual dispute between the parties is better suited for resolution in the civil court system. 5. There being no violations, this matter should be dismissed. RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that Citation and Complaint 2010-18224847 (formerly 10-1822) against Respondent Creative Sound and Integration, Inc. 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, January 25, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Complainant testified that he decided at some point to live in the house while it was for sale. [2] Exhibit A [3] Exhibit B. [4] Exhibit C. [5] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [6] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [7] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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