ALJDEC decisions subject to certification as final

2010A-2362591-ROC · Registrar of Contractors · 2010-08-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 23, 2010 at 8:00 a.m. APPEARANCES: The Complainant appeared through its authorized representative, Brett Wright. The Respondent appeared through its authorized representative, Ben Flood. ADMINISTRATIVE LAW JUDGE: M. Douglas

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. The Respondent is the holder of License K-61.201301-D issued by the Registrar of Contractors. 2. There was no dispute that on June 23, 2009 the Complainant submitted a bid to the Respondent for HVAC work on a commercial remodeling project. 3. Credible testimony established that the Respondent accepted the Complainant’s bid for the performance of the specified HVAC work for the sum of $5,188.00. 4. There was no dispute that both parties had planned on utilizing the existing duct work and much of the existing HVAC system as part of the construction project. 5. Credible testimony and evidence established that the Complainant discovered that parts of the existing duct work could not be utilized for the new HVAC work and submitted a bid in the form of a change order to demolish portions of the old duct work and install new duct work for the additional sum of $4,789.00. 6. Credible testimony and evidence established that the Respondent stated that the bid set forth in the written change order was too expensive and the parties then entered into oral negotiations regarding the cost for the additional construction work. 7. Credible testimony and evidence established that as a result of the negotiations the Complainant lowered its bid by $1,800.00 which reduced the cost of the HVAC work set forth in the change order to the sum of $2,989.00. 8. The Complainant asserted that the Respondent entered into an oral agreement with the Complainant for the performance of the additional HVAC work set forth in the change order. 9. The Respondent asserted that it did not agree to the performance of the additional work set forth in the written change order for the cost of $2,989.00. 10. There was no dispute that the Respondent did not sign the written change order. 11. There was no dispute that the Complainant performed the additional work set forth in the change order and submitted an invoice to the Respondent for the additional HVAC work in the sum of $2,989.00. 12. Credible testimony and evidence established that the Respondent was fully aware that the Complainant intended to perform the additional HVAC work and that the Respondent observed the Complainant performing the additional HVAC work. 13. Credible testimony and evidence established that the Respondent made no effort to stop the Complainant from performing the additional HVAC work despite the fact that the Respondent allegedly felt the additional HVAC work was unauthorized. 14. Credible testimony and evidence established that the Respondent made no effort to inform the Complainant that the Respondent disputed that it had given the Complainant authorization to precede with the additional HVAC work. 15. Credible testimony and evidence established that the Respondent did not inform the Complainant that it did not intend to pay the Respondent for the additional HVAC work until after the additional construction work was completed. 16. After completing the HVAC work on the construction project the Complainant utilized the Respondent’s check card number to pay itself for the completion of the entire construction project, including the additional work set forth in the written change order, in the total sum of $8,177.00. 17. The parties were in sharp dispute as to whether the Respondent had given the Complainant permission to utilize the Respondent’s check card number to pay the Complainant in full for the entire construction project. 18. The Respondent admitted that it had allowed the Complainant to utilize the check card number for previous construction projects and that the Respondent had authorized the Complainant to utilize the check card to pay for materials for the construction project at issue. 19. The Respondent vehemently denied that it had authorized the Complainant to utilize the check card to pay itself for the entire construction project. 20. The Complainant asserted that the parties had past dealings where the check card was utilized as a matter of course and that the Respondent had given the Complainant oral authorization to utilize the check card for payment for the HVAC work on the construction project at issue. 21. The credible evidence of record is insufficient and fails to support a finding as to whether or not the Respondent had given the Complainant oral authorization to utilize the Respondent’s check card for this particular transaction. 22. The issue of whether or not the Respondent had given the Complainant authorization to utilize the Respondent’s check card is not a part of the citation and complaint at issue. 23. There was no dispute that the Respondent informed its bank that the Complainant’s withdrawal of $8,177.00 was unauthorized and the bank then, after a short investigation, debited the Complainant’s account for the disputed sum of $8,177.00. 24. The parties then entered into negotiations regarding payment for the HVAC work completed by the Complainant for the construction project. 25. When the negotiations failed to result in a payment for the completed HVAC work the Complainant filed a formal complaint against the Respondent with the Registrar of Contractors for non payment for the additional HVAC work the Complainant performed for the Respondent. 26. On December 1, 2009 the Respondent issued a check to the Complainant for the original contract amount in the sum of $5,188.00 to the Complainant. 27. The Respondent refused to pay the additional $2,989.00 for the extra work performed by the Complainant pursuant to the change order. 28. Credible testimony and evidence, presented at hearing, established that the parties did enter into an oral construction agreement for the Complainant to perform the additional HVAC work set forth in the written change order for the additional sum of $2,989.00. 29. Credible testimony and evidence established that the Complainant performed the additional HVAC work in a professional and workmanlike manner and that the Complainant is entitled to payment for its completed HVAC work. 30. Credible testimony and evidence established that the sum of $2,989.00 is the proper balance due and owing to the Complainant from the Respondent. 31. Credible testimony and evidence established that notwithstanding repeated attempts and billings over a prolonged period of time, said balance remains unpaid. 32. The Respondent‘s failure to pay the aforementioned sum $2,989.00 to the Complainant for the additional HVAC work set forth in the change order is not found to be in good faith and accordingly, under all of the facts and circumstances presented herein Respondent’s conduct is found to constitute a violation of the applicable charged provision of the state’s contracting Laws. 33. Notice is taken of the Respondent’s prior excellent license record with the Registrar of Contractors.

CONCLUSIONS OF LAW 1. Credible testimony and evidence supported findings which establish that the Respondent violated the charged provisions of A.R.S. § 32-1154 (A) (11) (Failure to pay monies in excess of $750 when due).

RECOMMENDED ORDER In view of the foregoing, it is recommended commencing on the effective date of the Registrar of Contractors’ Order that the Respondent’s License No. K-61.201301-D be suspended until the Registrar of Contractors receives and accepts written proof that Respondent has paid the sum of $2,989.00 to the Complainant. It is further recommended that if the Respondent pays the above described sum of money on or before the effective date of the Registrar’s Order then the aforementioned indefinite license suspension shall not take place and that this matter be closed. 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, August 26, 2010.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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