ALJDEC decisions subject to certification as final

2010A-24819886-ROC · Registrar of Contractors · 2010-09-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 9, 2010 at 8:00 a.m. APPEARANCES: Complainant Mountain Shadows Custom Homes, L.L.C. appeared through Thomas G. Luikens, Esq., Ayers & Brown, P.C.; Respondent Hop Cassidy Pools, Inc. appeared through Thomas S. Moring, Esq., Pak & Moring, P.L.C. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On September 19, 1991, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC091104, Class B-5 for residential general swimming pool contracting to Respondent Hop Cassidy Pools, Inc. On September 3, 1993, the Registrar issued License No. ROC099022, Class B for general residential contracting to Complainant Mountain Shadows Custom Homes, L.L.C. On January 20, 2010, the Registrar received a complaint from Complainant against Respondent. Complainant alleged that Respondent had failed to pay $4,000.00 for a sales commission “in lieu of a builder discount” under a verbal and written contract in the amount of $64,189.76 for work at 5901 E. Edwards Ln. in Paradise Valley, Arizona. On March 8, 2010, the Registrar received Complainant’s request for a citation against Respondent. On May 11, 2010, the Registrar issued a Citation and Complaint against Respondent, charging a violation of A.R.S. § 32-1154(A)(11). Respondent filed a timely written answer to the Citation and Complaint, denying any statutory violation. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, to schedule and conduct a fair hearing. A hearing was held on September 9, 2010. Complainant presented the testimony of Richard Fisch, its qualifying party and managing member. Respondent presented the testimony of James Moss, its qualifying party and president, and submitted four exhibits. Hearing Evidence Between 2005 and 2008, Complainant, as general contractor, built a home for homeowner Scott Archer. Complainant’s superintendent, Richie Stancavage, provided pool plans to Respondent to allow it to submit a proposal. On May 12, 2006, Respondent submitted a detailed proposal to Mr. Stancavage that included itemized costs for the features on the plans. The proposal showed a total cost of $77,025.00, less a builder’s discount of $7,262.00, for a quoted price to Complainant of $69,763.00. Mr. Moss testified that Respondent routinely gives the general contractors that hire Respondent discounts of approximately 9½% for their profit. Respondent assumes that the general contractor will charge the homeowner the total cost. Mr. Moss testified that if Respondent contracts directly with a homeowner to build a pool, the price does not include any discount. On or about May 26, 2006, Mr. Moss, Mr. Stancavage, and Mr. Archer met at Mr. Archer’s office to prepare a contract for construction of the pool. To Mr. Moss’ surprise, Mr. Archer had a copy of Respondent’s May 12, 2006 proposal that showed the builder’s discount. Mr. Moss testified that general contractors may charge homeowners whatever they want for Respondent’s pools. However, if the general contractor gives its discount to a homeowner, Respondent does not further discount the price of the pool. On behalf of Respondent, Mr. Moss prepared a contract for Respondent to construct the pool at a total contract price of $69,763.00, with the “builder” to pay taxes. Mr. Moss signed the contract as Respondent’s “sales representative,” and Mr. Archer and Mr. Stancavage signed the contract as “buyers.” Respondent submitted draw requests directly to Mr. Archer, with a copy to Complainant. Mr. Archer paid the draw requests. At the time of the hearing, Mr. Archer had paid Respondent the full contract price of the pool. In May 2007, Mr. Archer asked Respondent if it would construct a koi pond and master bedroom water feature at the property. Mr. Moss prepared and delivered to Mr. Archer’s office a proposal to build the koi pond at a price of $52,049.17 and the master bedroom water feature at a price of $17,229.56, for a total price of $69,278.73. After Mr. Moss and Mr. Archer signed the proposal, Respondent provided a copy to Complainant. No one signed the May 2007 proposal on Complainant’s behalf. Mr. Fisch testified that at about the time that Respondent contracted to construct the koi pond and master bedroom water feature for Mr. Archer, Mr. Moss verbally promised to pay Complainant a $4,000.00 sales commission because the job would be very profitable for Respondent and it would not have obtained the job without Complainant’s referral. Mr. Fisch testified that he thought that Mr. Moss was an honorable man and did not insist that the alleged agreement be reduced to writing. Mr. Moss denied that he ever promised that Respondent would pay Complainant any sales commission. Mr. Moss testified that Mr. Archer was a smart man who could calculate Respondent’s cost because he had seen Respondent’s detailed proposal for the pool. Respondent did not make a lot of money on the koi pond, although Mr. Archer paid Respondent the amount of the proposal. Near the end of the project, Mr. Archer changed his mind about the master bedroom water feature and did not have Respondent construct it. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[1] Complainant bears the burden of proof and must establish Respondent’s statutory violation by a preponderance of the evidence.[2] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[3] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[4] When Mr. Moss made the alleged promise that Respondent would pay Complainant a $4,000.00 commission, Respondent had already substantially completed the pool. Because Complainant did not play an active role in Mr. Archer’s decision to hire Respondent to perform additional work, and Respondent had no reason at the time to pay Complainant a commission, Mr. Fisch’s testimony about Mr. Moss’ alleged verbal promise to pay Complainant $4,000.00 is not credible. In addition, “[f]or an enforceable contract to exist, there must be an offer, an acceptance, consideration, and sufficient specification of terms so that the obligations involved can be ascertained.”[5] “Consideration is a benefit to the promisor or a loss or detriment to the promisee, and there is no consideration for a promise where no benefit is conferred on the promisor or detriment suffered by the promisee.”[6] “[P]ast benefits do not constitute sufficient consideration for a promise conferred under such circumstances as to raise no moral obligation . . . .” Because Mr. Moss’ alleged verbal promise to pay Complainant $4,000.00 was unsupported by any benefit to Respondent, Complainant cannot enforce the alleged promise in an administrative complaint to the Registrar against Respondent’s license under A.R.S. § 32-1154(A)(11).[7] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order, the Registrar dismiss Case No. 2010- 24819886 against Respondent Hop Cassidy Pools, Inc.’s License No. ROC091104, Class B-5. If the Director of the Office of Administrative Hearings certifies this Administrative Law Judge Decision, the effective date of the order will be forty days from the date of certification. Done this day, September 22, 2010.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] See 32-1101 et seq. [2] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [3] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [4] Black’s Law Dictionary at page 1220 (8th ed. 1999). [5] K-Line Builders, Inc. v. First Federal Savings & Loan Ass’n, 139 Ariz. 209, 212, 677 P.2d 1317, 1320 (App. 1983) (citations omitted). [6] Id. (citations omitted). [7] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license “[f]ailure by a licensee . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay . . . .”

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