ALJDEC decisions subject to certification as final

2010A-308472715-ROC · Registrar of Contractors · 2011-02-17

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 2, 2011

APPEARANCES: Complainant appeared on her own behalf; Respondent was represented by attorney Rick Poster, accompanied by the company’s Managing Member Mary Crandall and former Qualifying Party Chris Papadakis.

WITNESSES: Echo LaBeau Lisa Sova Mary Crandall Chris Papadakis

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming that she is owed $2,500.00 from Respondent for services Complainant performed when Respondent hired her to build a website. Respondent has paid Complainant $440.00 and denies that further payment is owed. This tribunal entered the complaint file received from the Registrar of Contractors into the record, with the addition of Complainant’s Exhibits and 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 no violation of contractor licensing provisions.

FINDINGS OF FACT 1. Respondent is the holder of license B-1.255673-C, a general commercial contractor license issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform general commercial construction of a structure or appurtenance, except for certain specialty contracting such as electrical, plumbing, swimming pools, etc. The license has been suspended by operation of law since July 2010, for lack of a Qualifying Party. Before May 2010, Christopher Papadakis was the Qualifying Party. 2. The parties agree that Complainant was hired by Respondent in September 2009 to perform services needed to create a website for the Respondent. They disagree on the terms of the agreement. The agreement was not put in writing. 3. Complainant testified that she was hired by the three Members of the Respondent limited liability company to create three websites at $880.00 dollars per site (total of $2,640.00): one site for Respondent first, then one for Mary Crandall, and then one for another Member of the LLC, Daniel Vaught. Complainant thus testified that she was hired to create three websites. 4. Mary Crandall and Chris Papadakis testified that Complainant was hired to create one website (for Respondent) for $880.00. If that turned out well, then there was the possibility for two more. They testified that there was only one website to be done in the agreement with Complainant. 5. The parties agree that Respondent paid Complainant $440.00 at the time they entered into the agreement in September 2009.[1] 6. Complainant secured a domain name[2] and began to build a site. Complainant testified that she understood that the content for the site would be given to her by Respondent. She became frustrated because Respondent was very slow to provide content and began requesting that she create some of the content, which she testified was not within her scope of work. By late December 2009, the site was completed as far as Complainant was concerned. She testified that she could not get Respondent to look at it and approve it. Soon after that, she requested the $440.00 remainder of her fee, at which point she would turn over the work she had done. 7. Respondent’s witnesses testified that Complainant’s work was not complete. Therefore, they did not approve it or pay the remaining balance. 8. In April 2010, Complainant obtained a default judgment against Respondent in Maricopa County Justice Court for the amount of $2,500.00 plus court costs. She immediately filed a complaint with the ROC, requesting the amount in the default judgment. At hearing, counsel for Respondent avowed that the default had been set aside and a trial date set for March 2011. Complainant agreed that counsel’s avowal was accurate. Since the default judgment has been vacated, it cannot serve as a basis for Complainant’s claim. The facts of the claim must be addressed. 9. The evidence shows a contractual dispute between the parties. Each party holds a good faith belief that the other has breached the contract. 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 has violated the statutes cited in the Citation and Complaint.[5] Complainant has not met that burden. 2. Per the Citation and Complaint, this case focuses on 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” rendered in connection with a licensee’s operations when the licensee has the capacity to pay or when the licensee has been paid for the project. 3. Respondent argues that the no pay provision does not apply because the agreement with Complainant did not relate to contracting activity. This argument is not persuasive. The website Complainant was hired to create was for Respondent’s business as a licensed contractor and, therefore, was connected to Respondent’s operations as a licensee. Thus, the no pay provision is applicable. 4. However, the evidence shows only a good faith contractual dispute between the parties that does not warrant finding a violation of the no pay provision. This tribunal cannot find that the amount claimed by Complainant is due and owing from Respondent. The Registrar of Contractors, acting through an administrative disciplinary hearing, is not empowered by law to adjudicate amounts alleged to be due and owing in the face of a good faith dispute on such amounts. Until and unless any claimed obligation is reduced to judgment by a civil court of competent jurisdiction, no violation by Respondent of the no pay provision can be supported. 5. This matter should be dismissed. RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that the Citation and Complaint against Respondent Envision Builders, LLC in case 2010- [number redacted] 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, February 17, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibit 1. [2] Exhibit 2. [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).

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