ALJDEC decisions subject to certification as final

2010A-308473531-ROC · Registrar of Contractors · 2011-01-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 27, 2010 at 8:00 a.m. APPEARANCES: The Complainant appeared through its authorized representative, Michael Kramme. The Respondent appeared through its attorney, David Sandoval. 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 a Class A (No. 106559) License issued by the Registrar of Contractors. 2. On March 10, 2008, the Complainant entered into a written subcontract agreement with the Respondent wherein the Complainant agreed to furnish the labor, equipment and tools necessary for the removal of 492 linear feet of pipe and the installation of 4,573 linear feet of corrugated metal drain pipes, concrete headwall and a concrete catch base, at a construction project identified as Bowie Jct-Safford Hwy, for the sum of $148,773.00. 3. Credible testimony and evidence established that the parties then entered into a revised subcontract agreement on June 25, 2008, which increased the total for the construction project to the sum of $160,473.00. 4. Credible testimony and evidence established that during the course of construction, the parties began to experience difficulty in effectively communicating with each other and experienced occasional personal confrontations at the jobsite. 5. The Complainant performed construction during the removal and installation of the metal drainage pipes, which the Complainant considered to be beyond the scope of the parties’ revised written construction agreement, and the Complainant submitted invoices for the alleged extra work to the Respondent. 6. On June 11, 2008, the Respondent issued a written letter (Exhibit No. R- 1) which provides, in relevant part, as follows: Mr. Johnson, Jim Covey and I met and discussed the issue of pipe distribution, and the time you spent on this task, and Mr. Johnson reminded us that the issue was brought up in our meeting in Safford, and it was mentioned that the pipe was not separated, still Mr. Johnson is willing to discuss the issue of compensation at the end of the project but, from now on, if you believe that there are extra work involved please do not proceed unless you have authorization from Bison’s superintendant. 7. The Complainant continued to perform work that it considered to be beyond the scope of the parties’ written construction agreement and continued to submit invoices for the alleged extra work. 8. The Respondent declined to pay the Complainant for the alleged extras and asserted that the most of the alleged extra work completed by the Complainant was actually construction work that was within the scope of the parties’ written construction agreement. 9. The Complainant was unwilling to continue performing construction work that it considered to constitute extra work without compensation and stopped work and withdrew from the construction project. 10. When the Complainant stopped work and withdrew from the construction project, the Respondent terminated its construction contract with the Complainant and completed the construction project on its own. 11. When the Respondent refused to the pay the Complainant’s invoices for the alleged extra work that had been completed at the construction site, the Complainant filed a formal complaint against the Respondent with the Registrar of Contractors and a concurrent civil action for monetary damages. 12. The Complainant asserts in the Complaint at issue that the Respondent owes the Complainant the sum $108,764.56, pursuant to the terms of the parties’ revised written construction agreement. 13. The Respondent denied that the Respondent owes the Complainant any money and asserted that Complainant owes the Respondent the sum of $44,473.72 for the Respondent’s alleged cost of completing the construction project after the Complainant stopped work and withdrew from the construction project. 14. The evidence of record adequately demonstrated a dispute between the parties regarding what, if any, amount of money is due and owing to the Complainant from the Respondent. 15. The Respondent’s position in this money dispute is found under all of the circumstances to have been asserted in good faith and, therefore, precludes a finding that a liquidated sum is owed to the Complainant. 16. The credible testimony and evidence of record is inadequate and fails to support a finding of a violation of the charged provisions of A.R.S. § 32-1154 (A) (11) (Failure to pay monies in excess of seven hundred and fifty dollars when due). 17. The Complainant’s claim for monetary damages can be resolved in the parties’ ongoing concurrent civil suit. CONCLUSIONS OF LAW 1. The Complainant has the burden of demonstrating by a preponderance of the evidence that the Respondent violated the charged section of the state’s contracting laws. See Culpepper v. State of Arizona, 187 Ariz. 431, 437-38, 930 P.2d 508 (Ariz. App. 1996). 2. Proof by “preponderance of the evidence” means that it is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). 3. Proof by preponderance of the evidence “is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (rev. 6th ed. 1990). 4. 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 the Respondent of the charged provisions of A.R.S. § 32-1154A (11) can be supported. 5. The Complainant failed to sustain the requisite burden of proving the existence of a valid liquidated debt properly due and owing by the Respondent and thus, has not sustained the burden of proving that the Respondent has committed the violation charged herein. RECOMMENDED ORDER In view of the foregoing, it is recommended that this Citation, together with the Complaint upon which it is based be dismissed. 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, January 7, 2011.

/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