ALJDEC decisions subject to certification as final

2010A-308473696-ROC · Registrar of Contractors · 2011-01-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 16, 2010

APPEARANCES: Complainant was represented by its corporate President Mike Foster; Respondent was represented by attorney Brenda Lee, accompanied by company President and Qualifying Party Chris Coffee.

WITNESSES: Mike Foster Chris Coffee

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming that it is owed $2,020.30 from Respondent for labor and materials Complainant provided as a subcontractor for Respondent’s contracting activity. Respondent denies that it owes any money to Complainant. This tribunal entered the complaint file received from the Registrar of Contractors into the record, along with marked Exhibits Complainants A through K and Respondents 1 through 5, which included Exhibit 4: an “Unconditional Waiver and Release Upon Final Payment.” Testimony was taken from the witnesses above. Based upon the 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 Coffee Builders, Inc. is the holder of license KB- 1.231469-D, a dual contractor license issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform general construction of commercial and residential structures or appurtenances, except for certain specialty contracting such as electrical, plumbing, swimming pools, etc. Chris Coffee is Respondent’s Qualifying Party. 2. Complainant is a plumbing contractor that supplied subcontracting services to Respondent on a remodeling project identified as the “Furrier Bathroom.” 3. On February 16, 2010, Gail Maxwell, Complainant’s Office Manager, signed an “Unconditional Waiver and Release On Final Payment” (hereinafter “Waiver”) stating that Complainant had been paid in full by Respondent for the Furrier Bathroom job. The Waiver waived all rights to liens or any action against Respondent’s bond for payment. Above Maxwell’s signature is the statement: NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL RELEASE FORM.

At hearing, Mike Foster acknowledged that the signature on the Waiver was Maxwell’s and that Maxwell is an employee of Complainant. Foster also acknowledged that Respondent made a payment at the time the waiver was filed. 4. Complainant’s position in this matter is that Complainant was not paid in full when Maxwell signed the Waiver. 5. Even if that factual claim were found to be true, it would not overcome the weight of the Waiver and would not establish a violation of the no pay provision, the only cited allegation. At best, it might show a good faith legal dispute over the validity of the Waiver, a claim that might be appropriate for a civil court action but would not be a basis for disciplining a licensed contractor.[1]

CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[2] Further, the standard of proof at hearing is by preponderance of the evidence.[3] 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.[4] Complainant has not met that burden. 2. Only one statutory provision is cited in the Citation and Complaint as a potential violation: 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 provided in connection with construction activities when the licensee has the capacity to pay or when the licensee has been sufficiently paid for the project. The record does not support a conclusion that Respondent violated the no pay provision. 3. Gail Maxwell, the signer of the Waiver, was not present for the hearing. She signed a statement on behalf of Complainant that stated that the matter was paid in full. This is such a clear statement of waiver of Complainant’s right to pursue any further payment against Respondent that it is a sufficient defense to a claimed violation of the no pay provision. 4. On the basis of the Waiver alone, Complainant’s case against Respondent under A.R.S. § 32-1154(A)(11) fails. 5. This matter should be dismissed. RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that Citation and Complaint 2010-[number redacted] against Respondent Coffee Builders, 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 5, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] More likely, it might show a mistake on Complainant’s part. [2] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [3] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [4] 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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