ALJDEC decisions subject to certification as final

2010A-308474534-ROC · Registrar of Contractors · 2011-02-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 24, 2011, at 8:00 a.m. APPEARANCES: Complainant Progressive Fence Co. Corporation appeared through Jonathon Dolores Neri, its qualifying party and president; Respondent Douglas Charles Bailey dba D C B Development and Construction Services appeared on his own behalf. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure In July 1999, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC147002, Class KB-2 for dual residential and small commercial contracting to Douglas Charles Bailey doing business as (“dba”) D C B Development and Construction Services (“Mr. Bailey” or “Respondent”). In June 2006, the Registrar issued License No. ROC221573, Class K-31 for dual masonry to Progressive Fence Co. Corporation (“Complainant”). On July 29, 2010, the Registrar received a complaint from Complainant against Respondent that alleged that Respondent had failed to pay Complainant $2,825.00 for brick facing on a house at 5315 N. 69th Place in Paradise Valley, Arizona (“the Caruso residence”). The Registrar sent a copy of the complaint to Respondent. On August 4, 2010, the Registrar received Complainant’s request for hearing. On October 4, 2010, the Registrar issued a Citation and Complaint against Respondent, charging a violation of A.R.S. § 32-1154(A)(11). Respondent timely answered the Citation and Complaint, denying any statutory violation. Respondent affirmatively alleged that it paid a second contractor to repair Complainant’s work to pass the Town of Paradise Valley’s building inspection and that it tried to pay to Complainant the difference between the subcontract amount and what it paid to the second contractor, but that Complainant refused to accept payment. The Registrar referred the matter to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. A hearing was held on January 24, 2011. Complainant presented the testimony of Jonathon Neri, its president and qualifying party, and submitted two exhibits. Respondent testified on his own behalf and submitted twelve exhibits. Hearing Evidence On or about June 28, 2010, Respondent issued a subcontract for Complainant to install brick veneer on the Caruso residence “per plans and specifications provided for quote dated 3/23/10” for a total contract price of $2,900.00. The subcontract also provided that if Complainant’s work was deficient, Respondent would implement the following procedure: Subcontractor will receive, in writing, a “Notice of Non- performance” allowing a period of not more than (48) hours to fulfill this Subcontract Agreement. If Subcontractor fails to fulfill Subcontract Agreement any payment requests submitted by Subcontractor will be withheld and additional costs or expense will be charged to Subcontractor to complete work.

Although Complainant did not sign the contract, it started the job at the Caruso residence. The plans and specifications for the brick veneer on the Caruso residence were not submitted at the hearing. On or about July 3, 2010, Respondent issued Change Order No. 1 to Complainant, deducting $150.00 for “brick on fireplace and top of column,” and adding $75.00 for “detail on top of the East side door.” With the change order, the amount of Complainant’s subcontract for the Caruso residence was $2,825.00. Mr. Neri testified at the hearing that Complainant was not responsible for any deficiencies in its work because it performed certain work at the insistence of Respondent’s jobsite superintendent, Daniel, after Respondent had refused to install forms and wire, which were not part of Complainant’s subcontract. Mr. Neri testified that installation of black paper underneath the brick to provide waterproofing also was not part of Complainant’s subcontract. Mr. Bailey testified that construction of forms, installation of wires to support the brick veneer, and waterproofing were part Complainant’s subcontract. On July 20, 2010, at 9:50 a.m., Mr. Bailey sent a facsimile to Complainant regarding its work at the Caruso residence, in relevant part as follows: This is your second request to repair the column caps that were installed improperly. The mortar is not sticking and the brick [sic] are falling off. These could cause injury to the people standing below when they fall.

You are hereby given 24 hours notice to man the project per our contract requirements. If you do not provide personnel to the project within 24 hours, we will be forced to hire another contractor to complete the work and deduct these costs from any amounts that are still due to your company. . . .

On July 20, 2010, Mr. Neri, on Complainant’s behalf, responded to Respondent’s facsimile regarding the Caruso residence, in relevant part as follows: Per our conversation yesterday over the phone with your superintendent Daniel, he told me the Stucco Person hit the bricks and at this point we are not going to be able to make any repairs at such residence. You will get more information during this week about what is the next move on this matter.

On July 20, 2010, at 12:30 p.m., Mr. Bailey sent another facsimile in response to Complainant’s facsimile, in relevant part as follows: We have received your letter that states that you will not be repairing the defective masonry work on the columns at the Caruso Residence. As stated in our previous letter/fax that you received, we proceed with hiring another contractor to complete the defective work and reduce the amount owed to your company for the cost of the repairs. . . .

On or about July 21, 2010, the brick veneer that Complainant had installed at the Caruso residence failed the Town of Paradise Valley’s building inspection. Complainant did not return to the jobsite or perform any further work on the Caruso residence. On or about July 26, 2010, Respondent received a proposal from Catfish Masonry, L.L.C., License No. ROC258061, Class C-31 for residential masonry (“Catfish Masonry”), to perform the following work for a total price of $945.00: Remove existing block, chip mortar off sides of cut blocks, place building paper on exposed wood framing, nail/screw galvanized metal diamond lath to framing, relay all block with spec mortar, pour liquid cement slurry behind brick after given a full day for mortar to dry.

Remove and relay the two corner blocks on about 5 locations on front of house next to openings. Once again use lath to try to secure blocks to framing and prevent large cracks.

Remove and relay blocks with expanding glue above new opening in back of house. Tuck and point mortar back in. Sanded caulk may be required for non-cracking joint between block and lintels.

Catfish Masonry performed the work described on its July 26, 2010 proposal and, on or about August 2, 2010, Respondent paid $945.00 to Catfish Masonry. The brick veneer at the Caruso residence subsequently passed the Town of Paradise Valley’s building inspection. Respondent prepared a check to Complainant for $1,880.00, the difference between the $2,825.00 that would have been owed under the subcontract if Complainant had performed its work in a professional and workmanlike manner and the $945.00 that Respondent had paid to Catfish Masonry to repair Complainant’s work. Although Respondent informed Complainant that it could pick up the check at Respondent’s office, Complainant refused to pick up the check or to accept payment in any lesser amount than the amount of the original subcontract, as modified by Change Order No. 1. CONCLUSIONS OF LAW This matter lies within the Registrar’s jurisdiction.[2] Complainant bears the burden of proof and must establish Respondent’s statutory violation by a preponderance of the evidence.[3] Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.[4] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[5] 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.”[6] Respondent acknowledged that if Complainant had fully performed the scope of work in a professional and workmanlike manner, Respondent would have owed $2,825.00 to Complainant under Complainant’s subcontract, as modified by Change Order No. 1. However, Respondent established at the hearing that Complainant failed to perform its scope of work in a professional and workmanlike manner, which caused its work to fail the Town of Paradise Valley’s building inspection. Even if Complainant’s scope of work did not include waterproofing, forms, and wire, because Complainant accepted the surface at the Caruso residence by installing the brick veneer without these underlying components, its work must comply with industry standards. Under the subcontract and pursuant to general construction practice, Respondent was justified in withholding from Complainant the $945.00 that Respondent paid to Catfish Masonry to repair Complainant’s work. Respondent acknowledged that it owed Complainant $1,880.00. Because Respondent attempted to pay Complainant this amount, but Complainant refused to accept payment of any lesser amount than $2,825.00 before and during the hearing, Complainant did not establish that Respondent violated A.R.S. § 32-1154(A)(11)[7] by failing to pay any amount owed. RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the Registrar’s final order in this matter, Progressive Fence Co. Corporation’s complaint in Case No. 2010-[number redacted] against Respondent Douglas Charles Bailey dba D C B Development and Construction Services’ License No. 147002, Class KB-2 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 2, 2011.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Complainant’s complaint was made against D B C S, Inc., License No. 101232, Class B-1 for commercial general contracting. Douglas Charles Bailey is the qualifying party and only person listed on that license and on License No. 147002, Class KB-2 for dual residential and small commercial contracting. Both licenses have the same address of record. Because the job at issue was residential, at Mr. Bailey’s request, the Administrative Law Judge amended the caption in this matter to charge the correct license.

[2] See 32-1101 et seq. [3] 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). [4] See A.A.C. R2-19-119(B)(2). [5] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [6] Black’s Law Dictionary at page 1220 (8th ed. 1999). [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 or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.”

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