ALJDEC decisions subject to certification as final

2010A-308477673-ROC · Registrar of Contractors · 2011-07-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 29, 2011

APPEARANCES: Complainant was represented by corporate President Scott Wilson; Respondent was represented by attorney Kevin Bonner, Fennemore Craig, PC, accompanied by the company’s Managing Member and Qualifying Party Todd Simmons.

WITNESSES: Rob Gramhill, Commercial Lender, Alliance Bank of Arizona Richard Best, Management for Respondent Jagdeep Saran, Co-owner TJ & JD Chevron Scott Wilson Diane Pellegrino, Controller for Respondent Todd Simmons

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action seeking money it claims is owed by Respondent. The claims arise out of a subcontract agreement between the parties in which Complainant performed concrete work as a subcontractor on a gas station built by Respondent. Respondent denies that it owes the money. This tribunal entered the complaint file received from the Registrar of Contractors into the record, along with Complainant’s Exhibits A through K and Respondent’s Exhibits 1 through 15. 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 Recommended Order finding no violation. FINDINGS OF FACT 1. Respondent is the holder of license B-1.151737-C, a general commercial contracting license issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform general contracting work on commercial properties, except for specialty areas such as plumbing, electrical, and other work that requires a specialty license. Todd Simmons is Respondent’s Qualifying Party. 2. In May 2010, the parties entered into a subcontract agreement in which Complainant agreed to perform concrete work for Respondent at a gas station/convenience store (TJ & JD Chevron) that Respondent was building as a general contractor.[1] Work progressed, progress payments were made, and changes were made to the scope of Complainant’s work, which formed the basis for several change orders. Respondent submitted documentation that tracks the change orders, invoices, and payments made to Complainant.[2] Several of the change orders are based on a deduction and a back charge that Respondent made. The deduction from the contract price was based on a reduction of the scope of work (17 bollards not installed by Complainant).[3] The back charge was based on the costs incurred by Respondent to rent equipment for use by Complainant.[4] 3. Complainant disputes the bases for the change orders. Scott Wilson (“Wilson”) did not make the reasons for the dispute clear other than to state that Complainant performed its work and should be paid the amount he believes Complainant should be paid. 4. The evidence shows that Respondent agreed that it owed Complainant a particular amount that was unpaid and that Respondent attempted to give Wilson a check for that amount. Wilson refused to accept the check for many months, finally accepting it shortly before the hearing. Wilson continues to maintain that Complainant is owed $10,350.00 after deducting the amount accepted. 5. The evidence shows, at best, a contractual dispute between the parties. It also shows that Respondent holds its position that it is not in breach of contract and does not owe Complainant any more money in good faith.[5] CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[6] Further, the standard of proof at hearing is by preponderance of the evidence.[7] 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.[8] Complainant has not met that burden. 2. The Citation and Complaint in this case cites only 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” when the licensee has the capacity to pay or when the licensee has been paid for the project. 3. 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. 4. This matter should be dismissed.

RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that Citation and Complaint 2010-[number redacted] against Respondent Simmons Construction LLC 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, July 19, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibits B and 1. [2] Exhibits 2 – 10. [3] Exhibit 8. [4] Exhibit 9. [5] Respondent’s reliance on Exhibits 1 and 2 is in good faith. [6] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [7] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [8] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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