ALJDEC decisions subject to certification as final

2010A-308477855-ROC · Registrar of Contractors · 2011-06-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 23, 2011

APPEARANCES: Corporate President and Qualifying Party Troy Colby appeared on behalf of Complainant; Respondent was represented by attorney Scott Miskiel, accompanied by the company’s President and Qualifying Party Grady Hopson.

WITNESSES: Troy Colby Grady Hopson

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming that it is owed $4,438.20 from Respondent for subcontracting services Complainant performed. Respondent denies owing any amount to Complainant. This tribunal entered the complaint file received from the Registrar of Contractors into the record, with the addition of Complainant’s Exhibits through 11 and Respondent’s Exhibit A. 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 KA.154334-D, a general dual engineering contractor license issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform construction in connection with fixed works including streets, roads, etc. Grady Hopson is the Qualifying Party. 2. The parties agree that Respondent hired Complainant in April 2009 to install a loop detector automatic traffic recorder system at the U.S. Highway 93 and U.S. Highway 89 interchange in Wickenburg, Arizona. The parties entered into a written contract for Complainant to perform work described as “Loop Detector (automatic traffic recorder system) (inductive & Piezzo Loop installation only).” The dispute arose when the Arizona Department of Transportation required installation of not only the “inductive & Piezzo” loops, but also the installation of controller cabinets and hardware. Complainant contends that the parties made a verbal agreement for Complainant to do the extra work for $4,438.20. Troy Colby testified to this at the hearing. 3. Respondent presented evidence at the hearing in support of its position that it does not owe any additional amounts to Complainant because (1) the subcontract included installation of the controller cabinets and hardware and, alternatively, (2) the written agreement required any extra work to be submitted via written change orders, which Complainant did not submit. 4. Respondent relies on the language of the contract for both its positions. The written contract clearly requires written change orders. Complainant acknowledges that fact. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[1] Further, the standard of proof at hearing is by preponderance of the evidence.[2] 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.[3] 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’s argument that the installation of the controller cabinet and hardware was covered in the original agreement and is not extra work is patently contrary to the clear language of the contract that sets forth the scope of work as “(inductive & Piezzo Loop installation only).” Respondent’s position on this aspect of the dispute is not held in good faith, as the language is clear. Installation of the cabinet and hardware was extra work not included in the original scope of work. But Respondent’s second argument, that a written change order was required, is consistent with the clear language of the contract and is a position held in good faith. 4. 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 contractual 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 Grady’s Quality Excavating, Inc. 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, June 13, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [2] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [3] 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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