ALJDEC decisions subject to certification as final

2011A-1097-ROC · Registrar of Contractors · 2011-08-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 10, 2011

APPEARANCES: Complainant was represented by Managing Member James Deiley; Respondent was represented by CEO and Qualifying Party Chris Mellon.

WITNESSES: James Deiley Chris Mellon

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action seeking money it claims is owed by Respondent. The claim arises out of a subcontract agreement between the parties in which Complainant performed painting work as a subcontractor on a residential remodeling project for which Respondent was the general contractor. Respondent denies that it owes the money. This tribunal entered the complaint file received from the Registrar of Contractors into the record, along with Exhibits A, B, and C. 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 a good faith contractual dispute and no violation.

FINDINGS OF FACT 1. Respondent is the holder of license KB-1.197061-D, a general dual contracting license issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform general contracting work on both commercial and residential properties, except for specialty areas such as plumbing, electrical, and other work that requires a specialty license. Chris Mellon is Respondent’s Qualifying Party. 2. In January 2011, Respondent hired Complainant to perform painting work. The only documentation of the agreement is Exhibit A, which is an undated and unsigned typewritten proposal by Complainant to perform both interior and exterior painting as well as staining interior doors. The proposal is broken into five items that describe the work proposed. Four of the items show pricing for those items. In the lower right corner of Exhibit A is a handwritten note showing “$6400.00” and describing work to be done including specified portions of interior painting and door staining. The handwritten portion does not describe exterior painting work and is not signed by either party. 3. The parties disagree about what Complainant was hired to do. Complainant’s position is that Complainant was hired to perform the work described in the handwritten portion for $6,400.00 and was also hired to perform one of the items in the typewritten portion that pertains to exterior painting of the back of the house for $1,140.00. James Deiley testified that when the handwritten portion of Exhibit A was written and accepted, the parties also agreed that Complainant would perform the exterior painting for the price listed in the typewritten item that referred to the exterior painting. He understood the handwritten portion of the document to be a listing of the total price and description of the interior work only. Thus, Complainant’s position is that the contract price for the job was $7,540.00 ($6,400.00 for interior plus $1,140.00 for exterior). 4. Respondent disagrees. Chris Mellon testified that the contract price was $6,400.00 total and that it included both the interior and exterior painting. He testified that the handwritten “$6400.00” was the agreed upon price for the work described in both the typewritten and handwritten portions and that the handwritten portion was just more description of the scope of the interior work. 5. Respondent paid a $1,000.00 initial payment and Complainant began the work. Because Complainant had trouble staining the doors, the parties verbally agreed that Complainant would bring in a subcontractor to do the doors and that they would pay the subcontractor $3,500.00 by taking $2,500.00 of the contract amount and adding an additional $500.00 each from the parties. This was accomplished when Respondent issued a check to Complainant for $3,500.00.[1] Deiley testified that he paid that money to the subcontractor who had done the doors. 6. Complainant performed both the interior and exterior painting. Respondent had issues with Complainant’s workmanship and refused to pay Complainant any more on the contract. Mellon testified that Respondent has filed a complaint with the ROC alleging workmanship issues.[2] That complaint is being processed by the ROC. 7. Complainant sued Respondent in small claims court for $2,500.00 and was awarded that amount in a Judgment.[3] Respondent promptly paid that amount.[4] 8. Complainant claims that he is owed $1,140.00 for the exterior painting portion of the job. The evidence does not support that claim for the following factual reasons. 9. Assuming Complainant’s position that the contract price was $7,540.00, the price was modified when the parties agreed to a change for the door-staining portion of the contract. That change made the total contract price $8,040.00.[5] There is no dispute that Respondent has paid Complainant $7,000.00.[6] This leaves a balance due, assuming Complainant’s position is correct, of $1,040.00, not $1,140.00. However, Complainant has not shown that its position is correct. 10. The evidence of the terms and scope of the parties’ agreement is vague and inconclusive. The documentation is poor and does not provide sufficient information to make a factual determination by a preponderance of evidence as to what the scope or terms of the agreement were. 11. 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. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[7] Further, the standard of proof at hearing is by preponderance of the evidence.[8] 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.[9] 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 2011-1097 against Respondent Back to Basic Corp. dba Chris Mellon and Company 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, August 25, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibit B. [2] Mellon was unable to identify the complaint by number. [3] The documentation from small claims court was present at the hearing but was not made part of the record because the Administrative Law Judge erroneously believed that it had been submitted with the complaint and was already part of the complaint file. However, the absence of that documentation is inconsequential because the parties do not dispute those facts and payment of the Judgment is documented in Exhibit C. [4] Exhibit C. [5] The net result of the agreement pertaining to the door-staining portion of the contract was an additional $500.00 (Respondent’s agreement to put another $500.00 toward the staining) added to the total price. [6] $1,000.00 plus $3,500.00 plus $2,500.00. [7] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [8] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [9] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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