ALJDEC decisions subject to certification as final

2011A-1217-ROC · Registrar of Contractors · 2012-02-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 18, 2012

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

WITNESSES: Chris Mellon James Gordon Robert Mausbach James Deiley Tony Quirion

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming that Respondent, without legal excuse, abandoned the project for which Respondent had been hired. Complainant also alleges that Respondent’s workmanship was poor, that Respondent did not follow the specifications of the contract, and that Respondent charged Complainant more for the work than was allowed in the contract. Respondent denies the allegations. This tribunal entered the complaint file received from the Registrar of Contractors into the record, along with Complainant’s Exhibits 1 through (photographs), as well as Respondent’s Exhibit A (11 pages of photographs). The parties presented evidence and testimony from the witnesses listed above. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Decision finding that the evidence fails to show a violation. FINDINGS OF FACT 1. Respondent is the holder of license K-34.239903-D, a dual residential and commercial contractor’s license issued by the Registrar of Contractors (“ROC”). The license authorizes Respondent to perform painting and wall covering work for both residential and commercial projects. James Deiley is the Qualifying Party. 2. Complainant is a general contractor that hired Respondent as a subcontractor to perform painting work on a remodeling job. The parties have already been before this tribunal regarding the same contract in Carefree Painting, LLC v. License No. KB-1.197061-D of Back to Basics Corp. dba Chris Mellon and Company, ROC No. 2011-1097 (OAH Docket No. 2011A-1097- ROC). In that case, Respondent (“Carefree”) accused Complainant (“Back to Basics”) of failing to pay money that was owed on the subcontract. This tribunal made, and the ROC adopted, the following pertinent findings of fact: [a]. In January 2011, [Back to Basics] hired [Carefree] to perform painting work. The only documentation of the agreement is . . . an undated and unsigned typewritten proposal by [Carefree] 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 . . . 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. [b]. The parties disagree about what [Carefree] was hired to do. [Carefree]’s position is that [Carefree] 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 . . . was written and accepted, the parties also agreed that [Carefree] 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, [Carefree]’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). [c]. [Back to Basics] 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. [d]. [Back to Basics] paid a $1,000.00 initial payment and [Carefree] began the work. Because [Carefree] had trouble staining the doors, the parties verbally agreed that [Carefree] 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 [Back to Basics] issued a check to [Carefree] for $3,500.00. Deiley testified that he paid that money to the subcontractor who had done the doors. [e]. [Carefree] performed both the interior and exterior painting. [Back to Basics] had issues with [Carefree]’s workmanship and refused to pay [Carefree] any more on the contract. Mellon testified that [he] has filed a complaint with the ROC alleging workmanship issues [the present complaint]. . . . [f]. [Carefree] sued [Back to Basics] in small claims court for $2,500.00 and was awarded that amount in a Judgment. [Back to Basics] promptly paid that amount. [g]. [Carefree] claims that [it] 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. [h]. Assuming [Carefree]’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. There is no dispute that [Back to Basics] has paid [Carefree] $7,000.00. This leaves a balance due, assuming [Carefree]’s position is correct, of $1,040.00, not $1,140.00. However, [Carefree] has not shown that its position is correct. [i]. 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. [j]. The evidence shows, at best, a contractual dispute between the parties. It also shows that [Back to Basics] holds its position that it is not in breach of contract and does not owe [Carefree] any more money in good faith.[1]

Thus, the contract between the parties was found to be vague and the scope of work to be uncertain. The case was dismissed. No additional evidence was introduced at hearing on January 18, 2012, that would change that conclusion. 3. At hearing, Complainant Back to Basics presented testimony from James Gordon, Qualifying Party for Complainant’s stucco subcontractor Quality Stucco Corporation ACC, and from Robert Mausbach from RJR Best Painting, LLC, a painter that Complainant brought in to finish Respondent Carefree’s work. Neither one of these witnesses testified that they observed poor workmanship by Respondent Carefree. 4. James Gordon did not recognize either Mr. Deiley or Mr. Quirion as the painter who painted the stucco. He testified that he intended to fix the blend of a transition from old to new stucco, but that “someone” painted it before he performed the blend. This caused him to have to use a different product to perform the blend, but he got the job done. He characterized the problem as “aggravating.” It appears from the evidence that this was a matter of miscommunication not attributable to either party. 5. Robert Mausbach testified that he was called out to complete the painting portion of the job and that he found it unfinished. He characterized the condition of the painting work as “just stuff that wasn’t finished.” 6. The evidence shows that the parties had a good faith contract dispute that brought Complainant’s work to a stop shortly before the job was finished. Because the written contract was unclear, both parties had a good faith belief that the other party was in breach of contract. 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. The allegations in the Citation and Complaint are that Respondent has violated Arizona Revised Statutes (A.R.S.) § 32-1154(A)(1) by abandoning the project without legal excuse, (A)(3) by way of ROC Rule R4-9- 108 for failing to meet minimum workmanship standards, (A)(2) by failing to follow plans, specifications, or building codes, and (A)(9), failing to complete the job for the agreed-upon price. As found above, the evidence does not show that Respondent violated those statutes. 3. A preponderance of the evidence shows that the parties had a poorly drafted and vague contract and that when Respondent was almost done with the work, a dispute about the contract terms arose. Respondent had a good faith belief that it was not in breach of contract and was entitled to further payment.[5] The relationship broke down and Complainant hired others to finish Respondent’s work. The contract is the basis of the claims that Respondent violated (A)(1), (A)(2), and (A)(9). Because the contract was unclear and there was a good faith contractual dispute, the contract cannot serve as the basis for a violation, so no violation of those provisions has been shown. Furthermore, the evidence does not show by a preponderance of the evidence that the uncompleted workmanship was poor. 4. This matter should be dismissed. RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that Citation and Complaint 2011-1217 against Respondent Carefree Painting, 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, February 7, 2012.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Carefree v. Back to Basics, OAH No. 2011A-1097-ROC, pp. 2-3 (emphasis added.) [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] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996). [5] That belief was later confirmed in Justice Court.

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