ALJDEC decisions subject to certification as final

2011A-1974-ROC · Registrar of Contractors · 2011-12-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 30, 2011

APPEARANCES: Complainant appeared on his own behalf; Respondent was represented by attorney Mark Bainbridge, The Bainbridge Law Firm, LLC, accompanied by Managing Member and Qualifying Party Lonnie Ruscito Sr.

WITNESSES: Charles Hauck Lonnie Ruscito, Sr. Lonnie Ruscito, Jr.

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming that he is owed $5,000.00 from Respondent for sales and marketing services Complainant performed for Respondent as an independent contractor. Respondent denies that any money is owed. This tribunal entered the complaint file received from the Registrar of Contractors into the record, with the addition of Respondent’s Exhibits B, C, K, L and O. 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. FINDINGS OF FACT 1. Respondent is the holder of license C-11.252251-R, a specialty residential contractor license issued by the Registrar of Contractors (“ROC”). That license authorizes Respondent to perform electrical work for residential jobs. Lonnie Ruscito, Sr. is the Qualifying Party. Respondent sells and installs solar power equipment. 2. The parties agree that Complainant was hired by Respondent in September 2010 to perform sales and marketing services. They agree that the employment agreement was verbal and that it was entered into when Complainant met with Lonnie Ruscito, Jr. at a restaurant in September 2010. They disagree on the terms of the agreement. 3. Complainant testified that he was to provide leads and close sales and that he was to be paid a commission on each sale that was closed. He testified that he created a sales form and that he was authorized to use it. He testified that he is owed commission for two sales, one for $2,000.00 (Cervantes) and the other for $3,000.00 (Schwartz). The record contains copies of the sales forms he created and used for those transactions.[1] There is no documentation that supports his authority to create and use his own form in place of Respondent’s Purchase Agreement form.[2] 4. Lonnie Ruscito, Jr. testified that Complainant was hired along with a partner, Dariusz Bialowus, and that he believed he was hiring a partnership to perform marketing and sales of solar water heaters. He testified that commissions were due only after a sale was closed with approved financing, and that Complainant was never authorized to use his own form in place of the Purchase Agreement. He testified that the two sales at issue were not approved for financing. Therefore, according to Lonnie Ruscito, Jr., Complainant did not earn commissions on those sales. 5. Because the agreement was verbal and there is no documentation supporting either version of the terms, the evidence is unclear as to what the terms of any agreement were. Indeed, if the same terms were not agreed to by each party, such that a “meeting of the minds” took place, there may not even have been a legal contract. Because the evidence is so unclear, Complainant has not shown that an agreement existed or, if there was an agreement, what the terms of the agreement were. 6. At best, the evidence shows no more than a contractual dispute between the parties. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[3] Further, the standard of proof at hearing is by preponderance of the evidence.[4] 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.[5] 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. The evidence fails to show an enforceable agreement. At best, it 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 2011-1974 against Respondent Desert Sky Land Development dba Desert Sky Solar Energy 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, December 20, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibit B and C. [2] Exhibit L. [3] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [4] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [5] 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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