ALJDEC decisions subject to certification as final

2011A-2867-ROC · Registrar of Contractors · 2012-01-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 4, 2012 APPEARANCES: David Joseph Resendez appeared personally. Southwest Paving, L.L.C. was represented by its authorized representative, Mike Bourlier. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order: FINDINGS OF FACT 1. Southwest Paving, L.L.C. (“Southwest”) is the holder of License Nos. 238413, a Class A-5 contracting license, and 223412, a Class K-69 contracting license issued by the Registrar of Contractors (“Registrar”). 2. On April 4, 2011, David Joseph Resendez (“Complainant”) filed a written Complaint with the Registrar alleging nonpayment of equipment rental by Southwest and damages caused to Complainant’s equipment by Southwest. The Registrar designated the Complaint against Southwest’s License No. 238413 as Case No. 2011-1956. The Registrar designated the Complaint against Southwest’s License No. 223412 as Case No. 2011- 2867. 3. The Registrar issued a Citation and Complaint in Case No. 2011-1956 charging Southwest’s License No. 238413 with violating the provisions of A.R.S. § 32-1154(A) (11). 4. The Registrar issued a Citation and Complaint in Case No. 2011-2867 charging Southwest’s License No. 223412 with violating the provisions of A.R.S. § 32-1154(A) (11). 5. The Registrar forwarded Case Nos. 2011-1956 and 2011-2867 to the Office of Administrative Hearings, an independent agency, for a consolidated evidentiary hearing. 6. On April 1, 2010, Michael Ray Bourlier, who is listed on Southwest’s License No. 223412 as its employee and on Southwest’s License No. 238413 as its employee and qualifying party, spoke to Complainant about leasing the following equipment from Complainant: a Gilchrist ProPave Asphalt Paver; a Gannon; a Tac Wagon; and a trailer. The equipment was located in California. 7. Although Southwest sent Complainant a written Equipment Lease Agreement,[1] Complainant never executed it. The parties orally agreed to a lease/purchase of the subject equipment. 8. Southwest paid the sum of $1,400.00 to have the equipment transported from California to Arizona. 9. When the equipment arrived in Arizona, Southwest discovered that the paver was in bad condition. Southwest used the paver on three jobs, but Southwest could not use it any further due to its poor condition. 10. By check dated April 19, 2010, Southwest paid a $1,000.00 monthly lease payment to Complainant. 11. By check dated May 5, 2010, Southwest paid a $1,000.00 monthly lease payment to Complainant. 12. By invoice dated June 16, 2010, Southwest paid the sum of $152.59 for repairs to the equipment. 13. By check dated June 17, 2010, Southwest paid a $1,000.00 monthly lease payment to Complainant. 14. By check dated July 1, 2010, Southwest paid a $1,000.00 monthly lease payment to Complainant. 15. By invoice dated July 6, 2010, Southwest paid Empire Cat the sum of $448.07 for repairs to the equipment. Southwest also paid Wasser Engineering the sum of $700.00 and Southwest Rubber the sum of $250.00 for repairs to the equipment. 16. In August 2010, Southwest informed Complainant that Southwest no longer wanted to rent or purchase Complainant’s paver due to its poor condition. By check dated August 28, 2010, Southwest paid a lower monthly lease payment in the amount of $500.00 to Complainant. The payment was lower than previous lease payments because Southwest no longer rented the paver. There is no evidence that Complainant objected to the lower lease payment. 17. From August 28, 2010, to November 15, 2010, Southwest paid Robert Brown the total sum of $3,751.93 for the rental of a paver due to the poor condition of Complainant’s paver. 18. By check dated October 15, 2010, Southwest paid Complainant the sum of $4,000.00 as payment in full for the equipment, except for the paver. 19. Complainant presented Southwest with a handwritten bill of sale that read as follows: “I David Resendez sold [an] oil pot and a John Deer[e] tractor 310, and a 20 ton [trailer] to L.L.C. for the sum of $________.” Complainant did not produce any certificates of title or serial numbers for the equipment purchased by Southwest. 20. Southwest requested that Complainant supply Southwest with a proper bill of sale and title information so that the equipment could be registered in Arizona. Complainant refused that request. 21. When Southwest originally informed Complainant that Southwest did not want to purchase the paver, Southwest stated that he had a buyer for it in Arizona. Apparently the sale of the paver did not close. Complainant had the paver transported back to California at the cost of $1,575.00. Complainant did not require Southwest to pay to have it transported back to California. However, Complainant now seeks reimbursement for that expense from Southwest. 22. In June of 2011, Complainant made a claim to Southwest’s insurance carrier for damages to the equipment. In July of 2011, Southwest’s insurance carrier, who was willing to settle the claim, ultimately denied Complainant’s claim because Complainant would not produce proof of his ownership of the equipment. It was not until the day of the hearing that Complainant presented documentation supporting his claim of ownership of the equipment. 23. Complainant refuses to present Southwest with documentation for the equipment purchased by Southwest until Southwest pays Complainant the following alleged damages: $4,000.00 for new tracks for the paver; $1,575.00 for transporting the paver from Arizona to California; and $6,000.00 in back rental payments. 24. There appears to be a bona fide dispute concerning the tracks for the paver. Southwest contends that the tracks were missing when the paver was delivered. Complainant disagrees and testified that he had to put tracks on the paver when it was returned to California. 25. The evidence of record fails to establish that Southwest owes Complainant the sum of $6,000.00 for back rental payments. Complainant did not establish the period of time that Southwest failed to pay for the leasing of the equipment. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over Southwest’s License Nos. 238413 and 223412, and the subject matter in these consolidated cases. 2. Pursuant to A.A.C. R2-19-119(B), Complainant has the burden of proof in these consolidated matters. The standard of proof is by a preponderance of the evidence. A.A.C. R2-19-119(A). 3. With respect to the monetary compensation that Complainant asked the Registrar to order Southwest to pay as a condition of keeping its licenses in good standing, the legislature has not empowered the Registrar to adjudicate or award monetary or consequential damages.[2] Complainant’s claimed monetary loss resulted from Southwest’s alleged failure to maintain the equipment,[3] not directly from Southwest’s violation of any contracting statute. The evidence of record did not establish a failure to maintain the equipment, as evidenced by Southwest’s payments for the maintenance of the equipment. 4. Complainant failed to sustain his burden of establishing that Southwest violated the provisions of A.R.S. § 32-1154(A) (11), as charged by the Registrar. Complainant seeks consequential damages in this matter, which are outside the authority of the Registrar to award if established. RECOMMENDED ORDERS Case No. 2011-1956 The Citation and Complaint in Case No. 2011-1956 shall be dismissed on the effective date of the Order entered in that matter. Case No. 2011-2867 The Citation and Complaint in Case No. 2011-2867 shall be dismissed on the effective date of the Order entered in that matter.

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, January 24, 2012.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] The Equipment Lease Agreement named Copperstate Paving & Grading, L.L.C. as the lessee, not Southwest. [2] See J.W. Hancock Enterprises, Inc. v. Arizona State Registrar of Contractors, 142 Ariz. 400, 406, 690 P.2d 119, 125 (Ct. App. 1984). [3] “Consequential damages are such as are not produced without the concurrence of some other event attributable to the same origin or cause; such damage, loss, or injury as does not flow directly and immediately from the action of the party, but only from the consequences or results of such act.” 25 C.J.S., Damages, § 2 at 617 (quoted in State v. Morris, 173 Ariz. 14, 17, 839 P.2d 434, 437 (App. 1992)).

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