ALJDEC decisions subject to certification as final

2011A-3501-ROC · Registrar of Contractors · 2011-12-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 29, 2011

APPEARANCES: Complainant was represented by its President Matt McGraw; Respondent was represented by Managing Member and Qualifying Party Terry Cope.

WITNESSES: Matt McGraw Terry Cope

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action seeking money it claims is owed by Respondent. The claims arise out of the rental of a portable storage unit to Respondent. Respondent denies that it owes money to Complainant. This tribunal entered the complaint file received from the Registrar of Contractors into the record, along with Complainant’s Exhibits 1 through 4. 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 no violation. FINDINGS OF FACT 1. Respondent is the holder of license KB-2.222851-D, a dual residential and small commercial contractor’s license issued by the Registrar of Contractors (“ROC”). The license authorizes Respondent to perform general residential and general small commercial construction. Terry Cope is the Qualifying Party. 2. In March 2008, Respondent’s principal was building a home as an owner builder in Casa Grande, Arizona, using Respondent’s license. He rented a portable storage unit from Complainant that was used to store construction materials, tools, and other items. Initially, the unit was delivered to the wrong address. It was delivered to an address next to the address at which Respondent was building the house, and the owner of that property, the neighbor, signed for acceptance of it. Terry Cope notified Complainant that it was delivered to the wrong address, but Complainant did not move the unit. Although the unit was never moved, Respondent used it and made the rental payments for it for a time, signifying that Respondent accepted the unit even though it was not at the correct address. 3. The record contains a written rental agreement.[2] There is a dispute about whether Cope signed the written agreement. He denies that he did so. However, even if he did sign it, the written agreement is not clear with regard to termination of the agreement. The written agreement states that the rental term was for “3/10 thru 3/19” of 2008. Based on that provision, the agreement terminated after March 19, 2008. The written agreement does not clearly identify the means of termination of the agreement for periods beyond the written rental term. Here, Respondent used the unit beyond the written term of the rental. 4. As noted, Respondent paid rental fees for the unit. Exhibit 2 shows that Respondent paid the rental fee for the unit through August 2008, then stopped paying. Cope testified that he contacted Complainant by telephone “at around the first of the year,” meaning January 2009, and told them to pick up the unit. Complainant never did so. McGraw denies any contact from Cope. 5. Complainant continued to bill Respondent the rental fee through September 9, 2010, when Complainant finally repossessed the unit. It had been at the same location the entire time. 6. Complainant claims that it is owed rental fees for the period from August 2008 through September 2010. Respondent denies that it owes Complainant any more money. However, Respondent has admitted that it used the unit and did not contact Complainant to pick up the unit until January 2009. Thus, even if Respondent owed Complainant for the period prior to contacting Complainant, according to Exhibit 2, Respondent would owe Complainant no more than $461.40, an amount not greater than the $750.00 required to find a violation. 7. The evidence shows that there is a good faith dispute with regard to whether Respondent owes Complainant rental fees. At best, there is evidence showing that Respondent may owe Complainant no more than $461.40. 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. 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. Here, Complainant provided Respondent with services that were used in connection with Respondent’s operations as a licensee, but Complainant has not show that any amounts are due. 3. The evidence shows a good faith money 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 2011-3501 against Respondent Seven Seas building Systems 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, December 19, 2011.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Complainant’s representative stated at the start of the hearing that the company name was not “Portable Storage Corp of America” as stated in the caption of the Notice of Hearing. The caption has been changed to reflect the proper name. [2] Exhibit 1. [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] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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