ALJDEC decisions subject to certification as final

2011A-394-ROC · Registrar of Contractors · 2011-06-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 16, 2011, at 8:00 a.m. APPEARANCES: The Complainant appeared through its authorized representative, Derek Covington. The Respondent appeared through its attorney, William R. Brown. . ADMINISTRATIVE LAW JUDGE: M. Douglas

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order are made: FINDINGS OF FACT 1. The Respondent is the holder of a Class B (No. 218315) License issued by the Registrar of Contractors. 2. There was no dispute that the parties had entered into a joint venture agreement wherein the Complainant was to use his alleged influence to assist the Respondent in obtaining weatherization jobs through the State of Arizona including the cities of Phoenix and Tucson and that the Respondent, as a licensed contractor would perform any of the weatherization jobs that might be awarded to the Respondent as a result of the Complainant’s assistance. 3. Credible testimony and evidence established that the Complainant was to receive 50% of the net profit and an Operating Officer fee for each weatherization job that the Complainant assisted the Respondent to obtain. 4. On January 2, 2011, the Complainant filed a formal complaint against the Respondent with Registrar of Contractors alleging that the Respondent had failed to pay the Complainant $21,000.00 allegedly due to the Complainant under the terms of the parties’ joint venture agreement. 5. At the hearing the Complainant asserted that the Complainant had obtained several weatherization jobs for the Respondent and that the Complainant’s share of profits for the weatherization jobs should be $21,000.00. 6. The Respondent asserted that the Complainant had failed to obtain any weatherization projects for the Respondent and that since there were no jobs there was no profit to be divided in accordance with the terms of the parties’ joint venture agreement. 7. Credible testimony and evidence established that to participate in weatherization projects through Neighborhood Services in the City of Phoenix a contractor must provide proof that they are a properly licensed contractor and are properly bonded before they can be approved by the city counsel and entered in the city’s computer system. 8. Credible testimony and evidence established that the City of Phoenix then utilizes a computer to randomly select qualified contractors to bid on weatherization jobs and that the Complainant would have had no influence on the selection process in the City of Phoenix. 9. The Respondent further asserted that the Respondent had loaned the Complainant several thousand dollars as an advance on the Complainant’s expected profit share for the weatherization jobs that were to be provided under the terms of the parties’ joint venture agreement. 10. The Respondent asserts that the Complainant now owes the Respondent the entire sum that was loaned to the Respondent since there was no profit made under the terms of the parties’ joint venture agreement. 11. Credible testimony and evidence, presented at hearing, established that the Complainant signed a promissory note for $1,000.00 for a loan from the Respondent on October 5, 2010. 12. The credible testimony and evidence of record is insufficient and fails to support a finding that any profit was made by the Respondent for any weatherization jobs that were allegedly awarded to the Respondent as a result of the Complainant’s assistance under the terms of the parties’ joint venture agreement. 13. Credible testimony and evidence established a money dispute between the parties regarding what, if any, amount of money is due and owing to the Complainant from the Respondent under the terms of the parties’ joint venture agreement. 14. The Respondent’s position in this money dispute is found under all of the circumstances to have been asserted in good faith and therefore, precludes a finding that a liquidated sum is owed to the Complainant. 15. The parties’ good faith money dispute regarding their joint venture can be resolved in a civil court of competent jurisdiction. CONCLUSIONS OF LAW 1. The Complainant has the burden of demonstrating by a preponderance of the evidence that the Respondent violated the charged sections of the state’s contracting laws. See Culpepper v. State of Arizona, 187 Ariz. 431, 437-38, 930 P.2d 508 (Ariz. App. 1996). 2. Proof by “preponderance of the evidence” means that it is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). 3. Proof by preponderance of the evidence “is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (rev. 6th ed. 1990). 4. 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 the Respondent of the charged provisions of A.R.S. § 32-1154 (A) (11) (Failure to pay monies in excess of seven hundred fifty dollars) can be supported. 5. The Complainant failed to sustain the requisite burden of proving the existence of a valid liquidated debt properly due and owing by the Respondent and thus, has not sustained the burden of proving that Respondent has violated the charged provisions of A.R.S. § 32-1154 (A) (11) (Failure to pay monies in excess of seven hundred fifty dollars when due). RECOMMENDED ORDER In view of the foregoing, it is recommended that this Citation, together with the Complaint upon which it is based be dismissed. In the event of certification of this 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 the certification. Done this day, June 30, 2011.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826