ALJDEC decisions subject to certification as final

2011A-6226-ROC · Registrar of Contractors · 2012-05-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 3, 2012 at 8:00 a.m. These matters were held open until April 30, 2012, to allow parties sufficient time to prepare and submit legal memoranda regarding Sygnos, Inc.’s motion to dismiss. APPEARANCES: Complainant Tades, Inc. (“Tades”) appeared through its attorney, Michael Hornisher, Esq.,Michael Hornisher Law Office. Sygnos, Inc. (“Sygnos”) appeared through its attorney, Scott F. Frerichs, Esq., Mann, Berens & Wisner, LLP. ADMINISTRATIVE LAW JUDGE: M. Douglas

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Orders are made: FINDINGS OF FACT 1. Sygnos is the holder of License No. B-1.154531-C issued by the Registrar of Contractors. 2. Sygnos is also the holder of License No. A.188860-C issued by the Registrar of Contractors. 3. These are commercial matters in which Sygnos was the general contractor for federal construction projects for the VA Hospital located at 3601 S. 6th Ave., Tucson, Arizona and for the VA Hospital located at 650 E. Indian School Road, Phoenix, Arizona. 4. Tades performed construction work as an electrical contractor for the two commercial construction projects at issue. 5. Tades filed complaints against Sygnos with the Registrar of Contractors alleging that Sygnos owed it the sum of $357,938.42 for completed electrical work on the Tucson VA Hospital, and the sum of $4,000.00 for completed electrical work on the Phoenix VA Hospital. 6. Sygnos denied the allegations, and the matters were scheduled for a consolidated administrative hearing since both matters involved the same parties. 7. During the hearing, Tades reduced the amount that it claimed as due and owing from Sygnos for the two construction projects to a total of $150,419.00. 8. Sygnos denied that any money was due and owing to Tades at the present time. 9. Sygnos admitted that there would be $7,000.00 owed to Sygnos for the two construction projects, but asserted that the sum was not yet due to Tades because Sygnos had not yet been fully paid for the construction projects at issue. 10. Credible testimony and evidence established that Tades had been fully paid for the original contract price between the parties and that the parties’ monetary dispute was based upon unsigned change order requests prepared by Tades. 11. Tades asserted that the unsigned change order requests were based upon oral change orders that occurred during the construction process at the request of the owner or Sygnos. 12. There was no credible evidence that Sygnos agreed to the use of oral change orders for the construction projects at issue. 13. The parties’ written construction agreement requires that all change orders be in writing prepared by Sygnos [1] 14. Credible testimony and evidence established that the unsigned change orders at issue were prepared by Tades and have not been authorized or signed by Sygnos. 15. Credible testimony and evidence established that pursuant to the terms to the parties’ written construction agreement, Sygnos has no obligation to make payments to Tades until payment is received from the owner of the construction project.[2] 16. The Registrar of Contractors is charged with overseeing contracting activities of licensed contractors within the State of Arizona. There was no dispute that both of the parties involved in these matters are licensed contractors within the State of Arizona and that all construction work at issue took place within the State of Arizona. 17. The Registrar of Contractors is found to have appropriate jurisdiction over Tades’ complaints alleging non-payment for the two matters at issue.

18. The credible evidence of record adequately demonstrated a dispute between the parties regarding what, if any, amount of money is due and owing to Tades from Sygnos. Sygnos’ position in this 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 Tades. 19. The parties may resolve their good-faith monetary dispute in a civil court of competent jurisdiction. 20. Administrative notice is taken of Sygnos’ prior License record as reflected on the Registrar of Contractors’ public website on May 15, 2012. Such prior License record reflects that License No. B-1.154531-C of Sygnos, Inc. is current and in good standing. 21. Administrative notice is taken of Sygnos’ prior License record as reflected on the Registrar of Contactors’ public website on May 15, 2012. Such prior License record reflects that License No. A.188860-C of Sygnos, Inc. is current and in good standing. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in this matter is by a preponderance of the evidence. See A.A.C. R2-19-119. 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. Tades failed to sustain its burden of proof to establish that Sygnos violated the applicable charged sections of the State’s contracting laws. Therefore, the credible evidence of record did not sufficiently sustain a finding of violations by Sygnos of the provisions of A.R.S. §32- 1154(A)(11), as charged in the Citation. RECOMMENDED ORDERS Docket No. 2011A-6226-ROC In view of the foregoing, it is recommended that this Citation, together with the Complaint upon which it is based, be dismissed. Docket No. 2011A-6626-ROC 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 these Orders will be 40 days from the date of the certification. / / / / / / / / / / / / Done this day, May 14, 2012. /s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] See Exhibit C-1 page 6, paragraph 7. [2] See Exhibit C-1 page 6, paragraph 4.

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