ALJDEC decisions subject to certification as final

2011A-6460-ROC · Registrar of Contractors · 2012-05-07

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 17, 2012

APPEARANCES: Complainant appeared on his own behalf; Respondent was represented by Fidelis V. Garcia, Esq., accompanied by Member and Qualifying Party Brian Bondi.

WITNESSES: Ed Prestwood John Scoggins Brian Bondi

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming that Respondent, without legal excuse, abandoned the project for which Respondent had been hired. The Citation and Complaint also alleges that Respondent did not follow the specifications of the contract, and that Respondent charged Complainant more for the work than was allowed in the contract. Respondent denies the allegations. This tribunal entered the complaint file received from the Registrar of Contractors (“ROC”) into the record, along with Complainant’s Exhibits B through K (excluding J), and Respondent’s Exhibit 1. The parties presented evidence and testimony from the witnesses listed above. Based upon the entire record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Decision finding that the evidence fails to show a violation. FINDINGS OF FACT 1. Respondent is the holder of License No. B-3.269987-R, a general residential contracting license issued by the ROC. That license authorizes Respondent to perform general remodeling and repair of residential properties. Brian Bondi is the Qualifying Party on the license. 2. In July 2011, the parties entered into an agreement for remodeling work consisting of an addition to Complainant’s house. [1] The written contract is not clear as to the scope of the work that it covered. It generically refers to plans and specifications, but does not identify any specific plans. With regard to payment of the contract price, it called for 50% down at signing, and then three payments of the remaining amount as the project progressed. It also required written change orders for any changes to the scope of work and required that change orders be paid before the work was done. Both parties testified that these provisions were not strictly followed by either party. 3. Complainant made the initial down payment. Work began and there was a change order in August 2011 for plumbing trench work.[2] Complainant was not happy about that change order because he felt it was a surprise and should have been included in the original price. Nevertheless, he paid it in full. In addition, Complainant made two progress payments on the base contract in August and September 2011, leaving almost 20% of the contract price due after September 2, 2011. According to Brian Bondi (“Bondi”), Respondent’s owner, there were also change order payments due for other changes, some of which were in writing and some that were not. 4. In late September and early October 2011, the project had been progressing but the parties’ relationship was very poor. They were disputing the amount of money owed to Respondent and the progress of the work. Complainant wrote up a payment plan that is in the record as Exhibit H at page 3 (hereinafter “Payment Plan”). It is untitled, undated, and unsigned. It sets forth three payment amounts and the “milestone” in the project at which each payment would be due. Complainant and Bondi sat down and discussed the Payment Plan. Bondi made a few changes in the milestone section and initialed the changes. The parties admit that they verbally agreed to the Payment Plan. 5. Subsequent e-mails between the parties show that Respondent was wiling to continue working and that Complainant was willing to allow it. However, it is evident that misunderstandings continued because Complainant believed that the Payment Plan covered all outstanding payment issues and Respondent did not, believing instead that it covered only the base contract payments and not any outstanding change orders. The Payment Plan itself has no language expressing either Complainant’s or Respondent’s understandings. In fact, there is no language on the face of the document that states what the terms of any agreement would be. There are simply three columns: one for payment number, one for amount, and one for milestone. Because of the lack of specific language, Respondent’s understanding of the Payment Plan cannot be deemed unreasonable. 6. On October 26, 2011, Respondent sent an invoice for $3,796.56 to Complainant for change order work that had been completed. Bondi stated by e-mail that Complainant would have to pay this invoice before the work would continue.[3] 7. Complainant objected to the invoice, not only for the reason that he thought that the Payment Plan had covered all outstanding charges, but also because he felt that some of the individual charges in the invoice were already paid for or were not for change orders that he had agreed to. He treated it as a “resignation” of Respondent from the project and hired others to complete the job. 8. The evidence shows that the terms of the contractual arrangement between the parties under both the base contract and the Payment Plan are not clear. Respondent has a good faith belief that it is owed the money in the invoice sent to Complainant October 26, 2011. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[4] Further, the standard of proof at hearing is by preponderance of the evidence.[5] 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.[6] Complainant has not met that burden. 2. The allegations in the Citation and Complaint are that Respondent has violated Arizona Revised Statutes (A.R.S.) § 32-1154(A)(1) by abandoning the project without legal excuse, A.R.S. § 32-1154(A)(2) by failing to follow plans, specifications, or building codes, and A.R.S. § 32- 1154(A)(9), for failing to complete the job for the agreed-upon price. As found above, the evidence does not show that Respondent violated those statutes. 3. The evidence fails to show the terms of the parties’ agreement. At best, it shows only a good faith contractual dispute between the parties that does not warrant finding a violation of the cited provisions. This tribunal cannot find abandonment, or any of the other alleged violations, on the basis of a good faith contractual dispute. The ROC, acting through an administrative disciplinary hearing, is not empowered by law to adjudicate mere contractual disputes when a contractor holds its position in good faith. Such disputes can be taken to the court system for resolution. 4. There being shown, at best, a good faith contractual dispute only, this matter should be dismissed. RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that Citation and Complaint 2011-6460 against Ingenious, LLC dba Ingenious Remodeling 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, May 7, 2012.

/s/ Eric A. Bryant Administrative Law Judge Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Exhibit 1. [2] Exhibit G. [3] Exhibit I at 3. [4] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [5] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [6] Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996).

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