ALJDEC decisions subject to certification as final

2012A-4225-ROC · Registrar of Contractors · 2013-02-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 24, 2013

APPEARANCES: Complainant appeared on his own behalf; Respondent was represented by LLC Member Danielle Leibel and LLC Member and Qualifying Party Kevin Leibel.

WITNESSES: Jeff Kraust Danielle Leibel

ADMINISTRATIVE LAW JUDGE: Eric A. Bryant _____________________________________________________________________

Complainant brings this action claiming that he is owed $5,700.00 in commissions from Respondent for sales and marketing services Complainant performed for Respondent as an independent contractor. Respondent denies that any money is owed because of “offsets” for damages caused by Complainant. This tribunal entered the complaint file received from the Registrar of Contractors (“Registrar” or “ROC”) into the record, with the addition of Exhibits A, B, and C. 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 No: C65R.230641-R, a specialty residential contractor license issued by the ROC that authorizes Respondent to perform “window treatments” for residential jobs. Kevin Leibel is the Qualifying Party on the license. 2. The parties agree that Complainant was hired by Respondent in January 2011 to perform sales and marketing services, and worked for Respondent until July 2012. They agree that Complainant was an independent contractor and that the employment agreement was a verbal agreement. Complainant was to be paid on commission. The amount of commission was a percentage of profits Respondent earned after the customer paid in full. At hearing, the parties disputed whether the basis of the commission was gross profits or net profits. 3. At hearing, each party submitted a spreadsheet listing jobs and the commissions that were due Complainant for those jobs. Complainant’s spreadsheet is Exhibit A and Respondents is Exhibit B. Exhibit B has an attachment that contains supporting documentation for each entry on the spreadsheet. As each spreadsheet item was being reviewed during the hearing, Complainant essentially agreed that Exhibit B was an accurate accounting of the commissions he would be due. It shows a total of $3,069.84. 4. In addition to Exhibit B, Respondent submitted Exhibit C, which is an accounting of money due from Complainant to Respondent for merchant fees, unreturned samples, and other damages that Respondent claims it is owed by Complainant connected to his employment. The total of the damages on Exhibit C is $10,409.96. Respondent’s conclusion, then, is that Complainant owes Respondent $7,340.12. 5. The parties argued about whether Complainant should be responsible for merchant fees and the other charges on Exhibit C under the verbal employment agreement terms. Respondent expressed a position that Complainant is responsible for those charges and the Administrative Law Judge finds that Respondent holds that position in good faith. Thus, Respondent has a good faith belief that Complainant owes the charges in Exhibit C. 6. The evidence shows no more than a contractual dispute between the parties, in which Respondent holds a good faith belief in its legal position. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing is generally upon a complainant.[1] Further, the standard of proof at hearing is by preponderance of the evidence.[2] 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.[3] Complainant has not met that burden. 2. Per the Citation and Complaint, this case focuses on the “no pay’ provision found in A.R.S. § 32-1154(A)(11) that prohibits the failure of a licensee to pay monies in excess of seven hundred fifty dollars “when due for materials or services” rendered in connection with a licensee’s operations, when the licensee has the capacity to pay or when the licensee has been paid for the project. 3. The evidence fails to show a violation. At best, it shows only a good faith contractual dispute between the parties that does not warrant finding a violation of the no-pay provision. 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. This matter should be dismissed. RECOMMENDED ORDER Based on the foregoing, it is hereby recommended that Citation and Complaint 2012-4225 against Respondent Allied Window Coverings 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, February 13, 2013.

/s/ Eric A. Bryant Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors ----------------------- [1] Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). [2] Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). [3] See Culpepper v. State, 187 Ariz. 431, 437, 930 P.2d 508, 514 (Ct. App. 1996) (moving party bears burden of proof by preponderance of evidence in an administrative hearing).

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