ALJDEC decisions subject to certification as final

2015A-4070-ROC · Registrar of Contractors · 2016-05-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: January 28, 2016 APPEARANCES: PhoxZee Elliott, Owner and President, appeared on behalf of Complainant Red Concrete Inc. Respondent Moline Construction Co. Inc. was represented by Chase Halsey. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT 1. Moline Construction Co Inc. (Respondent) is the holder of License No. 083726 and 083722 issued by the Registrar of Contractors (Registrar). 2. Red Concrete Inc. (Complainant) filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $31,900.08 for concrete work performed at 2977 West Frye Road, Chandler pursuant to a contract with Respondent. 3. The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a formal Citation and Complaint charging Respondent with a possible violation of A.R.S. § 32-1154(A)(10). 4. At the time of the hearing, the only issue remaining was the payment of $7,344.00. 5. Complainant presented evidence that it originally bid the project with a single curb included. Respondent then requested to have the single curb replaced with an extruded curb as a cost-saving measure. The contract price was then credited by $7,344.00 to account for the reduced cost of the extruded curb. However, the plans on site were not changed to reflect extruded curb and called for a single curb. Because Complainant was obligated to perform its work in accordance with the plans, it installed single curbs. The single curbs were installed in March 2015. 6. In its pay application for March 2015, Complainant indicated that 100 percent of the site work had been completed. Pursuant to the pay application, Respondent paid Complainant for the site work. Respondent paid Complainant the reduced amount for the extruded curb as the adjusted contract called for rather than the full amount for the single curb. 7. On or about March 20, 2015, Complainant executed a lien waiver and release form that provided On receipt by the undersigned of a check from [Respondent] in the sum of $17,908.43 payable to [Complainant] and when the check has been properly endorsed and has been paid by the bank on which it is drawn, this document becomes effective to release any bond right, any claim for payment and any rights under any similar ordinance, rule or statute related to claim or payment rights for persons in the undersigned’s position that the undersigned has on the job of Melvin Property #3260, LLC., located at Chuck E Cheese, 2977 W Frye Road, Chandler, AZ 85244. This release covers a progress payment for all labor, services, equipment, or materials furnished to the jobsite or [Respondent], through March 30, 2015 only and does not cover any retention, pending modifications and changes or items furnished after that date. Before any recipient of this document relies on it, that person should verify evidence of payment to the undersigned.

Exhibit C (italics added).

8. On July 7, 2015, Complainant submitted a change order request for the “Reverse Contract Credit for 1,224 LF Single Curb @ $11.50” for a total of $7,344.00. The project owner did not accept the change order request. 9. Complainant’s contract with Respondent provided that “receipt of payment by [Respondent] from the Owner shall be a condition precedent to the right of [Complainant] to receive any payment.” Exhibit 2. 10. David C. Moline, Owner of Respondent, testified that the project owner failed to pay Respondent approximately $240,000.00 owed, and Respondent was unable to pay Complainant for the single curb that was installed. Mr. Moline testified that Respondent had gone out of business as a result of the project owner’s failure to pay. Respondent did not dispute that Complainant had put in a single curb rather than an extruded curb; however, Respondent argued that, by signing the lien waiver, Complainant had no claim for further payment.

11. PhoxZee Elliott, Owner and President of Complainant, testified that the project owner settled all outstanding payments, except the $7,344.00 due for the single curb. According to Ms. Elliott, the project owner refused to pay the additional $7,344.00 because he did not know that the single curbs had been removed from the contract and that he had already paid Respondent for single curbs and it was Respondent’s responsibility to then pay Complainant for the work. 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 these matters is by a preponderance of the evidence. See A.A.C. R2-19-119. 2. A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). 3. A.R.S. § 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, [f]ailure by a licensee or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee's operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

4. The change order request submitted on July 7, 2015, related back to the work performed in March 2015. However, Complainant executed a lien waiver indicating that once payment of $17,908.43 for all of the work performed in March 2015, Complainant had no further claim for payment. 5. Therefore, Complainant failed to establish that Respondent’s license should be disciplined for a violation of A.R.S. § 32-1154(A)(10). RECOMMENDed order Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall dismiss the complaint filed by Red Concrete, Inc. and close the Complaint in Case No. 2015-4070. 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, May 10, 2016.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors -----------------------

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