ALJDEC decisions subject to certification as final

2016A-4411-ROC · Registrar of Contractors · 2017-08-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Automatic Gate Systems Inc.,

COMPLAINANT,

v.

Coconino Fence Co Inc.,

License No: 185088

RESPONDENT.

No. 2016A-4411-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 17, 2017

APPEARANCES: Tony Campanella, Complainant, Sheryl Campanella, Complainants; Michael Gonzales, Respondent; Cindy Eagleton, Respondent witness.

ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson.

_____________________________________________________________________

FINDINGS OF FACT

On December 21, 2016, the Registrar of Contractors (“ROC”) issued a Notice of Hearing setting the above-captioned matter for hearing on February 1, 2017. A continuance of the matter was ordered on May 26, 2017 re-setting this matter for July 17, 2017 at the Office of Administrative Hearings in Phoenix, Arizona.

At the July 17, 2017 hearing, Tony Campanella and Sheryl Campanella appeared, were sworn and testified for Complainant Automatic Gate Systems Inc. (“AGS”).

Respondent Coconino Fence Co Inc., (“Coconino”), holds license number 185088 issued by ROC. Mr. Michael Gonzales appeared, was sworn and testified for Coconino. Mr. Gonzales also called Cindy Eagleton, manager of Munds Park RV, to testify as well.

On May 15, 2016, AGS and Coconino entered into a written agreement under which AGS was to fabricate, furnish and install an automatic parking gate barrier system with a 14 foot gate at the Munds Park RV in Munds Park, Arizona. The total contract price, including change orders, was $9,543.99.00.

Coconino was acting as general contractor for Munds Park RV. Cindy Eagleton appeared, was sworn and testified for Munds Park RV.

On August 12, 2016, the AGS installation under the contract was completed. On August 12, 2016, Respondent Michael Gonzales for Coconino signed the “Automatic Gate Systems Customer Acceptance Form” which in pertinent parts attests:

The Customer has inspected all of the above items and has confirmed to the Customer’s complete satisfaction that all of the items described in the Contract have been either installed or delivered to the job site and are working properly....Customer’s [sic] accepts of all of the work, equipment and a [sic] service furnished, installed and/or performed regarding the above contract including all change orders and understands that full and final payment is due upon signature below:...”

AGS sent Coconino its Invoice August 11, 2016. The amount due and owing per the Invoice was $5,122.50. AGS established and Coconino concurred that the amount of $5,122.50 remains unpaid as of the date of this hearing.

Mr. Gonzales for Coconino stated that Coconino has the capacity to pay AGS for the materials and services rendered in connection with the contract, but that Munds Park RV had withheld payment to Coconino claiming that the automatic parking gate barrier system did not work, had never worked and continues to be inoperable. Moreover, Cindy Eagleton, manager of Munds Park RV, testified that the gate arm was only 14 feet long and, therefore, too short.

Exhibit R-3 demonstrates on its face that Munds Park RV had specifically contracted for a 14 foot gate arm. Both Mr. Gonzales and Mr. Tony Campanella agree that Coconino contracted AGS to fabricate and did install a 14 foot gate arm.

Responding to a complaint from Munds Park RV that the installed gate system was not functioning, AGS sent its service staff to the Munds Park RV [a two hour drive from AGS’s business location] on August 18, 2016. It was observed that the gate’s sheer pins were snapped and the photo beam bracket was bent and out of alignment.

Mr. Campanella testified that in his experience and training, such damage is caused when an effort is made to breach the gate by force. He testified that the sheer pins are designed to snap under such circumstances in order to preserve the gate and its mounting. Such damages were not present on August 12, 2016.

On August 28, 2016, AGS again made the two hour trip to Munds Park RV to service AGS’s installation at the site. Utilizing a two man crew, AGS replaced damaged sheer pins and bent bracket. The Gate System was properly operating when AGS finished its repair. AGS did not assess charges for this service call. Even so, AGS was not paid on its last invoice.

Munds Park RV was not satisfied and did not pay Coconino for the work that AGS had performed. Coconino still did not pay AGS for its August 11, 2016 Invoice.

Approximately three months after the AGS’s August 11, 2016 Invoice, Coconino’s customer, Munds Park RV, began to complain to Mr. Gonzales about poor workmanship involving AGS. In response, Coconino suggested to its customer that a plastic extension be added to the gate to make it appear longer. Coconino undertook and did alter the length of the arm. Still, Munds Park RV was not satisfied and did not pay Coconino for the work that AGS performed.

On November 4, 2016, AGS filed its Complaint versus Coconino for non-payment.

On November 14, 2016 Coconino filed its Answer to the Complaint. In its Answer, Coconino responds that its customer, Munds Park RV had withheld payment from Coconino for the AGS contact performance because they were not satisfied with the work. The Answer did not specify what particular issue was present that caused the dissatisfaction of Coconino’s customer.

November 18, 2016, the ROC issued a Citation versus Coconino citing as a possible violation of A.R.S. § 32-1154(A)(10) (failure to pay) as its sole basis for a possible license suspension

In her testimony, witness Eagleton stated on several occasions that the gate system did not work, that the gate system never worked, ever and that no one made or attempted repairs.

AGS proposed to Coconino that it could fabricate a new, longer arm for Coconino’s customer, but that counterbalance would be necessary. Mr. Campanella testified that he estimated the cost for the re-fabrication and counterbalance would be $1,100.00. However, desiring to accommodate Coconino [who was a new customer for AGS], Mr. Campanella agreed he would reduce his price to $500.00. A change order was forwarded for the additional $500.00.

AGS undertook to fabricate a new, longer arm for Coconino’s customer.

On August 28, 2017, AGS sent a two man crew back to Munds Park RV to install the longer arm and counterbalance. The AGS crew was refused access to perform the installation of the refabricated longer arm and counterbalance.

Witness Eagleton admits in her testimony that AGS was refused admission to the job site because Munds Park RV had undertaken to obtain another contractor for the job.

CONCLUSIONS OF LAW

A party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

A preponderance of the evidence is:

The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

Black’s Law Dictionary 1373 (10th ed. 2014).

Substantial evidence is evidence that a reasonable mind would use to reach a conclusion. See Mealey v. Arndt, 206 Ariz. 218, 76 P.3d 892 (App. 2003).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

Ariz. Rev. Stat. section 32-1154(A) provides that:

The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: .... 10. Failure 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.

The evidence showing that Coconino failed to pay AGS for contracted services in the amount of $5,122.50 has been established and is not in dispute.

The testimony of witness Cindy Eagleton that the gate system has never worked and that no one made or attempted repairs of the gate is wholly unpersuasive. Testimony from Complainant Tony Campanella and Respondent Michael Gonzales, along with admitted exhibits, demonstrates by a preponderance that

The gate system was properly installed and properly operating on August 11, 2016;

On August 18, 2016 and August 28, 2016 and August 28, 2017 AGS was present at the Munds Park RV to make changes and repairs to the gate system;

The Gate System operated as intended by its installation on August 12, 2016. Thereafter, the Gate System was damaged by persons or events unknown that caused the unit’s sheer pins to be torn off. AGS repaired the sheer pins on August 18, 2016. The Gate System was working properly when AGS’s crew finished its repairs on August 12, 2016.

Coconino has explained in its Answer to the Complaint and confirmed by the testimony of Mr. Michael Gonzales at hearing that AGS has not been paid on its August 11, 2016 Invoice because Munds Park RV has failed and refused to pay Coconino for the work performed by AGS.

Michael Gonzales testified at hearing that Coconino has the capacity to pay AGS for its August 11, 2016 Invoice.

The preponderance of the evidence shows that Respondent Coconino violated Ariz. Rev. Stat. section 32-1154(A)(10) as alleged.

RECOMMENDed order

Based on the foregoing, it is recommended that the Registrar suspend Coconino Fence Co Inc.’s License No: 185088 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $5,122.50 in certified funds.

It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $5,122.50 in certified funds, the Registrar may close the Complaint in Case No. 2016A-4411.

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, August 2, 2017.

/s/ Randolph D. Wolfson

Randolph D. Wolfson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors