ALJDEC decisions subject to certification as final

2017A-2717-NPC-ROC · Registrar of Contractors · 2017-09-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Empire Southwest,

COMPLAINANT,

v.

Wild Wild West Trucking LLC,

License Nos. CR-2.292091-D,

CR57.298402-D,

RESPONDENT.

No. 2017A-2717-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 8, 2017, at 1:00 p.m.

APPEARANCES: Empire Southwest (“Complainant”) was represented by Edward J. Marko, Esq., Marko Law PLLC; Wild Wild West Trucking LLC (“Respondent”) appeared through Robert Brian Reidhead, its qualifying party/member.

ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

On or about June 3, 2014, the Arizona Registrar of Contractors (“the Registrar”) issued License No. CR-2.292091-D for dual excavating, grading, and oil surfacing to Respondent. On or about April 30, 2016, the Registrar issued License No. CR57.298402-D for dual wrecking to Respondent.

Complainant sells and rents machinery manufactured by Caterpillar to contractors like Respondent.

On or about May 24, 2017, Complainant filed a complaint with the Registrar alleging that Respondent owed Complainant $11,772.86 for rental of a model 330 Caterpillar excavator on a project located at 11450 E. Hideaway Lane Lot 1873, Scottsdale, Arizona 85255 (“the project”).

On June 7, 2017, the Registrar issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10) against Respondent.

Respondent filed a timely written answer to the Citation, admitting that it had used a Caterpillar model 330 excavator on the project, but affirmatively alleging that Complainant had verbally agreed that Respondent could use the model 330 for free during the 30 days after it started the project demonstration because it was considering purchasing the model 330.

The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing.

A hearing was held on September 8, 2017. Complainant submitted fourteen exhibits and presented the testimony of David Clark, its account manager for the Caterpillar products line in Arizona. Respondent presented the testimony of Robert Brian Reidhead, its qualifying party/member.

Additional Hearing Evidence

Caterpillar’s model 330 excavator is a large model that retails for approximately $300,000. Besides the job on Hideaway Lane, Respondent had other excavation jobs on hillsides where a larger excavator would provide an advantage.

In the past, Respondent has purchased model 323 excavators from Caterpillar and was familiar with that model’s operation. A model 323 excavator retails for approximately $200,000.

Mr. Clark testified that he discussed the model 330 with Mr. Reidhead and that on or about June 23, 2016, Complainant brought the model 330 to project. Mr. Clark testified that at that time, the property had not been staked and he informed Mr. Reidhead that Respondent could have a one- or two-week free demonstration period to get used to the machine and to see if it was something that it could use in its business. Mr. Clark testified that demonstration periods of a week or two weeks are common in the equipment industry because it takes about a week to get used to unfamiliar equipment, but that longer demonstration periods are not a common practice in the industry.

Mr. Reidhead testified that Complainant really wanted to sell the model 330 to Respondent and that Mr. Clark stated that Respondent could keep the machine for at least 30 days after it started the project without any charge. Mr. Reidhead testified that manufacturers frequently allow potential purchasers 30 days or longer to use equipment that they are considering purchasing at no charge.

At some point, Respondent purchased a model 323 excavator. Because Complainant did not have a model 323 in stock, it was not immediately delivered to the jobsite. Mr. Reidhead testified that he purchased the model 323 before he started the project on Hideaway Lane and that the purchase had nothing to do with the free demonstration of the model 330 excavator. Mr. Reidhead testified that he was considering purchaser another model 323 or the model 330 for use in Respondent’s business.

Mr. Clark testified that the parties agreed that Respondent could continue using the model 330 excavator at no charge until the model 323 was delivered to the jobsite, but that after the model 323 was delivered to the jobsite, Complainant would start charging rent for the model 330.

Complainant delivered the model 323 to the jobsite on July 18, 2017. Complainant submitted Mr. Clark’s entry on Complainant’s software system dated July 21, 2018, stating that “Spoke to Brian he’s going to keep the 330 F on rent I called Zach out of empire rental told him to make sure that that goes on the CAC rush account starting last Monday at market rate.” Mr. Clark said that the system does not allow information to be modified once it is entered. Mr. Clark testified that Mr. Reidhead said that he needed the model 330 to finish the project.

Respondent did not choose to purchase the model 330 from Complainant. Mr. Reidhead purchased a small excavator for his son and other equipment after the model 330 was picked up from the project. Respondent paid for this later purchased equipment and other materials that Complainant provided, but Respondent disputes the rental charge for the model 330 Caterpillar.

Complainant seeks rent in the amount of $11,088.11, which does not include late fees or penalties, for the model 330 and other related equipment and charges between July 18, 2017, and August 26, 2017.

CONCLUSIONS OF LAW

This dispute lies within the Registrar’s jurisdiction to resolve.

Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s license by a preponderance of the evidence. Respondent bears the burden of proof to establish affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” A preponderance of the evidence is “[t]he 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.”

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 . . . 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 . . . .”

The lack of a written contract or any document that sets forth the terms of the parties’ agreement complicates resolution of the parties’ dispute. No independent evidence establishes the common practice in the equipment sales and leasing industry regarding the usual term of equipment demonstrations. Mr. Reidhead and Mr. Clark were equally credible about their contrary expectations and understanding of their agreement.

Mr. Clark’s unsigned statement dated July 21, 2017, from Complainant’s software system is technically hearsay. Although hearsay may be admitted in an administrative hearing, it should not be relied upon if it is not the kind of evidence that reasonable persons would rely upon in serious matters. Mr. Clark’s testimony that the entry cannot be modified was not corroborated by any other evidence. The internal document is not the kind of evidence that reasonable persons would rely upon to penalize a contractor’s license and jeopardize his livelihood.

Because reliable evidence does not support either party’s position, Complainant did not establish cause to suspend or revoke Respondent’s license under A.R.S. § 32-1154(A)(10).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of the final order in this matter, Complainant Empire Southwest’s complaint in Case No. 2017-2717 against Respondent Wild Wild West Trucking LLC’s License Nos. CR-2.292091-D and CR57.298402-D shall 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 five days from the date of that certification.

Done this day, September 25, 2017.

/s/ Diane Mihalsky

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors