ALJDEC decisions subject to certification as final

2022A-08397-NPC-ROC · Registrar of Contractors · 2022-12-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Precision Blasting Services Inc,

COMPLAINANT

Earth Resources Corporation

License No. ROC 259019,

RESPONDENT

No. 2022A-08397-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 13, 2022

APPEARANCES: Luke Meister appeared via Google Meet on behalf of Complainant Precision Blasting Services Inc. Respondent Earth Resources Corporation was represent by Jerry Carver, Esq. who appeared via Google Meet.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

_____________________________________________________________________

FINDINGS OF FACT

On November 9, 2022, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on December 13, 2022, at the Office of Administrative Hearings, and independent state agency.

The Notice of Hearing shows that the hearing was being conducted on the charges made in the complaint and citation that were served on Respondent Earth Resources Corporation on September 29, 2022.

Through the citation and Notice of Hearing, ROC alleges that Respondent may have violated Ariz. Rev. Stat. section 32-1154(A)(10).

Respondent holds License No. 259019 issued by ROC. Wilson Wayne Orr was Respondent’s qualifying party and an officer in the corporation.

Complainant is Precision Blasting Services Inc.

On or about Respondent contracted with Complainant to provide blasting services at the Bungalows on Market Street project (Project). The total contract price was for $174,000.00. At some point thereafter, Respondent’s client wanted to expand the scope of work and the parties agreed that Complainant would be paid $204,870.64 for the project. An invoice for this amount was sent on or about March 29, 2022, and Respondent paid the same on or about April 14, 2022.

On or about April 18, 2022, Complainant sent an invoice to Respondent for the amount of $85,658.85.

Thereafter, the parties met to discuss issues with the depth of blasting areas. The parties agreed that Respondent would hold off on paying 10% of the April invoice until the matter was resolved.

Thereafter an updated invoice was issued demonstrating the amount due of $56,605.90 based upon the agreement to withhold 10%.

The parties also agreed that Respondent would perform the remediation work and bill Complainant on a “time and materials” basis. This work commenced on or about June 30, 2022, and lasted throughout the month of July.

On or about July 27, 2022, Respondent sent an invoice detailing the remediation work performed and the charges associated with the same in the amount of $24,269.60.

Thereafter, Respondent provided a statement to Complainant detailing the 10% retention ($29,052.95) less the remediation work charges ($24,269.60) for a total owed of $4,783.35 to Complainant. Also included was a check to Complainant in the same amount. The check was labeled “Final Payment” and was cashed on or about August 5, 2022.

Thereafter, Complainant filed with ROC a complaint against Respondent alleging that Respondent owed Complainant $24,269.60.

At hearing, Mr. Meister testified that there was a meeting between the parties to discuss how to remedy some high sports following the blasting. Mr. Meister agreed that Respondent would help out to remedy the situation.

Mr. Meister also testified that unexploded charges were found on the jobsite.

While Mr. Meister acknowledged receiving the $4,178.35, he believed that Complainant was owed an additional $21,104.00. Specifically, Mr. Meister disputed the charges contained in Exhibit 9, as it was outside of the original building footprint, and he never contracted to perform that work.

Respondent presented the testimony of Mr. Orr and Gerald Gnerre, and offered 17 exhibits into evidence.

Mr. Orr testified that the original contract was modified because his client had requested a larger area to be excavated. Further, Complainant agreed to now be paid $204,870.65, plus an additional $85,658.85 for the additional work.

Mr. Orr also testified that there were delays in the project due to the high spots as well as finding undetonated charges so they would have to remove the machines and workers out of the area for safety.

Further, Mr. Orr testified that Mr. Meister agreed that Respondent would be paid on a “time and materials” basis and deduct that amount form the 10% retention.

Mr. Orr testified that there were several areas on Complainant’s work which were not at the required depth, sometimes as much as 2-3 feet short.

Finally, Mr. Orr testified that after making the final deduction from the retention amount, Respondent paid $4,783.35 to Complainant as a final payment on the contract.

CONCLUSIONS OF LAW

Unless otherwise provided by 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.

“At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2).

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).

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).

Among the grounds for suspension or revocation of a contractor’s license is a “[f]ailure by [the] 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.” Ariz. Rev. Stat. § 32-1154(A)(10).

The preponderance of the evidence shows that Respondent owes no further monies to Complainant. First, as Respondent’s counsel argued, there was an accord and satisfaction in this matter once Complainant cashed Respondent’s check labeled “Final Payment” on or about August 5, 2022. The facts in this case are not dissimilar from the facts in Frank Culver Electric Inc. v. P.O. Jorgenson, 136 Ariz. 76, 664 P.2d 226 (1983). In that case, The Arizona Court of Appeals held that although there was a disputed amount, appellee understood the check to be a final payment and that its “assent to final payment may be inferred from it acceptance and cashing of the check.”

However, even if this were not the case, it was clear from the facts presented that the parties agreed to have Respondent complete the remediation work on a “time and materials” basis. The tribunal does not find Mr. Meister’s testimony persuasive about the remediation work being outside of the building footprint. Mr. Meister understood that the scope of work had been changed and agreed to be paid more for the same. Thus, it is clear that Complainant would be responsible for ensuring the entire project was done correctly. When it was not, and when it was agreed that Respondent would perform the remediation work, it would have necessarily encompassed the entire project. Therefore, the tribunal finds the charges in Exhibit 9, to be accurate and that they were properly deducted from the retention payment, leaving a balance of $4,783.35, which was promptly paid by Respondent and subsequently cashed by Complainant.

The preponderance of the evidence shows that Respondent has not violated section 32-1154(A)(10).

RECOMMENDED ORDER

IT IS RECOMMENDED that the complaint against Earth Resources Corporation be closed and that ROC take no further action.

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 is thirty days after the date of that certification.

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001

-137160-45720000Done this day, December 27, 2022.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted electronically or by mail to:

Jeffrey Fleetham, Director

Registrar of Contractors

Earth Resources Corporation

c/o Jerry Carver

[email redacted]

Precision Blasting Services Inc

[email redacted]

By Miranda Alvarez

Legal Secretary

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001

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