ALJDEC

97F-2586-ROC-RHG · Registrar of Contractors · 1998-06-26

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 26, 1998 APPEARANCES: Alan Otto, President, Otto Trucking, Inc. on behalf of the Complainant Charles Deerwester, Respondent, in his own behalf ADMINISTRATIVE LAW JUDGE: Allen Reed ____________________________________________________________________

FINDINGS OF FACT The Respondent had a contract to do the excavation and paving at a two acre site at East Thomas and 69th Street in Scottsdale, Arizona, where a self storage facility was to be constructed. The Respondent needed someone to haul away the excavated dirt which was estimated at 6000 cubic yards. On Friday, January 17, 1997, the Respondent telephoned the Complainant trucking company and spoke with Alan Otto (Otto). The discussion revolved around how soon the dirt could be hauled away and the cost per load to haul the dirt. Otto told the Respondent he would haul the dirt for either $31.00 or $34.00 a load. The Respondent wanted the work to start on January 20, 1997, but the Complainant could not begin that day. On January 18, 1997, the Complainant went to inspect the site. The Complainant had a potential buyer for the dirt and the Respondent agreed to the Complainant beginning work early on January 21, 1997. The Complainant appeared at the site early on January 21, 1997, and after the Respondent’s equipment was started, the Respondent’s employees began loading the Complainant’s trucks. The Complainant’s trucks hauled 66 loads to a commercial yard at McDowell and Alma School. At approximately 9:00 a.m., the party who was interested in buying the dirt from the Complainant, came to the Thomas Road site and approved the dirt for use at a moto-cross event to be held at Arizona State University (ASU).

The Complainant hauled 191 loads to ASU and was paid an unspecified sum for the dirt. The evidence indicates the Complainant was paid as much or more per load for the dirt as he was charging the Respondent to haul it away. During the course of hauling the dirt, the Complainant asked if the Respondent’s employees would work overtime. The Respondent agreed but the Complainant would have to pay them for the extra work, which he did. The last of the dirt was hauled away on January 22, 1997, and the Complainant sent a facsimile purchase agreement to the Respondent for the removal of 6000 cubic yards of dirt at $34.00 a load. The Complainant also sent invoices to the Respondent in the total amount of $9,573.00 ($5,406 for January 21, 1997, $3,332.0 for January 22, 1997, and $835.00 for hauling and dumping of debris including palm trees on January 23, 1997). The Respondent did not pay the above amount and the Complainant contacted him after two or three months to inquire about payment. The Respondent eventually paid the invoice for $835.00 for the debris hauling and dumping, but not the invoices for the hauling of the dirt. On April 18, 1997, the Respondent sent the Complainant an invoice in the amount of $8,738.00 as the cost of dirt which was removed by the Complainant. It is readily apparent that the remaining cost sought by the Complainant is the same amount as invoiced by the Respondent. The Complaint was filed with the Registrar of Contractors (Registrar) on April 25, 1997. CONCLUSIONS OF LAW The Citation and Complaint alleges violation of A.R.S. §32- 1154(A)(7), wrongful or fraudulent conduct, (11), failure to pay for services or material and (23), failure to take appropriate corrective action. There is no basis for finding a violation of A.R.S. §32-1154(A)(23) under the facts of this case and this allegation is recommended for dismissal. The remaining issues are determined based on the finding of whose testimony is considered more credible. The Respondent’s defense is summarized as follows. According to the Respondent, he and the Complainant discussed a cost per load of $31.00. However, during a subsequent personal meeting, the parties discussed that if the Respondent would wait three days the Complainant might have a customer for the dirt. The Respondent agreed to wait and the customer agreed to take the dirt. Based on this testimony, the Respondent and the Complainant agreed the dirt would cover the cost of the hauling. The Respondent testified the meeting was at the job site but cannot recall when it occurred. Respondent also asserted he had a bid for $10.00 a load for the hauling of the dirt from another company but he did not bring a copy of the bid to the hearing. The Respondent testified he never made any response to the invoices from the Complainant because he believed the Complainant had made a mistake in sending them. The Respondent’s testimony is not deemed credible. His memory seemed selective. He recalled quite clearly that he and the Complainant had reached a face to face agreement regarding the hauling of the dirt but could not specifically recall when the agreement was reached or what was going on at the job site when this agreement was purportedly reached. The Respondent’s failure to disclaim or otherwise respond to the invoices also does not appear reasonable under the circumstances. Normally some kind of response would be made to an incorrect billing of this type and amount. The Complainant’s testimony is considered more credible. This includes testimony regarding the meeting with the Respondent, when the customer approved the dirt for use at ASU, that there was no agreement that the value of the dirt would pay the cost of hauling the dirt, and that 66 loads of dirt which could have been used at ASU were taken to A&A Materials because it was not until after those loads were hauled away that the customer approved the dirt for ASU. This simply shows that three days prior to the work beginning, there could not be a final agreement to trade the dirt for hauling when the Complainant did not know if the dirt would be accepted for ASU. The fact that there was a contract cannot be denied in light of the fact that both parties performed pursuant to a verbal agreement. The Respondent loaded the dirt and the Complainant hauled it away. Although the Complainant’s testimony is deemed more credible and it is clear that there was a contract between the parties, it must still be determined if the price term of the contract was sufficiently clear and agreed upon. The Respondent has acknowledged discussion of $31.00 per load. His testimony of any modification of this amount based on the dirt being used at ASU is not considered credible and forms no part of the contract. Therefore, when the Respondent began loading the Complainant’s trucks, the Respondent accepted the price which he believed had been quoted by the Complainant. The Complainant’s testimony that the price was $34.00, is not sufficient to charge the Respondent with agreeing to that price. The Complainant will have to bear some responsibility for failure to commit essential terms to writing and the lack of certainty resulting therefrom. The fact that the Complainant may have received a financial benefit by the sale of the dirt is not relevant to the determination that the Respondent agreed to the cost of $31.00 per load irrespective of what benefit the Complainant might receive for the dirt. The total cost for the 257 loads at $31.00 a load, is $7,967.00. The Respondent’s failure to pay and the fact that the failure is not justified under the facts of the case establishes violation of A.R.S. §32-1154(A)(7) wrongful act and (A)(11). RECOMMENDED ORDER In view of the foregoing it is recommended commencing on the effective date of the Order entered in this matter that the Class A-14 license of the Respondent shall be suspended until the Registrar of Contractors receives written proof that the Respondent has paid or tendered payment in the amount of Seven Thousand-Nine Hundred-Sixty Seven ($7,967.00) Dollars, to the Complainant; It is further recommended that if the Respondent pays or tenders payment of the amount specified on or before the effective date of the order issued in this matter, then the aforementioned license suspension shall not take place and the Citation and Complaint upon which it is based shall be closed. Done this day, June 29, 1998.

_______________________________ ALLEN REED Administrative Law Judge

Original transmitted by mail this ____ day of June, 1998, to:

Michael P. Goldwater, Director Registrar of Contractors ATTN: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By _______________________________ -----------------------

Office of Administrative Hearings 1700 West Washington, Suite 602 Phoenix, Arizona 85007 (602) 542-9826