ALJDEC

98F-2763-ROC · Registrar of Contractors · 1998-10-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 29, 1998 APPEARANCES: Complainant appeared on his own behalf; Respondent appeared through Emil Uremovich, its General Manager ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

The parties presented evidence and testimony and, based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order:

STATEMENT OF FACTS

Respondent possesses a class B-05 license, number 085029, which the Registrar of Contractors first issued on December 27, 1989. On March 7, 1998, Complainant signed a contract with Respondent which obligated Respondent to construct a swimming pool behind Complainant’s home in consideration for payment by Complainant. The cost of the contract was based on an assumption that a mini-bobcat, which is 49-½” wide, could perform the job because the salesperson had estimated that a mini-bobcat could safely access the site where the pool would be constructed. At the time the contract was made, Complainant also signed a document to signify his acceptance of these additional terms and conditions: The following items could constitute additional charges to the homeowner above and beyond the swimming pool price list: . . . .

3. Tight access, under 10’ (when normal backhoe, and dump trucks cannot be driven into pool construction areas, and access is less than 10’, a bobcat or a mini bobcat is required and will be an additional cost). . . . .

6. Rock, abnormal soil excavation, and over-break if required. . . .

Complainant also signed a document entitled “SOIL CONDITIONS,” which provided in relevant part as follows: Due to the inability of either Contractor or Owner to anticipate unusual sub-surface conditions, it is hereby mutually agreed that in the event the Contractor, in excavating the location of the said swimming pool shall encounter caliche, sub-terranean water, granite or other like and unusual sub-sufrace [sic] conditions, mass concrete, unusually large boulders or the like . . . Owner agrees to pay for these additional items as an additional amount to the contract price.

Respondent’s subcontractor, W.S. Trucking, Inc., commenced excavation for the pool on April 8, 1998. William D. Bolick, who is W.S. Trucking, Inc.’s president and was in charge of the job, used a mini-mini bobcat, which is 36” wide, because the distance between Complainant’s house and block wall was only a little more than four feet along a course of 60 or 70 feet. Mr. Bolick feared that a mini-bobcat might hit and damage the house or fence in one of the more than 300 trips that would be required to excavate a hole sufficient to install a pool. A mini-mini bobcat is more expensive than a mini bobcat because its shovel is more narrow and, therefore, more trips are required to excavate a hole. According to Mr. Bolick, a mini-mini bobcat’s power is comparable to a mini bobcat’s. Respondent did not charge Complainant any more for using a mini-mini bobcat rather than a mini-bobcat, but instead absorbed this cost. On April 9, 1998, W.S. Trucking, Inc. encountered caliche and river rock and could dig no deeper. On April 14, 1998, Respondent issued a credit to Complainant of $266.00 for a pilaster of fence that had been damaged in the excavation. W.S. Trucking, Inc. went back to the job site on April 17, 1998, and discussed the “hard dig” with Complainant’s father. After Complainant soaked the excavation over the weekend, on April 21, 1998, W.S. Trucking, Inc. took out another three loads, but could not dig any further. Shortly thereafter, Respondent informed Complainant that W.S. Trucking, Inc. required payment of an additional $2,650 for the “hard dig.” Complainant refused to pay any additional monies. W.S. Trucking, Inc. subsequently agreed to accept $1,325 as the additional cost of the “hard dig,” mainly to accommodate Respondent. Respondent obtained two other bids to complete the “hard dig,” but neither was lower. Complainant again refused to pay any more than he had agreed to pay in the original contract. Respondent told Complainant that he could contract directly with another excavator for the “hard dig.” The only credible evidence of other bids given to Complainant is a bid for $2,200 submitted by A & A Swimming Pool Excavation, which Complainant did not accept. On April 29, 1998, Complainant demanded that Respondent complete the job within ten days or Complainant would consider Respondent to have breached the contract and would “hold [it] liable for damages” and seek another contractor. On May 4, 1998, Respondent responded to Complainant’s demand: After reviewing your letter . . ., I do not feel [10 days] is sufficient. Further, without the additional monies requested for the hard dig, Executive Pool & Spas cannot continue to move forward on your pool as you have been previously advised.

Mr. Garcia, as you know, we have received three separate bids for the hard dig. The lowest bid is $1325.00 less your credit of $266.00 for a net cost to you of $1059.00. If your decision is to cancel your contract with Executive Pools & Spas, please refer to the attached statement listing total expenses we have incurred to date. I will immediately release you from your contract once we have received your payment.

As you know however, my wish is to continue with you [sic] pool construction and making every effort to expedite this project. . . .

Attached to the letter was an invoice for $3,436.80. Complainant subsequently contacted several other pool contractors, but all wanted more money to complete construction of the pool than the total that remained to be paid to Respondent, including the additional cost of the “hard dig.” On May 25, 1998, Complainant signed the contract addendum and agreed to pay an additional $1,325 (or $1,059 with the $266 credit) for completion of the pool construction. Respondent subsequently satisfactorily completed construction of Complainant’s swimming pool using a small backhoe, which was not included in the cost of the original contract, and the mini-mini bobcat.

CONCLUSIONS OF LAW

The evidence does not establish that Respondent violated A.R.S. § 32- 1154(A)(1)[1] by abandoning or refusing to perform its contract with Complainant without legal excuse. Respondent in its experience building swimming pools knew that certain conditions underground that could not be known at the time of contracting could raise the cost of excavation, and so informs customers that these conditions might be discovered and require additional monies to be paid to complete excavation. Complainant agreed in the original contract to pay additional monies if certain underground conditions were discovered, such as the caliche and river rock encountered by Respondent’s subcontractor. Complainant’s refusal to agree to pay the extra monies necessitated by the “hard dig” constitutes a legal excuse for Respondent’s delay in performing its contract with Complainant. Moreover, Respondent did not abandon but eventually fully performed its contract with Complainant. The evidence does not establish that Respondent violated A.R.S. § 32- 1154(A)(7)[2] by charging Complainant an additional $1,325 for the “hard dig.” The evidence shows that Respondent’s subcontractor encountered unanticipated caliche and river rock and that the additional monies were fully justified by the additional time and equipment that excavation required. Although Complainant argued that Respondent should have obtained his approval before using a mini-mini bobcat in the first instance, the evidence showed that the additional cost was not due to the equipment originally used but, instead, was due to the need for a backhoe and additional time to perform an unanticipated “hard dig.”

RECOMMENDED ORDER

In view of the foregoing, it is recommended that the Registrar dismiss the citation and complaint in this matter and close case number 98F- 2763 without further action.

Done this day, November 2, 1998.

_________________________________ Diane Mihalsky Administrative Law Judge

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

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

ATTN: Joyce Armijo

By _______________________________

----------------------- [1] That subsection provides among the grounds for revocation or suspension of a contractor’s license “[a]bandonment of a contract or refusal to perform after submitting a bid on work without legal excuse for the abandonment or refusal.” “Legal excuse” is the “[d]octrine by which one seeks to avoid the consequences of his own conduct by showing justification for acts which would otherwise be considered negligent or criminal; e.g., killing of another in self defense.” Black’s Law Dictionary at 894 (6th ed. 1990).

[2] That subsection provides among the grounds for revocation or suspension of a contractor’s license “[t]he doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured.”

-----------------------

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