ALJDEC

99F-1896-ROC · Registrar of Contractors · 1999-06-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 11, 1999 at 9:00 a.m. APPEARANCES: Complainant appeared through its treasurer, Mike Simpson; Respondent appeared through its qualifying party, Phil Rossi. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

The parties presented evidence and testimony on the issue of whether Respondent violated A.R.S. § 32-1154(A)(11) and (7) by failing to pay Complainant monies due for work performed under a subcontract for a construction project. Based upon the entire record, the undersigned makes the following Findings of Fact, Conclusions of Law and Recommended Order. FINDINGS OF FACT Background The Registrar of Contractors issued License No. 103647, Class A-21 to Respondent, a corporation, on August 9, 1994. In May 1998, the City of Phoenix (“the City”) awarded Respondent a contract to perform landscaping and install an irrigation system at Mountain View Community Center, located at 1102 West Grovers Avenue in Phoenix (“the Park”). Although Respondent’s contract with the City of Phoenix was not offered into evidence, testimony from various witnesses established that the contract required that no soil be brought onto or removed from the site. The original amount of Respondent’s contract with the City was $98,954.00. In early July 1998, Respondent subcontracted to Complainant the job of “[g]rading ([i]ncluding the base bid),” in consideration for Respondent’s promise to pay $9,000.00. No further explanation of the services to be provided was included in the 5½-page single-spaced typewritten subcontract. The subcontract expressly incorporated Respondent’s contract with the City, including the “general Conditions, Supplementary General Conditions, the Drawings and the Specifications and Addenda prepared by the City of Phoenix Engineering & Architectural Services Department . . . .” [Emphasis in original.] The subcontract also provided in relevant part: [T]he parties also agree:

That the subcontractor shall: * * * 8) (a) Not assign this subcontract or any amounts due or to become due thereunder without the written consent of the contractor. (b) Nor subcontract the whole of this subcontract without the written consent of the contractor. (c) Nor further subcontract portions of this subcontract without written notification to the contractor when such notification is requested by the contractor. * * * 10) And does hereby agree that if the subcontractor should neglect to prosecute the work diligently and properly or fail to perform any provision of this contract, or fail to complete any item on his ‘punch list’ within (20) days of notification, the contractor after two (2) days written notice to the subcontractor, may, without prejudice to any other remedy he may have, terminate this subcontract agreement with just cause, or make good such deficiencies and may deduct the cost thereof plus thirty-five (35%) markup to cover overhead costs from the payment then or thereafter due the subcontractor, provided, however, that if such action is based upon faulty workmanship, the architect or Owner’s authorized agent, shall first have determined that the workmanship and/or material is defective. * * * 13) Make any and all changes or deviations from the original plans and specifications without nullifying the original contract when specifically ordered to do so in writing by the contractor. The subcontractor prior to the commencement of this revised work, shall submit promptly to the contractor written copies of the cost or credit proposal for such revised work in [a] manner consistent with the Contract Documents. . . . * * * 18) And does hereby agree that all work shall be done subject to the final approval of the Architect or Owner’s authorized agent . . . if within the terms of the contract documents.

That the Contractor shall: * * * 20) Pay the subcontractor within ten (10) days, unless otherwise provided in the contract documents, upon the payment of certificates issued under the contractor’s schedule of values, or [the contract price]. . . .

21) Pay the subcontractor on demand for his work and/or materials as far as executed and fixed in place, less the retainage percentage, at the time of payment should be made to the subcontractor if the Architect or Owner’s authorized agent fails to issue the certificate for any fault of the contractor and not the fault of the subcontractor or as otherwise provided herein. * * * 25) And does hereby agree that no claim for services rendered or materials furnished by the contractor to the subcontractor shall be valid unless written notice is given by the contractor to the subcontractor during the first ten (10) days of the calendar month following that in which the claim originated or with in (45) days which ever is greater.

Article Ten of parties’ subcontract (emphases in original). Changes of Plans At some point before Complainant commenced work on the Park project, the City amended its contract with Respondent to add an alternate plan to “install 10’ wide concrete sidewalk (2,910 s.f.), in lieu of decomposed granite with steel edgings per sidewalk section sheet C.S.” at an additional cost of $9,500.00.” After that change and another for $3,400.00 to remove certain asphalt and concrete, the value of Respondent’s contract with the City was $111,854.00. Sometime in July 1998, Complainant began grading dirt pursuant to its subcontract with Respondent and plans drawn by engineer Dennis Hustead.[1] Although Complainant spent 1½ or 2 days on the project, it made little progress because the dirt was hard and there was no water on site to reduce dust. When Complainant began the job, Larry Kraft, a senior construction inspector for the City, was filling in for the City’s chief construction inspector, Dale Fulcher, who was on medical leave. The second day of grading, Tom Bartsch, the project manager overseeing the Park project for the City’s Engineering and Architectural Services Department, stopped Complainant’s work because he realized that implementing Mr. Hustead’s original plan would require removal of dirt from the jobsite. Complainant’s grading therefore could not proceed until the plans were redrawn such that no dirt would have to be removed. Mr. Bartsch agreed to give Complainant a remobilization allowance of $2,872.00 to cover its equipment costs. Mr. Bartsch told Mike Simpson, Complainant’s project manager, that the budget for the project did not contain any more money to pay for any other extra costs. After this exchange, Mr. Bartsch went on a two-week vacation that lasted until after Labor Day. On or about July 30, 1998, Respondent submitted to the City of Phoenix Engineering and Architectural Services Department Change Order #1, which included additional charges of $2,155.00 for “Survey site,” $2,872.00 for “Equipment Move in and Out,” $21,647.00 for “Site Grade as per COP Engineering new plans,” $4,001.10 for “15% Mark-up,” $3,812.50 for “Field Supervision – Down time from July 16, 1998 to anticipated restart date of August 4, 1998,” and $496.51 for “Construction Bond.” Except for the $2,872.00 for equipment mobilization, the City did not approve the change order. Engineer Mr. Hustead redesigned the project and prepared a second set of plans. The City’s Parks Department did not like the second set of plans, however, and requested that Larry Sanchez, an engineer employed by the City, draw a third plan, which he did. When the City’s chief construction inspector Mr. Fulcher returned from his medical leave, the Park project job was still shut down and remained shut down until after Mr. Fulcher went on vacation, approximately a week after his return from medical leave, on September 2, 1998. The City’s project manager Mr. Bartsch testified that it did not approve any additional payment to Complainant due to the change in plans because, according to the City’s calculations, the second set of plans required Complainant to move 1,220 cubic yards of dirt, the same amount as the original plans, and the third set of plans required it to move only 800 cubic yards of dirt. The City’s senior construction inspector Mr. Kraft testified that the same amount of dirt had to moved in the second and third plans, but that the final configuration was different. Nonetheless, Complainant’s project manager Mike Simpson insisted to City personnel on site at the Park project that the plan that the City had decided to implement required Complainant to move more dirt than the plan on which Complainant’s bid was based and, therefore, it should be paid more money. The City’s project manager Mr. Bartsch testified at the hearing that he asked Mr. Simpson to provide calculations regarding the amount of dirt that the third plan required to be moved to support payment of additional money but that Mr. Simpson never provided such calculations. Wil Lopez, one of Complainant’s blade operators at the Park project, testified that he prepared and provided to Complainant’s project manager Mr. Simpson the engineering studies that calculated the amount of soil that would have to be moved for the first, second, and third plans. [2] On or about September 1, 1998, Complainant submitted to Respondent a change order increasing the base price of the contract $7,000.00, for a total of $16,000.00, for “revised plans increase in quantities,” and adding $2,872.00 for “[first] move-in equipment cost.” The change order showed a “total due” of $18,872.00, excluding “grading for sidewalks.” Respondent did not sign the change order. On or about September 3, 1998, Respondent sent via facsimile a request for “cut & fill calculations” to support Complainant’s requested change order to the City. Complainant apparently did not ever provide these calculations to Respondent or the City. Although Complainant offered into evidence calculations based on the first and second plans, it did not offer any calculations based on the third plan. No evidence was offered at the hearing to support Complainant’s assertion that the change in plans required it to move more dirt.[3] Complainant Returns to Work The City’s senior construction inspector Mr. Kraft again filled in for its chief construction inspector Mr. Fulcher until the latter’s return from vacation on September 11, 1998. By the time Mr. Fulcher returned the second time, Complainant had resumed grading work. The City’s senior construction inspector Mr. Kraft and its project manager Mr. Bartsch both testified that, in their opinions, the second plan was unacceptable and that they understood that the third plan was to be followed on the Park project. As noted above, the City’s chief construction inspector Mr. Fulcher was on medical leave when the plan was changed and was on vacation when Complainant resumed grading. According to Complainant’s employee, Mr. Lopez, the City approved using the second plan because the third plan had “mounds and swales” that would increase the cost of the project. Mr. Lopez did not identify the individual who, on the City’s behalf, had allegedly approved implementation of Mr. Hustead’s second plan in place of the third plan that the City’s engineer Mr. Sanchez had prepared at the behest of the City’s Parks Department. Anofre Dominguez, who is qualifying party for Esperanza Contracting, Inc.,[4] rented the equipment from ABC Equipment, Inc. under the name of his own company to perform Complainant’s subcontract with Respondent for grading on the City’s Park project. Robert Nally of ABC Equipment, Inc. testified that he thought Esperanza was Complainant’s subcontractor on the City’s Park project and, therefore, that Esperanza was responsible for paying for the equipment rental, not Complainant. Mr. Dominguez and Complainant’s project manager Mr. Simpson both testified that Mr. Dominguez was working at an hourly rate for Complainant as an employee, not as a subcontractor. Complainant’s employees Mr. Lopez and Mr. Dominguez began grading the Park according to the stakes that had been placed in various locations. Mr. Lopez does not recall seeing any stakes on the north side of the community center building. Mr. Dominguez remembers seeing a few stakes in that area and in the area of the playground. Although Mr. Dominguez thought the number of stakes was insufficient, he testified that he and Mr. Lopez graded the area north of the building and the playground area. No evidence was submitted at the hearing that any of Complainant’s three employees who worked on the City’s Park project ever told Respondent that staking on the project was insufficient or conflicted with the grading shown on the plan. Respondent’s project manager Greg Leal testified that the industry practice is for the grading subcontractor to check with the general contractor if the subcontractor believes the staking is inadequate.

According to Mr. Dominguez, he also graded the area where the sidewalk would be poured because Respondent’s qualifying party, Phil Rossi, instructed him to do so, even though Complainant’s on-site project manager, Mr. Simpson, told him it was not part of Complainant’s contract. Mr. Lopez testified that Complainant’s bid was lower than the bid that he submitted on behalf of Del Rio for the grading subcontract on the Park project and that he thought Complainant’s bid was too low. Mr. Dominguez testified that, after the City made additions and changes to Respondent’s contract without raising the contract amount, he told Respondent it should pull off the job. Respondent wanted to complete the contract, however, because it was Respondent’s first contract with the City.[5] Complainant Leaves the Jobsite Janus Concrete was the concrete subcontractor on the Park project. Alex Orosco, the president of Janus Concrete, testified at the hearing that Complainant’s grading for the sidewalk did not cause Janus to refuse to pour the sidewalks. A grading subcontractor normally only grades to established sub-grade, plus or minus 1/10’. Janus pulled off the job because the turndowns on the north end of the sidewalk had not been cut and Respondent would not agree to Janus’ change order for additional monies to cut the turndown.[6] According to Mr. Orosco, grading for turndowns for concrete sidewalks is a “grey area,” which is sometimes the responsibility of the grading subcontractor and sometimes the responsibility of the concrete subcontractor. Because Janus’ subcontract did not expressly provide for turndowns, Mr. Orosco did not include their cost in Janus’ bid. On September 21, 1998, Mr. Rossi on behalf of Respondent sent via facsimile to Complainant a memorandum informing it that, “[d]ue to the grading of the sidewalks not completed [sic] the Concrete Contractor pulled off the site on 09/18/98.” The memorandum further advised Complainant that, “if work has not started by the morning of Wednesday, September 23, 1998, [Respondent] will proceed with rectifying this problem at your expense.” Complainant did not return to the jobsite after September 22, 1998, when a jobsite meeting was held between the parties to discuss Janus Concrete’s requirements. According to Complainant’s project manager Mr. Simpson, Complainant pulled off the job because Respondent wanted it to construct turndowns for the sidewalk at no extra cost, which Complainant did not feel was part of its subcontract. Complainant’s employee Mr. Lopez testified that, before he took the rented equipment off the jobsite, the City’s chief construction inspector Mr. Fulcher and Respondent’s project manager Mr. Leal had approved the job. Mr. Fulcher testified that he did not remember if he approved the grading, but he would have approved it if it had been presented to him. Respondent’s project manager Mr. Leal testified that Complainant’s employee Mr. Dominguez told him at the jobsite that he knew that all the work that Respondent had requested needed to be done. Mr. Leal testified that Mr. Dominguez left the Park jobsite to go to another job but that he said he would be back to finish the grading for the sidewalk and turndowns. According to Mr. Leal, Mr. Dominguez never finished the work, however, but instead later told him that, because Complainant had underbid the job, Complainant’s project manager Mr. Simpson instructed Mr. Dominguez not to complete it. Mr. Leal denied that either he or Chief Inspector Fulcher ever approved Complainant’s grading. Complainant’s project manager Mr. Simpson testified that he told Respondent’s project manager Mr. Leal that he would perform additional work if he were paid. Mr. Leal testified that Mr. Simpson did not say anything about money but, because Complainant never returned to the jobsite, Mr. Leal completed the grading on a weekend on Respondent’s behalf. On or about September 25, 1998, Mr. Rossi sent another memorandum to Complainant, advising it that Respondent had undertaken to complete Complainant’s work and that Respondent would backcharge Complainant for the cost of completion. On or about September 29, 1998, the City’s project manager Mr. Bartsch sent a letter to Respondent that summarized a construction meeting that had been held at the Park jobsite on September 28, 1998. Among the City’s requirements was that Respondent “[r]e-grade future playground to make level. Cut a swale for runoff along the high side of the area surrounding playground.” Money Allegedly Earned and Owed Sometime in October, the City authorized payment of $47,803.46 to Respondent for the work performed on the project between September 1 and September 30, 1998. Included in this amount was $12,353.00 for completing 100% of “Grading/Site Survey.” The City deemed the quality of work Respondent had performed at the Park to be “Good” and the progress of work to be “Fair to Good.” The City’s project manager Mr. Bartsch was among the city officials who signed Respondent’s payment request to approve it. On or about October 5, 1998, Respondent sent Complainant a document entitled “Revised Contract Amount,” which showed the original contract amount as $9,000.00, a credit of $2,872.00 for the “Move In/Move Out approved by the City of Phoenix,” and a debit of $7,138.32. Two backcharges constituted this debit: (1) Complainant’s alleged “Non- Performance of Sub-contract (work completed by [Respondent]),” including $2,837.32 for labor and $2,774.00 for equipment rental; and (2) $1,500.00 for mobilization costs incurred by Janus Concrete. According to Respondent’s “Revised Contract Amount,” Complainant was owed $4,722.68. On or about November 12, 1998, Respondent submitted to the City Change Order #8 for $995.00 for “[a]dditional survey cost incurred due to change in Grading.” The stated reason for the change order was “[a] miscalculation in the amount of dirt on the site and the import of excess dirt prior to construction resulted in resurveying and restaking.” This change order and the change order for mobilization costs, described at Finding of Fact No. 9, appear to be the only change orders increasing the contract cost for surveying or grading that the City approved. On or about November 24, 1998, Complainant sent an “Invoice for Payment – 3rd Request” to Respondent for $22,622.00. This total was comprised of $9,000.00 for the base contract price, $2,872.00 for mobilization of equipment, $7,000.00 for “change order number three, as per revised plans drawn by the City of Phoenix Engineers Office,” and $3,750.00 for “grading of sidewalks as requested by [Respondent’s project manager Mr. Leal].” The City approved Respondent’s Change Order #8 in April 1999, which resulted in an adjusted contract amount of $114,474.26[7] out of total funds of $150,000.00. According to the City’s project manager Mr. Bartsch, the total funds included the costs of consultants and engineers, not just the general contractor, and that all available funds not paid to Respondent were not available to pay for change orders increasing the cost of the project. On October 1, 1998, Respondent issued a check to Complainant for $2,872.00 for the remobilization allowance that the City had promised. Following a discussion with its attorney, however, Respondent decided to withhold payment until it could calculate backcharges and additional costs caused by Complainant’s failure to return to the job and, therefore, stopped payment on the check. On October 3, 1998, Esperanza deposited into its account a check drawn on Complainant’s account, dated October 2, 1998, payable to Esperanza Contracting, Inc. for $2,384.00 for “equipment move in cost Park site (Par).” At some point, ABC Equipment, Inc. perfected a mechanic’s lien under A.R.S. § 33-981 on the Park project for the cost of the equipment it had rented to Esperanza Contracting, Inc. for Complainant to use to perform the subcontract. On December 28, 1998, Respondent issued a check for $2,295.86, made jointly payable to Complainant and ABC Equipment, Inc., to satisfy the debt and cause the lien to be released. Respondent has made no further payments to Complainant for work performed on the Park project. Complainant made a claim to the Registrar on November 24, 1998, Respondent did not resolve the claim, and, on February 24, 1999, the Registrar issued a Citation and Complaint that charged Respondent with a violation of A.R.S. § 32-1154(A)(7) and (11). The Citation and Complaint issued by the Registrar advised Respondent that, if it were found in violation of any contracting law, its prior disciplinary record of final Registrar of Contractors’ orders might be considered in mitigation or aggravation. Accordingly, notice is taken of official records of the Registrar of Contractors, which reveal that, if the Registrar accepts this recommended decision, it will be the only final agency order against Respondent on the Registrar’s current record. Therefore, Respondent’s prior record is deemed to be excellent and, thus, is viewed as a matter in mitigation for any disciplinary penalties to be imposed as a direct result of this case. CONCLUSIONS OF LAW In this administrative proceeding, Complainant bears the burden of proof and must establish a statutory violations by a preponderance of the evidence. See A.A.C. R2-19-119; see also Culpepper v. State, 187 Ariz. 431, 438, 930 P.2d 508, 515 (App. 1996). “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). A preponderance of the evidence is “evidence which is of greater weight or more convincing than evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary at page 1064 (6th ed. 1990). Both parties dispute their opponent’s positions in good faith. It appears that construction of the City’s Park was not an especially profitable project for any of the contractors involved, although the final result may have been a good deal for the City’s taxpayers. Both parties exacerbated a bad situation when they refused to communicate with each other and instead communicated with the City’s inspectors and project manager, whose various opinions about the project and Complainant’s workmanship do not appear to have been consistent. The record supports an inference that this dispute could have been avoided had the parties negotiated with each other and together with the City, rather than working against one another. Complainant has borne its burden to establish that Respondent was paid for the Park project and that, in failing to pay Complainant anything for its work on the project, Respondent violated A.R.S. § 32-1154(A)(7)[8] and (11).[9] Even under Respondent’s calculation, Respondent owes Complainant at least $2,426.82 (the difference between the $4,722.68 on Respondent’s October 5, 1998 “Revised Contract Amount” and the December 28, 1998 joint payment of $2,295.86 Complainant and ABC Equipment, Inc.). See Findings of Fact Nos. 36, 37, and 43. Complainant has not borne its burden to show entitlement to payment for either the $7,000 charge for extra grading under either the second Hustead plan or the third Sanchez plan, as set forth in Complainant’s September 1, 1998 change order described in Finding of Fact No. 16, or the $3,750.00 charge for Complainant’s November 24, 1998 invoice for grading the sidewalk, described at Finding of Fact No. 39, because neither Respondent nor the City ever approved these change orders. An unsigned change order cannot increase the contract price because, once two contracting parties agree to a contract term, such as price, “[o]ne party . . . cannot alter its terms without assent of the other party.” See Ruck Construction Co., Inc. v. City of Tucson, 116 Ariz. 533, 535-36, 570 P.2d 220, 222-23 (Ct. App. 1977). Therefore, “[o]rdinarily when a contractor makes a contract calling for performance of a job, in accordance with a certain plan, if nothing is said in regard to what shall be done in case he finds the work necessary to conform to the plan is for any reason more difficult or expensive than either party had anticipated, he must bear the cost of the excess of the contract price.” Gillespie Land & Irrigation Co. v. Hamilton, 43 Ariz. 102, 113-14, 29 P.2d 158 (1934). Moreover, the record does not show that Complainant ever provided to Respondent, the Registrar, or the undersigned the documentation needed to support an increase in the cost of performing the subcontract, despite Respondent’s request. The fact that Complainant’s employees apparently implemented a plan different from the one City officials thought they had approved further undermines Complainant’s claim that it should be allowed to increase the contract price unilaterally. Respondent claims that it should be relieved of any obligation to pay Complainant for the City’s Park project because Respondent did not complete the subcontract and, therefore, under the terms of the contract and industry practice, Respondent is entitled to offset the cost of completion.[10] A claim of set-off against monies that otherwise would be owed is an affirmative defense for which the party asserting the right to a set-off bears the burden to prove. See, e.g., Consolidated Roofing & Supply v. Grimm, 140 Ariz. 452, 457, 682 P.2d 457, 462 (Ct. App. 1984). The parties’ contract is ambiguous with respect to whether Complainant contracted to install turndowns or perform grading for a concrete sidewalk. Since the City apparently replaced the decomposed granite sidewalk with a concrete sidewalk after Complainant had submitted its bid, it appears likely that Complainant did not include the cost of turndowns or of grading for a concrete sidewalk in its bid, on which the parties’ subcontract was based. For this reason, Respondent has not borne its burden to show that Complainant was responsible for the cost of installing turndowns or for Janus Concrete’s mobilization costs while the turndowns were installed, even if Complainant should be responsible and backcharged for additional grading of the playground. Because Respondent did not itemize or present any evidence with respect to the backcharges on its October 5, 1998 “Revised Contract Amount” between the sidewalk and playground, see Finding of Fact No. 37, it has not borne its burden to show entitlement to and the amount of an offset for additional grading of the playground. The record establishes that Complainant is due the $9,000.00 base contract amount, plus $2,872.00 mobilization allowance, minus the $2,295.86 payment to ABC Equipment, Inc. to satisfy its lien, for a total of $9,576.14. Although the parties may be able to recover additional amounts from each other in interest, attorneys’ fees, and other consequential damages in a breach-of-contract action brought in a court having appropriate general civil jurisdiction, the legislature has empowered neither the Office of Administrative Hearings or the Registrar of Contractors to award such damages. RECOMMENDED ORDER Based on the foregoing, it is recommended that the Registrar suspend Respondent’s Class A-21 License No. 103647 on the effective date of the Registrar’s order in this matter, thirty-five days after the date of mailing. It is further recommended that if, on or before the effective date of the Registrar’s order, Respondent provides proof in writing to the Registrar that it has paid Complainant $9,576.14, no license suspension shall take place and the Registrar shall close Case No. 99-1896. Done this day, June 23, 1999.

______________________________________ Diane Mihalsky Administrative Law Judge

Original transmitted by mail this ____ day of June, 1999, to:

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

By ___________________________

----------------------- [1] The record is not clear whether the City or Respondent employed Mr. Hustead or if he was, instead, an independent consultant. [2] Mr. Lopez is qualifying party for Del Rio Contracting, Inc., Class A- License No. 099975 for general engineering, which the Registrar issued on November 26, 1993. That license was suspended on July 16, 1998 and presently is delinquent.

[3] Complainant did enter into evidence computer printouts for the original Hustead plans and the revised Hustead plans, which Mr. Lopez had prepared and which showed various numbers for “cut volume” and “fill volume” and the like. For the original plans, the “fill volume” was 267 cubic yards and the “cut volume” was 4,400 cubic yards, which would seem to support the hearing testimony that the original plans would require removal of a large amount of dirt from the site. For the Hustead revised plans, the “fill volume” was 2,340 cubic yards and the cut volume was 2,810 cubic yards. The undersigned cannot reconcile these numbers with the City’s project manager Bartsch’s testimony that only 1220 cubic yards would need to be moved under both Hustead plans. She also cannot see any support in Mr. Lopez’ calculations for Complainant’s assertion that the second or third plans required Complainant to move substantially more dirt, however.

[4] Class A- License No. 103764 for general engineering, which the Registrar issued on August 18, 1994. That license is presently delinquent.

[5] Apparently, Complainant had completed several contracts or subcontracts for the City’s jobs. Respondent’s qualifying party Mr. Rossi testified at the hearing that he was hoping that Complainant’s project manager Mr. Simpson would be able to help Respondent with City protocol.

[6] The undersigned notes that the Registrar’s records reveal that Janus made a complaint against Respondent for failure to pay monies allegedly owed on the same construction project, which was designated Case No. 99- 2467. Apparently, Janus resolved at least some of its differences with Respondent because the complaint was closed on April 13, 1999. [7] The City also had approved an additional payment of $1,625.26 for construction of water lines for future water uses and a drinking fountain and removal of concrete footing for installation of a new irrigation line. Complainant was not involved in making in any of these changes.

[8] This statutory subsection includes among the grounds for suspension, revocation, or other disciplinary action against 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.”

[9] This statutory subsection 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 . . . .”

[10] Respondent also seemed to imply at the hearing that Complainant may have breached the terms of its subcontract with Respondent by subcontracting grading on the Park project to Esperanza Contracting, Inc. The evidence presented at the hearing showed that Complainant’s project manager Mr. Simpson supervised Mr. Dominguez’ and Mr. Lopez’ work. It cannot be seriously argued that Mr. Dominguez’ rental of the equipment under the name of his own company would justify Respondent’s failure to pay Complainant.

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826