ALJDEC

99F-L0161-ROC · Registrar of Contractors · 1999-12-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: December 15, 1999 APPEARANCES: Complainant was represented by its attorney, Harvey Jackson and Respondent appeared through its owner and qualifying party, Mike Gilbertson. ADMINISTRATIVE LAW JUDGE: Mark A. Silver _____________________________________________________________________

Evidence and testimony were presented and, based upon the entire record in this matter, the following Findings of Fact, Conclusions of Law, and Recommended Order are made: FINDINGS OF FACT

1. Complainant is in the business of supplying block and cement related materials. Respondent is the holder of a commercial license limited to masonry work.

2. Over a very significant period of time Complainant has supplied Respondent with block and other cement related materials on an open account. Complainant contends that Respondent’s account is grossly overdue, reflecting a very large sum of unpaid billings. Respondent contends that Complainant’s invoices are, in part, erroneous and grossly exaggerate the sums that his company may be owing to Complainant.

3. Although Complainant claimed a higher figure past due and owing in the complaint filed in the instant matter, at the hearing Complainant averred that currently Respondent’s unpaid billings total $425,755.44. This figure also reflects a 1 ½% finance charge per month for the numerous bills that were not paid on time.

4. Notwithstanding the fact that this total unclaimed sum was accrued over the course of at least two years and represents numerous deliveries of materials to Respondent over said period of time which were not paid for, Complainant indicates that it continued to supply Respondent with materials over this period of time due to the fact that Respondent was one of the largest consumers of their materials.

5. Respondent presented evidence and testimony at the hearing which indicated that he believes that Complainant is not entitled to the full amount of the sum claimed, due to the fact that said figure fails to take into account his claim for gross mistakes in the billings by Complainant, involving double billing and other inaccuracies in the billings. He also asserts a claim for credits for breakage and for unspecified backcharges. Moreover, he contests the fact that he has any contractual obligation to pay late fee finance charges of 1 ½ % for the billings claimed past due by Complainant. Respondent’s claims in this regard are found to be asserted in good faith

6. The weight of the evidence of record was sufficient to support a finding that Respondent does not contest that it owes Complainant $75,558.51 of the sum claimed herein by Complainant. Nevertheless, Respondent has failed to pay this uncontested portion of Complainant’s claim. Respondent’s failure to pay the $75,558.51 is found to be a liquidated sum due and owing to Complainant and thus, said amount of the unpaid balance on the claim is properly found to constitute a failure to pay for construction materials provided and a finding of a wrongful act within the meaning of the applicable charged section of the State’s contracting laws.

7. Under the particular facts and circumstances of the instant case, it appears proper to require that Respondent pay Complainant $75,558.51 as a condition to avoid a suspension of its contractor’s license. The remainder of Complainant’s claim for non-payment is found to be indicative of an accounting nightmare, due to the sheer number of billings involved and the claims by Respondent involving double billings and inaccurate billings.

8. The Registrar of Contractors, acting through an administrative license disciplinary hearing is the inappropriate forum to provide accounting services for the parties or to award monetary damages for monies that are found to be the subject of a good faith dispute. Thus, based on the foregoing finding of an assertion of a good faith defense by Respondent to the remainder of the claim by Complainant, in the event Complainant should continue to seek further payment, it must pursue its remaining claim before a civil court of competent jurisdiction in order to have an adjudication and liquidation of what, if any, further payments it may be entitled to receive from Respondent. It is important to note that nothing in the instant decision should be construed to prevent Complainant from seeking and receiving any further payment through a proper adjudication in a civil court.

9. Notice is hereby taken of official Registrar of Contractors public records, which reveal that Respondent’s contracting license has been suspended by operation of law for failure to renew his license since December 1, 1999. Such suspension does not preclude this tribunal from conducting these administrative proceedings nor from issuing separate disciplinary orders. Moreover, Respondent’s existing suspended license status must be considered when determining appropriate penalties in this case. Little, if any, motivation would exist for any Respondent contractor to comply with an Order of the Registrar to avoid a suspension of an already suspended license.

10. As set forth in the Citation and Complaint issued by the Registrar of Contractors, Respondent was advised that in the event of a finding of a violation against Respondent, Respondent’s prior disciplinary record of final Registrar of Contractors’ orders may be considered in mitigation or aggravation. Accordingly, subsequent to conclusion of the instant hearing, notice was taken of official records of the Registrar of Contractors regarding any prior final disciplinary orders against Respondent and said notice revealed prior complaints that had gone into the hearing process. One of these prior complaints resulted in a suspension of Respondent’s license for a specified period of time. Therefore, Respondent’s prior record is properly deemed to be less than exemplary and thus, is viewed as a matter in aggravation for any disciplinary penalties to be imposed as a direct result of this case.

CONCLUSIONS OF LAW

1. Respondent violated the provisions of A.R.S. § 32-1154A (11) and (7).

RECOMMENDED ORDER

In view of the foregoing, it is recommended that Respondent’s Class- license shall be revoked on the effective date of the Order entered in this matter.

It is further recommended that if Respondent pays or tenders to Complainant the total sum of $75,558.51 on or before the effective date of the Order entered in this matter, then the above-provided license revocation shall not take place but instead Respondent’s Class C-31 license shall be placed on active suspension for a period of 5 days followed immediately by a period of disciplinary probation for 180 days. This alternative penalty shall commence, if at all, on the effective date of the Order entered in this matter. It is further recommended, if the alternative penalty is applicable and in addition to the above-provided alternative disciplinary penalties, that any restoration of Respondent’s contracting rights, whether or not probationary, shall be subject to a condition that Respondent first post an additional surety bond, cash deposit or alternative deposit for a period of twenty-four (24) months, including future renewal periods, in the amount of $2,500.00, such bond or deposit to be in addition to the required surety bond or cash deposit set forth in A.R.S. § 32-1152(D). Cash or alternative additional deposits, if utilized, shall be returned only after the expiration of an additional two year period following the above-provided twenty-four (24) month period and only if no claims are then pending. Done this day, December 21, 1999

______________________________________ Mark A. Silver Administrative Law Judge

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

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

By ___________________________

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