ALJDEC

99F-Y0104-ROC · Registrar of Contractors · 1999-06-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

|B & B COATINGS, |(|Case No.: Y99-0104 | | |(| | |Complainant, |(|Docket No.: 99F-Y0104-ROC | | |(| | |vs. |(| | | |(| | |License No. 073756, Class B-01of |(|Recommended | |DENNIS CONSTRUCTION COMPANY OF |(|Decision and Order | |YUMA, INC. (CORP), |(| | | |(| | |Respondent. |(| | | |(| |

HEARING: May 26th, 1999; 9:00 a.m. Appearances: The Complainant appeared through the Vice President, Mr. Thomas E. Brennan. The Respondent appeared through the President and Qualifying Party, Mr. Keith Dennis. Administrative Law Judge: Grant Winston

This matter was brought on for administrative hearing on Wednesday, May 26th, 1999, at 9:00 a.m., in Yuma, Arizona. Testimony was taken and other evidence admitted to record, and, based on the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Order are made.

FINDINGS OF FACT

1. The Respondent herein, Dennis Construction Company of Yuma, Inc., is and at all times material hereto was, a contractor licensed by and doing business in the State of Arizona, holding Class B-01 License Number 073756.

2. Respondent was the general contractor performing renovations of an elementary school in Rolle, Yuma County, Arizona, in 1998. The Complainant, B & B Coatings, subcontracted with Respondent, by written contract executed on March 18th, 1998, for the Complainant to install epoxy (quartz) flooring in the restrooms in the school.

3. The contract called for the Respondent to pay the Complainant $9,176.00 for the work. The amount of $7,676.00, including retention, remains unpaid. The instant Complaint was filed by the Complainant to recover that amount. The Respondent defends that the work performed by the Complainant was unsatisfactory and untimely, and had to be re- done by others, which resulted in costs to Respondent exceeding the amount Complainant claims it is owed by Respondent. Thus, both parties sought at hearing to compel payment to it from the other. However, Respondent has filed no complaint with the Registrar of Contractors against the Complainant involving this contract.

4. Respondent notified the Complainant by letter dated August 13th, 1998, that Complainant’s work to that date was “unacceptable.” The letter described the unacceptable aspects of the work in detail as “incomplete coves, with voids, fins and thin areas, the floor field area has thin areas, thick areas, no aggregate in areas and the floor drains were not keyed in, in accordance with the project’s specifications.” The letter suggested a date and time for the two parties to review the work and arrange for corrections to be made.

5. Respondent sent another letter to Complainant dated August 18th, 1998, in which a schedule for completion of the repair and sealing of the floors was included.

6. On August 28th, 1998, Complainant wrote a letter to Respondent, acknowledging the work schedule to correct the problems. Complainant took issue with the proposed schedule; however, Complainant did acknowledge the problems with the work, and the need for their correction. Complainant stated “We will grind out any spots on the base and repair, install another layer of material and seal everything one more time.”

7. Respondent sent its response letter to Complainant on August 31st, 1998. Respondent stated that the Complainant’s proposed method of repairs was acceptable, but the counter-offered time frame for performance of the repairs was not. Respondent noted the only available time frame was in mid-October, during a break in the school schedule.

8. Complainant contacted Respondent by letter dated October 29th, 1998, noting therein that the repair work had been completed, with only “areas on cove to be touched up.” The letter went on to note that those, and other areas would be attended to on November 28th, and 29th, 1998. The letter concluded with a demand for payment from the Respondent in the amount of $6,907.50, an amount arrived at by subtracting the retention amount, $767.50, from the total amount due, $7,676.00.

9. Respondent then notified Complainant by letter dated December 16th, 1998, that the Subcontract Agreement (contract) was being terminated. The letter outlined the history of the project, and noted how, in Respondent’s judgment, the Complainant had failed to perform by applying a satisfactory epoxy floor coating, as Respondent had contracted to do. The termination letter noted the following construction deficiencies: “The cove was of a different color/hue than the field area, resin puddles at base of cove, cove to floor transition rough, square and excess material left at transition. Cove did not have smooth vertical to horizontal transition and excess sand and resin were smeared over the ceramic wall tile above the cove.”

10. Not having been paid by the Respondent, the Complainant filed the instant Complaint with the Registrar of Contractors on January 13th, 1999. Respondent filed its Response thereto on January 15th, 1999. Citation and Complaint was issued from the Registrar’s office on February 11th, 1999, and Respondent filed its response thereto on February 18th, 1999.

11. The contract’s terms include that the subcontractor’s (Complainant’s) work must be approved by the owner, which in this case was the school district, and the architect, who was Mr. Barry Patterson. Testifying at the hearing were representatives from the school district who were charged with the responsibility and given the authority to speak and act for the school district in this construction, as well as the project’s architect. All these witnesses testified consistently that the Complainant’s work was unsatisfactory, and when inspected by them, up to the time of Respondent’s termination of the contract, the work was unacceptable and they had refused to approve it under the pertinent provision of the contract.

12. It was also clear from the testimony at the hearing from Respondent, and the documentary evidence of record corroborating its testimony that reasonable efforts were made by the Respondent to work with and accommodate the Complainant in its efforts to make the necessary corrections to its work; corrections the Complainant conceded needed to be made.

13. There was testimony from the Complainant that much of the cause of its floors’ unsatisfactory nature was the condition of the sub-surface created by other workers than the Complainant’s. However, additional testimony from the Respondent which was undisputed by the Complainant when given the opportunity to dispute it, was that, yes indeed, there were such conditions impairing Complainant’s ability to perform, and Complainant did bring those conditions to the attention of Respondent. However, as the testimonial evidence of both parties continues to bear out, Complainant and Respondent jointly addressed those concerns and conditions, and an approach to them was agreed upon which the parties mutually believed would remove them as a barrier to Complainant’s going ahead and installing the floors as contracted. Thereafter, Complainant went ahead with its work without protest that it could not perform under existing conditions. Also, Complainant offered no documentary evidence in the form of any letters or memorandum to Respondent that conditions existed preventing its work from being acceptable, and that it was proceeding under protest because they had not been corrected. Even Complainant conceded at hearing that perhaps it should not have laid the floor with the base being what it was.

14. The clear weight of the evidence shows that the Complainant’s own actions of performing unsatisfactorily, and inaction in not performing in a timely manner, were the proximate causes of Respondent’s justified termination of the contract, and turning to another subcontractor to perform that work. It is found that the delays in Complainant’s work schedule were not caused to any significant degree by the other workers on site blamed by Complainant. This finding is especially true taken with the ample evidence that Respondent was trying to facilitate Complainant’s work to the fullest degree possible under the circumstances. The evidence also shows that Respondent ended up being obligated to pay the other subcontractor (Concrete Restoration Systems, Inc.) an amount exceeding the amount Complainant claims it is due.

Conclusions of Law

1. This hearing was held under authority of and pursuant to A.R.S. §32- 1156, and A.R.S. §41-1092.

2. The Respondent herein is charged with possible violations of A.R.S. §32-1154.7. and 11.

3. The weight of evidence supports the conclusions that the Respondent did not violate A.R.S. §32-1154.7, and did not violate A.R.S. §32- 1154.11, failure to pay the Complainant money due under the contract, because the money never became due the Complainant.

4. The Respondent’s claim that Complainant should pay the Respondent the money it had to pay others to perform the work Complainant should have performed, is not before the Registrar as a part of this case.

Recommended Order

Wherefore, it is hereby recommended that Citation and Complaint number Y99-0104, together with the Complaint on which it is based, be dismissed.

Dated this 8th day of June, 1999.

OFFICE OF ADMINISTRATIVE HEARINGS

_________________________________ Grant Winston Administrative Law Judge

Original mailed this day of June, 1999, to:

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

Transmitted by: -----------------------