Arbitration Award Blank

Document Sample
Arbitration Award Blank Powered By Docstoc
                         STATE OF OREGON
                               for the

In the Matter of the Complaint of:

MITICA LEONTESCU                                                  File No: 150253-101
                                                          ARBITRATION AWARD


                                 HISTORY OF THE CASE

       Complainant Mitica Leontescu filed this complaint with the Construction Contractors Board
(CCB) on June 25, 2009, alleging that respondent Daniel Aurel Gligor, doing business as Pacific
NW Heating & Cooling, performed negligent or improper work or breached a contract to perform
construction work at 23300 SW Stafford Hill Dr., West Linn, Oregon. Complainant filed a
Statement of Monetary Damages for $25,373.94.

       On January 11, 2010, CCB referred this claim for binding arbitration to the Office of
Administrative Hearings (OAH) pursuant to ORS 701.148 and 701.149 and OAR 812-004-0590.
Neither party requested a contested case hearing.

       On January 21, 2010, OAH served a Notice of Arbitration Hearing on the parties, setting
the matter for arbitration on March 31, 2010, and including a copy of the administrative rules
contained in OAR chapter 812, division 10.

      The arbitration proceeded as scheduled in Salem, Oregon before arbitrator James W. Han.
Complainant appeared and testified. Respondent appeared and testified.

        The record consists of Exhibits 1 through 76 and R1. Respondent's relevance objection to
Exhibits 29 and 30 was overruled. The rest of the exhibits were admitted in evidence without


        Complainant hired respondent under a written contract to install a geothermal heat pump
and related pipes, fans, fireplace, and materials for $50,000. Complainant paid respondent $12,000
as a down payment and orally agreed to pay another $10,000 after the first inspection. Respondent

Mitica Leontescu v. Daniel Aurel Gligor, CCB File No. 15023-101
Page 1 of 4
agreed to use the $12,000 downpayment to buy materials and to use the $10,000 payment to pay
for materials as well as labor up to the first inspection. Complainant paid respondent $10,000 in
October 2008, after respondent's loop installation and post and beam sheet metal ducting work
passed the first rough inspection.

       After the first inspection, complainant told respondent to wait until complainant had
completed further construction on his house before resuming work. Respondent then allowed his
contractor license to lapse. He told complainant that he would reinstate his license when
complainant was ready for respondent to resume work.

        In April or May 2009, complainant asked respondent to reactivate his license and to install
the fireplace and roof venting. Respondent did not reactivate his license and demanded $3,000
more to buy materials. Complainant refused to pay respondent more money and asked respondent
how he had used the $22,000 complainant had paid. Respondent refused to provide that
information and did not resume work.

       Respondent wrongfully terminated the contract by refusing to reactivate his license and
resume work, even if respondent believed that complainant breached the contract by refusing to
make an additional "progress payment." In view of the parties' dispute over whether respondent
was entitled to a progress payment, respondent unreasonably refused to show complainant how he
used the money complainant had paid. Further, the ordinary remedy for a breach of contract is
payment of money damages. Respondent could lawfully terminate the contract only if money
damages against complainant would have been an inadequate remedy after respondent performed
his contract obligations.

       Money damages would have been an adequate remedy. Complainant had already paid
almost half the contract price when respondent had done less than half the work. Respondent had
no reason to believe that complainant would fail to pay the balance when respondent completed the

        Because respondent breached the contract, complainant is entitled to the money damages
caused by respondent’s breach. Complainant claimed damages from respondent for (1) the amount
of invoices for geo-thermal pipes that respondent had not paid; (2) a refund of most of the money
complainant paid respondent; and (3) the cost to excavate the field where respondent installed loop

Unpaid Invoices

       Complainant claimed as damages the amount of two invoices for geo-thermal materials and
an engineer's consulting fee that respondent failed to pay. I cannot award damages for this item
because it is not a type of complaint within CCB's jurisdiction.

       For CCB to have jurisdiction over a complaint, the complaint must be of a type described
under ORS 701.140.1 The statue states that for a complaint by the owner of real property against a
contractor, based on the contractor's failure to pay a person who provided materials or services on

    OAR 812-004-0320(1).

Mitica Leontescu v. Daniel Aurel Gligor, CCB File No. 15023-101
Page 2 of 4
the property, CCB has jurisdiction only if the person providing the materials or services filed a lien
against the owner's property.

        Here, the supplier and engineer billed respondent—not complainant—for the materials and
services. Complainant presented no evidence that he paid the supplier or engineer or that they filed
a construction lien against complainant's property. Because complainant presented no evidence of
a construction lien, CCB has no jurisdiction over this complainant item and I have no authority to
award damages for this item.

Refund and Offset

        Based on a visual inspection, CCB's investigator concluded that respondent had completed
about 10 percent of the contract. According to the engineer who supplied at least some of the
tubing to respondent and instructed respondent how to lay out the loop fields, respondent installed
4,200 linear feet of loop tubing. According to contractor Sandu, Inc., another 4,800 feet of tubing
will be required and respondent completed about eight to 10 percent of the work.

       Based on these estimates, complainant claimed he is entitled to a refund of the difference
between the $22,000 he paid respondent and the value of the work respondent completed. If
respondent completed ten percent of the work, the value of his work was $5,000.

        A breaching contractor may recover the reasonable value of its partial performance to the
extent the performance benefited the owner. But the contractor must prove the reasonable value of
his partial performance.2 A claim for the reasonable value of labor and materials has three
elements: (1) that the labor and materials were actually expended for the benefit of the property
owner, (2) that the amount of labor and materials used was reasonable and (3) that the charge for
that amount was reasonable.3 Because respondent refused to disclose what materials he actually
purchased and installed for complainant and at what cost, he failed to show he had earned the
$22,000 he received. Indeed, evidence in the record showed that respondent failed to pay for at
least some of the tubing and other materials he installed. He also presented no testimony or other
evidence that he purchased any of the equipment he would need to complete the work.

         At the arbitration hearing, respondent testified that he had installed two layers of loop fields
and offered photographs of loop fields he installed at different depths. I am persuaded that the
engineer had seen respondent lay only one field and was not present when respondent laid the other
field at the higher elevation. Sandu based its estimate for additional loops entirely on the engineer's
opinion. Therefore, I conclude that complainant's evidence underestimated the value of the loop
fields respondent installed.

       But because respondent produced no invoices, receipts, or other evidence to show exactly
how much loop tubing or other materials he installed, I cannot accurately determine the value of
respondent's work or the amount respondent is entitled to as an offset against complainant's
damages. An arbitrator may order such remedies as the arbitrator considers just and appropriate
under the circumstances of the arbitration proceeding.4 Exercising my equitable authority, I
  B&D Investment Corp. v. Petticord, 61 Or App 585, 587-589 (1983).
  Cyberco Holdings v. Con-Way Transportation Ser., 212 Or App 576, 592 (2007).
  ORS 36.695(3).

Mitica Leontescu v. Daniel Aurel Gligor, CCB File No. 15023-101
Page 3 of 4
conclude that the reasonable value of respondent's work is equal to the $5,000 the CCB investigator
and Sandu estimated plus $3,000 for the additional loop field respondent installed, for a total of
$8,000. Therefore, complainant is entitled to a refund of $14,000 ($22,000 - $8,000).


       Complainant claimed the cost to reexcavate the ground to determine how many loops
respondent installed. But complainant did not establish that excavation is necessary. Respondent
contended that he installed the proper number of loops and that any contractor could easily add
more if needed. Complainant did not persuasively rebut respondent's contention. No award will be
made for this item.

        Based on the foregoing, and in accordance with ORS chapter 701 and OAR chapter 812,
division 10, I conclude that respondent's breach of contract caused complainant damages of
$14,000. Complainant is also entitled to recover the $50 processing fee under OAR 812-004-
0250(2)(c). Therefore, I hereby enter the following:

      Respondent shall pay complainant $14,000 plus the $50 processing fee, for a total of

Dated this 6th day of May 2010.

                                                 James W. Han, Arbitrator

Mitica Leontescu v. Daniel Aurel Gligor, CCB File No. 15023-101
Page 4 of 4

Shared By: