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Complaint for Breach of Contract

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Complaint for Breach of Contract Powered By Docstoc
					               BEFORE THE OFFICE OF ADMINISTRATIVE HEARINGS
                             STATE OF OREGON
                                   for the
                    CONSTRUCTION CONTRACTORS BOARD


In the Matter of the Complaint of:

MARK & DIANE ABEL,                                              File No: 155709-101
Complainants

vs.                                                       PROPOSED AND FINAL ORDER
JOHN PAUL MORGAN dba
JP MORGAN CONCRETE CONSTRUCTION,
Respondent


                                          HISTORY OF THE CASE

        On April 28, 2008, Mark & Diane Abel (Complainants) filed a Breach of Contract
Complaint with the Construction Contractors Board (CCB) against John Paul Morgan dba JP
Morgan Concrete Construction (Respondent), alleging that Respondent improperly installed
concrete around his home. Respondent was licensed at the time the work was performed. The
CCB concluded that Complainants did not timely file their complaint and that Complainants did
not have a direct contractual relationship with Respondent, and on June 27, 2008, issued a
Proposed Default Order to Dismiss. Complainants filed a timely request for a hearing. The CCB
referred their request to the Office of Administrative Hearings (OAH) on August 14, 2008.

       Administrative Law Judge Lawrence S. Smith of the OAH conducted a hearing in this
case by telephone on October 21, 2008. Mark Abel (Complainant) appeared and testified, as did
Respondent. The CCB did not appear. The record was closed after hearing that day.

                                                ISSUES

        1. Whether Complainants had a direct contractual relationship with Respondent, as
required by OAR 812-004-0320(5).

        2. Whether Complainants filed their Breach of Contract Complaint within the time limit
set in ORS 701.143(4).

                                          EVIDENTIARY RULING

       Exhibits 1 through 37 from the CCB’s file were admitted into evidence without objection.

                                           FINDINGS OF FACT

       1.     In about December 2006, Complainants called Respondent for a bid to do
concrete work around their home at 1310 Karen Way NW, Salem, Oregon. Respondent was in


Abel v. Morgan, CCB File No. 155709-101
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Arizona as he usually is for five months each winter and said he could not do the work until he
returned to Oregon in April. Complainants said they wanted the work done earlier than that, so
Respondent gave Complainants the phone numbers of Randy Marston and two other concrete
installers. Respondent had used Marston as a day laborer on 10 to 12 jobs in 2006 and
understood that Marston would soon be licensed by the CCB to do work on his own. In
November 2006, Respondent sold Marston a truck that had Respondent’s name, phone number,
and CCB number on it. Respondent expected that Marston would remove this information, but
did not make sure Marston had removed the information nor did he contact the CCB to make
sure Marston had become licensed. (Test. of Respondent.)

        2.    Complainant Mark Abel (Complainant) contacted Marston for a bid, which
Marston prepared and provided on January 30, 2007. (Test. of Complainant.) The bid says the
work would be done in a week at a cost of $3,742.05 and contains no reference to Respondent.
(Ex. 5.) Complainant accepted the bid the same day and told Marston how he wanted the work
to be done. Marston provided no information from the CCB with his bid. (Test. of
Complainant.)

        3.     Marston started the work the next day. He drove the truck he purchased from
Respondent to the job site. Respondent’s name, phone number, and CCB number were still on
the truck. Marston had Complainant pay $300 for the rock laid under the new concrete because
Marston did not have any money. On February 6, 2007, Marston had the concrete poured for the
complete job. Some of it dried before it could be smoothed. Marston left before finishing the
job and said he would return later to smooth out the concrete. Complainant gave Marston a
check in his name for $2,699.41 for the work up until that point. (Test. of Complainant.)

        4.      Shortly later, Complainant called Marston and asked him when he was going to
return to finish the job. Marston came by on March 4, 2007, and laid a coating on the rough
cement. Marston promised to come back to smooth the rough edges and asked for final payment.
Complainant gave Marston a check in his name for $874, the remainder owing under the
contract. (Test. of Complainant; Ex. 2.)

        5.      Complainant called Marston on April 16, 2007, and reminded him that he needed
to finish the work as promised. On May 23, 2007, Complainants sent a certified letter to
Respondent, stating that they intended to file a complaint against him with the CCB in 30 days.
(Ex. 6.) Respondent’s wife signed for it. (Ex. 8.) Respondent then contacted Marston and told
him to take care of it. Shortly later, Marston showed up at Complainants’ home and said that
Respondent had called him and told him to take care of the problems. Marston promised to
come back on Memorial Day, but did not. Marston promised a couple more times to come back
and repair the problems, but never returned. (Ex. 3; Test. of Complainant.)

        6.      On April 28, 2008, the CCB received a Breach of Contract Complaint from
Complainants against Respondent. (Exs. 1 through 4.) Complainants did not file earlier because
they tried to negotiate with Marston.

                                          CONCLUSIONS OF LAW

        1. Complainants did not have a direct contractual relationship with Respondent, as
required by OAR 812-004-0320(5).



Abel v. Morgan, CCB File No. 155709-101
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      2. Complainants did not file their Breach of Contract Complaint within the time limit set
in ORS 701.143(4).

                                            OPINION

         Complainants have the burden of proving that their complaint is a type that the CCB has
the jurisdiction to process. ORS 183.450(2) (“The burden of presenting evidence to support a
fact or position in a contested case rests on the proponent of the fact or position. ”).

       In its Proposed Default Order to Dismiss, the CCB concluded that Complainants’ Breach
of Contract Complaint should be dismissed because:

        The complainants hired Mr. Randy Marston to perform construction work for
        them and issued two checks to him for payment. Complainants did not enter into
        a contract with respondent or pay the respondent for work. Therefore, the
        complainants do not have a direct contractual relationship with the respondent or
        any of the other relationships required by OAR 812-004-0320(5) and the
        complaint against respondent must be dismissed.

        The complainants filed this complaint more than one year after Mr. Marston
        ceased work on the structure. Therefore, the complaint must be dismissed
        because it was not filed within the time limit set forth in ORS 701.143(4).

(Ex. 17.) These two bases for dismissal are considered separately.

1. No direct contractual relationship

         OAR 812-004-0320 describes the jurisdiction of the CCB and provides in parts relevant
to this case:

        (1) A complaint must be of a type described under ORS 701.140.
        *****
        (5) Complaints will be accepted only when one or more of the following
        relationships exist between the Complainants and the respondent:
        (a) A direct contractual relationship based on a contract entered into by the
        complainant and the respondent, or their agents;

        OAR 812-002-0250 defines “Direct Contractual Relationship” and provides in relevant
part:

        "Direct Contractual Relationship" as used in OAR 812-004-0320 has the
        following meanings:
        (1) For an owner * * * complaint, "direct contractual relationship" means a
        relationship created by a contract between the complainant and the respondent
        providing that the respondent perform construction work in return for valuable
        consideration conveyed directly from the complainant to the respondent.




Abel v. Morgan, CCB File No. 155709-101
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        Based on the testimony and evidence at the hearing, there is insufficient evidence of a
direct contractual relationship between Complainants and Respondent. Marston may have
appeared to be working for Respondent because Marston was using a truck purchased from
Respondent that still had Respondent’s name, phone number, and CCB number on the side, but
Complainant admitted that the only contact he had with Respondent was to receive the referral to
Marston, before a bid was submitted and a contract signed. The contract contains no reference to
Respondent, and Complainants issued checks to Marston in his name for the work. Under these
circumstances, Marston was not the agent for Respondent. Moreover, there was no objective
manifestation of assent to the same terms between Complainants and Respondent, which is
required for a contract. Newton/Boldt v. Newton, 192 Or App 386, 392 (2004). Complainants
have never had a written or verbal contract with Respondent.

2. Complaint filed within the deadline

       ORS 701.143 contains the deadlines for timely filing a Breach of Contract Complaint and
provides in relevant part:

       The Construction Contractors Board may not process a complaint against a
       licensed contractor, * * *, unless the complaint is filed in a timely manner as
       follows:
               *****
       (4) Regardless of whether the complaint involves a new or an existing structure, if
       the owner of the structure files the complaint and the licensed contractor failed to
       substantially complete the work, the board must receive the complaint no later
       than one year after the date the contractor ceased to work on the structure.

       The CCB has defined “substantial completion” in OAR 812-002-0740, which provides in
relevant part:

       "Substantial completion" may occur at the time of but not be limited to the first
       occurring of any of the following events: final inspection is completed, certificate
       of occupancy is issued, the structure or portion of structure is in a habitable or
       usable condition, most or all of payment is made. Work under a warranty
       provision of a contract or repair to already completed work does not extend the
       date of substantial completion, except that removal and replacement of completed
       work may extend the date of substantial completion to the date the replacement
       work was substantially complete.

        Complainants argued that the work by Marston was never completed, so their complaint
was timely filed. Marston never performed the repair work that he promised, but Complainants
had already paid him by March 6, 2007, and the failure to complete repair work does not extend
the deadline for substantial completion. See OAR 812-002-0740 (above). The rule allows
extension of the deadline only for removal and replacement of the completed work, and Marston
never removed or replaced the work nor did he promise to. Therefore, the job was substantially
completed on March 6, 2007.

        Complainants’ complaint was received on April 28, 2008, more than a year later and
beyond the time limit. Complainant testified that he delayed filing his complaint because he was
trying to negotiate with Respondent. Those negotiations seem to have ended by July 2007, so

Abel v. Morgan, CCB File No. 155709-101
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Complainant had plenty of time afterward to file a complaint. Complainant also testified that the
delay was due in part to his wife’s health, but nothing in the law allows for extension of the
one-year time limit, not even for good cause. Marston did not provide to Complainants the CCB
information on filing a complaint, but Complainants had contacted the CCB before submitting
their 30-day notice letter on May 23, 2007, and must have also been advised of the deadline for
filing a complaint. Complainants’ Breach of Contract Complaint was not timely filed and cannot
be processed by the CCB.

        While their Breach of Contract Complaint cannot be accepted and processed by the CCB,
Complainants may have other recourse available for resolution of their problems with the
concrete installation. Because this dismissal is based on lack of the CCB’s jurisdiction, the
merits of Complainants’ Breach of Contract Complaint have not been considered and dismissal
is without prejudice to Complainants’ rights to seek satisfaction in another forum.

                                             ORDER

       Complainants’ Breach of Contract Complaint received by the CCB on April 28, 2008, is
dismissed due to lack of contractual relationship as required by OAR 812-004-0320(5) and is
dismissed as untimely under ORS 701.143(2).

Dated this 4th day of November, 2008



                                   ________________________
                                       Lawrence S. Smith
                                    Administrative Law Judge


                             NOTICE OF R EVIEW AND APPEAL RIGHTS

As provided in ORS 183.460, any party that d isagrees with this Proposed and Final Order may
file written exceptions, including argument. If you choose to file exceptions, carefully follow the
instructions enclosed with this order. Mail your exceptions to the Construction Contractors
Board (CCB) at the address provided below. CCB must receive written exceptions on or before
the 21st day after this order was mailed to the parties. If CCB does not receive your written
exceptions on or before the 21st day after this order was so mailed, your exceptions will not be
considered.

If exceptions are timely received, CCB will send the opposing party a copy of the written
exceptions. At the same time, CCB will send both parties information and guidelines for
participating in the exceptions process. Thereafter, the Construction Contractors Board Appeal
Committee (Appeal Committee) will consider the exceptions at an Appeal Committee meeting.
This will not be a new hearing. The Appeal Committee will only review the original hearing
record and this order. The Appeal Committee will not consider evidence that was not a part of
the original hearing record.

If CCB does not timely receive exceptions, this order will automatically become final on the
21st day following the date of issuance of this order, unless CCB requests the ALJ to review

Abel v. Morgan, CCB File No. 155709-101
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and consider revising the order. OAR 812-009-0160. If this order becomes final, you are
entitled to request judicial review pursuant to the provisions of ORS 183.482, by filing a petition
for judicial review with the Court of Appeals within 60 days from the date that this order
becomes final. Mail any exceptions or a copy of any petition for judicial review to:

                             Assistant to Dispute Resolution Manager
                                 Construction Contractors Board
                                          PO Box 14140
                                     Salem, OR 97309-5052




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