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                              STATE OF OREGON
                                      for the

In the Matter of the Arbitration between:

FITZ & SON PAINTING, LLC,                                            File No: 176227-102

and                                                              ARBITRATION AWARD

                                   STATEMENT OF THE CASE

        Fitz & Son Painting, LLC (Complainant) timely filed a complaint in accordance with
ORS 701.143. All items determined are within the scope of ORS chapter 701 and require
licensing with the Construction Contractors Board (CCB). Complainant, a subcontractor, alleges
that Portland Remodeling Group, LLC (Respondent), a general contractor, failed to pay for dry
wall and painting work Complainant performed on a residential remodel for Respondent.
Complainant filed a Breach of Contract Complaint (Subcontractor) alleging monetary damages
in the amount of $8,181.69. Respondent alleges that it does not owe Complainant any amount
and also alleges an offset.

       Pursuant to its authority under ORS 701.148(1) and subject to the provisions of ORS
701.148(4), the CCB, on August 28, 2009, referred this matter to the Office of Administrative
Hearings, as required under ORS 701.149, for binding arbitration, in accordance with OAR
Chapter 812, Division 10. A Notice of Arbitration Hearing, along with a copy of OAR Chapter
812, Division 10, was served on the parties. Robert L. Goss was appointed as the Arbitrator.

        At telephone prehearing conference was held on November 3, 2009. Complainant
appeared through Mike Fitzpatrick, member of the LLC. Respondent was represented by
attorney Thomas Murphy. The arbitration was held on December 7, 2009 in Tualatin, Oregon.
Complainant appeared through Mike Fitzpatrick, and was not represented by counsel.
Respondent appeared through Mr. Murphy. Testifying on behalf of Complainant was Mike
Fitzpatrick, Kenneth Fitzpatrick, and Cory Fitzpatrick. Testifying on behalf of Respondent was
James Christensen, Alex Beglets, Tom Rojas, Terry Hansen and Mike Hubbell. Having duly
heard the proofs and allegations of the parties, and having considered the entire record,
consisting of Exhibits 1 through 63, C1 through C3 and R1 through R9, and a digital recording
of the arbitration hearing, I, the undersigned Arbitrator, enter the following:


        In April 2009, Complainant was hired by Respondent to perform dry wall work on an
existing residence located 1261 SE 48th Ave., Portland, Oregon. Respondent was the general

Fitz & Son Painting, LLC vs. Portland Remodeling Group, LLC, CCB File No. 176227-102
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contractor for an extensive remodel of the residence, which was owned by Phoenix
Redevelopment. After Complainant began the dry wall work, Respondent hired Complainant to
perform painting work on the residence. Complainant has been paid a total of $7,500 for the
work it performed.

        The nature and extent of the work Complainant was hired to perform on the project is the
main issue in this arbitration and the two sides presented substantial contradictory evidence in
that regard. Complainant alleges that he was authorized to perform substantial additional work
by Respondent’s Project Manager, Alex Beglets. Mr. Beglets testified that he never authorized
Complainant to perform any “additional” work and that all the work performed by Complainant
was within the original scope of their agreement.

      The agreement between the parties regarding the work at issue is essentially an oral one.
Respondent’s Project Manager walked through the residence with representatives of
Complainant. Both sides agree that the initial oral agreement regarding the original drywall
work was to do all the necessary dry wall work in the residence for the sum of $3,800.00.
Respondent paid Complainant a down payment of $1,000.00.

       At some point after the initial oral agreement, Complainant drafted an invoice, describing
his understanding of the scope of the drywall work to be:

        Hang, tape and texture 100 sheets of drywall
        Tie into existing lath and plaster where possible
        All patches and plugs where needed (from electrical and HVAC)
        All aspects of clean-up from our trade will be done and trash removed
        Estimate includes material and labor costs

       The invoice goes on to state that, “Any extras or changes will be documented and
additionally charged for T & M @ $55.00 per day.”

        The invoice is signed by Mike Fitzpatrick of Complainant. However, it is not signed by
anyone from Respondent, and I find credible the testimony of the Project Manager and
Managing Member of Respondent that they never endorsed or otherwise gave approval of the
scope of work as described in the invoice. In fact, Respondent’s Project Manager never saw the
document. According to the Project Manager, who was the person that entered into the original
agreement with Complainant for Respondent, Complainant was to perform all the drywall work
in the residence for the agreed upon sum. There were no “additional” items regarding the dry
wall to be charged above and beyond the initial price.

        A few days after drafting the above noted invoice, Complainant drafted an “Extra Work
Change Order” listing additional work items that Complainant believed were not contemplated in
the original agreed scope. Some of the items regarding drywall were:

        Add backing in corners of bedroom and south wall of hallway
        Demo ceilings in living room, dining room, north wall of dining room and areas
        in kitchen,, remove debris and install additional drywall to areas where needed.
        Prep upstairs area, pull nails where needed, shim/square up framing to prepare for
        additional drywall, install additional drywall upstairs and adding backing to
        ceiling in kitchen on the north wall.

Fitz & Son Painting, LLC vs. Portland Remodeling Group, LLC, CCB File No. 176227-102
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        The document states that Complainant estimated five extra days for the additional work,
using four workers at $55.00 per day.

       Again, the document is signed by Mike Fitzpatrick of Complainant, but is not signed by
anyone on behalf of Respondent, even though there is a specified space for doing so.
Respondent contends, and I am persuaded, that neither the Project Manager or anyone else ever
approved the “Change Order” and that Respondent continued to believe the originally agreed
scope of work covered all the work performed by Complainant.

      A week or two after preparing the “Change Order,” Complainant drafted an Extra Work
Order Billing Invoice, listing $14,681.69 for “additional” work, some of which was for drywall

        Weighing the contradictory evidence produced by the parties at the arbitration, I conclude
from this record that Respondent did not approve of any additional work that would be paid
above and beyond the initial agreed upon price for the drywall. The scope of the work initially
agreed to included those items specified later by Complainant as being “additional.”
Complainant had a full opportunity to walk through and make appropriate judgments as to the
amount of materials he would need for the job and whether he needed to demolish some of the
existing construction in order to complete the job. Complainant is bound by his initial agreement
to perform all the work for the agreed upon price. This conclusion is complicated somewhat by
two other competing documents prepared by the parties during the course of this work. On May
11, 2009, Mike Fitzpatrick of Complainant hand drafted a document stating:

        “All work completed by Fitz & Son Paint/Drywall is finished and accepted as
        complete. Approved by project manager of Portland Remodeling Group on this
        day of May 11th, 2009.”

        Respondent’s Project Manager, Alex Beglets, signed the document.

        Complainant contends that the document is evidence that Respondent accepted all the
“additional” work and supports his efforts to obtain additional payment for that work. Mr.
Beglets, the Project Manager, testified that when he signed the statement, he thought it meant
that it pertained to only those work items that were already completed. According to Mr.
Beglets, at the time he signed that document, there were some items that were still unfinished
and that he had asked Complainant to come back and complete them.

        To complicate it further, Respondent prepared a Conditional Waiver and Release Upon
Final Payment on May 22nd, 2009, which an employee of Complainant signed. That document
states Complainant’s release covers the final payment to Complainant for all labor, services,
equipment or material furnished on the job, as well as any further attempt to collect monies in the
future relating to the job. Also, it states: “The undersigned have performed labor for wages on
the project described and have been paid in full to date.” The employee of Complainant that
signed the document was a part time day laborer for Complainant.

       In effect there are two executed documents that seemingly conflict as to whether
Complainant was entitled to any further payment beyond the initial agreed price. I say
“seemingly”, because a close review of the document prepared by Mike Fitzpatrick and signed
by Mr. Beglets on its face only indicates that Respondent accepted the work performed. It does

Fitz & Son Painting, LLC vs. Portland Remodeling Group, LLC, CCB File No. 176227-102
Page 3 of 4
not indicate or otherwise support a conclusion that Complainant was due any additional monies
for the work it performed for Respondent. As to the Conditional Waiver prepared by
Respondent and signed by a day laborer employed by Complainant, I cannot conclude that a day
laborer’s signature on a document successfully binds his employer to the terms of the document.

       As I find the testimony of Respondent’s witnesses persuasive, I conclude that the original
oral agreement between the parties regarding the dry wall work included the items now
characterized by Complainant as “additional work.” That includes those items listed by
Complainant in its Extra Work Change Order and Extra Work Billing Invoice. Therefore,
Complainant is not entitled to any award for damages for performing that work. Complainant
was paid what he had agreed to be paid for the work and that is all he is entitled to.

        As to the painting work, much of the same issues arise as previously discussed above.
However, Complainant also received, before starting the painting work, detailed paint
specifications from Respondent, which included painting areas that Complainant attempts to now
characterize as “additional”. I conclude from this record that what Complainant calls
“additional” painting work was within the scope of the original agreement between the parties,
and therefore Complainant is not entitled to any award.

        In short, this record supports the conclusion that all of Complainant’s work was within
the original scope of the agreement and Complainant is not entitled to an award for damages.

       Respondent has argued that Complainant owes him an offset against any amount that
might be awarded to Complainant, due to Respondent’s payment of a construction lien filed by
one of Complainant’s suppliers. However, since there is no award due to Complainant, there is
nothing to offset.

       Based on these Findings, and in accordance with ORS Chapters 701 and 36, and OAR
Chapter 812, Division 10, I enter the following:


Complaint number 176227- 102 is dismissed.

Dated this 20th day of January, 2010

                                                     Robert L. Goss, Arbitrator

Fitz & Son Painting, LLC vs. Portland Remodeling Group, LLC, CCB File No. 176227-102
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