Butch Randolph & Associates, Inc. v. International Fidelity Insurance

136 P.3d 232, 212 Ariz. 550, 480 Ariz. Adv. Rep. 3, 2006 Ariz. App. LEXIS 74
CourtCourt of Appeals of Arizona
DecidedJune 13, 2006
DocketNo. 1 CA-CV 05-0171
StatusPublished
Cited by8 cases

This text of 136 P.3d 232 (Butch Randolph & Associates, Inc. v. International Fidelity Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Butch Randolph & Associates, Inc. v. International Fidelity Insurance, 136 P.3d 232, 212 Ariz. 550, 480 Ariz. Adv. Rep. 3, 2006 Ariz. App. LEXIS 74 (Ark. Ct. App. 2006).

Opinion

OPINION

LANKFORD, Presiding Judge.

¶ 1 A surety, International Fidelity Insurance Company, appeals a summary judgment in favor of a subcontractor, Butch Randolph & Associates, Inc. The issue on appeal is whether the subcontractor is disqualified from recovery of the value of materials against the surety’s construction payment bond because subcontractor is not a licensed contractor. We affirm the judgment for the subcontractor because it was not required to be licensed on these facts.

¶2 The facts are undisputed. Diamond Building Group, Inc., was the general contractor on a municipal park project in Glendale. The contractor obtained from the surety a $2.2 million statutory payment bond pursuant to Arizona Revised Statutes (“A.R.S.”) section 34-222 (2000).

¶ 3 The subcontractor, a park and playground equipment seller, agreed to supply barbecue grills and ramadas for the park project. The contract price for the grills and ramadas was $60,571, and the total contract price including installation was $73,971. The subcontractor was not a licensed contractor at any relevant time. However, a licensed contractor installed the grills and ramadas.

¶ 4 The contractor, Diamond, failed to pay subcontractor for providing the grills and ramadas. When the surety failed to pay subcontractor’s claim for payment, the subcontractor sued for the price of the grills and ramadas, $60,571.1

¶ 5 The surety contended that the subcontractor was barred from recovery for the materials it supplied because it was not a licensed contractor. The superior court determined that the subcontractor was exempt from the licensing requirement and entered judgment in its favor for the value of the materials.

¶ 6 The surety timely appealed. Our jurisdiction rests on A.R.S. § 12-2101(B) (2003). We review the summary judgment de novo. United Bank of Ariz. v. Allyn, 167 Ariz. 191, 195, 805 P.2d 1012, 1016 (App.1990).

¶ 7 The superior court correctly decided that the subcontractor was not barred from recovery. The statute that bars recovery by unlicensed contractors is A.R.S. § 32-1153 (2002). It provides that no contractor shall “commence or maintain any action ... for collection of compensation for the performance of any act for which a license is required by this chapter without alleging and proving” that the contractor “was a duly licensed contractor when the contract.... was entered into and when the alleged cause of action arose.”

¶ 8 To determine whether the subcontractor was subject to this provision, we must determine first whether it was a contractor and second whether it was required to be licensed. The subcontractor is a contractor within the meaning of the statute. “Contractor” means any person or organization that:

[552]*552undertakes to or offers to undertake to, ... submits a bid ..., [or] does himself or by or through others, or directly or indirectly supervises others to ... construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building ... or other structure, project, development or improvement....

A.R.S. § 32-1101(A)(3)(a) (2002). The term also includes subcontractors. A.R.S. § 32-1101(B). The subcontractor submitted a bid and entered into a contract to provide and install ramadas and grills for the project. It meets the definition of contractor.

¶ 9 Although it is a contractor, the subcontractor is not necessarily required to be licensed if it is exempt from licensing by statute. Section 32-1121(A)(4) provides that the licensing requirement does not apply to a supplier of materials. It reads:

Any materialman, manufacturer or retailer furnishing finished products, materials, or articles of merchandise who does not install or attach such items or installs or attaches such items if the total value of the sales contract or transaction involving such items and the cost of the installation or attachment of such items to a structure does not exceed seven hundred fifty dollars including labor, materials and all other items. The materialman, manufacturer or retailer shall inform the purchaser that the installation may also be performed by a licensed contractor whose name and address the purchaser may request.

A.R.S. § 32-1121(A)(4) (Supp.2005). The parties dispute the scope of the exemption.2 The surety argues that the $750 limit in A.R.S. § 32-1121(A) applies. It contends that any contractor who agrees to a transaction in excess of $750 must be licensed even if the contractor does not “install or attach” the items supplied. On the other hand, the subcontractor contends that a supplier who simply furnishes items and “does not install or attach” them is exempt from the licensing requirement regardless of the cost. Although the subcontractor did not install or attach any items, the contract price exceeded $750.

¶ 10 The subcontractor is exempt under the facts at hand. The statute creates two exemptions. First, it exempts contractors who merely supply materials and perform no installation. Second, it exempts suppliers of materials who also install them if the value of the transaction does not exceed $750. The two exemptions are independent of each other, and the $750 limit applies only to the second exemption.

¶ 11 This meaning is clear from the statutory language itself. The Legislature used the word “or,” placing the two alternatives in the disjunctive: A contractor is exempt if it does not install materials or if it installs them but their value is no greater than $750. The subcontractor fell within the first exemption. It did not install the materials; a licensed contractor performed that work.

¶ 12 The surety’s interpretation would render a portion of the statute meaningless. We strive to avoid an interpretation that makes parts of a statute “void, inert, redundant, or trivial.” Walker v. City of Scottsdale, 163 Ariz. 206, 210, 786 P.2d 1057, 1061 (App.1989). Prior to the 1991 amendment, the exemption applied to:

Any materialman, manufacturer or retailer furnishing finished products, materials or articles of merchandise who does not install or attach such items.

See A.R.S. § 32-1121(A)(4) (1990) and 1991 Ariz. Sess. Laws 1415, 1417. The amended statute provides an additional exemption for:

Any materialman, manufacturer or retailer furnishing finished products, materials or articles of merchandise who ... installs or attaches such items if the total value of the sales contract ... and the cost of the installation ...

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Greenwell v. Allen
Court of Appeals of Arizona, 2022
Hahn v. INDUSTRIAL COM'N OF ARIZONA
252 P.3d 1036 (Court of Appeals of Arizona, 2011)
Mousa v. Saba
218 P.3d 1038 (Court of Appeals of Arizona, 2009)
Hounshell v. White
199 P.3d 636 (Court of Appeals of Arizona, 2008)
TOWN OF GILBERT PROSECUTOR'S OFC. v. Downie
162 P.3d 669 (Court of Appeals of Arizona, 2007)
Town of Gilbert Prosecutor's Office v. Downie
162 P.3d 669 (Court of Appeals of Arizona, 2007)

Cite This Page — Counsel Stack

Bluebook (online)
136 P.3d 232, 212 Ariz. 550, 480 Ariz. Adv. Rep. 3, 2006 Ariz. App. LEXIS 74, Counsel Stack Legal Research, https://law.counselstack.com/opinion/butch-randolph-associates-inc-v-international-fidelity-insurance-arizctapp-2006.