ALJDEC

01F-2359-ROC · Registrar of Contractors · 2001-09-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 17, 2001. APPEARANCES: Nihad Isic, Complainant; Mark Lasee, Respondent’s attorney; Ken Litaker; Complainant’s witness; Ken Mathis, witness and president of Respondent; Brenda Hutchison and Steve Gustafson, Respondent’s witnesses, and Milos Stojanovic, interpreter. ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang. _____________________________________________________________________ Nihad Isic of Mimi Tile, a former independent contractor for S.M. Tile, Inc., in a complaint against the contracting license of S.M. Tile, alleged numerous activities and office practices that he claimed were improper or unethical. The evidence Mr. Isic presented at hearing, however, was insufficient to establish any violation of the statutes governing licensed contractors in Arizona. Therefore, it is recommended that the Citation and Complaint be dismissed. FINDINGS OF FACT 1. On March 27, 2001, Nihad Isic, a former independent tile worker for S.M. Tile, Inc., filed a complaint with the Registrar of Contractors alleging “unethical business practices; taking money from my pay to pay for another installer’s back charges”. On April 6, 2001, S.M. Tile submitted an answer to the complaint. On April 14, 2001, Mr. Isic requested a hearing with a letter attached specifying paychecks that he disputes and adding other charges to the complaint. 2. In response to Mr. Isic’s request, a hearing was set with the Office of Administrative Hearings on September 14, 2001. Both parties appeared. Mr. Isic did not speak English well and was aided by an interpreter that he provided. 3. Mr. Isic testified that his last check was voided in retaliation for filing a complaint with the Registrar of Contractors. S.M. Tile’s Payroll and Human Resources Director testified that the last payroll check mailed to Mr. Isic was voided because the money had already been advanced to him in a final payment given to him on the day he was fired. 4. Mr. Isic testified that S.M. Tile wrongfully deducted his brother’s back-charges from his checks. Mr. Isic worked as an independent contractor doing jobs for S.M. Tile, under an alternative payment plan offered by S.M. Tile to its hired employees. Mr. Isic’s brother was a former employee of S.M. Tile who had been fired for poor workmanship and owed substantial back-charges for a job he had done and refused to correct. When S.M. Tile officials learned that the brother was working with Mr. Isic on their jobs, they objected, saying that they would not let him work on one of their jobs unless Mr. Isic took responsibility for him and also accepted his back-charges. Mr. Isic agreed and his brother did work with him. At hearing, Mr. Isic argued that he did not agree to this in writing and it was wrong to subtract another worker’s back-charges from his check. S.M. Tile attempted to reimburse Mr. Isic for the back-charges but Mr. Isic refused to cash the checks. 5. Mr. Isic complained that S.M. Tile would not allow employees to keep a copy of the list by which they pay for various types of jobs. Employees are allowed to see the pay list as much as they want but cannot take it out of the office. The reason for this is that S.M. Tile does not want its competitors to have its pay list. 6. Mr. Isic complained that S.M. Tile did not always pay the $50 “trip charge” for times when he went to a job and was sent home again because they were not ready for him. S.M. Tile’s defense was that Mr. Isic had the duty to get a signed statement from the superintendent on site before leaving or, per office policy, the charge would not be paid. 7. Mr. Isic complained that S.M. Tile deducted 10% from every floor tiling job he did and did not pay him by the actual square footage installed as promised. S.M. Tile offered testimony of several witnesses that the pay method was understood throughout the office and was explained to Mr. Isic many times. The workers were paid according to the square footage reported by the builder on their invoices. The builder’s invoices reported an added 10% on flooring because the flooring measurement was obtained from their computer’s purchasing records. The purchasing records always reported an additional 10% on tile square footage because the builder ordered an additional 10% of tile to allow for “waste” (mistakes and broken or cut tile). The builder told S.M. Tile that it could not adjust its computers to take out this 10% on the invoices, so S.M. Tile did the adjustment itself prior to paying its workers. Countertops were paid by direct reference to the blueprints and did not involve subtraction of a percentage. 8. Mr. Isic testified that he disagreed with the way his paychecks were calculated and believed there were errors. S.M. Tile’s witnesses testified that the workers were all invited to meet with Ms. Hutchison every Wednesday morning to ask questions or dispute her calculation of their pay. Mr. Isic did not dispute that this was the standard practice. In fact, he even complained that the meetings had been mandatory at one point. He did not dispute that the pay list was available at the meetings or available in the office at all times. 9. According to Mr. Isic’s testimony, Mr. Mathis yelled at him, told him he would throw him out of his office during a dispute, and threatened to counter-sue him. None of these alleged actions met a level of impropriety that could amount to wrongdoing. It is not entirely unreasonable to yell during an argument or threaten to expel an ex-employee from one’s office when that ex-employee repeatedly insists, as Mr. Isic clearly did, that standard office practices, such as protecting information from competitors and adjusting figures to reflect actual measurements, are improper. Further, just as anyone can bring suit or threaten to bring suit no matter how weak their case is, the other party is just as entitled to counter-sue or threaten to do so. 10. Mr. Isic testified that he was fired in March 2001 for poor workmanship. He disputes the claims that he had his children at a job site or that he failed to appear for a job. He complained that he was not given written notice of his reprimands. 11. Mr. Isic stated that S.M. Tile charged him for materials that he did not take. S.M. Tile has tiling materials available for workers to use. That way the workers can take what they need from the warehouse and save the time it takes to go buy them. The sheet they use to request the materials goes to payroll where the cost is deducted from independent contractors’ pay. Mr. Isic claimed he was sometimes charged for materials that he did not check out. Ms. Hutchinson testified that Mr. Isic had not made her aware of any errors of this kind when she issued the checks. CONCLUSIONS OF LAW 1. This matter is within the jurisdiction of the Registrar of Contractors pursuant to A.R.S. §§ 32-1104(A)(4), 32-1154(B) and 32-1156. 2. The Citation and Complaint issued by the Registrar of Contractors in this matter alleged potential violations of A.R.S. § 32-1154(A) (7) and (11). 3. The Arizona Revised Statutes at § 32-1154(A)(7) provides for suspension or revocation of a contractor’s license for the “doing of a wrongful or fraudulent act by the licensee as a contractor resulting in another person being substantially injured”. 4. The Arizona Revised Statutes at § 32-1154(A)(11) provides grounds for suspension or revocation of a contractor’s license for failure to pay moneys when due for materials or services on a project when the amount owed is in excess of $750. 5. The Registrar of Contractors may consider the prior record of a contractor in any disciplinary proceeding provided the records are introduced into evidence. A.A.C. R4-9-117. On standing motion by the Registrar of Contractors, the computer records of the Registrar of Contractors may properly be considered to be evidence in the event the Administrative Law Judge finds a violation of any of the statutory provisions cited in the Citation and Complaint. 6. In this case, the Administrative Law Judge finds no violation of the applicable statutory provisions. The Respondent’s records, therefore, are not relevant and may not be considered evidence. 7. The burden of proof at an administrative hearing is generally upon the Complainant. Utah Construction Company v. Berg et al, 68 Ariz. 285, 205 P.2d 367 (1949). Further, the standard of proof at hearing is a “preponderance of the evidence”. Smith v. Arizona Dept. of Transportation, 146 Ariz. 430, 706 P.2d 756 (App. 1985). This standard “allows both parties to ‘share the risk of error in roughly equal fashion’… Any other standard expresses a preference for one side’s interests.“ Herman & MacLean v. Huddleston, 459 U.S. 375, 390, 74 L.Ed.2d 548, 103 S. Ct. 683 (1983) quoting Addington v. Texas, 441 U.S. 418, 423, 60 L.Ed.2d 323, S. Ct. 1804 (1979). 8. Complainant did not establish with any degree of certainty or specificity that the Respondent knowingly or negligently withheld any money properly due him. Deductions from his brother’s charge-backs were reimbursed when Complainant objected. Nevertheless, Respondent’s witnesses’ testimony that Complainant had agreed to them was consistent and believable. Respondent’s reasons for keeping its pay list private and its policy of deducting 10% on flooring in order to be accurate in pay were logical. Witnesses’ testimony that this was explained repeatedly to Complainant was also consistent and believable. 9. Complainant’s argument that S.M. Tile officials yelled at him or fired him without cause proposed no grounds for finding a violation of the above statutes, especially since he was an independent contractor and both parties were free to contract with whomever they pleased. In all, the numerous broad allegations by Complainant were accompanied by insufficient evidence to meet his burden of proof. Therefore, the Citation and Complaint should be dismissed. RECOMMENDED DECISION Based upon the foregoing considerations, it is hereby recommended that the Citation in this case, together with the Complaint upon which it is based, be dismissed.

Done this day, September 27, 2001. OFFICE OF ADMINISTRATIVE HEARINGS

______________________________________ Dorinda M. Lang Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2001, to:

Registrar of Contractors Michael P. Goldwater ATTN: Joyce Armijo 800 West Washington, 6th Floor Phoenix, AZ 85007

By ___________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826