ALJDEC decisions subject to certification as final

09F-3259-ROC · Registrar of Contractors · 2009-11-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

CONSOLIDATED HEARING: October 21, 2009. APPEARANCES: Collings Holdings, L.L.C., doing business as Sun Devil Plumbing and Rooter, was represented by its attorney, Daniel J. McCauley III, Esq. Nublock, Inc. was represented by its president and qualifying party, Ivan Vucichevich. ADMINISTRATIVE LAW JUDGE: Brian Brendan Tully _____________________________________________________________________ Based upon the evidence of record, the Administrative Law Judge makes the following Findings of Fact, Conclusions of Law, and Recommended Order: FINDINGS OF FACT 1. Collins Holdings, L.L.C., doing business as Sun Devil Plumbing and Rooter (“Sun Devil”), is the holder of License No. 206292, a Class K- contracting license issued by the Registrar of Contractors (“Registrar”). 2. Nublock, Inc. (“Nublock”) is the holder of License No. 142157, a Class B-01 contracting license issued by the Registrar. 3. On December 5, 2008, Sun Devil filed a written Complaint with the Registrar alleging non-payment by Nublock in the amount of $4,350.00 for work it performed for Nublock on a project located at 424 W. Guadeloupe, Mesa, Arizona. The Registrar designated the Complaint as Case No. 09-3259. 4. The Registrar issued a Citation and Complaint in Case No. 09-3259 alleging possible violations by Nublock of A.R.S. § 32-1154(A) (7), (11), and (13), namely A.R.S. § 32-1129.02(E).[1] Sun Devil posted the statutorily required $500.00 cash bond. 5. On February 12, 2009, Nublock filed a written Complaint with the Registrar alleging a failure by Sun Devil to perform four items of work on the subject project. In the Complaint, Nublock sought to have the Complaint removed by Sun Devil in Case No. 09-3259. 6. The Registrar designated Nublock’s Complaint as Case No. 09-4395. 7. The Registrar issued a Citation and Complaint in Case No. 09-4395 alleging violations by Sun Devil of A.R.S. § 32-1154(A) (1), (7), and (3), namely A.A.C. R4-9-108. 8. The Registrar forwarded Case Nos. 09-3259 and 09-4395 to the Office of Administrative Hearings, an independent agency, for a consolidated evidentiary hearing. 9. Nublock was the general contractor for a commercial project located at 424 W. Guadeloupe, Mesa, Arizona. Nublock was hired by M.I.T., L.L.C., the property owner. 10. Nublock originally contracted with Toma Plumbing. L.L.C. (“Toma”) for the plumbing scope of work on the project. The plumbing scope of work was divided into stages. 11. Sun Devil acquired Toma in June 2007 and, among other things, assumed Toma’s contractual obligation with Nublock on the subject property. 12. Sun Devil completed the first stage of the plumbing scope of work. Sun Devil could not perform the next stage of work until contacted by Nublock. 13. When Nublock contacted Sun Devil to commence the second stage of plumbing work, Nublock gave Sun Devil less than 24-hours to man the work. Nublock insisted that Sun Devil needed to commence its work within that time frame due to other trades having been scheduled, and those trades could not perform their work until the second stage of plumbing was completed. 14. Sun Devil responded to Nublock advising that the 24-hours notice was unreasonable. Sun Devil stated that it could provide a crew in approximately five days. That response was unacceptable to Nublock. Consequently, Nublock terminated Sun Devil from the balance of the project. 15. Sun Devil is found not to have abandoned its scope of work, as alleged by Nublock, but was terminated by Nublock after being given an unreasonable short period of time to report to the project. Nublock mismanaged the subcontractors by scheduling all other necessary trades prior to scheduling Sun Devil, whose plumbing scope of work needed to be completed before the other trades could work. 16. Sun Devil requested payment from Nublock for its costs and expenses for the work completed on the first stage of the plumbing project. Sun Devil did not seek its profit for the completed work. Nublock has not paid Sun Devil those costs and expenses. 17. Nublock executed an Unconditional Waiver and Release on Final Payment and delivered it to the property owner’s bank, Arrowhead Community Bank. In that document, Nublock warranted that it had either paid or would pay all subcontractors. Therefore, there is credible evidence that Nublock received payment for the first stage of plumbing work performed by Sun Devil, but has refused to pay Sun Devil for such work. 18. The work allegedly not performed by Sun Devil listed in Nublock’s Complaint is work that was within the scope of the second stage of plumbing work. Since Nublock terminated Sun Devil from the project, Sun Devil was no longer obligated to perform such work. 19. As a result of Nublock’s failure to pay the outstanding balance to Sun Devil, M.I.T., L.L.C. entered into a Promissory Note with Sun Devil in the amount of $4,250.00 to guarantee payment to Sun Devil for the funds owed to it for the first stage of plumbing work. 20. Nublock’s failure to pay Sun Devil the outstanding balance owed for the first stage plumbing work is a wrongful act resulting in substantial injury to Sun Devil. 21. A review of the Registrar’s official electronic records reveals that Nublock’s contracting license has been inactive since March 6, 2009. CONCLUSIONS OF LAW 1. The Registrar has jurisdiction over Nublock and Sun Devil and the subject matters in these consolidated matters. 2. Pursuant to A.A.C. R2-19-119(B), Nublock and Sun Devil have the burden of proof in their respective Complaints. The standard of proof is preponderance of the evidence. A.A.C. R2-19-119(A). Case No. 09-3259 3. Nublock violated the provisions of A.R.S. § 32-1154(A) (7) and (13), specifically A.R.S. § 32-1129.02(E), as charged in the Citation and Complaint issued by the Registrar. 4. As a result of meeting its burden of proving the allegations applicable to the violation of A.R.S. § 32-1129.02(E), Sun Devil is entitled to the following relief from Nublock: payment in the amount of $4,350.00, plus applicable statutory interest set forth in the statute until paid in full; and, the return of its $500.00 cash deposit. Case No. 09-4395 5. The evidence of record does not support a conclusion that Sun Devil violated the provisions of A.R.S. § 32-1154(A) (1), (7), and (3), namely A.A.C. R4-9-108. RECOMMENDED ORDERS Case No. 09-3259 Nublock’s License No. 142157 shall be revoked on the effective date of the Order entered in Case No. 09-3259. If Nublock pays Sun Devil the principal sum of $4,350.00, plus accrued applicable interest as provided in A.R.S. § 32-1129.02(E), on or before the effective dated of the Order entered in Case No. 09-3259, then the above-provided license revocation shall not take place, but instead Nublock’s contracting license shall be placed on disciplinary probation for 180 days. This alternative penalty shall commence, if at all, on the effective date of the Order entered in Case No. 09-3259. The Registrar shall initiate and finalize payment procedures to return Sun Devil’s $500.00 cash deposit paid pursuant to A.R.S. § 32-1129.02(E). Case No. 09-4395 The Citation and Complaint in Case No. 09-4395 shall be dismissed on the effective date of the Order entered in this matter. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be 40 days from the date of that certification.

Done this day, November 10, 2009.

/s/ Brian Brendan Tully Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] This statute is commonly referred to as the “Prompt Pay” statute.

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