ALJDEC decisions subject to certification as final

2010A-24639128-ROC · Registrar of Contractors · 2010-08-12

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 5, 2010 at 8:00 a.m. APPEARANCES: Odessa Construction LLC appeared through its attorney, Joel Sannes. Standard Plumbing LLC appeared through its attorney, R. Christopher Pierce. ADMINISTRATIVE LAW JUDGE: M. Douglas

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Orders are made:

FINDINGS OF FACT 1. Standard Plumbing LLC (“Standard”) is the holder of License No. L- 37.209341-C issued by the Registrar of Contractors. 2. Odessa Construction LLC (“Odessa”) is the holder of License No. A.196489- C issued by the Registrar of Contractors. 3. These matters were consolidated for hearing because both of these cases arise out of substantially the same facts and parties, and involved the same issues that occurred at the same commercial construction project that took place at the Arizona Cultural Academy. 4. Credible testimony established that Standard started the construction of a four inch fire line at the Academy. When the construction of the four inch fire line neared completion, Standard was informed that the construction of the four inch fire line was beyond the scope of Standard’s L-37 License. 5. There was no dispute that the construction of such a fire line was beyond the scope of Standard’s Class L-37 License. 6. Standard informed the general contractor, indentified as PCS, of the problem and the general contractor informed Standard of the possible financial liabilities involved with such a mistake if Standard did not cause the problem with the construction of the fire line to be resolved quickly. 7. Credible testimony and evidence established that Standard then contacted Odessa and requested Odessa’s assistance in resolving the matter. 8. Odessa then inspected the work that had been performed by Standard on the new fire line and informed Standard that the fire line work that had been performed by Standard failed to comply with applicable code requirements for fire line construction. 9. Odessa then submitted a proposal to remove the construction work that had been performed by Standard and replace it with a properly constructed four inch fire line. 10. Credible testimony and evidence established that Standard accepted the construction proposal from Odessa and that pursuant to the terms of the proposal Odessa then completed the agreed upon construction work on the new fire line. 11. When the construction work on the new four inch fire line was completed Odessa sent Standard an invoice for $12,000.00 for the completed construction work. 12. When Standard failed to pay for the completed construction work on the new four inch fire line, a representative from Odessa went to Standard’s office and, following a verbal confrontation, Standard gave Odessa a check for $5,000.00. 13. When Standard failed to pay the remaining $7,000.00 that was due for the completion of the agreed upon construction work on the new four inch fire line, Odessa filed a formal complaint against Standard with the Registrar of Contractors. 14. Standard then filed a formal complaint against Odessa with the Registrar of Contractors alleging that Odessa had been fully paid for the four inch fire line by the general contractor and was now seeking a full second payment for the same construction work from Standard. 15. Credible testimony and evidence established that Odessa properly completed the agreed upon construction work on the four inch fire line for Standard and then invoiced Standard for the completed work. 16. The local building authority then inspected the four inch fire line that had been installed by Odessa and informed the general contractor that a four inch fire line, as set forth in the specifications provided by the general contractor, failed to comply with applicable code requirements and that the four inch fire line would have to be replaced with a six inch fire line. 17. The general contractor then entered into a direct contract with Odessa for the removal of the new four inch fire line and the construction of a new six inch fire line that would comply with applicable code requirements. 18. Credible testimony and evidence established that the completion of the four inch fire line for Standard and the removal and replacement of the four inch fire line with a new six inch fire line for the general contractor were two different construction projects and that the general contractor did not pay Odessa for the construction work that Odessa performed on the four inch fire line for Standard. 19. Credible testimony and evidence established that the sum of $7,000.00 is the proper balance due and owing to Odessa from Standard for Odessa’s completed construction work on the four inch fire line. 20. Credible testimony and evidence established that notwithstanding repeated attempts and billings over a prolonged period of time, said balance of $7,000.00 remains unpaid. 21. The instant record demonstrated that Standard’s failure to pay the aforementioned sum of $7,000.00 to the Complainant was not in good faith, and accordingly, under all of the facts and circumstances presented herein Standard’s is found to constitute a violation of the applicable charged provisions of the state’s contracting laws. 22. Credible testimony and evidence, presented at hearing, established that Standard either knew or should have known that the construction of the four inch fire line at the Arizona Cultural Academy was beyond the scope of Standard’s L-37 License. 23. Notice is taken of Standard’s prior excellent license record with the Registrar of Contractors. CONCLUSIONS OF LAW 1. Credible testimony and evidence established that Standard Plumbing LLC violated the charged provisions of A.R.S. § 32-1154A (11) (Failure to pay monies in excess of seven hundred and fifty dollars when due) and A.R.S. § 32-1154A (17) (Knowingly contracting beyond the scope of its Class L-37 License). 2. Standard Plumbing LLC has the burden of demonstrating by a preponderance of the evidence that Odessa Construction LLC violated the charged sections of the state’s contracting laws. See Culpepper v. State of Arizona, 187 Ariz. 431, 437-38, 930 P.2d 508 (Ariz. App. 1996). 3. Proof by “preponderance of the evidence” means that it is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). 4. Proof by preponderance of the evidence “is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (rev. 6th ed. 1990). 5. Standard Plumbing LLC failed to sustain its burden of proof to establish that Odessa Construction LLC violated the applicable charged sections of the state’s contracting laws. Therefore, the credible evidence of record did not sufficiently sustain a finding of violations by Odessa Construction LLC of the provisions of A.R.S. §32-1154A, as charged in the Citation and Complaint. RECOMMENDed orderS 1. In view of the foregoing, it is recommended, commencing on the effective date of the Registrar’s Order, that the License No. L-37.209341-C of Standard Plumbing LLC be suspended until the Registrar of Contractors receives and accepts written proof that Standard Plumbing LLC has paid the sum of $7,000.00 to Odessa Construction LLC. It is further recommended that if Standard Plumbing LLC pays the above described sum of money on or before the effective date of the Registrar’s Order, then the aforementioned indefinite license suspension shall not take place. It is further recommended, in addition to the foregoing indefinite license suspension, if any, that License L-37.209341-C be placed on a period of sixty (60) days disciplinary probation. This additional disciplinary penalty shall commence on the effective date of the Registrar’s Order or upon the date on which notice of Standard Plumbing’s compliance with the terms of this Order is filed with the Registrar, whichever is later. 2. In view of the foregoing it is recommended that the Citation and Complaint against License No. A.196489-C of Odessa Construction be dismissed. In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of these Orders will be 40 days from the date of the certification. Done this day, August 12, 2010.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors -----------------------

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