ALJDEC decisions subject to certification as final

2011A-3271-ROC · Registrar of Contractors · 2011-10-19

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 6, 2011

APPEARANCES: Gregory Hinkel, Attorney for Complainant; Sione Vaisa, Complainant’s Qualifying Party; Fidelis Garcia, Attorney for Respondents; Brian Bondi, sole member of Ingenious LLC dba Ingenious Kitchen and Bath Remodeling; Ian Cowan, observer

ADMINISTRATIVE LAW JUDGE: Dorinda M. Lang _____________________________________________________________________

FINDINGS OF FACT 1. Around November and December 2010, Complainant, a licensed contractor, worked as a subcontractor for the Ingenious LLC dba Ingenious Kitchen and Bath Remodeling (hereinafter “Ingenious”) in the homes of three clients who had contracted with Ingenious for interior remodeling. In each case, Complainant and Ingenious entered into an initial contract, and then Ingenious had Complainant do additional work or changed the scope of work. Although Ingenious’s owner, Brian Bondi, directly approved the prices quoted by Complainant and agreed to sign Complainant’s change orders in each case, Mr. Bondi refused to sign the change orders Complainant submitted. Mr. Bondi allowed Complainant to complete the additional work and Ingenious was paid by all of the homeowners. 2. In the course of refusing to pay Complainant’s invoices, Mr. Bondi told Complainant’s Qualifying Party, Sione Vaisa, that one homeowner was dissatisfied with his job. Mr. Vaisa went to that home several times to try and find out what the complaint was, only to be sent away. Ultimately, the homeowner wrote Mr. Vaisa a letter stating that she was very happy with Complainant’s work and that she had paid all of the invoices presented by Ingenious even though they were higher than the original quotes. She also stated that Mr. Bondi was very dishonest. (Exhibit 6) The other homeowners provided Complainant with written confirmation that they had paid Ingenious in full. (Exhibits 7 and 8.) 3. According to the testimony of Mr. Vaisa, all of the additional work and prices were directly approved by Brian Bondi on the phone prior to the start of the work. Mr. Bondi denied this. 10/6/11 Hearing Record (hereinafter “H.R.”) at 1:39:17-1:40:15. Mr. Bondi claimed that the additional work was done without his knowledge, although he also admitted that Mr. Cowan had approved the changes. H.R. at 1:42:20-1:43:00. He argued that if the Complainant had complied with the proper protocol and gone through Mr. Cowan, who was to communicate everything to Mr. Bondi and obtain signed change orders, Complainant would have been paid. Mr. Bondi emailed Mr. Vaisa and stated that he would not pay for the additional work because there were no signed agreements. (Exhibit M.) Mr. Bondi admitted that there were situations in which work was paid for without signed change orders. H.R. 2:05:40-2:06:15. However, Mr. Bondi testified that Ingenious has not honored any verbal change orders with the Complainant because Complainant was a new subcontractor to him. Yet, Ingenious’s own evidence shows that Mr. Vaisa submitted a proposed change order that Mr. Bondi failed to sign, and Ingenious paid it. (Exhibit E.) Mr. Bondi was unable to offer a satisfactory explanation for the inconsistency in his testimony. H.R. 2:07:02-2:09:30. 4. Mr. Vaisa’s testimony indicated that Mr. Bondi was in the habit of requesting that Complainant complete work without a signed change order even though Mr. Vaisa dutifully submitted all change orders for his signature, which Mr. Bondi ignored despite several reminders. Mr. Bondi claimed that Mr. Vaisa failed to submit change orders, that Mr. Bondi was unaware of the additional work, and that his protocol requires that all change orders be signed prior to the beginning of work or Complainant would not be paid. Aside from other indications that Mr. Bondi’s testimony was not reliable, Exhibit E settled the matter. Respondent paid for the work in that invoice without signing the change order, even though the exhibit contains the unsigned change order submitted by Complainant for that work. This is consistent with Mr. Vaisa’s testimony that Mr. Bondi ignored all of his submitted change orders, lending additional credibility to his statements. Mr. Bondi’s testimony was not believable because he contradicted himself several times, first saying that he did not know if Complainant did the work, then admitting that it did do the work; first claiming that the work was unsatisfactory, then admitting that it was satisfactory; first saying that he had a strict protocol, then saying that other contractors with whom he had a history were not required to get written change orders while Complainant was required to have them, and then offering an unsigned change order by Complainant as evidence of work that Mr. Bondi did agree to. Most tellingly, Mr. Bondi claimed that Complainant’s invoices had not been agreed to, then admitted that Mr. Cowan, his own superintendant, had approved the work. 5. Throughout the hearing, Ingenious argued that the amounts Complainant claimed were due differed between the Registrar of Contractors complaint, the liens that were filed, and the statements made at hearing. Mr. Vaisa testified that, on advice of counsel, he was dropping all claims for interest and costs that were included in those documents. Regardless, Ingenious continued to put forth an argument based on those discrepancies without offering any legal basis for finding that disagreement as to the amount due excuses payment altogether. 6. Ingenious offered no evidence to establish that it did not have the funds to pay Complainant or that it had not been paid in full on all three projects. None of Ingenious’s arguments established a credible or legally recognized bases for excusing Ingenious from paying Complainant. 7. According to the records of the Registrar of Contractors, License No. 213216, Class K-61, is suspended for non-renewal effective December 1, 2010; it has two open complaints and two complaints that were resolved, settled or withdrawn. Registrar of Contractors records also show that License No. 269987, Class B-3, opened on December 14, 2010, is current and has two open complaints against it. Considering the dates of the Ingenious’s contracts with its clients and the invoices presented at hearing, it appears that Complainant worked for Ingenious while Ingenious was using both of its licenses, albeit at different times. 8. Although the Citation and Complaint included a reference to an alleged failure by Ingenious to display its license number and the acronym “ROC” in its documents and on the premises of the projects, no evidence of this alleged violation was offered at hearing. 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)(11) and (13)(specifically A.R.S. § 32-1124(B). 3. The Arizona Revised Statutes at § 32-1154(A)(11) provides for suspension or revocation of a contractor’s license for failure to pay a subcontractor the amounts due for materials and services in excess of seven hundred fifty dollars. The only defenses provided in the statute concern the contractor’s lack of capacity to pay and, if he lacks such capacity, the failure of the homeowner to make sufficient payment for the particular project at issue. 4. A.R.S. § 32-1154(A)(13) provides grounds for suspension or revocation of a contractor’s license for failure to comply with provisions of that chapter. A.R.S. § 32-1124(B) requires contractors to display their license number and the acronym “ROC” on the premises of their projects and on all documents they employ. 5. Complainant has the burden of showing that Ingenious is in violation of the applicable contracting statutes, and Ingenious has the burden of establishing its defenses. The standard of proof on all issues is by a preponderance of the evidence. See A.R.S. § 41-1092.07(G); A.A.C. R2-19-119 3. . A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence, § 5 (1960). 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). 6. The Registrar of Contractors may consider the prior record of a contractor in any disciplinary proceeding. A.A.C. R4-9-117. On standing notice 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. 7. In this case, Complainant has established that Ingenious violated A.R.S. § 32-1154(A)(11) when it failed to pay Complainant $2,600 for work involving three of Ingenious’s clients because Ingenious, through Mr. Bondi and Mr. Cowan, agreed to the work and allowed Complainant to complete it. Ingenious did not establish that it does not have sufficient funds to pay Complainant. Even if Ingenious had established that it lacked sufficient funds to pay, Complainant established that Ingenious was paid in full on all three projects. Finally, Ingenious did not establish any legal basis for finding that Ingenious was not responsible for paying Complainant or that it was not liable for the violation on any other legally recognizable grounds. Any potential violations of A.R.S. § 32-1124(B) were not addressed at hearing and therefore were not established. 8. Complainant requested that Ingenious’s licenses be suspended until Complainant has been paid in full. It is a factor in aggravation that Ingenious refused to pay Complainant with no legal excuse and that it could offer no legally recognizable excuse at the hearing, yet it offered inconsistent and unreliable testimony in an attempt to avoid payment for services that it accepted and for which it received payment in full. RECOMMENDED DECISION In view of the foregoing, it is recommended, commencing on the effective date of the Order entered in this matter that Ingenious’s License No. 269987, Class B-3 and License No. 213216, Class K-61 be suspended until the Registrar of Contractors receives written proof that Ingenious has paid or tendered the sum of $2,600.00 to Complainant by certified or cashier’s check. It is further recommended that if Ingenious pays or tenders the above- described sum of money on or before the effective date of the Order entered in this matter, then the aforementioned license suspension shall not take place. It is further recommended, in addition to the foregoing license suspension, if any, that Ingenious’s License No. 269987, Class B-3 be placed on 90 days disciplinary probation. This additional disciplinary penalty shall commence on the effective date of the Order entered in this matter or the date of proof of Ingenious’s compliance with the terms of this Order is filed with the Registrar, whichever is later.

If the Director of the Office of Administrative Hearings certifies this Administrative Law Judge Decision, the effective date of the order will be forty (40) days from the date of certification. Done this day, October 19, 2011.

/s/ Dorinda M. Lang 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