ALJDEC decisions subject to certification as final

2012A-2448-ROC-rhg · Registrar of Contractors · 2013-11-20

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: October 30, 2013, at 8:00 a.m. This record in this matter was held open until November 8, 2013. APPEARANCES: Terra Excavation LLC[1] (hereinafter “Terra”) was represented by its owner, Thomas M. Carr. Growers Market Inc (hereinafter “Growers”) was represented by its qualifying party, Neal A. Brooks. ADMINISTRATIVE LAW JUDGE: M. Douglas _____________________________________________________________________

Evidence and testimony were presented and the following Findings of Fact, Conclusions of Law and Recommended Order on Rehearing are made: FINDINGS OF FACT Growers is the holder of License No. C-21R.152975-R issued by the Registrar of Contractors. This is a commercial matter wherein Terra performed grading, excavation, and installation work as a subcontractor for Growers at the Freeport McMoran Copper and Gold construction project in Morenci, Arizona (“the project”). Growers failed to pay Terra in full for its construction work and Terra filed a formal Complaint against Growers with the Registrar of Contractors.

The parties were unable to resolve their dispute and a Citation and Complaint was issued charging Growers with possible violations of A.R.S. § 32-1154(A)(11)[2] and A.R.S. § 32-1154(A)(17).[3] Testimony of William “Bill” Carr. William “Bill” Carr (hereinafter “Mr. Carr”) testified that he is an employee of Terra. Mr. Carr stated that he was the person who actually supervised the construction work performed by Terra at the project. Mr. Carr testified that Terra provided Growers with written invoices for Terra’s construction work performed at the project on a daily basis. Mr. Carr testified that all of the daily invoices for the project were true and correct. Mr. Carr stated that Neal A. Brooks (hereinafter “Mr. Brooks”) was never at the construction project. Mr. Carr testified that Growers’ construction foreman was rarely at the construction project. Mr. Carr testified that Terra inadvertently damaged a new playground slide during its installation. Mr. Carr stated that Terra followed the manufacturer’s installation instructions. Mr. Carr testified that the manufacturer acknowledged that that the installation instructions were deficient and replaced the damaged slide with a new slide without any additional charge to Growers. Mr. Carr testified that he had worked with Growers for years on multiple construction projects. Mr. Carr stated that in the past, Growers would always reduce the amount owed by several hundred dollars and that Terra was always willing to let the minor amounts go. Mr. Carr testified that Growers failed to pay Terra for Terra’s work on the project despite the fact that Growers had been fully paid for Terra’s work by the owner of the construction project. Mr. Carr’s testimony is found to be credible. Testimony of Thomas M. Carr Terra’s owner, Thomas M. Carr (hereinafter “Mr. T. Carr”) testified that Terra had a long history with Growers and that Growers repeatedly failed to pay Terra in full for Terra’s construction work. Mr. T. Carr stated that Growers presented Terra with a written Settlement Agreement that reduced Terra’s monetary compensation from $57,863.13 to $50,000.00. Mr. T. Carr stated that Terra accepted the terms of Growers’ Settlement Agreement. Mr. T. Carr testified that Growers paid Terra the first agreed-upon payment of $10,000.00. Mr. T. Carr stated that Growers failed to pay Terra any further payments that were required pursuant to the terms of the written Settlement Agreement prepared by Growers. Mr. T. Carr testified that Growers breached the parties’ Settlement Agreement and asserted that Terra was no longer bound by the terms of the Settlement Agreement. Mr. T. Carr testified that the principal amount owned to Terra by Growers is the sum of $47,863.13. Mr. T. Carr testified that the principal sum of $47,863.13 did not include penalties or interest. Mr. T. Carr’s testimony is found to be credible. Testimony of Ricardo Hurtado Ricardo Hurtado (hereinafter “Mr. Hurtado”) testified that he was Growers’ project manager for the project. Mr. Hurtado stated that he tried to keep track of Mr. Carr’s hours at the construction project. Mr. Hurtado testified that he believed that Terra had invoiced Growers for more hours than Mr. Carr actually worked at the project. Mr. Hurtado stated that the construction project was difficult to complete because there was “a whole bunch of chiefs and very few Indians.” Testimony of Neal A. Brooks Growers’ qualifying party, Mr. Brooks testified that he did not believe that the invoices presented by Terra were true and correct. Mr. Brooks stated that Terra was knowingly misrepresenting the hours worked by Terra at the project and charging Growers for work that Terra did not actually perform. Mr. Brooks testified that Terra damaged a slide during the installation of the slide and that Growers should be given financial credit for the damaged slide. Mr. Brooks stated that Terra functioned as a competitor rather than a subcontractor on the project. Mr. Brooks acknowledged that the manufacturer did not charge Growers for the damaged slide. Mr. Brooks acknowledged that he prepared the written Settlement Agreement that was accepted by Terra. Mr. Brooks stated that he prepared the Settlement Agreement because he was under a “lot of pressure” from the owner of the construction project to pay Terra. Mr. Brooks testified that Growers entered into the Settlement Agreement in an attempt to pacify the owner of the construction project. Mr. Brooks denied that Growers owed Terra any money for the construction project. Mr. Brooks asserted that Terra’s invoices were fraudulent. Administrative notice is taken that License No. C-21R.152975-R of Growers is a residential contractor’s license and that the project was a commercial construction project. Administrative notice is taken of Growers’ prior license record as reflected on the Registrar of Contractors’ public website on November 18, 2013. Such prior license record reflects that License No. C-21R.152975-R of Growers is current. License No. C-21R.152975-R of Growers was suspended for non-renewal from May 1, 2012, through July 9, 2012, and was previously suspended for non-renewal from May 1, 2004, through May 1, 2005. CONCLUSIONS OF LAW 1. The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in these matters is by a preponderance of the evidence. See A.A.C. R2-19-119. 2. 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). 3. Growers failed to pay Terra the principal sum of $47,863.17 for Terra’s completed construction work on the commercial construction project at issue. Growers had been fully paid by the owner of the construction project for the construction work completed by Terra. This Tribunal concludes that Growers violated the charged provision of A.R.S. § 32- 1154(A)(11). 4. License No. C-21R.152975-R of Growers is a residential contractor’s license. The construction project at issue is a commercial construction project. This Tribunal concludes that Growers violated the charged provision of A.R.S. § 32-1154(A)(17). RECOMMENDed order In view of the foregoing, it is recommended on rehearing that commencing on the effective date of the final Order, License No. C- 21R.152975-R of Growers shall be suspended until the Registrar of Contractors receives and accepts written proof that that Growers has paid the principal sum of $47,863.17 in certified funds to Terra. It is further recommended that if on or before the effective date of this Order, Growers provides acceptable written proof and the Registrar accepts such proof that Growers has paid the principal sum of $47,863.17 in certified funds to Terra, then the above provided License suspension shall not take place and, instead, License No. C-21R.152975-R of Growers shall be placed on disciplinary probation for a period of sixty (60) days. In the event of certification of this 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 the certification Done this day, November 20, 2013.

/s/ M. Douglas Administrative Law Judge

Transmitted electronically to:

William A. Mundell, Director Registrar of Contractors

----------------------- [1] License No. KB-2.231242-D. [2] A.R.S. § 32-1154(A)(11) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, failure by a licensee or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee's operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased. [3] A.R.S. § 32-1154(A)(17) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, knowingly contracting beyond the scope of the license or licenses of the licensee.

-----------------------

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