ALJDEC decisions subject to certification as final

2015A-3985-ROC · Registrar of Contractors · 2016-07-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: July 20, 2016 APPEARANCES: Michael Thal represented Technic Air Solutions LLC. No one appeared on behalf of Matrix Land Development, LLC. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ FINDINGS OF FACT 1. Matrix Land Development Inc. (Respondent) is the holder of License Nos. 258437, 273891 and 273892 issued by the Registrar of Contractors (Registrar). 2. Technic Air Solutions (Complainant) filed four complaints against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the total sum of $64,218.60 for HVAC services provided on jobsites at four different shopping centers (Arrowhead, Mesa Shores, Deer Valley and Northsight) that had been damaged by hail. On each job, Complainant alleged that Respondent had requested that Complainant submit a bid, which Complainant did after receiving an exactimate quote and the mechanical report. After the bid was accepted for each job, Complainant alleged it began work and received its portion of the insurance company’s cash value payment. In each instance, Complainant maintained that Respondent failed to pay Complainant its portion of the insurance’s company’s recovered depreciation check. 3. The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a formal Citation that apparently consolidated all four complaints, charging Respondent with a possible violation of A.R.S. § 32- 1154(A)(10). 4. Respondent failed to appear at the time scheduled for hearing and did not request to appear telephonically. After the expiration of a 20 minute grace period, the Administrative Law Judge conducted the hearing in Respondent’s absence.[1] 5. Lisa Avila, Complainant’s office manager and member of Complainant, offered the only testimony in this matter. She indicated that she had text messages form J.R. Hudspeth of Respondent showing that he was aware of the hearing. 6. Avilla testified that on each of the projects, Hudspeth requested bids from Complainant and provided Complainant the information necessary to make each bid. 7. On the Deer Valley job, Complainant bid $12,182.82 to install eight HVAC units. Complainant began its work installing HVAC units and was paid $2,991.16 by Respondent out of the cash value payment it received from the insurance company. 8. On May 27, 2013, Avila sent Respondent an invoice for the remaining balance of $9,191.66, which remains unpaid. See Exhibit 38 at 3. No additional payment was provided to Complainant. 9. On the Northsight job, Complainant bid $34,971.60. Complainant began its work and was paid $21,989.62 by Respondent out of the cash value payment it received from the insurance company. See Exhibit 39. 10. On July 31, 2013, Avila set Respondent an invoice for the remaining balance of $12,981.98, which remains unpaid. See Exhibit 39 at 3. No additional payment was provided to Complainant. 11. On the Arrowhead job, Complainant bid $81,300.36. Complainant began its work and was paid $51,500.00 by Respondent out of the cash value payment it received from the insurance company. See Exhibit 9. 12. On February 9, 2014, Avila set Respondent an invoice for the remaining balance of $24,800.36, which remains unpaid. See Exhibit 10. No additional payment was provided to Complainant, but Respondent received its recovered depreciation check from the insurance company. See Exhibits 26 and 27. 13. On the Mesa Shores job, Complainant bid $76,224.60. See Exhibit 13. Complainant began its work and was paid $59,000.00 by Respondent out of the cash value payment it received from the insurance company. See Exhibits 21 and 28. 14. At Respondent’s request, Complainant sent Respondent photos of its completed work. See Exhibit 22. In response, Hudspeth said:” Great photos Hector. I will send the invoice in today so we can get paid. Thank you.” Id. at 3. 15. On August 21, 2014, Avila sent Respondent an invoice for the remaining balance of $17,244.60, which remains unpaid. See Exhibit 13 at 3. No additional payment was provided to Complainant, but Respondent received its final payment from the insurance company. See Exhibits and 30. 16. Avila testified regarding the multiple efforts Complainant made to obtain payment on the outstanding invoices without success. 17. Complainant provided voicemails from Hudspeth berating Complainant for filing the complaints and promising to sue Complainant for bad work and other issues. 18. Respondent did not file any complaints with the Registrar concerning Complainant’s work. 19. In its answer to the complaint, Respondent argued that it had an agreement to pay Complainant $250.00 per HVAC unit, which Complainant breached. Respondent also contended that Complainant did poor work that Respondent had to pay to fix. Complainant disputed these allegations. 20. In voicemails played at hearing, Hudspeth argued that Complainant did not work for Respondent, but rather worked for an unlicensed entity owned by Hudspeth. Complainant denied these allegations. 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. The Order Granting Continuance was sent to Respondent’s address of record and hence constitutes adequate notice of the hearing. Evidence presented at hearing also suggest that Respondent and Hudspeth were aware of the hearing, but chose not to attend. 4. A.R.S. § 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, [f]ailure by 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.

5. The evidence established Respondent had not paid the balance on each of the four outstanding invoices and therefore owes Complainant a total of $64,218.60 (the sum of $24,800.36 +$17,244.60 +$9,191.66 +$12,981.98). 6. Respondent failed to establish that it lacked the ability to pay Complainant for the work performed. 7. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant $64,218.60 for services rendered in connection with Respondent’s contracting business. 8. Based upon Respondent’s violation of the provisions of A.R.S. § 32- 1154(A)(10), grounds exist to impose discipline against Respondent’s licenses. RECOMMENDed order Based on the foregoing, it is recommended that the Registrar suspend Matrix Land Development Inc.’s Licenses Nos. 258437, 273891 and 273892 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $64,218.60 in certified funds. It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $64,218.60 in certified funds, the Registrar may close the Complaint in Case No. 2015- 3985. 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, July 29, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] Respondent and its attorney had appeared at a hearing scheduled for February 17, 2016, which was continued to permit settlement discussions to ensue and to obtain an interpreter for one of Complainant’s potential witnesses.

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