ALJDEC decisions subject to certification as final

2015A-5267-ROC · Registrar of Contractors · 2016-07-08

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 22, 2016 APPEARANCES: Martin Wiedner, owner of All About Mobile Sand Blasting, appeared on behalf of Complainant. Concrete Finishing Inc. was represented by William Holm, Esq. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ FINDINGS OF FACT 1. Concrete Finishing Inc. (Respondent) is the holder of License Nos. 075991 and 059462 issued by the Registrar of Contractors (Registrar). 2. All About Mobile Sand Blasting, Inc. (Complainant) filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay $14,469.50 stemming from an invoice dated September 11, 2015, for sand blasting and grinding done on the Marina Heights jobsite. Attached to the Complaint was an invoice dated September 11, 2015, for $14,469.50, which was created after the parties agreed that Respondent had terminated Complainant for failing to finish the sandblasting work all the way to the street by Labor Day so that the roadway/driveway could be opened for use by the building owner, State Farm. 3. The parties agreed that Respondent had paid Complainant $8,500.00 pursuant to an invoice dated August 31, 2015. The parties disputed whether that invoice was payment for completing 2000 square feet of sandblasting as reflected in the invoice or was simply an advance to allow Complainant to fix its equipment and work faster so that it could meet the Labor Day deadline. 4. Mr. Weidner acknowledged that he did not meet the Labor Day deadline and was terminated from the Marina Heights jobsite. He indicated that when he was terminated he had finished sandblasting an additional 626 square feet and had ground another 3,357 square feet that simply needed to brushed. Mr. Weidner stated that the September 11, 2015 invoice was for this work and that Complainant deserved to be paid $4.25 per square foot for the completed 626 square feet and that $3.50 per square foot was fair for the remaining square footage because the owner of Respondent, Ken Kahoun, told his wife that the replacement sandblasting contractor was only charging Respondent $.75 a square foot to brush the concrete Complainant had ground. 5. Respondent denied that Complainant’s work had been “passed” or approved by the architect on the project. It took the position that Complainant had been overpaid for the work it had done on the Marina Heights job and that Respondent was owed a refund.[1] Respondent submitted evidence that Desert Mobile Sandblasting, Inc. (“Desert Mobile”), the replacement sandblasting company, had to redo all of Complainant’s work, and that Respondent paid Desert Mobile $1.75 a square foot for 7,220 square feet of sandblasting on the driveway plus the cost of the cost of four nights in four hotel rooms for a total of $14,044.00. See Exhibit 4. 6. The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a formal Citation charging Respondent with a possible violation of A.R.S. § 32-1154(A)(10). A hearing was subsequently scheduled at the Office of Administrative Hearings. 7. Mr. Wiedner and his wife Lisa Aldrete testified consistently with their position detailed above. Mr. Wiedner and his witness Paul Haifley also testified that Complainant was never told by Respondent or the general contractor Ryan Construction that its work was not sufficient. They recalled an individual with Ryan commenting that the work was good, but that there needed to be more work done. Ms. Aldrete said that after Complainant was fired for failing to finish on time, she had a conversation with Mr. Kahoun in which he ranted that Complainant’s cost per square foot was too high, that he had found a cheaper replacement sandblasting company that charged $1.75 per square foot and would only charge him $.75 per square foot to brush the square feet Complainant had ground, and that he wanted a refund. 8. Travis Koats, Respondent’s superintendent, testified that he spoke to Mr. Weidner on an almost daily basis about the quality of Complainant’s work and the fact that Complainant’s etching was not deep enough. He noted that he also told Complainant it needed to finish one area and not start another before doing so. Mr. Koats said he was unaware that Mr. Kahoun, who was out of town and not onsite, had agreed to pay Complainant any money on August 31, 2015 and would have counseled against him doing so given that the architect had not approved Complainant’s work. 9. Mr. Kahoun testified consistently with Respondent’s position detailed above. He indicated that he had a growing concern that Complainant was unable to complete the project and so began looking for another sandblasting company, He said that once he returned to town on September 6, 2015, and met with Weidner he regretted paying him any money because it was clear that Complainant lacked the equipment to get the job done. He then met with Desert Mobile and made arrangements for it to redo the job in order to finish it on time and avoid the possibility of Respondent owing liquidated damages under its contract with Ryan. Mr. Kahoun denied telling Ms. Aldrete that Desert Mobile agreed to charge him $.75 per square foot for the area Complainant had ground but not brushed. He said that he had asked Complainant for a refund of $5,000.00, but then became angry after receiving the September 11, 2015 invoice and demanded that the full $8,500.00 he had paid Complainant be refunded. 10. Respondent submitted a signed statement by James Nickell, owner of Desert Mobile (Exhibit 3), which stated in full: On approximately September 4th, I was contacted by Ken Kahoun, owner of Concrete Finishing, Inc. His company was in need of about 20,000- 25,000 SF of sand blasting done at the Marina Heights project in Tempe, AZ. Mr. Kahoun had previously hired another company to do the work. However, per Mr. Kahoun, after multiple weeks, the company was not able to get anywhere near the work they promised done, and the work they did do was not acceptable to the owners of the project.

I met Mr. Kahoun at the jobsite on Sunday, September 6th. He showed me the work the other company be hired (All About Mobile Sandblasting) bad done. It was subpar work, and I could understand why the Owner did not accept it, but I ensured Ken that my company would be able to not only fix the areas sand blasted incorrectly by the previous company, but finish the rest of the project in the time he needed it completed.

Mr. Kahoun and I agreed to $1.75 SF for the whole project, with hotel per diem for my crew since we were traveling from Tucson. My estimated time to finish all areas that needed sand blasting was 10- days, with two mobile blasting rigs. ([S]ee attached estimate)[.] I ended having to go over everything done by All About Mobile Sandblasting because it was such bad work, inconsistent, and needed to be cleaned up in order to be deemed acceptable by the [Ryan]. 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. 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.

4. In the absence of a written contract between the parties that specified that Complainant was to be paid for all work it did on the job regardless of whether it was accepted by the general contractor or had to be redone, the Tribunal cannot determine by a preponderance of the evidence that Respondent owes Complainant any additional monies for its work on the Marina Heights job. While Complainant vehemently believes it deserves additional payment for value added to the Marina Heights job, Respondent is equally convinced Complainant’s work provided no value and had to be redone at substantial cost to Respondent after it had already overpaid Complainant for subpar work. Where, as here, the evidence is of equal weight, Complainant has failed to meet it burden of proof that Respondent violated A.R.S. § 32- 1154(A)(10). RECOMMENDed order Complainant’s Complaint should 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 the Order will be 40 days from the date of the certification.

Done this day, July 8, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] Respondent filed a Complaint with the Registrar on October 28, 2015, but that Complaint was dismissed after the Registrar determined that Respondent had modified the work and paid a replacement sandblasting company to complete the work.

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