ALJDEC decisions subject to certification as final

2015A-579-ROC · Registrar of Contractors · 2015-12-18

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 30, 2015 APPEARANCES: Gary Dean Carter for Complainant; Nicole Heyninck for Respondent ADMINISTRATIVE LAW JUDGE: Thomas Shedden _____________________________________________________________________ FINDINGS OF FACT 1. On October 18, 2015, the Registrar of Contractors (“ROC”) issued a Notice of Hearing setting the above-captioned matter for hearing on November 30, 2015, at the Office of Administrative Hearings in Phoenix, Arizona. 2. Respondent MSI Construction, Inc. (“MSI”), holds license number KB-1.218753-D issued by ROC.[1] Nicole Heyninck appeared and testified for MSI. 3. Complainant Quality Floor Covering Inc. (“Quality”) was represented by Gary Dean Carter. 4. Quality and MSI entered an agreement under which Quality was to provide and install flooring material, and to demo or remove the existing flooring at a facility in Mesa. 5. The project was to proceed in two phases. Quality provided MSI with a bid or quote showing the total price as $15,893.00. 6. Quality completed the phase one work. 7. After phase one was complete, the facility’s owner decided to complete the project without using MSI’s services (and consequently MSI did not require Quality’s services), but the owner used material provided by Quality. 8. Quality presented MSI with what it styled a progress-billing invoice for $14,773.00 for the work it did complete and for the materials it had provided. 9. MSI sent Quality a payment of $12,362.65. 10. On February 9, 2015, Quality filed with ROC a Complaint against MSI alleging that it had been underpaid by $2410.35.[2] 11. On June 19, 2015, ROC issued a Citation alleging that MSI may have violated Ariz. Rev. Stat. section 32-1154(A)(10). 12. After MSI received the Complaint, Ms. Heyninck audited MSI’s file to determine whether Quality had been paid appropriately. To do so, using Quality’s job-quote, Ms. Heyninck calculated unit prices for the labor and materials Quality was to provide. She then applied the unit pricing to the work completed and material delivered to the site based on the information in MSI’s file.[3] 13. Attachment Exhibit E of MSI’s Answer to the Complaint presents Ms. Heyninck’s calculations in two tables: the top table shows the calculation of unit pricing using the information taken from Quality’s bid, and the bottom table shows the calculated value of the labor and material Quality supplied using the calculated unit prices and MSI’s record of what Quality actually provided. 14. Ms. Heyninck’s calculations show that Quality should have been paid $11,873.20, meaning MSI overpaid Quality by $489.45.[4] MSI is not taking the position that it should receive a refund. 15. At the hearing, Mr. Carter initially took the position that Quality was owed $2410.35 as alleged in its Complaint, and that MSI had withheld this amount because Quality had not made a payment in that amount to MSI for a job that MSI performed for Mr. Carter. 16. After an off-the-record discussion among the parties (outside the presence of the Administrative Law Judge), Mr. Carter acknowledged that MSI did not owe Quality $2410.35. Instead, he took the position that MSI owed Quality only $1415.60. 17. Mr. Carter did not contend that Ms. Heyninck’s unit-price calculations were in error, but he testified that Attachment Exhibit E does not include all the labor and material Quality provided. 18. In particular, Ms. Heyninck determined that Quality provided and installed 240 linear feet of rubber base (at $1.29/unit) and that it performed two moisture tests (at $100/unit), whereas Mr. Carter asserts that Quality delivered 1080 linear feet of rubber base (as called for in its bid), that it conducted five moisture tests, and that it was owed $200 for repairs it had contracted- out for. CONCLUSIONS OF LAW 1. A party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119. 2. A preponderance of the evidence is: The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

Black’s Law Dictionary 1373 (10th ed. 2014). 3. Substantial evidence is evidence that a reasonable mind would use to reach a conclusion. See Mealey v. Arndt, 206 Ariz. 218, P.3d 892 (App. 2003). 4. Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes."). 5. “Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B). 6. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). 7. Ariz. Rev. Stat section 32-1154(A) provides that: The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: …. 10. 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.

8. The evidence showing that MSI failed to pay Quality is limited to Mr. Carter’s testimony, which cannot be considered substantial evidence in the absence of any corroborating evidence (e.g., delivery receipts).[5] 9. The preponderance of the evidence does not show that MSI violated Ariz. Rev. Stat section 32-1154(A)(10). ORDER IT IS ORDERED that on the effective date of the final Order in this matter, the Citation in Case No. 2015-579 is dismissed. . In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order is forty days after the date of that certification.

Done this day, December 18, 2015.

/s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] ROC’s website shows MSI’s license number as 218753. Consistent with existing policy, in this Decision the number set out in the Notice of Hearing’s caption is used. [2] $14,773.00 minus $ 12,362.35 equals $2410.35. [3] Ms. Heyninck acknowledged that her calculations were based only on information in MSI’s file, rather than firsthand knowledge, except that her boss informed her that Quality did two moisture tests, whereas the file showed only one. [4] $12,362.65 actually paid minus $11,873.20 that she calculates MSI owed. [5] Corroboration is particularly important in this matter because Quality was inconsistent with respect to the amount it alleges it is owed.

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