ALJDEC decisions subject to certification as final

2016A-2063-ROC · Registrar of Contractors · 2016-09-06

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 1, 2016 APPEARANCES: James H. Anderson (Complainant) appeared on his own behalf. Pool Renovation Pros LLC was represented by Ishmael Cervantes, its member and representative. ADMINISTRATIVE LAW JUDGE: Suzanne Marwil _____________________________________________________________________ FINDINGS OF FACT 1. Pool Renovation Pros LLC (Respondent) is the holder of License No. 277248 issued by the Registrar of Contractors (Registrar).[1] 2. Complainant filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay him earned commissions on numerous projects during 2016 on which he sold pool renovations and often supervised work done by Respondent’s in-house workers. Complainant alleged that the parties had a verbal agreement whereby Complainant would receive five percent (which later rose to six) percent commission on any project sold and then would receive an additional three percent commission for supervising a job. Respondent disputed these allegations and said that it only agreed to pay Complainant five percent commission for selling a job and that it was “understood” between the parties that if Complainant “ruined” a job, he would not receive commission for the job in question. 3. 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). 4. Complainant testified that when he was hired in March 2013, Respondent agreed to pay him five percent commission for selling pool renovation projects and that this commission later rose to six percent via verbal agreement. Complainant recalled that Cervantes needed help managing construction and asked him to serve as a construction manager on jobs for which he would earn an additional three percent. 5. Complainant said his commissions where often late but he was appropriately paid through the end of 2015. By 2016, Cervantes took a job with another pool company to manage debt and did not pay as much attention to the jobs Complainant sold or supervised for Respondent. 6. Complainant indicated that Respondent received payment on various different pool projects Complainant sold in 2016, but failed to pay Complainant’s commissions ranging from six to nine percent on those jobs. He calculated his unpaid commissions as totaling $18,639.00 and attached a spreadsheet to his Complaint showing how much commission was attributable to each job. 7. Cervantes testified that Respondent was going out of business and that he was simply working to finish Respondent’s existing projects, many of which had ongoing issues due to Complainant’s negligence and failure to supervise Respondent’s workers. 8. Cervantes denied ever agreeing to pay Complainant more than five percent commission on any job. Cervantes acknowledged that numerous jobs Complainant had supervised were completed without any problems. He agreed that commissions attributable to those jobs totaled $9,944.12. Cervantes argued however that Respondent did not owe Complainant any money because it was out-of-pocket funds to repair other jobs that Complainant failed to supervise. 9. No evidence was presented that the parties ever verbally agreed that commissions on a completed job could be withheld due to problems with an unrelated job. 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. Because the parties’ agreement was only verbal, Complainant has not met his burden of proving he was entitled to commissions above five percent on jobs. While Complainant is adamant that amount increased to six percent and further included an additional three percent when Complainant supervised construction, Respondent was equally adamant that it never agreed to these increases in commission. 5. The evidence established however that Respondent owes Complainant $9,944.12 based on a five percent commission for completed jobs on which Respondent was paid in full. The evidence was unclear regarding the status of the various other jobs and on this record without a written agreement, the Tribunal cannot determine whether Respondent owes Complainant more than $9,944.12. 6. Respondent argued that it lacked the ability to pay Complainant under its present circumstances. Respondent did not suggest that its inability to pay stemmed from nonpayment on any of the completed jobs that form the basis of the $9,944.12 in commission. If Respondent believes that Complainant owes it money to correct or complete other jobs, Respondent has the ability to pursue those amounts in another forum, but cannot unilaterally fail to pay Complainant commissions admittedly earned on completed jobs. 7. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant $9,944.12 in commissions 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 license. RECOMMENDed order Based on the foregoing, it is recommended that the Registrar suspend Pool Renovation Pros LLCS License No. 277248 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $9,944.12 in certified funds. It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $9,944.12 in certified funds, the Registrar may close the Complaint in Case No. 2016- 2063. 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, September 6, 2016.

/s/ Suzanne Marwil Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] Cervantes claimed that Respondent’s license was suspended for lack of bond, but the Registrar’s website reviewed on September 6, 2016, shows the license is current. The license was subject to a finite suspension from September 1-2, 2016.

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