ALJDEC decisions subject to certification as final

2016A-598-ROC · Registrar of Contractors · 2016-05-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: April 25, 2016 APPEARANCES: Elder Peralta, Member, appeared on behalf of Complainant JK and V Flooring. David Poarch, Qualifying Party and Director, appeared on behalf of Respondent Pyramid Southwest Inc. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT 1. Respondent Pyramid Southwest Inc. (Respondent) is the holder of License No. 111917 issued by the Registrar of Contractors (Registrar). 2. On or about February 19, 2016, JK and V Flooring (Complainant) filed a Complaint against Respondent with the Registrar alleging that Respondent still owed Complainant $17,600.00 on a contract for work done at a Hampton Inn. 3. The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10). 4. On or about December 15, 2015, Complainant entered into a verbal contract with Respondent to install 7,636.53 square feet of wall tile.

5. According to Mr. Poarch’s testimony at the hearing, Complainant originally offered to do the job for $4.75 per square foot. According to Mr. Peralta’s testimony at the hearing, Complainant originally offered to do the job for $6.50 per square foot. 6. Respondent made four payments to Complainant totaling $13,250.00 between December 22, 2015, and February 8, 2016. 7. Complainant billed remaining balances totaling $17,600.00 based on its calculations that Respondent had underpaid for the work in the payments made and had not paid for some additional work. 8. When Complainant questioned Respondent about the payments of $4.75 per square foot, Respondent denied an original agreement for that amount. However, Respondent stated it would submit a change order to the project owner to increase the payment $6.50 and would pay Complainant the increased rate if the project owner approved the change order. 9. Respondent then showed Mr. Peralta several workmanship issues that needed to be addressed. Some of Complainant’s workers arrived to perform the work while a lift was still on site, but then left before fixing any of the problems. Respondent asserted that Complainant had failed to pay its subcontractors on several occasions resulting in project delays. 10. Respondent submitted the change order, and the project owner denied it. In the denial, the project owner stated, “We’ve reviewed your change order and we believe it is not warranted for the Owner or Big-D to pay for. . . . In addition, Pyramid SW may want to have a quality control person on site as just today the installer had to remove and replace multiple tiles that were not plum and would not fit to the adjacent windows properly. As we[ ] all know, this causes loss of time and money for everyone involved.” 11. According to Respondent’s calculations, it owed Complainant $1,629.00 after backcharges for repairs performed by other contractors and it was withholding that payment until all repairs had been completed. Mr. Poarch testified that the project was still not acceptable to the project owners and further repair work had to be completed after the grand opening. Mr. Poarch stated that the work performed was not worth $4.75 per square foot much less $6.50 per square foot. 12. Complainant asserted that it had never been informed of any repairs that needed to be done, had not received a punch list, and had not been given any change orders for repair work. Complainant argued that the failure of Respondent to provide any such documentation meant Respondent accepted the work and should have paid the full invoices sent by Complainant. 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 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.

4. Complainant performed work on the project that was not accepted by Respondent and/or the project owner. Complainant failed to establish by a preponderance of the evidence that the agreed upon contract price was $6.50 per square foot or that Complainant had completed the project in a professional and workmanlike manner such that it was currently owed any monies from Respondent for the completed project. 5. Therefore, Complainant failed to establish that Respondent violated A.R.S. § 32-1154(A)(10). RECOMMENDed order Based on the foregoing, it is recommended that the Registrar dismiss the Compliant in Case No. 2016-598. 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, May 16, 2016.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors -----------------------

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