ALJDEC decisions subject to certification as final

2016A-780-ROC · Registrar of Contractors · 2016-09-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: September 1, 2016, at 8:00 a.m. APPEARANCES: Pyramid Southwest Inc. (“Complainant”) appeared through Kay Poarch (“Mrs. Poarch”), its Director; One Way General Contractors LLC (“Respondent”) appeared through Howard Robbins, Director of Business Development. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________

FINDINGS OF FACT Background and Procedure On or about March 11, 1996, the Arizona Registrar of Contractors (“the Registrar”) issued License No. CR-8.111917-D for dual floor covering to Complainant. On or about January 8, 2007, the Registrar issued License No. B-1.228451-C for commercial general contracting to Respondent. On March 7, 2016, Complainant filed a complaint with the Registrar alleging that Respondent had paid Complainant only $32,400.00 on its $41,523.44 contract to renovate the bathrooms at the Salt River Pima-Maricopa Indian Community’s Casino Arizona at 524 N. 92nd St., Scottsdale, Arizona 85256. According to the complaint, Complainant started work on August 22, 2015, and last worked on the project on September 29, 2015. In a letter attached to the complaint, Mrs. Poarch very candidly described the difficulties that it had encountered on the job, in relevant part as follows: We were contracted by [Respondent] to do the ceramic tile in the Keno Bathrooms at Casino AZ.

At the beginning of the CAZ job we had an installer lined up that we use on a regular basis. About a week before the job started there was falling out between his helpers. The CAZ job needed to be complete in 14 business days and he didn’t have a crew large enough to man the job. After an exhausting search for another crew, he told us about a crew he knew. They were contacted by our superintendent and hired. The worst mistake ever! The lead guy was let go the first day. His next in command was a guy named Israel. Israel was talked into staying the project.

The first week went fairly well, we thought. By the second week on Friday, Sept. 6th about 4:30 PM things fell apart. Apparently Israel had not paid his help for a couple of weeks and no one had been able to find him on that Friday.

Israel had told his guys and One way that we hadn’t paid him. After a lot of commotion I was able to get his guys settled down. It was agreed by David [Poarch (“Mr. Poarch”)] (my husband and business partner [and Complainant’s qualifying party/ Director], One Way and Israel to meet on the job site the next norming, Saturday, Sept. 5th. I should mention here that Israel had inflated his bills and we had over paid him for the work that had been done. The installers are paid piece work.

Well… Israel started holding he job hostage to get another $1000 out of us. At this point we felt like the job should be shut down until we could get another crew lined up. But, that decision was taken away from us. The project manager, Howard Robbins, from One Way told Israel that if we didn’t pay him the $1000, he would, in order to keep him on the job. So David got a check for $1000, gave it to Israel. Israel cashed it, gave two installers $200 each, left and no one saw him again until the next day. I can’t quite remember if he came in late morning or early afternoon. But he didn’t work very long.

It is also very important to know that David or [Mr. and Mrs. Poarch’s daughter] Amy [(“Ms. Poarch”)] would have to stay at the job and watch the crews since Howard, nor the superintendent Ricardo, wanted to work the weekend. They were very angry at us for ruining their weekend. At the time we understood and knew this was our problem and we had to take care of it. . . . .

By Monday, Labor Day we were able to get another 2-man crew on the project, but only for a couple days. They had just finished another job, but were leaving town on Wednesday. On Tuesday morning, 9/8, Israel showed up and was escorted off the jobs site. I wish I could say that was the last we saw of him, but it wasn’t and he just about drove me crazy. But that is another story. The two people Israel had on the job full time agreed to stay and work if we would pay them direct. They did and put in some very long hours, which is probably one of the reasons we had so many repairs.

David, Amy, [Complainant’s superintendent] Cory, Howard and Ricardo met on the job site Friday, 9/11 to review the work and agree on all the repairs that needed to be made. It was considerable. We ordered more tile and had it flown in. . . . In the mean time One Way needed to get other subs to hang wall paper, cabinets, etc.

The tile made it in the following week and we started making repairs on Friday, Sept. 18th, but realized real quick we needed a bigger crew. By Tuesday, September 22, we had a 3 man crew making repairs. We were only able to work in the evenings for the rest of the time we were out there. On Tuesday the 29th Howard text [ed] Amy that he had to open the restrooms up on Wednesday the 30th and that any other repairs would have to be done after the walk through by the owner and architect on October 14th.

That was the last we heard from them and we have asked about the final punch list numerous times.

The Registrar subsequently issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10) against Respondent. Respondent filed a timely written answer to the Citation and Complaint, denying any statutory violation because Complainant’s crews were unqualified, caused collateral damage, and delayed other trades and asserted that Respondent had made a partial payment to Complainant “while the back charge amount was to be reviewed.” The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. A hearing was held on September 1, 2016. Complainant submitted one exhibit and presented the testimony of four witnesses: (1) Mrs. Poarch; (2) Ms. Poarch; (3) Mr. Poarch; and (4) Cory Temple (“Mr. Temple”), one of Complainant’s superintendents on the job. Respondent submitted two exhibits and presented of two witnesses: (1) Mr. Robbins; and (2) Respondent’s superintendent on the job, Ricardo Martinez (“Mr. Martinez”). Additional Hearing Evidence The gist of Complainant’s claim was that Respondent’s backcharges were inflated and unjust because Complainant was not allowed to perform repairs on the project. Complainant witnesses acknowledged that it had difficulties staffing the job with a qualified crew and superintendent when most of the work was performed. Mr. Temple testified that he became the superintendent on the job on September 30, 2015. Mr. Robbins testified that Salt River Pima-Maricopa Indian Community was a long-time customer. Mr. Martinez testified that the tile in the the bathrooms in Casino Arizona were supposed to be finished by Labor Day 2015, September 7, 2015. On September 9, 2015, Respondent issued a list of deficiencies to Complainant regarding its tile work to date. Complainant acknowledged that its crew’s and initial supervisor’s performance of the job was substandard. Nonetheless, it argued that it was entitled to the full contract price because it was available to make repairs after September 29, 2015. Respondent submitted a spreadsheet that showed a total of $9,803.87 in backcharges.[1] Mr. Martinez testified that Complainant’s inability to provide competent crews and a responsible supervisor on the job delayed other trades and caused Respondent to incur significant additional expenses. Included among the charges were drywall repair on September 3, 2015, after Complainant installed a cove base for tile at an improper height on a finished surface, renting a tile saw on September 23, 2015, after Complainant’s crew showed up without one,[2] and cutting the tile to install the fixtures after Complainant’s crews tile installation did not allow sufficient room for the fixtures. The backcharges also included $500.00 as the cost to repair the items on the owner’s and architect’s punch list in January 2016. The backcharges also included $1,225.11 for Respondent’s additional labor costs. Mr. Martinez explained that the bathrooms were locked to keep casino guests out during construction and that Complainant’s crew frequently was late or failed to appear. Mr. Martinez testified that whenever Complainant’s crew appeared, he had to drop what he was doing and let them in and when the crew did not appear, he still had to be available to provide access. Mr. Martinez testified that Complainant’s crew was untested and unreliable and that Israel was not dependable. Mr. Martinez testified that on September 24, 2015, Respondent had to repair immediately the tiles that had an excess lippage of more than ¼” because the tiles presented a trip hazard and Complainant’s crew did not appear as promised. Mr. Martinez testified that because the owner did not want repairs over the holiday, Respondent waited until January to repair the tiles. Mr. Martinez testified that since the bathrooms would be secured for repairs and Respondent had to be on site to provide access for the after-hours repairs, Respondent performed the repairs on the owner’s and architect’s punch list. CONCLUSIONS OF LAW This dispute lies within the Registrar’s jurisdiction to resolve.[3] Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s license by a preponderance of the evidence.[4] Respondent bears the burden of proof to establish affirmative defenses by the same evidentiary standard.[5] “A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[6] A preponderance of the evidence is “[t]he 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.”[7] Complainant established that Respondent did not pay Complainant the full contract price. Complainant acknowledged that the crew it used until September 29, 2016, was inexperienced and undependable, if not incompetent, and that the job was supposed to be complete two weeks after it was started on August 22, 2015, or by Labor Day, September 7, 2015, but that it was still on the jobsite on September 29, 2015. Respondent established that it was required to correct Complainant’s work and incurred additional extraordinary expenses as a result of Complainant’s substandard performance of its contract. Therefore, Complainant did not establish cause to suspend or revoke Respondent’s license under A.R.S. § 32-1154(A)(10).[8] RECOMMENDED ORDER Based on the foregoing, it is recommended that on the effective date of the final order in this matter, Complainant Pyramid Southwest Inc.’s claim in Case No. 2016-780 against Respondent One Way General Contractors LLC’s License No. B-1.228451-C shall be 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 will be five days from the date of that certification. Done this day, September 16, 2016.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] See Respondent’s Exhibit 1. [2] Respondent submitted the receipt for the saw. See Respondent’s Exhibit 2. [3] See A.R.S. § 32-1101 et seq. [4] See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [5] See A.A.C. R2-19-119(B)(2). [6] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [7] Black’s Law Dictionary at page 1220 (8th ed. 1999). [8] 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 . . . .”

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