ALJDEC decisions subject to certification as final

2016A-863-ROC · Registrar of Contractors · 2016-06-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 16, 2016 APPEARANCES: Charles T. Stegall, counsel for the Complainant appearing along with Doug Ward corporate officer and qualifying party of Wards Tractor Works, Inc., Complainant. Trysta M. Putenney, counsel for the Respondent appearing along with Steven Adams, managing member and Hud Reiersgaard, corporate officer and qualifying party of Adams Craig Acquisitions, LLC, d/b/a Adams Craig Technology, Respondent, ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson

Evidence and testimony were presented and, based on the entire record in this matter, the following Findings of Fact, Conclusions of Law and Recommended Order are made:

FINDINGS OF FACT 1. The hearing convened at the time, date and place set forth in the Registrar of Contractors’ Notice of Hearing dated April 28, 2016. 2. Respondent Adams Craig Acquisitions, LLC, d/b/a Adams Craig Technology [hereinafter “Adams Craig”] is a corporation which holds Arizona Contractor’s License numbers 283251, [a Class B| RESIDENTIAL license] first issued on February 16, 2013 and 286974 [CR21 DUAL license] first sued October 3, 2013 by the Arizona Registrar of Contractors (Registrar/ROC). 3. Steven Adams, is Adams Craig’s managing member and Hud Reiersgaard, is a corporate officer and qualifying party of Adams Craig Acquisitions, LLC, d/b/a Adams Craig Technology, Respondent. 4. Wards Tractor Works, Inc., Complainant, [hereinafter “Wards”], is the holder of License Nos. 159274 and 159275 issued by the Registrar. 5. Complainant filed a complaint with the ROC on March 14, 2016 wherein it alleged non-payment of $7,727.00 by the Respondent for Complainant’s services performed pursuant to an oral contract for Wards to remove existing footings, dig new footings and to haul away removed dirt on a project of Adams Craig referred to by the parties as the “Najera Project” located at 4800 East Crystal Lane in Paradise Valley, Arizona. 6. On April 1, 2016, the Registrar issued a Citation and Complaint in Case No. 2016-863 charging Respondent with a possible violation of A.R.S. §32-1154(A) (10). 7. Respondent filed an Answer on or about April 18, 2016 wherein it asserted a general denial of all allegations and further affirmatively alleged poor workmanship by the Complainant. 8. A hearing was held on June 16, 2016. 9. At the hearing, Complainant’s principal, Doug Ward, testified on behalf of Complainant and submitted Exhibit 1 with its attached invoices numbered 11195;11299;11300 and 11301 along with two accounting statements from Wards dated January 8, 2016 and March 11, 2016 which were marked, admitted without objection and considered. 10. Tim Townsend, Complainant’s heavy machine operator on the Najera Project for the Complainant, also testified on behalf of the Complainant and submitted photographic Exhibit 10 A-H and Exhibit 11 which were marked, admitted without objection and considered. 11. Finally, Larry Fredrick testified on behalf of the Complainant. 12. Judicial Notice of “Workmanship Standards for Licensed Contractors”, Arizona Registrar of Contractors, June, 2009 at the request of the Respondent, without objection. 13. Hud Reiersgaard, corporate officer of Adams Craig Acquisitions testified on behalf of the Respondent and submitted Exhibit 9 which was marked, admitted without objection and considered. 14. Steve Adams, a principal of Adams Craig, testified on behalf of the Respondent and submitted Exhibit 5, 9 and 12 which was marked, admitted without objection and considered. 15. From the evidence elicited at the hearing, the following salient facts are important to note: a. Adams Craig, Respondent, entered into an oral contract with Wards [Complainant] to provide services – on an hourly basis to be billed by Wards by invoice – 30 day net. Under this oral agreement Wards was to remove existing footings, dig new footings and to haul away removed dirt on a project of Adams Craig referred to by the parties as the “Najera Project” located at 4800 East Crystal Lane in Paradise Valley, Arizona. b. On or about July 9, 2015, Wards brought their equipment and three men to the Najera Project site and commenced work. Work on the site continued thorough August 13, 2015. c. Respondent’s Project Manager for the Najera Project, an agent and employee of Adams Craig is Tony Kusov. Mr. Kusov is no longer employed by the Respondent, was not subpoenaed for this hearing and did not appear to testify. d. The Complainant submitted several invoices for payment to the Respondent. All invoices were paid. However, the Respondent stopped payment on the check for the final invoice in the amount of $7,727.00. The last invoice remains unpaid. e. The Complainant maintains that when it arrived on the site to begin the work, Respondent’s Project Manager, Tony Kusov, had marked the locations for the digging of the footings. When digging had begun, the Complainant discovered already existing footings were in place that Complainant dug out in order to perform the job he was contracted to do. f. Respondent asserts that the Complainant dug in the wrong place and that is the reason Complainant encountered existing footings. Respondent also asserts that Complainant failed to compact the soil that was replaced by the Complainant after the footings were made. The asserted failure to compact the soil is claimed by the Respondent as the cause for an asserted failure of the structures built on top of the soil during a drenching rain that occurred after Complainant’s job was completed. The expense of the structure failure is claimed as an offset by the Respondent. g. Claimant was not hired to compact soil, received no soil report from the Respondent and was never shown site plans to examine the job site location or dimensions. h. Claimant was directed by Respondent’s Project Manager, Tony Kusov, at the beginning of the job, where Claimant was to dig. Mr. Kusov directed Claimant at the end of the job not to compact the soil. Mr. Kusov advised Complainant to wrap up their work because Respondent was in a rush to complete Claimant’s portion of the site work because another sub-contractor was due on to site to install pavers over the dirt placed by the Complainant. Mr. Kusov did not testify and these facts were unrebutted. i. Hud Reiersgaard, corporate officer of the Respondent, acknowledged that the Respondent did and now continues to have the capacity to pay Complainant’s outstanding invoices but asserts a right to offset his incurred expenses against the Complainant because of the failure to compact the job site soil. j. Administrative notice is taken of Respondent’s prior License record as reflected on the Registrar’s public website on June28, 2016. Such prior License record reflects that Respondent’s License No. 256686 was first issued on February 2, 20013 and reflects no negative discipline reported.

CONCLUSIONS OF LAW

1. This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32- 1101 et seq. 2. Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and A.A.C. R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). “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. The credible evidence presented at hearing established that the Respondent had ordered a stop payment on the final invoice of Complainant. At the time of the complaint invoicing in the total amount of $7,727.00 was due and owing to the Complainant by the Respondent for materials or services rendered in connection with the Complainant licensee's operations as an Arizona licensed contractor, 4. Complainant was supervised by Respondent’s Project Manager, Mr. Tony Kusov, who directed Complainant’s employees where to dig and directed Complainant not to compact soil. Complainant was not contracted to compact soil. Notwithstanding provisions of the “Workmanship Standards for Licensed Contractors”, Arizona Registrar of Contractors, June, 2009, Respondent has no claim for offset for lack of soil compaction since Complainant had no soil studies provided and was expressly directed not to compact the soil by Mr. Kusov.. 5. Therefore, Respondent’s conduct in stopping payment on Respondent’s final invoice check and its continued failure to pay the Complainant’s remaining charges in the amount of $7,727.00 is a violation of A.R.S. §32-1154(A) (10)..[1] 6. Upon consideration of all the facts and circumstances presented by this case, the Administrative Law Judge concludes that Adams Craig Acquisitions LLC d/b/a, Adams Craig Technology, License Nos: 283251 and 286974 should be suspended. However, the suspension should be conditional and Adams Craig Acquisitions LLC d/b/a, Adams Craig Technology should be given the opportunity to avoid suspension by effecting payment to Complainant in the sum of $7,727.00 , which represents the amount which Respondent owes Complainant concerning the work which Complainant performed at the “Najera Project” located at 4800 East Crystal Lane in Paradise Valley, Arizona. In the alternative, Adams Craig Acquisitions LLC d/b/a, Adams Craig Technology can avoid suspension by entering into a mutually acceptable arrangement with Complainant. RECOMMENDED ORDER Based on the foregoing, the Administrative Law Judge makes the following recommended order: Commencing on the effective date of the Order entered in this matter, Adams Craig Acquisitions LLC d/b/a, Adams Craig Technology License numbers 283251, [a Class B| RESIDENTIAL license] and 286974 [CR21 DUAL license] Class shall be and is hereby suspended. Adams Craig Acquisitions LLC d/b/a, Adams Craig Technology can avoid suspension if the ROC receives credible proof that Adams Craig Acquisitions LLC d/b/a, Adams Craig Technology has complied with the following alternative conditions: 1. Adams Craig Acquisitions LLC d/b/a, Adams Craig Technology has made full payment to Complainant in the amount of $7,727.00; OR 2. Adams Craig Acquisitions LLC d/b/a, Adams Craig Technology has entered into a mutually acceptable arrangement with Complainant.

If the ROC receives credible written proof that Adams Craig Acquisitions LLC d/b/a, Adams Craig Technology has complied with the foregoing conditions on or before the deadline identified above, then the above provided license suspension shall not take place

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 40 days from the date of that certification. Done this day, June 27, 2016.

/s/ Randolph D. Wolfson Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors

----------------------- [1] A.R.S. §32-1154(A) (10).includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license: § 32-1154. A. 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.

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