ALJDEC decisions subject to certification as final

2016A-864-ROC · Registrar of Contractors · 2016-06-03

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: May 23, 2016 APPEARANCES: Allen Bordeaux for Complainant; Vaughn Farthing for Respondent ADMINISTRATIVE LAW JUDGE: Thomas Shedden _____________________________________________________________________ FINDINGS OF FACT 1. On April 11, 2016, the Registrar of Contractors (“ROC”) issued a Notice of Hearing setting the above-captioned matter for hearing on May 23, 2016. 2. The Notice of Hearing shows that the hearing was set to consider the charges made in the Citation and Complaint.[1] 3. Through the Citation, ROC alleges that Respondent Farco Construction LLC (“Farco”) may have violated Ariz. Rev. Stat. section 32-1154(A)(10). The Citation shows that if the Administrative Law Judge finds that the alleged charge is valid, ROC may suspend or revoke Farco’s license. 4. Farco holds license number 236434 issued by ROC. Vaughn Farthing is Farco’s qualifying party. 5. In May 2015, Farco and Complainant Cool Smooth Air LLC (“CSA”) entered a contract under which CSA was to provide mechanical work for a project referred to as Proverbs Tenant Improvement. The contract amount was $62,000.00, of which Farco has paid CSA $56,200.00. 6. On March 14, 2016, CSA filed with ROC a complaint alleging that Farco owed it the remaining $5800.00. 7. On March 24, 2016, ROC issued to Farco the Citation at issue. 8. In an Answer received by ROC on April 8, 2016, Farco asserted that the contract provided for a 10% retention to be held until all work had been completed, that CSA had not properly completed its entire scope of work, and that the work was not done in a timely and workmanlike manner. 9. With its Answer, Farco provided information related to back- charges totaling $6538.57 it asserts it incurred to finish or correct CSA’s work. According to Farco, the back-charges were related to: installation of a fan in janitor’s closet; properly sealing eight roof-penetrations, making curb repair(s), and a pad for “mini-split;” installing a diffuser; cutting threads on unistruts; sealing ductwork to meet UL/IEEC requirements; reframing studs and dry-walling an area altered for duct repair; and replacing bracing. 10. Regarding the roof penetrations, in its complaint CSA had written that the job required making roof penetrations and that there was no written agreement by which CSA was required to seal those penetrations. With its Answer, Farco provided excerpts from the contract documents/architectural drawings that support Farco’s position that CSA was responsible to properly seal the roof-penetrations. 11. At the hearing, Mr. Farthing provided testimony that was consistent with Farco’s Answer. 12. Mr. Farthing testified that with the exception of the roofing repairs, Farco allowed CSA eight weeks to complete its work and then an additional nine weeks to make the required corrections. Mr. Farco testified that he had the roofing-penetrations properly sealed in July 2015 because Farco had to warranty the roof. 13. CSA’s qualifying party Allen Lamor Bordeaux, provided testimony that when CSA originally bid the project, the building was supposed to be a “shell” when it did its work. As it occurred however, this was not the case, which expanded the time required to complete the job. 14. Mr. Bordeaux did not agree that Farco had completed all the work for which it now asserts there were back-charges and CSA had entered into evidence exhibits that purport to show that CSA did some of that work. 15. Mr. Farthing acknowledged that he did not have receipts for all that work, but explained that some of it was completed by his own laborers. 16. CSA also presented evidence to the effect that it had received compliments on its work and that it had passed inspections. CONCLUSIONS OF LAW 1. Unless otherwise provided by law, 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. “At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2). 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 ROC’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 …. (Emphasis added.)

8. In essence, Farco’s position is that the $5800.00 retention amount was not due because CSA did not comply fully with the contract. Farco presented sufficient credible evidence to show that there is a good faith dispute on this issue and that its failure to pay CSA the retention amount was not a violation of Ariz. Rev. Stat section 32-1154(A)(10) as alleged. 9. Consequently, this matter should be dismissed. RECOMMENDATION IT IS RECOMMENDED that on the effective date of the final Order in this matter, Case No. 2016-864 against Farco Construction, LLC’s license No. 236434 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 is forty days after the date of that certification. Done this day, June 7, 2016.

/s/ Thomas Shedden Thomas Shedden Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors ----------------------- [1] The Notice of Hearing does not provide the date the Citation was issued or when the Complaint was issued or filed. There appears to be no dispute that the Citation was issued on March 24, 2016 or that the Complaint was filed on March 14, 2016.

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