ALJDEC decisions subject to certification as final

2017A-30-NPC-ROC · Registrar of Contractors · 2017-07-09

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Manny's Dump Truck Service, LLC,

COMPLAINANT,

v.

Keith Smith Excavation, LLC,

DBA: K S Excavation,

License Nos: 233738, 220195,

RESPONDENT.

No. 2017A-30-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 18, 2017, with the record held open until June 19, 2017.

APPEARANCES: Manuel Navarro, Member and Qualifying Party, appeared on behalf of Complainant Manny’s Dump Truck Service, LLC. Respondent Keith Smith Excavation, LLC doing business as K S Excavation was represented by Andre Carman.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Keith Smith Excavation LLC, doing business as K S Excavation (Respondent) is the holder of License Nos. 233738 and 220195 issued by the Registrar of Contractors (Registrar).

On or about January 3, 2017, Manny’s Dump Truck Service, LLC (Complainant) filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $24,380.00 for work performed.

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).

Manuel Navarro, Complainant’s Member and Qualifying Party, testified that the total due to Complainant was $24,380.00. Mr. Navarro did not provide a written contract that Complainant had with either Respondent or with Decca Multi-Family Builders, Inc. (Decca), the general contractor on the project. Mr. Navarro indicated that he had not been paid for invoices dating back to April 2016 and May 2016, and invoices in August 2016. Mr. Navarro acknowledged that after Complainant stopped working on the project, Respondent provided Complainant with materials to help satisfy the balance owed, but Mr. Navarro disagreed with the value of the materials as presented by Respondent. Mr. Navarro also admitted that, on August 30, 2016, he signed an Unconditional Waiver and Release on Progress Payment which provided, in pertinent part,

The undersigned has been paid and has received a progress payment in the sum of $10,366.25 for all labor, services, equipment or material furnished to the jobsite or to KEITH SMITH EXCAVATION on the job of 3137 Willow Creek Road, LLC located at

Willow Creek Apartments

3137 Willow Creek Road

Prescott, AZ 86301

And does hereby release any mechanic’s lien, any state or federal statutory bond right, any private bond right, any claim for payment and any rights under any similar ordinance, rule or statute related to claim or payment rights for persons in the undersigned’s position that the undersigned has on the above referenced project to the following extent. This release covers a progress payment for all labor, services, equipment or materials furnished to the jobsite or to KEITH SMITH EXCAVATION through 08/19/16 only and does not cover any retention, pending modifications and changes or items furnished after that date.

Keith Smith, Respondent’s Member and Qualifying Party, testified that Respondent did not hire Complainant as a subcontractor on the project. Mr. Smith stated that he provided Decca several names of contractors and Decca selected Complainant. Mr. Smith acknowledged that for some time, checks were issued by Decca to Complainant and Respondent jointly for work Complainant performed. Mr. Smith stated that all of those funds were paid to Complainant and Respondent did not make any money off any work performed by Complainant. Mr. Smith asserted that Decca had failed to pay Respondent approximately $900,000.00 on the project. Mr. Smith also testified that only two invoices were issued after the August 30, 2016 Unconditional Waiver and Release on Progress Payment totaling $8,641.25 and that Respondent had provided Complainant with $7,236.90 worth of materials to reduce the balance due, thus leaving a balance of $1,404.35. Mr. Smith stated that if Decca had paid Respondent the remaining balance owed to it, Mr. Smith would have paid Complainant the remaining balance, but Respondent had difficulty absorbing a $900,000.00 shortfall.

CONCLUSIONS OF LAW

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.

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).

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.

The evidence failed to establish that Respondent owed Complainant for the work on the project. While Complainant performed the work, nothing in the record established that Respondent had entered into a contract with Complainant to perform that work.

Therefore, Complainant failed to establish that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant for services or materials rendered in connection with Respondent’s contracting business.

RECOMMENDed order

Based on the foregoing, it is recommended that on the effective date of the Order, the Registrar shall dismiss the complaint filed by Manny’s Dump Truck Service, LLC.

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, July 9, 2017.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors