ALJDEC decisions subject to certification as final

2017A-4525-NPC-ROC · Registrar of Contractors · 2018-01-24

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Kay Construction Inc.,

COMPLAINANT,

Zagros Construction, LLC,

License No: 279114

RESPONDENT.

No. 2017A-4525-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 27, 2017, with the record held open until January 4, 2018.

APPEARANCES: William Kay appeared on behalf of Complainant Kay Construction, Inc. Andrew R. Peshek, Esq. appeared on behalf of Zagros Construction, LLC.

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

1. On or about October 11, 2016, Complainant Kay Construction, Inc. (“Kay” submitted a proposal to Respondent Zagros Construction, LLC (“Zagros”) to furnish labor and hardware for Desert Springs lot 10. The proposal provides, in relevant part, as follows:

Date: October 7, 2016

To: Zagross const

Re.: Lot 10

We hereby propose to furnish labor and hardware in accordance with specifications on prints dated: n/a. All work shall be done in a workmanlike manner according to standard trade practices

Any alterations or deviations from the specifications involving extra cost will be executed at $80.00 per hour plus material and will become an extra charge over and above the estimate.

$65,000.00 Base Price

The above prices, specs and conditions are hereby accepted. You are authorized to do the work as specified. Payment shall be net 15 days from invoice delivered at time reasonable to bring in other trades to continue the process.

Proposal is valid for thirty (30) days due to material increases.

2. Pouya Sardari is the qualifying party for Zagros.

3. On December 6, 2016, Mr. Sardari sent an electronic mail message (“e-mail”) to Mr. Kay which included the revised plans for Desert Springs which included an entry tower.

4. Mr. Kay received the e-mail.

5. On January 23, 2017, Kay submitted an invoice to Zagros in the amount of $2,070 for worked performed at lot 10.

6. On or about January 30, 2017, Complainant Kay Construction, Inc. (“Kay” offered Respondent Zagros Construction, LLC (“Zagros”) submitted a proposal to Kay to furnish labor and hardware for Desert Springs. The proposal provides, in relevant part, as follows:

Date: January 30, 2017

To: Zagross const

Re.: Desert Springs 34

We hereby propose to furnish labor and hardware in accordance with specifications on prints dated: n/a. All work shall be done in a workmanlike manner according to standard trade practices

Any alterations or deviations from the specifications involving extra cost will be executed at $80.00 per hour plus material and will become an extra charge over and above the estimate.

$66,000.00 Base Price

full shear

Proposal is valid for thirty (30) days due to material increases.

7. Kay began work under the contract at the Desert Springs lots 10 and 34.

8. On May 1, 2017, Kay submitted an invoice to Zagros in the amount of $7,780 for work performed at lot 34.

9. On or about September 12, 2017, Zagros filed a timely response.

10. On September 20, 2017, the Registrar issued a Citation and Complaint against Zagros alleging that it violated A.R.S. Section 32-1154(A)(10).

11. On October 13, 2017, Zagros paid Kay $4,000 for work performed at lots 10 and 34.

12. The matter was referred to the OAH for an evidentiary hearing.

13. At hearing, Zagros contended that it did not owe Kay any money because it paid its balance on October 13, 2017 when it issued Kay a $4,000 check. Zagros contended that it owed Kay a total of $1,140 for the work Kay performed at lot 10. Zagros contended that it owed kay of total of $3,160 for the work it performed at lot 34, including $480 for 19’ beam for aracadia door change.

Lot 10

14. Zagros refuted Kay’s allegations that Zagros owed it $800 for adding light boxes in the hallway, $150 for lumber and $460 for adding arches next to the fireplace. Zagros contended that Kay only spent two hours adding light boxes in the hallway and that the proper charge for the work was $480. Zagros also argued that Kay never provided it with a receipt for the lumber charged in the amount of $150. Zagros contended that Kay’s workers only spent about two hours adding arches next to the fireplace and that the correct charge is $160, instead of $460 for an additional 6 hours of labor.

Lot 34

15. Zagros disputed the amount of material charged by Kay in the amount of $2,000 for adding a rough sawn trellis. Zagros argued that based upon the amount of labor and materials required, the correct charge is $1,000. Zagros also contended that the entry tower listed on the invoice was a part of the bid and the contract price of $66,000. Zagros argued that the charge for the entry way was included in the initial proposal. Zagros contended that it is not responsible for any cost that Kay incurred when it raised the ceiling height at casita because Kay never informed Zagros that there would be an additional cost to raise the ceiling.

16. Additionally, Zagros argued that it was entitled to several credits for work that was not performed by Kay, but was included in the proposal. It was undisputed that the plans called for the parapet to be straightened. It is also undisputed that Mr. Sardari told Kay not to straighten the Parapet, but later straightened the parapet himself. Zagros contended that Kay should provide it with a credit of $640 for straightening the parapet for 8 hours of labor. Kay did not dispute the charge but only that Kay did not straighten the parapet because Zagros informed him not to perform the work. Although the proposal states that extra work would be charged at $80 per hour, the proposal does not state the amount that would be charged per hour for labor under the proposal.

CONCLUSIONS OF 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.

“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).

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).

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.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

The purpose of the Registrar’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).

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 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.

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 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.”

9. Payment for “[s]ervices rendered in connection with the licensee’s operations as a contractor” does not include interest, finance charges, lien charges, or other charges that are based solely on contract terms.

10. The preponderance of the evidence does not show that Zagros owes Kay $5,850. Zagros conceded during the hearing that it owed Kay $480 for a 19’ beam for arcadia door change. The preponderance of the evidence did not show that Zagros was entitled to credits in the amount of $3,440. The preponderance of the evidence shows that Zagros violated Ariz. Rev. Stat section 32-1154(A)(10) as alleged.

ORDER

IT IS ORDERED that on the effective date of the final Order in this matter, Zagros Construction LLC, License No: 279114 is revoked unless THE REGISTRAR receives and accepts written verification that Zagros Construction LLC has paid to Kay Construction Inc., $480 in certified funds.

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, January 24, 2018.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors