ALJDEC decisions subject to certification as final

2017A-5434-NPC-ROC-RHG · Registrar of Contractors · 2018-07-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

DGB Enterprises Inc.,

COMPLAINANT,

v.

Maverick General Contractors LLC dba,

New Sun Energies ,

License No: 293258

RESPONDENT.

No. 2017A-5434-NPC-ROC-RHG

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: March 16, 2018

APPEARANCES: Dan Behrens, Complainant, Joel Sunnes, Respondent’s legal

Counsel, Pablo Cruiel, Respondent’s General Manager, Celeste Diaz,

Respondent’s witness, Chris Wasson, Respondent Witness.

ADMINISTRATIVE LAW JUDGE: Randolph D. Wolfson

_____________________________________________________________________

FINDINGS OF FACT

Respondent Maverick General Contractors LLC dba, New Sun Energies, (Respondent) is the holder of License No: 293258 issued by the Arizona Registrar of Contractors (Registrar).

On or about October 26, 2017, the Registrar received a complaint against Respondent from DGB Enterprises Inc., Complainant [hereinafter “DGB”] alleging Respondent’s failure or refusal to pay monies when due that are in excess of seven hundred fifty dollars for materials or services rendered in connection with the Respondent licensee’s operations as a contractor on numerous invoices.

The Registrar investigated the charges by reviewing the written complaint filed by DGB, additional documents provided by Complainant, and documents provided by the Respondent.

On the November 15, 2017, The Registrar issued a citation against Respondent, charging possible violations of A.R.S. § 32-1154(A)(10)

A hearing was held on March 16, 2018.

Complainant testified that DGB provided installation services under a written contract with the Respondent to install solar units purchased by customers for their residential homes. Complainant testified and presented invoices for services performed but for which the Respondent did not or would not pay. The total amount of DGB’s claim is $41,562.00. [See, Exhibits C-A and R-3 and R-4].

At hearing, Mr. Dan Behrens testified that after experiencing several instances where invoices that he presented for DGB remained unpaid, he notified the Respondent that he would perform no further services for Respondent unless he was paid in cash, in advance for the work.

Mr. Dan Behrens did admit that the back-charge against his billings for his having failed or refused to return a 5 Kilowatt Solar unit of the Respondents is supported by his conduct, to a degree. Mr. Behrens indicated that did refuse to return a 5 Kilowatt Solar Unit belonging to the Respondent. He had intended to hold the property to secure payment on his submitted invoices. He testified that he used six of the unit’s panels on another job that he performed for the Respondent. He said the cost of the unit to the Respondent is nowhere the $10,500.00 amount off-set by against billings. It is estimated that the 5 Kilowatt Solar unit, less the 6 panels used by Complainant on other projects of the Respondent, is worth not more than $5,000.00. Complainant noted at hearing the he has many times stated to the Respondent’s representatives that they authorized to come pick up the unit at any time.

Respondent General Manager, Pablo Cruiel testified that the Respondent refusal to pay DGB is reasonably justified because DGB has accumulated back charges incurred by the Respondent in excess of the amount DGB claims totaling $43,658.65.00. [See, Exhibit R-6, R-5] Mr. Cruiel testified, item by item, regarding the basis of each of the asserted accumulated back-charges as follows:

DGB Invoice 0066 date March 21, 2017 – panels relocated. DGB Invoice is not approved – incorrect sub-contractor site evaluation & design. (-$800.00);

January 1, 2017 back-charge against DGB – Respondent alleges DGB obtained a 5 Kilowatt solar system for one job where the install did not occur, but did not return the system – (-$10,500.00);

July 17, 2017 back-charge against DGB. DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-1,000.00);

November 1, 2017 back-charge to DGB. DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-$641.00);

August 26, 2016 back-charge to DGB, DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-1,090.00);

August 25, 2017 Back-charge. DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-1,024.00);

February 1, 2018. DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-1,224.00);

August 26, 2016. Back-charge. DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-1,190.00);

August 31, 2017 Back-charge. DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-1,547.00);

August 26, 2016 Back-charge. DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-1,360.00);

November 30, 2017 Back-charge. DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-799.00);

October 17, 2017 Back-charge. DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-$748.00);

January 18, 2018 Back-charge. DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-826.00);

August 26, 2016. DGB refused to respond to “warranty” call-back from customer. Respondent sent another crew to complete system analysis and system repair. (-1,360.00);

May 1, 2017. Back-charge. A solar system install was removed by DGB. Customer refused to pay Respondent the difference (-$12,147.00);

Various back-charges for asserted over-charging on invoices for a “travel differential” totaling $2,449.24. Charged-back ($2,449,24)

Respondent asserts a claim against invoices for attorney fees incurred to review case and write a cease and desist letter to DGB regarding what Respondent believed to be an improperly noticed and claimed Notice of Lien issued by DGB. Via testimony of Mr. Cruiel, the amount of the Attorney fee claim back charged to DGB is -$1,100.00.

Although Respondent tendered and admitted into evidence numerous computerized summaries, management invoice notes and software originated reports, there was scant evidence provided to substantiate much of the back-charge items.

DGB Invoice 0066 date March 21, 2017 – panels relocated. DGB Invoice is not approved – incorrect sub-contractor site evaluation & design. (-$800.00).

Although no one provided testimony regarding when or who made this determination and whether the value charged was supported by first-hand observation or documentation, the Complainant does not deny the back-charge was improper or incorrect.

Regarding the January 1, 2017 back-charge against DGB – Respondent alleges DGB obtained a 5 Kilowatt solar system for one job where the install did not occur, but DGB did not return the system to the Respondent. Respondent back-charged DGB in the amount of $10,500.00. Mr. Dan Behrens admitted in his testimony that the 5K solar system was not returned and was in his possession. Complainant admits he retains the 5 Kilowatt Solar unit, less 6 panels that were applied on other of Respondent’s projects.

There is no testimony to support the fair market value of this equipment. Complainant disputes the $10,500.00 back-charge as excessive. It is estimated that the 5 Kilowatt Solar unit, less the 6 panels used by Complainant on other projects of the Respondent, is worth not more than $5,000.00.

Thus, the Respondent has not proven by a preponderance of the evidence that the $10,500.00 back-charge amount is correct or accurate. The Respondent is entitled to a back-charge or an off-set in the amount of $5,000.00.

Regarding the May 1, 2017. Back-charge, Respondent asserts a solar system install was removed by DGB and that the Customer refused to pay Respondent the difference (-$12,147.00).

There is no evidence presented to explain this back-charge other than apparently the Respondent customer’s system was removed. No evidence appears that this removed system was in any way related to DGB’s conduct.

Moreover, there is no contractual or other evidence presented where it is demonstrated that DGB is responsible for payment to Respondent for customers of the Respondent who refuse to pay Respondent for materials, equipment or services.

The Respondent has not proven by a preponderance of the evidence that the May 1, 2017 back-charge amount $12,147.00 is a reasonable justification for its refusal to pay DGB’s invoices.

Regarding the July 17, 2017 back-charges against DGB listed in Paragraphs 8(c) through and including Paragraph 8(n), Respondent asserts DGB refused to respond to “warranty” call-back from customer. DGB responds that as long as outstanding invoices remain unpaid, DGB would not continue to perform work for the Respondent unless it was paid in advance. DGB testified that this advanced payment requirement applied to “warranty” calls.

The Respondent back-charged DGB various amounts which Respondent alleges it paid when Respondent sent another crew to complete system analysis and system repair.

There is no corroboration offered by the evidence to show a work order was issued either to DGB to respond to a “warranty” call or that a work order was issued to another “crew” for the “warranty” calls.

No evidence was offered demonstrating a check or other payment was made to another “crew” for the “warranty” calls. There is no invoice or other document substantiating what the “other crew” charged the Respondent for “warranty” calls.

The Respondent has not proven by a preponderance of the evidence that the charged-back amounts Paragraphs 8(c) through and including Paragraph 8(n) are accurate or reasonable.

Thus, these unsubstantiated back-charges referred to in Paragraphs 8(c) through and including Paragraph 8(n), hereinabove, cannot form a basis for Respondent to claim reasonable justification for its refusal to pay DGB’s invoices. The total of the back-charges asserted in Paragraphs 8(c) through and including Paragraph 8(n) is $12,809.00.

Various back-charges were asserted against DGB invoices by Respondent for alleged over-charging by DGB on invoices for a “travel differential” totaling $2,449.24. [Exhibit R-10 - contract] The travel differential contract provision allowed DGB to invoice an increased per watt of system size charge if the work were to be performed outside of Maricopa County, Arizona or outside the City of Maricopa. Respondent asserts that the increase differential was being charged invoices where the jobsite was within Maricopa County, Arizona or within the City of Maricopa. The amount Respondent back-charged DGB was $2,449.24.

There was no evidence presented that permits the Tribunal to infer that the amount of the alleged over-charge for the travel differential was actually paid to DGB. The more reasonable inference in light of the evidence presented, is that the Respondent has not been paying the invoices of DGB for quite a while.

The Respondent has not proven by a preponderance of the evidence that the back-charge amount for the “travel differential” totaling $2,449.24 is a reasonable justification for its refusal to pay DGB’s invoices.

Respondent asserts a claim against invoices for attorney fees incurred to review this case and to prepare a Cease and Desist letter to DGB regarding what Respondent believed to be an improperly noticed and claimed Notice of Lien issued by DGB to a non-party to this proceeding. Via testimony of Mr. Cruiel, the amount of the Attorney fee claim back-charged to DGB is $1,100.00.

Respondent cites no support for its prayer that attorney fees may be ordered in an ROC Administrative Proceeding. Respondent’s footing on this demand is all the more set upon sinking sand considering the Cease and Desist letter was directed at a non-party to this proceeding.

The Respondent has not proven by a preponderance of the evidence that the back-charge amount for $1,100.00 of attorney fees is a reasonable justification for its refusal to pay DGB’s invoices.

There is no argument or evidence of record to support a contention that the invoices were fraudulent or otherwise submitted for work not performed by DGB.

No evidence or argument has been presented of record indicating the Respondent is unable to pay the amounts claimed by the DGB in its Complaint.

Respondent claims it is justified in not paying DGB’s invoices because of accumulated back-charges in excess of the invoiced amount in the sum total of $43,658.65. [See, Exhibit R-6, R-5] The Respondent asserts back-charges reduces the amount owed to DGB.

DGB’s complaint claims it is owed a total of $41,562.00 from the Respondent. By a preponderance of the evidence, Complainant has demonstrated invoices and billing unpaid by the Complainant in the amount of $41,562.00.

By a preponderance of the evidence, Respondent has proven it was entitled to deduct $6,020.00 of its claimed back-charges.

Respondent has failed, without reasonable justification, to pay DGB $35,542.00

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction. See A.R.S. § 32-1101 et seq.

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).

Complainant has proven, by a preponderance of the evidence, that Respondent has been invoice or billed $41,562.00 to Respondent that remains unpaid.

The credible evidence presented at hearing established that, without reasonable justification, Respondent refused and continues to refuse payment to DGB for invoices DGB submitted for payment after deduction of allowable off-sets of $6,020.00, in the total amount of $35,542.00.

By a preponderance of the evidence presented, Complainant has proven that Respondent violated A.R.S. § 32-1154(A)(10) through its failure as a Arizona licensed contractor to pay monies to DGB in excess of seven hundred fifty dollars when due for materials or services rendered by DGB in connection with the Respondent’s operations as a contractor when the Respondent has the capacity to pay.

An examination of Respondent’s license history was performed by the ALJ through a review of the Registrar’s on-line contractor information website. The license history affords neither aggravating nor mitigating factors in this matter.

RECOMMENDED ORDER

Based on the foregoing:

IT IS RECOMMENDED that on the effective date of this Order, the Registrar shall SUSPEND Respondent Maverick General Contractors LLC dba, New Sun Energies License number 293258 for two (2) days.

FURTHER IT IS ORDERED the Respondent shall provide sufficient written proof to the Registrar on or before the effective date of this Order that Maverick General Contractors LLC dba, New Sun Energies has paid $35,542.00 in certified funds to Complainant DGB Enterprises Inc. If Respondent has timely provided sufficient written proof of the payment ordered herein, then Respondent’s Maverick General Contractors LLC dba, New Sun Energies License No: 293258 shall not be suspended.

FURTHER IT IS ORDERED that if the Respondent fails to pay the $35,542.00 in certified funds to Complainant DGB Enterprises Inc. on or before the effective date of this Order, the Registrar shall REVOKE Respondent Maverick General Contractors LLC dba, New Sun Energies License number 293258.

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, July 23, 2018.

/s/Randolph D. Wolfson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors