ALJDEC decisions subject to certification as final

2017A-5477-NPC-ROC · Registrar of Contractors · 2018-01-31

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Interior Concepts Inc,

COMPLAINANT,

v.

D A R Custom Builders LLC,

License No:

216089

RESPONDENT.

No. 2017A-5477-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 22, 2018, 1:00 P.M.

APPEARANCES: Jason Doughty appeared on behalf of Complainant; David Rita appeared on behalf of Respondent

ADMINISTRATIVE LAW JUDGE: Roger A. Geddes

_____________________________________________________________________

FINDINGS OF FACT

1. The D A R Custom Builders LLC (Respondent), is the holder of License Number 216089 issued by the Registrar of Contractors (Registrar).

2. On or about October 30, 2017, Interior Concepts Inc., (Complainant), filed a Complaint against Respondent with the Registrar alleging that Respondent owed Complainant the sum of $5,010.02. This amount represented an unpaid invoiced on and relating to a certain subcontract entered into between Respondent, the general contractor, and Complainant, the subcontractor, for the installation of flooring by Complainant in connection with a commercial renovation.

3. On November 21, 2017, the Registrar then issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10) for the alleged failure by Respondent to pay monies in excess of $750.00 when due for materials or services rendered in connection with Respondent’s operations as a contractor. The Registrar referred the matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. The Registrar issued a Notice of Hearing setting a hearing for January 22, 2018, at 1:00 P.M.

4. Jason Doughty, president of Complainant, appeared and testified on behalf of Complainant; David Rita, owner of Respondent, appeared and testified on behalf of Respondent.

5. Jason Doughty testified on behalf of Complainant that Complainant and Respondent entered into a subcontract evidenced by Proposal 1-013847, dated March 31, 2016, for the contract amount of $13,371.54. Mr. Doughty testified that the subcontract entailed the installation of new flooring for which verbal approval for the work was given by David Rita on behalf of Respondent on April 1, 2016. He further testified that the work was performed by Complainant and the full payment of $13,371.54 was made by Respondent.

6. According to Mr. Doughty, the parties also entered into a change order evidenced by Proposal 1-014090, dated June 7, 2016, for the contract amount of $5,010.02 for which verbal approval for the work was given by David Rita on behalf of Respondent on June 8, 2016. Mr. Doughty further testified that the work was performed by Complainant but no part of the $5,010.02 was made by Respondent.

7. David Rita testified on behalf of Respondent that Respondent had not paid for the change order contract amount of $5,010.02 evidenced by Proposal 1-014090, dated June 7, 2016. He admitted that the work was performed and stated he had no issues with the work.

8. According to Mr. Rita, the reason for Respondent’s non-payment at issue stemmed from a different subcontract between Complainant and Respondent, evidenced by Proposal 1-013827, dated March 23, 2016 (Respondent’s Exhibit 2), for a job unrelated to the unpaid change order which remains unpaid. Mr. Rita testified that the Proposal 1-013827 contract price was for $18,993.92, the full amount of which Respondent has paid.

9. With regard to Proposal 1-013827, although already paid in full by Respondent, Mr. Rita testified that he objects now to a portion of the invoice in the amount of $9,730.00 for floor preparation. Mr. Rita states that he was told that part of the job would take about two days to complete when in fact, according to Mr. Rita, it only took five hours to complete. Respondent thus contends that there should have been a credit to the invoice for Proposal 1-013827 because the job did not take as long to complete as was represented to him. As a result, Respondent has withheld $5,010.02 due on a separate subcontract, Proposal 1-014090, between the parties.

10. On rebuttal, Jason Doughty testified on behalf of Complainant that he could not speak specifically to Respondent’s contention that a part of the Proposal 1-013827 job took five hours to complete as opposed to two days as allegedly represented. However, he testified that the $9,730.00 amount in Proposal 1-013827 (Respondent’s Exhibit 2) to which Respondent objects was arrived at on a square footage basis, not a time and materials basis. Exhibit 2 reflects a quantity amount of 2,780 (total flooring square footage according to Complainant) and a unit price of $3.50, which calculates to $9,730.00.

11. Respondent did not assert that it lacked the capacity to pay the amount Complainant contends is due.

CONCLUSIONS OF LAW

1. The Registrar has jurisdiction over this matter, pursuant to A.R.S. § 32-1101, et seq., which authorizes the Registrar to impose disciplinary sanctions against licenses for violations of A.R.S. § 32-1154.

2. 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 preponderance of the evidence. See Arizona Administrative Code Rule 2-19-119.

3. To warrant such sanctions by the Registrar, Complainant must demonstrate by a preponderance of the evidence that Respondent violated the statutory section cited. Proof by a “preponderance” means that “the evidence is sufficient to persuade the finder of fact that the proposition is more likely true than not.” In re: Arnold and Baker Farms, 177 B.R. 648 (9th Cir. BAP (Ariz.) 1994). See also Culpepper v. State of Arizona, 187 Ariz. 431, 930 P.2d 508 (App. 1996). It is “evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” BLACK’S LAW DICTIONARY 1182 (Rev. 6th ed. 1990).

4. 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.

5. The evidence established that Respondent owes a total of $5,010.02 to Complainant. Respondent does not dispute that it owes $5,010.02 on subcontract Proposal 1-014090. Respondent approved the work in advance and had no objection to the work once completed by Complainant or the subcontract price charged. The fact that Respondent objects to an amount it owes in a completely separate subcontract between the parties, Proposal 1-013827, which Respondent has paid in full does not justify withholding an amount on a subcontract to which Respondent does not object, Proposal 1-014090.

6. Further, Respondent objects to payment solely on the ground that with respect to Complainant’s work performed under the subcontract, Proposal 1-013827, Complainant allegedly represented to Respondent that a portion of the work would take two days to complete but actually only took five hours to complete. However, the evidence presented demonstrated that the work was bid on a square footage basis, not a time and materials basis. Thus, even if Complainant did in fact provide such a two day estimate, the evidence reflects that such an estimate had no bearing on the bid or invoice amount.

7. In this matter, Respondent failed to pay the amount of $5,010.02 to Complainant for materials or services rendered in connection with Respondent’s operations as a contractor. Complainant has established that Respondent’s license should be disciplined for a violation of A.R.S. § 32-1154(A)(10).

RECOMMENDED ORDER

Based on the foregoing, it is recommended that on the effective date of this Order, the D A R Custom Builders LLC, License Number 216089 is suspended until the Registrar receives and accepts written verification that D A R Custom Builders LLC, has paid $5,010.02 to Interior Concepts Inc., in certified funds.

It is further recommended that if and when the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $5,010.02 in certified funds, the Registrar may close the Complaint in Case No. 2017A-5477-NPC-ROC.

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 five days from the date of the certification.

Done this day, January 31, 2018.

/s/ Roger Geddes

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors