FINACT2018A-2401-NPC-ROC.pdf

2018A-2401-NPC-ROC · Registrar of Contractors · 2018-10-17

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Arizona Flooring & Remodel, LLC, Case No. 2018-2401 COMPLAINANT, Docket No. 2018A-2401-ROC-NPC v. FINAL ADMINISTRATIVE DECISION N X S Construction, LLC, AND ORDER DBA: N X S Remodeling, License Nos. 316256, 237833 RESPONDENT.

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the Registrar must provide written justification setting forth the reasons for the modification or rejection. REGISTRAR’S ACCEPTANCE In this case, a hearing was held, and the administrative law judge issued a written decision. See Administrative Law Judge Decision, attached. The Registrar reviewed that decision and hereby accepts it. CONCLUSION Because the Registrar has accepted the administrative law judge’s decision, that decision is the final administrative decision in this case and becomes effective on November 20, 2018.

Dated October 11, 2018. Registrar of Contractors /s/ Nicole Sornsin Nicole Sornsin Assistant Director, Legal and Recovery Fund

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 Copy mailed via USPS First Class mail October 11, 2018 to: Respondent N X S Construction LLC DBA: N X S Remodeling 15050 N Northsight Blvd Scottsdale, AZ 85260 N X S Construction LLC 16838 N 7th St Ste 5, Phoenix, AZ 85022-2686 Complainant Arizona Flooring & Remodel LLC 25418 N 16th Ave Phoenix, AZ 85085 AND copy electronically mailed this same date to: Respondent at email address on record with the Registrar Complainant at email address on record with the Registrar

Office of Administrative Hearings Roger A. Geddes, Administrative Law Judge Case No. 2018-2401 / AN

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St. Suite 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 1-877-692-9762 RECEIVED 9.19.2018 ROC LEGAL IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Flooring AND Remodel LLC, No. 2018A-2401-NPC-ROC

ADMINISTRATIVE LAW JUDGE COMPLAINANTS, DECISION v.

N X S Construction LLC dba,

N X S Remodeling, License No: 316256, 237833

RESPONDENT.

HEARING: August 30, 2018, 1:00 P.M.

APPEARANCES: Iosif Fechete, owner of Complainant, appeared on behalf of

Arizona Flooring AND Remodel LLC; William Gillaspy, partner of Respondent, appeared

on behalf of N X S Construction, LLC

ADMINISTRATIVE LAW JUDGE: Roger A. Geddes _____________________________________________________________________ FINDINGS OF FACT BACKGROUND AND PROCEDURE

1. N X S Construction, LLC, dba N X S Remodeling (Respondent) is the holder of License Numbers 316256 and 237833 issued by the Registrar of Contractors (Registrar). 2. On or about May 29, 2018, Arizona Flooring & Remodel, LLC, (Complainant) filed a Complaint against Respondent with the Registrar alleging that Respondent owed Complainant the sum of $2,925.00. The Complaint reflects that this amount represented the remaining unpaid amount on a $29,035.00 subcontract entered

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 9.19.2018 ROC LEGAL

into between Respondent, the general contractor, and Complainant, the subcontractor, for kitchen and bathroom remodeling work by Complainant. 3. On June 22, 2018, 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 August 30, 2018, at 1:00 P.M. 4. At the August 30, 2018 hearing, Complainant presented the testimony of Iosef Fechete, owner of Complainant. Respondent presented the testimony of William Gillaspy, partner of Respondent. The Tribunal received and admitted Respondent’s exhibit numbers 1 - 2.1

5. Iosef Fechete testified on behalf of Complainant that the unpaid amount of

$2,925.00 was due from Respondent in March 2018, when the job was completed.

With regard to Respondent’s stated reasons for nonpayment, he stated that the

photographs presented by Respondent showed the progress of the work during construction and did not show the condition after the work was completed. He further stated that the cabinets Complainant installed were supplied by Respondent and were already damaged upon delivery to the residence. He stated that when he brought the damage to Respondent’s attention, Stephanie, Production Manager for Respondent, directed Complainant to install the cabinets as is and stated that Respondent’s employees would take care of the damage once the cabinets were installed. He stated that he was never provided with a punch list or given an opportunity to repair any items with which the homeowner was dissatisfied, and that he never refused to return to the residence to do any repairs.

The Tribunal also took administrative notice of the Registrar’s file. RECEIVED 9.19.2018 ROC LEGAL

6. William Gillaspy testified on behalf of Respondent that he did not dispute that the amount of $2,925.00 remained unpaid on the underlying contract. However, he testified that the homeowner came in a dozen times to his office with issues in Complainant’s work and also complained by text. (Respondent’s Exhibit 1). He stated that when he visited the residence after Complainant’s work was completed, he observed scratched cabinet doors, items misaligned, and the improper use of caulk on baseboard rather than wood filler. He further testified that Complainant came back to repair some of the items but did not repair all of them and that the homeowner had told him that Complainant later refused to return. 7. Mr. Gillaspy further testified that as a result, Respondent’s employees made three trips to the residence and spent a lot of hours correcting Complainant’s work. He stated that after the fact he prepared an estimate with a “rough sketch” of the hours to correct Complainant’s work totaling the amount of $2,893.73, which included

such items as $756.00 for a Field Superintendent and $241.92 for Production Staff. He

stated further that the homeowner had paid the entire amount of their contract with the

exception of a credit Respondent gave of $390.53 for a damaged cabinet door.

8. 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.

RECEIVED 9.19.2018 ROC LEGAL

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. A.R.S. § 32-1154(A)(10). Complainant has satisfied its burden that

Respondent has failed to pay Complainant the amount of $2,925.00 that had become due for materials or services rendered in connection with Respondent’s operations as a contractor. In its defense of nonpayment, Respondent did present evidence to establish that there may have been some workmanship issues with respect to Complainant’s work, although it was not clear whether Complainant was given adequate notice and an opportunity to correct those items. However, even if there were workmanship issues with respect to some of Complainant’s work that went uncorrected by Complainant, Respondent has failed to present adequate proof of the cost to remedy these deficiencies. First, Respondent offered no evidence in the form of independent bids or other witnesses to support the alleged cost to correct Complainant’s work. Further, Respondent’s estimate or rough sketch of hours its employees worked is insufficient when presumably Respondent could have kept time sheets or other records

RECEIVED 9.19.2018 ROC LEGAL

and presented into evidence the precise number of hours its employees worked at the residence with their hourly rates. Lastly, Respondent’s withholding from the contract amount what would appear to be its overhead costs for supervisor and production staff time relating to corrective work appears excessive relative to the amounts estimated for workers actually doing the corrective work at the residence. For these reasons, the Tribunal finds that Respondent has failed to present adequate evidence to justify its withholding of the amount of $2,925.00, or to show that that amount or any lesser amount was not otherwise due to Complainant. 6. In this matter, Respondent failed to pay the amount of $2,925.00 to Complainant for materials or services rendered in connection with Respondent’s operations as a contractor. Complainant has established that Respondent’s licenses 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, N X S Construction, LLC’s, License Numbers 316256 and 237833 are

suspended until the Registrar receives and accepts written verification that N X S

Construction, LLC, has paid $2,925.00 to Arizona Flooring & Remodel, LLC, in certified funds. It is further recommended that if and when the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $2,925.00 in certified funds, the Registrar may close the Complaint in Case No. 2018A-2401-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, September 19, 2018. /s/ Roger Geddes Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director RECEIVED 9.19.2018 ROC LEGAL

Registrar of Contractors