FINACT2019A-02301-ROC.pdf

2019A-02301-NPC-ROC · Registrar of Contractors · 2019-09-05



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New ALJ Decision transmitted for ROC (2019A-02301-NPC-ROC) message

OAH Electronic Decision Transmission System <[email redacted]> Wed, Aug 14, 2019 at 1:22 PM To: [email redacted]

This is a message from the Arizona Office of Administrative Hearings to inform you that a decision has been transmitted for Registrar of Contractors. The details are as follows:

Decision type: ALJ Decision Matter ID: 2019A-02301-NPC-ROC Filed by: OAH Filed on: 8/14/2019 Due Date for Final Agency Action (if applicable): 9/18/2019

You may access this decision at https://portal.azoah.com/aljdec/documents/ROC/2019A-02301-NPC-ROC-ALJDecision-6427.pdf.

To view all available ALJ decisions, visit https://portal.azoah.com/aljdec/documents/ROC/. RECEIVED 8.14.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

AZ Fixing Old Pools LLC, No. 2019A-02301-NPC-ROC DBA: Budget Pool Repair, ADMINISTRATIVE LAW JUDGE COMPLAINANT DECISION v. Mira Bella Builders LLC, License Nos. ROC 196548 and ROC 215908,

RESPONDENT.

HEARING: July 31, 2019, at 1:00 p.m. APPEARANCES: AZ Fixing Old Pools LLC, DBA: Budget Pool Repair (“Complainant”) appeared through Hung Khanh Vuong, its member/qualifying party; Mira Bella Builders LLC (“Respondent”) appeared through James Arturo Meringer, its member/qualifying party. ADMINISTRATIVE LAW JUDGE: Diane Mihalsky _____________________________________________________________________ FINDINGS OF FACT BACKGROUND AND PROCEDURE 1. On or about May 24, 2004, the Arizona Registrar of Contractors (“the Registrar”) issued License No. ROC 196548 for General Dual KB-1 Dual Building Contracting to Respondent. On or about January 24, 2006, the Registrar issued License No. ROC 215908 for Specialty Dual CR-11 Electrical contracting to Respondent. 2. On or about June 26, 2015, the Registrar issued License No. ROC 299158 for Specialty Dual CR-6 Swimming Pool Service and Repair contracting to Complainant. On or about June 29, 2015, the Registrar issued License No. ROC 299265 for Specialty Dual CR-36 Plastering contracting to Complainant.

Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 8.14.2019 ROC LEGAL

3. On or about May 2, 2019, Complainant filed a non-payment complaint with the Registrar against Respondent for allegedly failing to pay Complainant a total of $10,750.00 for performing a substantial remodel on a pool pursuant to its subcontract

with Respondent.

4. On May 23, 2019, the Registrar issued a Citation for Alleged Violation of

A.R.S. § 32-1154(A)(10) against Respondent’s licenses.

5. On or about June 7, 2019, Respondent’s qualifying party/member James A.

Meringer filed a timely written answer to the citation on its behalf stating in relevant part

as follows:

We contracted the complainant to refinish a pool for a client in Scottsdale. This is a repeat client, we have done much work for this client. This was a very good client who [we] had a sterling reputation with. The complainant was told that we would not pay their final invoice until the following items were carried out: The pool was fully completed with all accessories and hardware installed. The pool was fully tested for proper operation of all features and components. The Owner was given all relevant materials for operation of the water features, lighting and components. The pool Maintenance company was handed off a stabilized fully functional & operational pool and briefed on its proper operation.

[Respondent] took the following steps to resolve the situation to the satisfaction of the pool owner: We requested [Complainant] to meet at the convenience of their personnel to review the pool condition and the owner [’] s issues. We notified them by email, text and telephonically that we were not receiving a final payment until this conference took place and their final payment would be withheld until these items were addressed.

RECEIVED 8.14.2019 ROC LEGAL

[Complainant] never responded to our requests and subsequently the customer suspended our retention on the project and we were never able to collect the final payment which [were] the monies owed to [Complainant].

Please be aware that we only were notified of this complaint today the 7th and did not have the proper time to respond to this action. We are considering all options at this time and have put together this brief email in order to preserve our right to contest the action taken by the complainant and the ROC. . . .

6. The Registrar referred the complaint to the Office of Administrative Hearings

(“OAH”), an independent agency, for an evidentiary hearing.

7. On June 13, 2019, the Registrar issued a Notice of Hearing, setting a hearing

on July 31, 2019, at OAH. The Notice of Hearing advised the parties that “this is an

adversarial hearing before an administrative law judge and is conducted in a similar

manner as judicial proceedings. Your attendance is required and you must be

prepared to produce relevant and material testimony and evidence in support of your

position.”

8. A hearing was held on July 31, 2019. Complainant’s qualifying party/member

Hung Khanh Vuong appeared and testified on its behalf. Complainant’s general

manager, Rex Parry, also attended the hearing, but did not testify. Mr. Meringer

appeared and testified on Respondent’s behalf. Neither party submitted any exhibits,

although Complainant was prepared to submit photographs of the completed pool. HEARING EVIDENCE 9. In the past, the parties have done several projects together. Respondent always paid Complainant for previous projects. 10. Mr. Vuong testified that the pool was completed and operational and showed the Administrative Law Judge photographs of the completed pool remodel. 11. Mr. Meringer did not dispute that Complainant completed its work on the pool. 12. Mr. Meringer testified consistently with the written answer that he filed on Respondent’s behalf, stating that that because the operational components on the pool RECEIVED 8.14.2019 ROC LEGAL

were complex and he did not know how to operate the pool’s features, he did not know whether it worked or not. 13. Mr. Meringer testified that Complainant’s contract required it to provide

orientation to the owner and that he tried numerous times to schedule Complainant’s

orientation session with the owner, but that Complainant never responded to his phone

calls, texts, and emails. Mr. Meringer testified that as a result, the owner of the pool

refused to pay Respondent its retention, which exceeded $10,000.00.

14. Mr. Meringer testified that this was Respondent’s third project with the

owner. Mr. Meringer claimed that as a result of Complainant’s failure to provide

orientation to the owner, the owner was no longer hiring Respondent to perform

projects, which significantly reduced Respondent’s income.

15. Mr. Vuong acknowledged that Complainant had not provided orientation to

the owner on the project, but testified that he had answered the owner’s questions. Mr.

Vuong testified that Complainant was waiting for Respondent to provide a time when

Complainant could meet with the owner for orientation.

16. Mr. Vuong denied that Mr. Meringer had called or sent numerous texts and

emails to Complainant to attempt to schedule an orientation meeting between Complainant and the owner. Mr. Vuong testified that before Complainant filed the complaint with the Registrar, Respondent had promised to take money from a line of credit on Mr. Meringer’s house to pay Complainant. Mr. Vuong testified that an orientation only takes about ten minutes and that Complainant would not have jeopardized its relationship with Respondent by refusing to perform an orientation with Respondent’s customer. 17. Mr. Meringer testified he had the texts and emails to prove Respondent’s attempts to contact Complainant and Complainant’s non-responsiveness. However, as noted above, it did not submit the texts and emails or any other exhibits into evidence. 18. Pursuant to A.A.C. R4-9-117, administrative notice is taken of Respondent’s license history on the Registrar’s public website on this date. Respondent’s License No. ROC 215903 is administratively suspended for lack of bond. Respondent’s License No. ROC 196548 is active and in good standing. Neither RECEIVED 8.14.2019 ROC LEGAL

license shows prior discipline on the current record. Complainant’s complaint appears to be the only complaint pending against License No. ROC 196548.

CONCLUSIONS OF LAW

1. This matter lies within the Registrar’s jurisdiction.1

2. Complainant bears the burden of proof to establish Respondent’s statutory

violation by a preponderance of the evidence.2 Respondent bears the burden to

establish affirmative defenses by the same evidentiary standard.3

3. “A preponderance of the evidence is such proof as convinces the trier of fact

that the contention is more probably true than not.”4 A preponderance of the evidence

is “[t]he 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.”5 4. A.R.S. § 32-1154(A)(10) includes among the grounds to suspend or revoke 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. Respondent does not dispute that Complainant remodeled the pool pursuant to its subcontract with Respondent. Therefore, Complainant made a prima facie showing that Respondent owes Complainant $10,750.00 for services that Complainant rendered in connection with Respondent’s operations as a licensed contractor.

See 32-1101 et seq. See A.R.S. § 41-1092.07(G)(2); A.A.C. R2-19-119(A) and (B)(1); see also Vazanno v. Superior Court, Ariz. 369, 372, 249 P.2d 837 (1952). See A.A.C. R2-19-119(B)(2). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). 5 BLACK’S LAW DICTIONARY at page 1220 (8th ed. 1999). RECEIVED 8.14.2019 ROC LEGAL

6. As noted above, Respondent bears the burden to establish affirmative defenses that justify its failure or refusal to pay Complainant. Although Mr. Meringer alleged in Respondent’s written answer that he sent numerous texts and emails to

Complainant trying to get Complainant to finish the project by providing orientation to

the owner and the Registrar’s Notice of Hearing advised the parties that they should be

prepared to produce relevant evidence at the hearing to support their positions,

Respondent failed to submit the alleged texts and emails. Respondent also did not

produce any evidence that the owner had failed to pay Respondent the retention on the

project or that the reason for the failure was Respondent’s inability to set up the pool

orientation with Complainant.

7. Mr. Vuong credibly testified that Complainant did not ignore numerous texts

and emails and that it was waiting for Respondent to set up a meeting with the owner,

but that Respondent failed to set up the meeting. Mr. Vuong credibly testified that the

first time Complainant heard about the alleged reason for Respondent’s failure to pay

Complainant for the project was when Respondent filed the written answer and that,

before then, Respondent had simply been claiming cash-flow difficulties.

8. Based on the foregoing, Complainant established that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant $10,750.00. RECOMMENDED ORDER Based on the foregoing, IT IS ORDERED that thirty days after the effective date of the final order in this matter, Respondent Mira Bella Builders LLC’s License No. ROC 215908 shall be revoked and License No. ROC 196548 shall be suspended until Respondent pays $10,750.00 to Complainant AZ Fixing Old Pools LLC DBA: Budget Pool Repair. IT IS FURTHER ORDERED that if on or before thirty days after the effective date of the final order, the Registrar receives written proof from Respondent that is satisfactory to the Registrar that Respondent has paid Complainant $10,750.00 by certified or cashier’s check, the Respondent’s licenses shall not be revoked or suspended but, instead, the Registrar may close Case No. 2019-02301. RECEIVED 8.14.2019 ROC LEGAL

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 five days from the date of that certification.

Done this day, August 14, 2019.

/s/ Diane Mihalsky Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors