ALJDEC decisions subject to certification as final

2019A-03855-NPC-ROC · Registrar of Contractors · 2019-11-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: November 1, 2019 APPEARANCES: John Zeman, Owner and Qualifying Party, appeared on behalf of Complainant Master Mechanical Inc. Nathan Jarosch, Owner and Qualifying Party, appeared on behalf of Respondent Straighline Construction LLC. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT 1. Straighline Construction LLC (Respondent) is the holder of License No. 314002 issued by the Registrar of Contractors (Registrar). 2. On or about November 19, 2018, Master Mechanical Inc. (Complainant) entered into a contract with Respondent for HVAC work on a new home. The total contract price was $16,000.00. The payment terms of the contract provided $8,000.00 “due upon approval”; $4,000.00 “due upon rough-in completion”; and “[b]alance due at trim”. 3. There was a $200.00 change order agreed to on the project. Respondent paid Complainant $13,000.00 over the course of the project. 4. At the point in the project where Complainant’s work was approximately percent complete, Respondent refused to let Complainant back on the site to complete the work. Mr. Zeman represented Complainant had approximately $150.00 to $200.00 worth of work left to do. 5. According to the homeowner, Respondent reportedly abandoned the project and they have a legal matter pending to determine what homeowner owes to Respondent. The homeowner hired another contractor to complete the work and paid that contractor almost $1500.00. Mr. Zeman argued that the replacement contractor performed more work than was necessary to complete the contract. 6. On or about July 29, 2019, Complainant filed a complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $16,000.00 for work performed. The documentation attached to the complaint indicated Respondent had paid Complainant $13,000.00 on the project. 7. The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10). 8. Mr. Zeman testified that the total due to Complainant was $3,200.00 plus late fees. Mr. Zeman indicated that the power and gas had not been turned on at the time Complainant left the project. Mr. Zeman stated that Complainant only needed to complete the start up once the power and gas was connected. 9. Mr. Jarosch testified that Respondent had only been paid $10,500.00 of the $13,000.00 allocated to the HVAC in the financing. Mr. Jarosch acknowledged that Respondent received more than $16,000.00 in total from the draws on the project. 10. Respondent did not assert that it lacked the capacity to pay the amount Complainant asserted was due. CONCLUSIONS OF LAW 1. 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 a preponderance of the evidence. See A.A.C. R2-19-119. 2. 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). 3. 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.

4. While Complainant was unable to complete the trim phase of the project, the contract provided that the final payment was due “at trim”, not “upon trim completion” or “upon completion of the work”. It is notable that the other progress payment was due “upon rough-in completion.” One may conclude that the drafter of the contract understood the difference between “at trim” and “upon trim completion” or a different term indicating all of the work was completed. 5. The evidence established that Respondent owed a total of $3,200.00 for the work on the project. 6. Respondent failed to establish by a preponderance of the evidence that it lacked the ability to pay Complainant for the work performed. 7. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant $3,200.00 for services or materials rendered in connection with Respondent’s contracting business. 8. Based upon Respondent’s violation of the provisions of A.R.S. § 32- 1154(A)(10), grounds exist to impose discipline against Respondent’s license RECOMMENDed order Based on the foregoing, it is recommended that the Registrar suspend Straightline Construction LLC’s License No: 314002 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $3,200.00 in certified funds. It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $3,200.00 in certified funds, the Registrar may close the Complaint in Case No. 2019- 03855. 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 40 days from the date of the certification. Done this day, November 21, 2019.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors -----------------------

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