FINACT2019A-04259-NPC-ROC.pdf

2019A-04259-NPC-ROC · Registrar of Contractors · 2020-02-19

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

The Patchworks Of Arizona Inc., Case No. 2019-04259 COMPLAINANT, Docket No. 2019A-04259-NPC-ROC v. Arizona Plumbing & Mechanical Specialists FINAL ADMINISTRATIVE LLC, DECISION AND ORDER License No. ROC 283446, 321748,

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 of each finding of fact or conclusion of law. 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 accepts it. CONCLUSION AND ORDER 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 March 25, 2020. FINAL NOTE On page 1, line 19 replace “September 23, 2019” with “August 21, 2019.”

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19 Dated February 14, 2020. By: /s/ Joseph Citelli Joseph Citelli Chief Counsel Chief of Legal Department and Recovery Fund Copy mailed via USPS First Class mail February 14, 2020 to: Respondent Arizona Plumbing & Mechanical Specialists LLC 236 W Mahoney Ave Chandler, AZ 85225 PO Box 159 Eagar, AZ 85925-0159 Respondent’s Attorney Douglas N Nelson Esq. 2650 E Southern Ave Mesa, AZ 85204 Complainant The Patchworks Of Arizona Inc 26955 N 160th St Scottsdale, AZ 85262 Complainant’s Attorney David C. Turnbull, Esq. 6730 N Scottsdale Rd, Ste 101 Scottsdale, AZ 85253 Copy sent electronically this same date to: Office of Administrative Hearings Tammy L. Eigenheer, Administrative Law Judge Respondent at email address on record with the Registrar Respondent’s Attorney at email address of record with Registrar Complainant at email address on record with the Registrar Complainant’s Attorney at email address of record with Registrar Case No. 2019-04259 / VE

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19 RECEIVED 1.24.2020 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

The Patchworks of Arizona Inc., No. 2019A-04259-NPC-ROC COMPLAINANT v. ADMINISTRATIVE LAW JUDGE Arizona Plumbing & Mechanical Specialists DECISION LLC, ROC License: ROC 283446, 321748, RESPONDENT

HEARING: December 19, 2019 APPEARANCES: Glenn Banning, Owner and Qualifying Party, appeared on behalf of Complainant The Patchworks of Arizona, Inc., which was represented by David Turnball. Andrew Brennan, Owner, and Douglas Udall, Owner, appeared on behalf of Respondent Arizona Plumbing & Mechanical Specialists LLC, which was represented by Doug Nelson. ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer _____________________________________________________________________ FINDINGS OF FACT 1. Arizona Plumbing & Mechanical Specialists LLC (Respondent) is the holder of License No. 283446 and 321748 issued by the Registrar of Contractors (Registrar). 2. On or about September 23, 2019, The Patchworks of Arizona, Inc. (Complainant) filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $19,537.50 for repair work and punch list work performed. 3. 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). 4. The majority of the work at issue was repair work to shower stalls improperly installed by Respondent at two independent living facilities. Complainant was to cut out the floor of the shower, repair the issues under the shower, and reinstall the shower floor. There were two different sizes of showers in the project. Some units had only a master RECEIVED 1.24.2020 ROC LEGAL

bathroom with a larger shower, and some units had the master bathroom and a second bathroom with a smaller shower. 5. Neither party ensured a written contract was executed before Complainant began work on the project. Each party offered witnesses who purported to be present during the conversation between Complainant and Respondent when the pricing of the work to be done was discussed and agreed upon. 6. According to Mr. Banning, he told Mr. Brennan that Complainant would be able to do the work and the large showers would be $1,500.00 each and the small showers would be $1,200.00 each. 7. According to Mr. Brennan, Mr. Banning told him, while Mr. Koelsch from Koelsch Construction, the general contractor, was present that Complainant would be able to do the work for $1,000.00 per shower. Then, after Mr. Koelsch left, Mr. Banning told him that he could probably get it down to $800.00 per shower, but he did not want to say that while Mr. Koelsch was there. 8. Complainant started doing work on the project in February 2019. 9. On or about February 27, 2019, Complainant submitted an invoice to Respondent indicating work done on one large unit for $1,500.00 and two small units for $1,200.00 each for a total of $3,900.00. Respondent paid the invoice on March 26, 2019. 10. On or about March 5, 2019, Complainant submitted an invoice to Respondent indicating work done on two large units and one small unit that required the gypcrete had to be dug out for a total $4,350.00. Respondent paid the invoice on March 14, 2019. 11. On or about March 13, 2019, Complainant submitted an invoice to Respondent indicating work done on three units that required a bigger cut out due to gypcrete for a total $4,050.00. Respondent paid the invoice on March 26, 2019. 12. On or about March 17, 2019, Complainant submitted an invoice to Respondent indicating work done on two large units and one small unit for a total $4,200.00. Respondent paid the invoice on March 26, 2019. 13. On or about April 6, 2019, Complainant submitted an invoice to Respondent indicating work done on two showers in one unit charging $1,500.00 for the master and 2 RECEIVED 1.24.2020 ROC LEGAL

$1,500.00 for the smaller shower due to excess gypcrete, and a credit of $200.00 on each shower because Respondent provided a worker to assist, resulting in a total of $2,600.00. Respondent paid the invoice on April 11, 2019. 14. On or about April 10, 2019, Complainant submitted an invoice to Respondent indicating work done on two large showers for a total of $3,000.00. Respondent paid the invoice on April 11, 2019. 15. On or about April 14, 2019, Complainant submitted an invoice to Respondent indicating work done on two large units for $1,500.00 each and one small unit for $1,200.00 each with two $200.00 credits for the worker provided for a total of $3,800.00. Respondent paid the invoice on May 1, 2019. 16. On or about April 15, 2019, Complainant submitted an invoice to Respondent indicating work done on three small units for $1,200.00 each with a $200.00 credit on each for the worker provided for a total of $3,000.00. Respondent paid the invoice on May 1, 2019. 17. On or about April 21, 2019, Complainant submitted an invoice to Respondent indicating work done on two small units for $1,200.00 each with a $200.00 credit on each for the worker provided for a total of $2,000.00. Respondent paid the invoice on May 1, 2019. 18. On or about April 28, 2019, Complainant submitted an invoice to Respondent indicating work done on five units for a total of $6,000.00. Respondent paid the invoice on May 1, 2019. 19. On or about May 1, 2019, Complainant submitted an invoice to Respondent indicating work done on one unit for $1,200.00. Respondent paid the invoice on May 26, 2019. 20. On or about May 20, 2019, Complainant submitted an invoice to Respondent indicating work done on five small units and one large unit for a total of $7,500.00. Respondent paid the invoice on May 26, 2019. 21. On or about May 29, 2019, Complainant submitted an invoice to Respondent indicating work done on five small units and one large unit for a total of $7,500.00. Respondent did not pay the invoice. 3 RECEIVED 1.24.2020 ROC LEGAL

22. On or about June 3, 2019, Complainant submitted an invoice to Respondent indicating work done on six small units for a total of $7,000.00. Respondent did not pay the invoice. 23. On or about May 13, 2019, Israel Chavez, sent three photographs with handwritten lists of room numbers to Complainant. The heading on each photograph was a different floor, i.e. 1st Floor, 2nd Floor, and 3rd Floor. Under the floor, the note “small damage” was written. Next to some of the room numbers, a note of “holding water” or “holding water ?” was written. There were no such notes on the first floor, five such notes on the second floor, and seven such notes on the third floor. 24. When discussing the punch list items, Mr. Chavez testified that while walking with Mr. Banning, he told Mr. Banning that Complainant only needed to address the floors of the showers Complainant repaired. 25. On or about May 16, 2019, Mr. Banning sent a text message to Respondent stating, “I tentatively have Kevin scheduled Tuesday and Thursday out at surprise to start the punch list. . . .” 26. On or about June 3, 2019, Mr. Banning sent an email to Mr. Brennan and Mr. Udall stating, “The punch list for Surprise is still a work in progress. Also any new punch list repairs that were done in Chandler and any more that come up in Surprise after what Israel gave us (and there is one already) will be given to Koelsch unless you say otherwise.” 27. On or about June 5, 2019, Mr. Banning sent a text message to Respondent stating, “There are tons of hours into the punch list on the park at surprise. It is almost done but I think I want to stop until I at least get paid for the floors.” Mr. Banning got a message back, “I need to collect some money from Koelsch. In the meantime we will put a hold on anymore Work. They haven’t approved any of my change orders for the fixes we’ve done for them.” 28. On or about June 12, 2019, Mr. Banning sent a text message to Respondent stating, “I am supposed to go out tomorrow working for the contractor instead of your company. They are chomping at the bit however to get the punch list Israel gave me that you okayed me to finish up. If I understand the message the other day, I am supposed 4 RECEIVED 1.24.2020 ROC LEGAL

to wait. Give me some directions please as to how to proceed and better yet give me a time when I can pick up my check for the 12 floors I took care of as agreed upon please.” 29. Respondent replied, “We have contracted another company to finish up for us. They are about half what you charge. As I said before when we get paid then we can pay you. I will let you know the minute I find out when we can have a check ready.” 30. On or about June 13, 2019, Complainant submitted an invoice to Respondent indicating 59.5 hours of labor at $85.00 per hour to address the punch list items. The total of the invoice was $5,037.50. Respondent did not pay the invoice. 31. By their own description, Mr. Udall ran the office side of Respondent’s business while Mr. Brennan ran the field side of Respondent’s business. Mr. Udall acknowledged that he had failed to ensure the existence of an executed contract or to have any conversation with Mr. Brennan about his agreement with Complainant prior to paying the invoices submitted by Complainant. 32. Mr. Udall stated that as the project was winding down, he met with Mr. Brennan to go over the project numbers. Mr. Udall testified that it was at that time that Mr. Brennan told Mr. Udall that Mr. Banning told him Complainant would do the repairs to the showers for $1,000.00 each. Mr. Udall reran the numbers and determined that Respondent had overpaid Complainant $18,697.33 on the invoices it had already paid and owed $12,000.00 on the two outstanding invoices for shower repairs. Accordingly, Mr. Udall concluded that Complainant owed Respondent $6,697.33. 33. Respondent was paid in full for the project. Respondent did not assert that it lacked the capacity to pay Complainant the amount in dispute. 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).

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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 $750 when due for materials or services rendered in connection with the licensee's operations as a contractor unless the licensee proves that the licensee lacks the capacity to pay and has not received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased. 4. Ultimately at issue in this matter is the existence and terms of a contract between the parties. 5. The evidence did not establish the parties intended to enter into a contract for the punch list work. The pictures sent by text message did not indicate that Respondent was asking Complainant to repair every room. Complainant’s belief to the contrary was a misunderstanding on its part. 6. Based on the actions of the parties and the evidence presented, each party intended to enter into a contract for the repair of the shower floors. Mr. Banning and Mr. Brennan engaged in a conversation about the terms of the contract, Complainant performed the work and submitted invoices, and Respondent paid the invoices presented. 7. As to the terms of the contract, Mr. Banning testified he quoted $1,500.00 for a large shower and $1,200.00 for a small shower and Complainant consistently invoiced Respondent in accordance with that quote. Mr. Brennan asserted he had been quoted $1,000.00 per shower, large or small; however, Mr. Brennan failed to communicate that quote to Mr. Udall at any time in the months from when Complainant started working prior to the winding down meeting toward the end of the project. 8. Mr. Banning’s testimony in this regard was more credible than that of Mr. Brennan and Mr. Udall. 9. The preponderance of the evidence established that the parties agreed that Complainant would perform the repair work on large showers for $1,500.00 and on small showers for $1,200.00. 10. Accordingly, Respondent owes Complainant $14,500.00 for the May 29, 2019, and June 3, 2019 invoices. 6 RECEIVED 1.24.2020 ROC LEGAL

11. Respondent failed to establish by a preponderance of the evidence that it lacked the ability to pay Complainant for the work performed. 12. Therefore, Complainant established that Respondent violated A.R.S. § 32- 1154(A)(10) by failing to pay Complainant $14,500.00 for services or materials rendered in connection with Respondent’s contracting business. 13. 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 Arizona Plumbing & Mechanical Specialists, LLC’s License No: 283446 and 321748 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $14,500.00 in certified funds. It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $14,500.00 in certified funds, the Registrar may close the Complaint in Case No. 2019-04259. 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, January 23, 2020.

/s/ Tammy L. Eigenheer Administrative Law Judge

Transmitted electronically to: Jeffrey Fleetham, Director Registrar of Contractors

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