ALJDEC decisions subject to certification as final

2019A-04906-NPC-ROC · Registrar of Contractors · 2020-08-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Sun Valley Carpet Service Inc.,

COMPLAINANT

G & T Custom Homes LLC,

ROC License: ROC 277893,

RESPONDENT

No. 2019A-04906-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 27, 2020

APPEARANCES: Les Heinart, President, appeared on behalf of Complainant Sun Valley Carpet Service Inc., which was represented by Elisabeth Martini. Darryl Jones, Manager, appeared on behalf of Respondent G & T Custom Homes LLC.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

G & T Custom Homes LLC (Respondent) is the holder of License No. 277893 issued by the Registrar of Contractors (Registrar).

In 2017, Sun Valley Carpet Service Inc. (Complainant) performed work on a main house project for Respondent. In December 2017, Respondent paid the invoice in full for that project.

On the same property, Respondent was starting work on a casita. Respondent asked Complainant to provide bids for showers, floor tile, and wood flooring in the casita.

On or about June 11, 2018, Complainant submitted estimates to Respondent for the three parts of the casita project. The estimate for the showers was $26,183.11 with a $16,000.00 deposit required; the estimate for the tile flooring was $28,691.00 with an $18,000.00 deposit required; and the estimate for the wood flooring was $9,499.94 with a $6,500.00 deposit required.

Respondent accepted the bids and authorized Complainant to charge the deposits to the Respondent’s credit cards.

Complainant performed the work on the casita as agreed upon by the parties. Complainant submitted invoices to Respondent for final payment on the project. According to the invoices, the totals due were as follows: $10,504.67 for showers; $10,691.00 for tile flooring; and $2,999.94 for wood flooring. The total due on the three invoices was $24,195.61. Respondent refused to pay the invoices.

After months of attempting to collect on the invoices, Complainant issued revised invoices in which it allowed a fifteen percent discount on materials in an effort to collect something on the balances owed. The totals due on the discounted invoices were as follows: $8,553.97 for showers; $8208.17 for tile flooring; and $2,097.48 for wood flooring. The total due on the three discounted invoices was $18,859.62. Respondent refused to pay the discounted invoices.

On or about September 26, 2019, Complainant filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $18,859.62 for work performed.

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).

Aron Heinert, Vice President, testified that he oversees jobs and prepares estimates for Complainant. Mr. Heinert indicated that Complainant performed the work outlined in the estimates and that neither Respondent nor the homeowner had never expressed any concerns with the workmanship on the project. Mr. Heinert stated that Complainant had issued the discounted invoices in an attempt to collect something on the outstanding balance. Mr. Heinert testified that the total due to Complainant was $24,195.61.

Mr. Jones testified that Respondent had a policy of completing all its jobs “open book” in that customers were able to see Respondent’s costs on the project. Mr. Jones indicated this project was a cost plus fifteen percent contract with the homeowner and was approximately a $6 million project with over 100 subcontractors. Mr. Jones asserted that Respondent believed that Complainant would also follow Respondent’s practice of charging cost plus fifteen percent in submitting its bid to Respondent on the project. Mr. Jones stated that Respondent was unaware that Complainant was “overcharging” Respondent until Respondent learned of the price Complainant was being charged and then charging Respondent for the floor tile. Mr. Jones indicated that Respondent intended to pay the invoices, but “just wanted them to be correct.” Respondent asserted that it would never have agreed to a contract with Complainant with the mark ups included.

Respondent did not assert that it lacked the capacity to pay the amount Complainant asserted was due or had not been paid at least that much on the project.

CONCLUSIONS OF LAW

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.

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).

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.

Respondent’s assertion that it “never would have agreed” to a contract with Complainant with the mark ups included was undercut by the fact that Respondent did, in fact, enter into a contract with Complainant for the casita. Respondent may have later decided that the prices included in the estimates were more than it was willing to pay, but that does not negate the acceptance of the contract as evidenced by the payment of the deposits.

The evidence established that Respondent owed a total of $24,195.61 for the work performed on the casita.

Respondent failed to establish by a preponderance of the evidence that it lacked the ability to pay Complainant for the work performed.

Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant $24,195.61 for services and materials rendered in connection with Respondent’s contracting business.

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 G & T Custom Homes LLC’s License No. 277893 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $24,195.61 in certified funds.

It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $24,195.61 in certified funds, the Registrar may close the Complaint in Case No. 2019-04906.

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.

-54864001

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-137160-45720000Done this day, August 11, 2020.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

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-137160-45720000