ALJDEC decisions subject to certification as final

2019A-05705-NPC-ROC · Registrar of Contractors · 2020-07-29

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Creative Plumbing LLC,

COMPLAINANT

G M K Building and Development LLC,

License No. 256241,

RESPONDENT

No. 2019A-05705-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: July 14, 2020

APPEARANCES: Amy Jo Munier, on behalf of Creative Plumbing, LLC. George Kasnoff, on behalf of G M K Building and Development, LLC.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

_____________________________________________________________________

Having heard the evidence and testimony and having considered the record in this matter, the undersigned Administrative Law Judge hereby makes the following Findings of Fact and Conclusions of Law and issues the following Recommended Order to the Director of the Arizona Registrar of Contractors (“Registrar”).

FINDINGS OF FACT

Background and Procedure

On June 8, 2009, the Registrar issued License No. 256241 for General Dual KB-2 Dual Residential and Small Commercial to Respondent. Respondent’s address of record for the license is 15933 E. Trevino Dr., Fountain Hills, Arizona 85268. George Kasnoff, Jr. is listed on the license as the Qualifying Party.

Pursuant to Ariz. Admin. Code R4-9-117, Administrative Notice is taken of Respondent’s prior License record for License No. 256241, as reflected on the Registrar’s public website on July 13, 2020. Such prior license record reflects that Respondent’s license was never disciplined, but the record also reflects that there are two resolved/settled cases on Respondent’s license. Currently, the record shows that there are two open complaints against Respondent’s license, one of which is presumed to be related to this matter. Respondent has an active $14,000.00 surety bond issued through Merchants Bonding Company effective April 17, 2017.

Hearing Evidence

Ms. Munier testified that she owns Creative Plumbing, LLC with her brother-in-law, Billy Heeb. She testified that was hired by Respondent to install rough plumbing in a house located at 6155 N. 73rd Way, Scottsdale, Arizona 85250 the week of July 19, 2019. Ms. Munier testified that Complainant was hired by Respondent through a sister company (Creative Air Conditioning, LLC) owned solely by Billy Heeb.

Ms. Munier stated that Creative Air Conditioning, LLC was already doing work on the property when Respondent inquired about plumbing services. It was then that Mr. Heeb entered into a verbal agreement to install the rough plumbing.

Ms. Munier testified there was no written contract for the rough plumbing, only a written estimate and that schedule and verbal instructions were provided by Respondent.

Ms. Munier testified Complainant completed the work and was given a $1,500.00 check for the same, but she did not recall who paid for the work.

Thereafter, Ms. Munier testified that Respondent contacted Mr. Heeb to perform trim work, and again everything was decided verbally.

On September 10, 2019, a written estimate was sent for installation of two toilets, a bidet, three sinks, shower trim and a urinal. Ms. Munier testified that Respondent called Mr. Heeb and told him to get started after he received the estimate.

Ms. Munier testified that based on the prior work for the rough plumbing, she assumed everything would be handled in the same manner.

Ms. Munier testified that she had her employee, “Raul” perform the work at the home. When Raul commenced work, he noticed that someone else had completed some of the work. Ms. Munier then testified that a person with Respondent called Mr. Heeb to go forward with completing the trim even though it was already started.

Ms. Munier next testified that Raul informed her that there were some items missing that the homeowner was to supply and Raul stopped working until those items were purchased. After about a week with no contact from the homeowner, Ms. Munier reached out and it was discovered that the homeowner hired a different company to finish the work.

Ms. Munier testified that she then sent an invoice on September 18, 2019 for $700.00 to Respondent in an effort to collect for the work that was performed by Raul. In addition, Ms. Munier believes that there was an additional $250.00 for the work done under the July 28, 2019 invoice that was not paid.

In total, Complainant is seeking $950.00 for the work it performed.

Respondent refused to issue payment(s) to Complainant on the outstanding invoices at issue because Respondent opined that the work from Complainant was “shoddy” and a disaster from the start. In addition, Respondent testified that there was never a written agreement/contract.

Respondent stated that while he did business with Creative Air Conditioning, he never met with Ms. Munier. He further testified that at the direction of the homeowner, he told Complainant to do the trim work, and that with the first invoice he gave the same to homeowner and they paid for the work.

On November 14, 2019, the Registrar received a complaint from Complainant alleging non-payment of services and/or materials against Respondent.

On February 11, 2020, the Registrar issued a Non-Payment Complaint Notification Letter to the parties, advising that Respondent could supply any affirmative defenses or raise other issues to the Registrar by February 11, 2020. Respondent submitted its response on or about February 18, 2020.

On February 20, 2020, the Registrar issued a Citation and Complaint to Respondent for an alleged violation of Ariz. Rev. Stat. § 32-1154(A)(10). Respondent was given until March 6, 2020, to respond with its Answer or face discipline pursuant to Ariz. Rev. Stat. § 32-1155(C).

On March 20, 2020, the Registrar referred this matter to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing on May 6, 2020. Per the Notice of Hearing issued on April 3, 2020, the issue to be determined is whether the Registrar has cause to discipline Respondent’s license based on the following charges:

Charge 1: A violation of A.R.S. § 32-1154(A)(10) (“Failure 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.”).

CONCLUSIONS OF LAW

The Registrar has jurisdiction over this matter pursuant to Ariz. Rev. Stat. §§ 32-1101 et seq. and 32-1154(A). The matter was properly brought before the Office of Administrative Hearings pursuant to Ariz. Rev. Stat. §§ 41-1092 et seq.

The Registrar may resolve contractual disputes if such resolution is ancillary to its regulatory mission and may penalize a contractor’s license by ordering payment of restitution if a proven statutory violation was not remedied by corrective action.

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.

Complainant bears the burden of proof to establish cause to discipline Respondent’s license by a preponderance of the evidence. Respondent bears the burden to establish factors in mitigation of the penalty and affirmative defenses by the same evidentiary standard.

“A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” 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.”

Ariz. Rev. Stat. § 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, for “[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.”

In this case, the material facts are in dispute.

The parties agree that there was no written contract, just an exchange of estimates and invoices. Complainant argues that based on the course of dealing on the initial rough installation of plumbing that the second agreement for the trim would be paid in the same manner.

Respondent argues that he was essentially the “middle man” between the homeowner and Complainant. He would pass along the estimates, then the homeowner would tell him to tell Complainant to commence work. Then Complainant would send the invoice to Respondent, and Respondent would pass along the same to homeowner for payment.

There is no dispute that $1,500.00 was paid for the rough plumbing.

Black’s Law Dictionary defines a contract as, “an agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law.”

Here, while there is evidence to suggest there is was a contract to perform the plumbing work, it is not clear if it was between Complainant and Respondent or Complainant and the homeowner.

In support of Respondent’s argument, he notes that the estimates and the invoices were all billed to the property address and not to Respondent or Respondent’s address.

In support of Complainant’s argument, Ms. Munier believed there was an agreement, as the work was completed. Further, Respondent was the one communicating with her (or Mr. Heeb) when the estimate was accepted, when the work was to commence, and to whom the final invoice was sent.

Perhaps the best evidence that could have resolved the issue, was a copy of the cancelled $1,500.00 check and if it was paid by Respondent or the homeowner.

While Respondent testified a copy of the cancelled check was requested in its Response, no subpoena was requested for that information. Ms. Munier testified that she could not remember who drafted the check and did not know she would need to produce the same.

Neither party presented any other witnesses to testify which again could have arguably helped determine the issue at hand.

To that end, Complainant has not established by a preponderance of the evidence that there was a contract and that by failing to pay Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10).

RECOMMENDED ORDER

Based on the foregoing,

IT IS RECOMMENDED, the Complaint be dismissed as Complainant has not met the burden of establishing that a contract existed between it and Respondent.

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.

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-137160-45720000Done this day, July 29, 2020.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000