ALJDEC decisions subject to certification as final

2020A-00866-NPC-ROC · Registrar of Contractors · 2020-06-11

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Bravado Pools and Landscape LLC,

COMPLAINANT,

v.

Platinum Construction LLC,

License Nos. ROC 217822 & ROC 318407,

RESPONDENT

No. 2020A-00866-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: May 22, 2020, at 1:00 p.m.

APPEARANCES: Bravado Pools and Landscapes LLC (“Complainant”) appeared through Brian Walters, its qualifying party/member; Platinum Construction LLC was represented by Gordon S. Bueler, Esq., Bueler Jones LLP.

ADMINISTRATIVE LAW JUDGE: Diane Mihalsky

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

According to the Arizona Registrar of Contractors’ (“the Registrar’s”) public website, on March 23, 2012, the Registrar issued License No. ROC 277822 for General Residential B-5 General Swimming Pool contracting to Respondent. On March 30, 2018, the Registrar issued License No. ROC 318407 for Specialty Dual CR-21 Hardscaping and Irrigation Systems to Respondent.

On November 16, 2018, the Registrar issued License No. ROC 322639 for General Residential B-4 General Residential Engineering contracting to Complainant. Brian D. Walters is Complainant’s qualifying party/manager.

On or about February 18, 2020, Complainant filed a non-payment complaint with the Registrar against Respondent for failing to pay Complainant a total of $11,704.30 on three jobs, as follows: (1) Invoice #65 in the amount of $8,170.80 on the Maggadino job; (2) Invoice #66 in the amount of $740.00 for the Ackley job; and (3) Invoice #67 in the amount of $2,793.50 for the Kinney job.

On or about March 10, 2020, the Registrar issued a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10) against Respondent’s contractor’s licenses.

Respondent filed a written answer to the Citation, denying that it owed any money to Complainant.

The Registrar referred the complaint to the Office of Administrative Hearings, an independent agency, for an evidentiary hearing. A hearing was held on May 22, 2020. Mr. Walters testified on Complainant’s behalf. Respondent submitted 13 exhibits and presented the testimony of four witnesses: (1) John Miller, Respondent’s Controller; (2) Larry Simmons, Respondent’s qualifying party/managing member; (3) Robert Pimentel, Respondent’s field superintendent; and (4) Aaron Rosas Hernandez, the qualifying party and owner of Aaron Rosas Hernandez DBA: Arizona Golden Pavers, License No. ROC 329265 for Specialty Dual CR-21 Hardscaping and Irrigation Systems, whom Respondent paid to correct some of Respondent’s work.

Hearing Evidence

In August and September, the parties entered into subcontracts for Respondent to perform work at the three projects. They had never before done business together. The subcontracts were not submitted.

Mr. Walters testified that Complainant performed the subcontracts and that he never received a request from Respondent for repairs. Mr. Walters testified that Complainant had paid for labor and materials to perform the jobs and that it would have performed any repairs that were necessary so that Complainant would get paid. Mr. Walters testified that he understood that the Registrar’s standard practice is to allow contractors to repair workmanship deficiencies.

Mr. Walters acknowledged that on September 25, 2019, Respondent terminated Complainant from the projects.

Respondent submitted the termination email from its job scheduler, Michele Garcia, which provided in relevant part as follows:

I’m giving you a formal letter advising that we have pulled all of our jobs from you due to lack of returning phone calls or showing up on any of the jobs that were assigned to you for weeks.

Our homeowners have become very upset and want to cancel their contracts with us unfortunately we can’t run our jobs like this.

Mr. Walters’ only response to the email was to ask, “So I have pavers being delivered to Kinney that I paid 3k for. Should I cancel order?”

Mr. Walters testified that the alleged reasons for Respondent’s termination were untrue. He stated that, although he did not send an email contesting the alleged reasons for the termination, he called Michele after the email. Mr. Walters acknowledged that Complainant performed no work for Respondent after September 25, 2019.

Mr. Walters acknowledged that the three invoices that Complainant attached to its complaint were dated February 11, 2020, the day that the complaint was filed. Mr. Walters stated that Complainant earlier had provided the original invoices to Respondent’s controller, Mr. Miller, but did not submit the original invoices.

Mr. Walters testified that when Respondent had engaged Complainant, he could not agree to Respondent’s pricing. The three projects stalled out while the parties were going back and forth on price.

Mr. Miller testified that he was present at the first meeting between Mr. Simmons and Mr. Walters in August 2019. Respondent always provides subcontractors with a Price Book, which lists the prices that Respondent is willing to pay at each stage of construction. Respondent never engages subcontractors who do not agree to the Price Book; if subcontractors do not agree, Respondent hires someone else. Mr. Miller stated that Mr. Walters was given Respondent’s Price Book, which was submitted.

Mr. Miller testified that he first received Complainant’s invoices on February 11, 2020. The invoices did not reflect the prices in Respondent’s Price Book. Mr. Miller marked the invoices to reflect the Price Book and Respondent’s other policies, as follows:

Invoice #66, for job #2925, the Ackley job. Complainant charged $24.50 for each of the 20.0 quantity of stacked stone, rather than the $19.00 in Respondent’s Price Book, for a total of $380.00, rather than $490.00, and deleted a trip charge of $250.00, because the Price Book does not allow trip charges. The amended total of the invoice was $380.00.

Invoice #65, for job #2945, the Maggadino job, was reduced from $8,170.80 to $3,951.50 to reflect the Price Book. Respondent also deducted amounts to repair the job, as follows: (1) $2,055.40 to Arizona Golden Pavers to repair Complainant’s work; (2) $2,523.29 to Marvel for materials; and (3) A $200.00 charge for a no show. The modified amounts and back-charges resulted in a credit of $1,173.21 in Respondent’s favor.

Invoice #67, for job #2952, the Kinney job, was reduced from $2,793.50 to $2,544.25 to reflect the Price Book. Mr. Miller explained that Complainant was pulled off the Kinney job for failure to appear. Respondent deducted amounts to complete the job due to Complainant’s failure to appear, as follows: (1) $3,905.00 to Icon to complete the job; (2) $167.88 to Monterrey for materials; and (3) $53.44 to Monterrey for materials. The modified amounts and back-charges resulted in a credit of $1,582.57 in Respondent’s favor. Mr. Miller noted that Complainant’s invoice did not show $3,000.00 for pavers and that the back-charges were not all reflected in the credit due to Respondent because some of the work was beyond Complainant’s scope.

On March 22, 2020, Mr. Miller sent the marked up invoices to Complainant, with a copy of the termination letter. Mr. Miller explained that Respondent’s practice was to review invoices submitted before the 15th of the month for payment the next month. Mr. Miller also provided invoices from Icon Pool Works, Monterrey Tile, the job cards for the three jobs, and photographs of poor work. Respondent also submitted Arizona Golden Pavers’ and Marvel’s invoices.

Mr. Miller testified that homeowners complained to Respondent about the quality of Complainant’s work and about its failure to diligently perform its work. Respondent submitted its Job Cards for the three jobs, which reflected scheduling and customer complaints, in relevant part as follows:

Job #2952, the Kinney job included the following entries: (1) On 8/30/2019, Complainant was notified of the assignment for coping and deck was to be performed on 9/5/2019; (2) On 9/5/2019, Ms. Garcia tried to call Complainant to see when it would do the coping, but received no answer; (3) On 9/6/2019, Ms. Garcia informed Complainant that the customer wanted to know whether the project was on schedule; (4) On 9/9/2019, Ms. Garcia notified Complainant that the deck and coping had been scheduled for 9/5/2019; and (5) On 9/9/2019, the cleanup crew told Ms. Garcia that “Brian at Bravado” said “he is starting the deck tomorrow.”

Job #2945, the Maggadino job included the following entries: (1) On 9/20/2019, Ms. Garcia called and left a voicemail for Mr. Walters that he failed to meet Respondent’s supervisor on site the day before and still had not returned calls; (2) On 9/23/2019, the homeowner complained to Ms. Garcia that no one had shown up on Saturday to install the deck; (3) On 9/24/2019, the homeowner told Ms. Garcia he was getting frustrated with deck issues and that he did not want water in the pool until the deck was complete; and (4) On 9/25/2019, Ms. Garcia pulled Complainant off the job and hired Mr. Hernandez, noting that Mr. Walters had not called her back, even though she left several messages for Complainant.

Mr. Simmons testified that Respondent builds between 115 and 145 pools a year and that, during the summer, it has between 40 and 60 pools under construction at any given time. The Price Book is part of Respondent’s contract with its subcontractors. He discusses the Price Book with every subcontractor that is considering working with Respondent. Only a few scopes of work, such as venting, are not included in the Price Book. Respondent submitted the invoice that it had sent to Complainant on or about March 3, 2020, for the costs of completing and repairing the three projects.

Mr. Simmons acknowledged that he did not know whether Respondent had ever issued a work order to Complainant for the claimed repairs, although Respondent’s field superintendents may have done so. He also acknowledged that Respondent did not have a document signed by Mr. Walters agreeing to the Price Book.

Mr. Pimentel testified that he was the superintendent on the Maggadino job. It took forever for Complainant to get started. The homeowner called about workmanship issues in Complainant’s work. The pavers were supposed to have a 3-piece random pattern, but Complainant did not install them that way. The deck was tilted to flow into the pool, although rain was supposed to flow the other way.

Mr. Pimentel testified that homeowners can be particular about pools because pools are a big investment. He attempted to call Mr. Walters to meet to discuss concerns, but Mr. Walters usually was not available. Efforts at communication would go on for 3 or 4 days. Mr. Walters did not respond to Ms. Garcia, Respondent’s job coordinator.

Mr. Pimentel testified that Respondent attempts to build pools quickly, but will tolerate delays if the subcontractor is in contact. Homeowners complain if their projects are not completed on schedule.

Mr. Pimentel testified that Respondent hired Arizona Golden Pavers to complete the Maggadino project. Photographs that were taken at the project showed that the deck that Complainant had installed sloped into the pool.

Mr. Hernandez testified that he got a call from Mr. Pimentel that there were problems with the Maggadino project and met Mr. Pimentel on site to discuss the job. He is familiar with Respondent’s Price Book, with sets the prices that subcontractors can bill Respondent.

Mr. Hernandez testified that the pavers that Complainant had installed at the Maggadino job did not meet industry standards because they sloped the wrong way. He took the photographs that Respondent submitted. He had to tear out the pavers and redo them. In the process, many pavers were damaged. He submitted an invoice to Respondent and was paid for the work.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish Respondent’s statutory violation by a preponderance of the evidence. Respondent bears the burden to establish 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.”

A.R.S. § 32-1154(A)(10) includes among the grounds for suspension or revocation 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.”

A homeowner who files a complaint with the Registrar against a contractor for poor workmanship is generally required to allow the contractor to repair its work to comply with a directive issued by the Registrar before the contractor’s license may be suspended or revoked. Respondent did not file a complaint with the Registrar against Complainant for its poor work and no directive was ever issued in this matter. No statute requires a general contractor to allow a subcontractor to perform repairs before the general contractor may claim an offset for repairing the subcontractor’s poor work in defense of a complaint for non-payment under A.R.S. § 32-1154(A)(10).

Although parties agreed that Respondent subcontracted work to Complainant, Complainant did not establish that the payment terms of the subcontract were not set forth in the Price Book. Respondent acknowledged that it not paid anything to Complainant for the three jobs. Respondent argued that its failure was justified by Complainant’s poor work and failure to perform work diligently, which required Respondent to hire others to repair and complete Complainant’s work. Respondent bore its burden to establish the affirmative defense that that any monies that it otherwise might have owed Complainant for the three jobs are more than offset by the monies that Respondent had to pay others to repair or complete Complainant’s work. Complainant therefore did not establish cause to suspend or revoke Respondent’s licenses under A.R.S. § 32-1154(A)(10).

RECOMMENDED ORDER

Based on the foregoing, it is ordered that thirty days after the effective date of the final order in this matter, Complainant Bravado Pools and Landscaping LLC’s complaint against Respondent Platinum Construction LLC’s License Nos. ROC 277822 and ROC 318407 shall be dismissed.

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, June 11, 2020.

/s/ Diane Mihalsky

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors