ALJDEC decisions subject to certification as final

2020A-04672-NPC-ROC · Registrar of Contractors · 2021-01-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Carefree Floors, Inc.

COMPLAINANT,

v.

Standing Rock Construction, LLC,

License Number ROC 147994,

RESPONDENT.

No. 2020A-04672-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 5, 2021

APPEARANCES: Brian Kunkel appeared on behalf of Complainant Carefree Floors, Inc. (Carefree). Hank E. Pearson, Esq. appeared on behalf of Respondent Standing Rock Construction, LLC (Standing Rock).

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

_____________________________________________________________________

FINDINGS OF FACT

1. Standing Rock holds license number 147994 issued by the Registrar.

2. Arthur Luhrs is the qualifying party for Standing Rock.

3. Brian Kunkel is the owner of Carefree.

4. Carefree and Standing Rock entered into a contract wherein Carefree agreed to install tile for new home construction project (Silverleaf project).

5. In or around October of 2019, Carefree sent an invoice to Standing Rock in the amount of $53,659.50 for the project.

6. Mr. Luhrs did not believe that Standing Rock owed Carefree $53,659.50. 7. Mr. Luhrs prepared and issued a revised invoice to Mr. Kunkel. The revised invoice showed that Carefree’s invoice exceeded the amount due by $10,155.

8. Mr. Kunkel did not agree with the revision and requested that Mr. Luhrs meet him at the jobsite to remeasure the project.

9. Mr. Luhrs and Mr. Kunkel met at the jobsite along with Chris Weigel, Standing Rock’s Superintendent and Jose Balbastro, Carefree’s Superintendent.

Mr. Kunkel became frustrated because he did not agree with Standing Rock’s remeasurements. As a result, Mr. Kunkel left the meeting early.

10. On November 25, 2019, Mr. Luhrs created a second revised invoice based on the remeasurements. Mr. Luhrs sent the revised invoice that included rates and measurements to Mr. Kunkel by e-mail. The revised invoice showed that Mr. Kunkel’s invoice exceeded the amount owed by $7,464.50. Mr. Luhrs included the following message in the e-mail, “...We’ve reviewed your invoice for Lot 1856 extensively and have revised the invoice based on our measurements for square footage and for price per sq. foot. Please see the attached file for the review by invoice line item and the difference we found. Please let me know your thoughts and let’s get tougher [sic] to discuss. We have a payment ready pending your review of our revisions of the invoice.”

11. On or around December 4, 2019, Mr. Luhrs sent Carefree a final payment in the amount of $46,195.

12. Standing Rock provided an Unconditional Waiver and Release on Final Payment (Release) to Carefree.

13. On December 5, 2019, Mr. Kunkel signed the Release on behalf of Carefree. The Release shows that Carefree had been paid in full for the Silverleaf project in the amount of $96,195.

14. Mr. Kunkel signed and cashed the check in the amount of $46,195.

15. Standing Rock subsequently filed a complaint against Carefree for poor workmanship in connection with a construction job. As a result, the Registrar issued a Directive to Carefree on September 22, 2020.

16. On or about September 30, 2020, Carefree filed a complaint against Standing Rock for nonpayment for services and materials rendered in connection with the Silverleaf project. Carefree alleged that it was owed $7,464.50.

17. Standing Rock was not aware that Carefree believed that it has been underpaid until Standing Rock received the no pay complaint.

18. On October 19, 2020, the Registrar issued a Citation against Standing Rock’s license for non-payment. Through the Citation, the Registrar alleged that Standing Rock may have violated A.R.S. section 32-1154 (A)(10).

19. The Citation shows that if the Administrative Law Judge finds that the alleged charge is valid, the Registrar may suspend or revoke the license of Standing Rock.

20. Standing Rock filed a timely answer to the Citation.

21. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.

22. A hearing was held on January 5, 2021.

23. Mr. Kunkel testified on behalf of Carefree. Standing Rock presented the testimony of Mr. Luhrs and Mr. Weigel. Standing Rock submitted exhibits 1 through 8. 24. Mr. Kunkel asserted that Carefree owes the last “$7,500”. Mr. Kunkel stated that he has been working with Standing Rock for years and that he always charges the same rate. Mr. Kunkel stated that he sets the rate for his work. Mr. Kunkel stated that Standing Rock changed the rates after the fact and that Standing Rock’s measurements are not correct. Mr. Kunkel stated that he left the meeting early because he was frustrated as he disagreed with Mr. Luhrs’s measurements.

25. Mr. Kunkel testified to the effect that he signed the Release because it is the only way to ensure payment. Mr. Kunkel asserted that Standing Rock should pay the $7,500 because Carefree is required to give Standing Rock a warranty.

26. Mr. Kunkel testified that he disagreed with Carefree’s original invoice based upon the rate and remeasurements. Mr. Kunkel did not communicate that he disputed the final payment after he signed the waiver and cashed the check.

27. Mr. Weigel testified that Carefree’s Superintendent agreed with the re-measurements reflected in Standing Rock’s second revised invoice.

CONCLUSIONS OF LAW

1. This matter lies within the Registrar’s jurisdiction.

2. A party asserting a claim, right, or entitlement bears the burden of proof; a

party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. Ariz. Admin. Code § R2-19-119.

3. A preponderance of the evidence is:

The 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.

Black’s Law Dictionary 1373 (10th ed. 2014).

4. Statutes should be interpreted to provide a fair and sensible result.

Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.")

5. “Statutes shall be liberally construed to effect their objects and to

promote justice.” Ariz. Rev. Stat. § 1-211(B).

6. The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

7. Ariz. Rev. Stat section 32-1154(A) provides that:

The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: .... 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.

8. Carefree failed to establish by a preponderance of the evidence that it failed to pay monies due for the Silver Leaf project. Although Mr. Kunkel asserted that his rates are based on a past history with Standing Rock, Mr. Kunkel provided no written evidence or direct testimony regarding the amount of the rates that he has charged in the past. Carefree failed to establish that the measurements reflected in Standing Rock’s invoice were incorrect. Moreover, Carefree signed a waiver acknowledging that he had been paid in full for the Silverleaf project. The evidence in this case is insufficient to establish that Standing Rock owes Carefree $7,464.50. The preponderance of the evidence shows that Carefree has been paid in full for the for services and materials rendered in connection with the Silver Leaf project.

9. The preponderance of the evidence does not show that Standing Rock violated Ariz. Rev. Stat section 32-1154(A)(10) as alleged.

ORDER

IT IS ORDERED that the Citation and Complaint in Case No. 2020A-04672 is 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 is forty days after the date of that certification.

/s/ Velva Moses-Thompson

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors