ALJDEC decisions subject to certification as final

2021A-01820-NPC-ROC · Registrar of Contractors · 2021-09-02

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Steel Erection and Maintenance Inc.,

COMPLAINANT

Ridgeview Contracting LLC

License No. ROC 300396,

RESPONDENT

No. 2021A-01820-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: August 13, 2021

APPEARANCES: James Crawford, Owner and Qualifying Party, appeared on behalf of Complainant Steel Erection and Maintenance Inc. Sidney Mattila, Owner and Qualifying Party, appeared on behalf of Respondent Ridgeview Contracting LLC.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

Ridgeview Contracting LLC (Respondent) is the holder of License No. 300396 issued by the Registrar of Contractors (Registrar).

On or about October 2, 2019, Steel Erection and Maintenance Inc. (Complainant) entered into a contract with Respondent for the construction of a greenhouse. Complainant had constructed two warehouses at the same location for Respondent and was planning to build three greenhouses.

During conversations with Respondent, Complainant indicated it had never built a greenhouse before and was uncertain of the exact cost breakdown. Complainant intended that the first greenhouse would serve as a blueprint for the second and third greenhouse going forward.

The scope of the contract was set forth as follows:

LABOR & EQUIPMENT TO ERECT ON YOUR CONCRETE PIERS ONE (1) 120’ x 252’ x 16’ with 4/12 pitch, PRE-FAB GREEN HOUSE BLDG. TO INCLUDE THE FOLLOWING ITEMS:

All bolt together frames for greenhouse structure

All secondary steel girts, purlins, braces & flange bracing

Perimeter walls and roof sheeting

Exterior trims, gutters and downspouts.

. . . .

Exclusions: . . . . ANY AND ALL ITEMS, MATERIALS OR TRADES NOT SPECIFICED [sic] MENTIONED ABOVE.

The original contract was intended to be for the smaller of the three greenhouses, measuring 80’ by 120’. However, Complainant inadvertently put the dimensions of the bigger greenhouse in the contract, 120’ by 252’. The total contract price was listed as $109,800.00 for “work to be completed in a substantial and workmanlike manner.”

Complainant and Respondent did not execute a contract that included the dimensions for the smaller greenhouse.

The smaller greenhouse project started on November 5, 2019. The larger greenhouse project started on December 2, 2019.

During the course of the project, Respondent noted the size difference in the contract and called upon Complainant to complete the larger greenhouse for the “agreed upon” price of $109,800.00 as listed in the contract. Respondent asserted that because the smaller greenhouse was one-third the size of the larger greenhouse, it would pay Complainant one-third the price listed in the contract as being the cost for the larger greenhouse.

Complainant acknowledged its error and agreed to build the larger greenhouse for the “agreed upon” price of $109,800.00, but in an effort to minimize its losses, determined it would only provide those items specifically called for in the contract. Accordingly, Complainant did not install interior walls as that was not part of the contact. Respondent asserted that “perimeter walls” in the contract included the interior walls.

During the course of the project, Respondent also requested that Complainant construct a lean-to for the agreed upon price of $22,000.00.

At the conclusion of the project, Respondent would not pay the remaining balance on the contract based on workmanship concerns. Respondent filed a complaint with the Registrar regarding those workmanship issues, which was pending at the time of the hearing.

On or about April 29, 2021, Complainant filed a Licensed Complaint Form against Respondent with the Registrar alleging that Respondent had failed to pay Complainant on the final of five contracts on the project.

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).

At hearing, Mr. Crawford testified that the total due to Complainant was $81,760.50. Mr. Crawford acknowledged that there were some punch list items remaining to be addressed, but indicated Complainant would not perform any additional work until it had been paid. Mr. Crawford argued that, because of the error of the building size identified in the contract, Complainant had lost a great deal of money on the project and needed to be paid for the work it did perform in accordance with the contract. Mr. Crawford admitted his mistake in the size and wanted to honor his contract, but he was not willing to perform more work for Respondent without being compensated. Mr. Crawford argued that 95 percent of the roof cracks Respondent raised were at the gutters, which Complainant did not install. Mr. Crawford questioned the design of the building and the impact a significant snow storm in April 2021 had on the roof. Mr. Crawford asserted that Registrar Investigator Jim Dimond had information relating to the nature of the issues and would address that in the near future.

Tawny Charlesworth testified on behalf of Complainant that the total due to Complainant was $81,760.50. That total included the amount due on the original contract, a change order for materials, and $11,880.00 owing on the lean-to.

Mr. Mattila testified that the larger greenhouse was not completed, was installed improperly, and was abandoned. Mr. Mattila asserted that Complainant said it would sheet the inside of the greenhouse and then failed to do so, even though that was not part of the contract. Mr. Mattila also provided time sheets to establish he paid workers $37,440.00 to complete the wall sheeting that was not a part of the contract with Complainant. Mr. Mattila indicated that the smaller greenhouse had approximately twelve items on the punch list to be addressed while the larger greenhouse had over 300 items. Mr. Mattila pointed to an “incredible number” of roof leaks as a major concern. Mr. Mattila testified that Respondent had paid Complainant in full for the work performed. Mr. Mattila disputed that Respondent owed $11,800.00 on the lean-to and believed that the total due was only $2,618.31.

Respondent did not assert that it lacked the capacity to pay the amount Complainant asserted was due.

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 was unconvincing in it assertion that the parties did not intend to have a contract for the smaller greenhouse, which was started first, and that the parties understood the smaller greenhouse would be one third the price of the larger greenhouse. Respondent capitalized on an error made by Complainant, which Complainant honored as its mistake.

Not satisfied to take advantage of Complainant’s error in the building size, Respondent also wanted Complainant to perform work on the larger greenhouse that was not in the contract for the erroneously low price. The interior walls were not included in the contract, but Respondent argued it should have been completed by Complainant and/or the amount due to Complainant should be reduced by the cost to Respondent to complete the work.

The punch list items remaining to be addressed do not negate the substantial completion of the project or relieve Respondent of its obligation to pay on the contract. As to the roof issue, that is a question better left to the workmanship complaint or another venue.

The evidence established that Respondent owed a total of $81,760.50 for work performed on the project.

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 $81,760.50 for services or 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 Ridgeview Contracting LLC’s License No: 300396 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $81,760.50 in certified funds.

It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $81,760.50 in certified funds, the Registrar may close the Complaint in Case No. 2021-01820.

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.

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-137160-45720000Done this day, September 2, 2021.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors-54864001

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-137160-45720000