ALJDEC decisions subject to certification as final

2021A-02338-NPC-ROC · Registrar of Contractors · 2021-11-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Beyond Brick Tucson Inc,

COMPLAINANT

Mesa Verde Design and Development LLC

License No. ROC 130312,

RESPONDENT

No. 2021A-02338-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: November 8, 2021

APPEARANCES: Natan Ben Shabat appeared on behalf of Complainant Beyond Brick Tucson, Inc. Respondent Mesa Verde Design and Development LLC was represented by Brooke Harris, Esq. and Samantha Sanchez, Esq.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

_____________________________________________________________________

FINDINGS OF FACT

On July 28, 2021, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on September 10, 2021 at the Office of Administrative Hearings. The matter was continued and a hearing was held on November 8, 2021.

The Notice of Hearing shows that the hearing was being conducted on the charges made in the complaint and citation that were served on Respondent Mesa Verde Design and Development LLC (MVDD).

Through the citation and Notice of Hearing, ROC alleges that Respondent may have violated Ariz. Rev. Stat. section 32-1154(A)(10).

MVDD held License No. 130312 issued by ROC. Kevin Hartman was MVDDs qualifying party and an officer in the corporation.

On or about September 27, 2020, the parties entered into a contract to pave a 6,500 square foot driveway on the Bebout residence. The total cost was to be $32,500.00, plus tax.

On February 28, 2021, the parties entered into a change order for riprap in the amount of $2,640.00, plus tax.

MVDD had made payments to Complainant totaling $18,450.00 prior to the completion of the project. On April 23, 2021, Complainant provided an invoice to MVDD showing a balance due of $21,423.69.

MVDD also provided an additional payment of $14,138.00 to Complainant, which has yet to be deposited.

On or about May 17, 2021, Complainant filed with ROC a complaint against MVDD alleging that MVDD owed Complainant $21,423.69.

At hearing, Mr. Shabat testified that it was impossible to install the driveway without significant cutting and waste of bricks. He testified further that cutting and waste is a part of every project, and there was no term in the contract for the 10% waste fee.

Mr. Shabat testified that the parties agreed to the first change order prior to the project commencing, but the second change order was not signed by the parties. Mr. Shabat testified that he was initially not going to charge for the second change order, but included the same in the final invoice because of MVDD’s refusal to pay.

Mr. Shabat further testified that he acknowledged that he was aware as early as a week into the project that the square footage of the project may be less than 6,500 square feet. Mr. Shabat testified that the completed driveway was not 6,500 square feet but did not measure it himself, nor did he take up MVDD’s on its offer to be present at the survey confirming the actual square footage.

In addition, Mr. Shabat testified that he received MVDD’s check for $14,193.00, but has not deposited the same.

MVDD offered the testimony of Lorraine Bebout and Kevin Hartman. MVDD also offered 20 exhibits into evidence.

Ms. Bebout was the homeowner where the driveway was installed, and testified that she requested no changes to the driveway, and never agreed to pay for extra edging or the border.

Further, as to the first change order for the riprap, Ms. Bebout testified that she believed the work was incomplete.

Mr. Hartman testified on behalf of MVDD. He testified that he has been in business for 40 years.

As the square footage, Mr. Hartman testified that the 10% cutting and waste terms were not industry standard and not in the contract. He further argued that to charge for waste would encourage waste.

Mr. Hartman testified that he notified Mr. Shabat that the project was not going to be 6,500 square feet, and that Mr. Shabat should not have ordered that amount when he initially ran out of pavers.

Mr. Hartman also testified that the final square footage of the project was 5,699.

As to the first change order for the riprap, Mr. Hartman testified that the job was incomplete and the Bebouts had to spend an additional $700.00 to finish the project. Mr. Hartman also testified that there was no agreement for the second change order and was only charged because of his refusal to pay for the cutting and waste.

In addition, Mr. Hartman testified that he has been paid on the project except was waiting for the final resolution of this matter as the agreement with the Bebouts was “cost plus”.

Finally, Mr. Hartman testified that he has paid a total of $32,643.00 to Complainant, and believes that he has paid in full for the project.

CONCLUSIONS OF LAW

Unless otherwise provided by law, 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.

“At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” Ariz. Rev. Stat. § 41-1092.07(G)(2).

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).

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.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” Ariz. Rev. Stat. § 1-211(B).

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).

Among the grounds for suspension or revocation of a contractor’s license is a “[f]ailure by [the] 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.” Ariz. Rev. Stat. § 32-1154(A)(10).

Working backwards, both parties agreed there was no agreement for the second change order thus, the Tribunal finds that the $1,820.00 was not a valid charge. In addition, the Tribunal finds there was also no agreement, either with the Bebouts nor Mr. Hartman, for the “add-on edge area” charge of $600.00. As to the February 28, 2021 change order for the riprap, the Tribunal finds that this was a valid charge and finds that the work was fully completed as the terms stated “as needed”, and it does not specify who was to determine “as needed”. As to the total square footage, the Administrative Law Judge is curious as to why a new/amended contract was not drafted when the parties realized that the driveway would be less than the 6,500 square feet. From the evidence presented it is impossible to determine exactly how many full pavers were used and how much waste actually occurred.

The Tribunal believes the correct square footage of pavers should be 6,332 which after being cut and “wasted” would equal 5,699 square feet for the driveway, thus equaling the 10% waste. At $5.00 per square feet, the total for the pavers would be $31,660.00 plus tax of $1,950.26, for a total of $33,610.26. That amount plus the first change order for $2,802.62 (which includes tax), equals $36,412.88. Per the uncontroverted testimony, Respondent has paid a total of $32,643.00 to date, therefore there is a balance due of $3,769.88.

Therefore, the preponderance of the evidence shows that Respondent owes Complainant more than $750 for materials purchased in connection with Respondent’s operations as a contractor. Further, while Mr. Hartman testified that he was waiting final payment from the Bebouts he was waiting to supply an invoice for the same pending the outcome of the hearing.

The preponderance of the evidence shows that MVDD has violated section 32-1154(A)(10).

MVDD’s license should be suspended until it pays to Complainant $3,769.88.

RECOMMENDED ORDER

IT IS RECOMMENDED that Mesa Verde Design and Development LLC’s license number 130312 be suspended until the Registrar receives proof that it has paid to Beyond Brick Tucson, Inc. $3,769.88.

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.

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-137160-45720000Done this day, November 22, 2021.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

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-137160-45720000