ALJDEC - Licensing
2022A-11060-NPC-ROC · Registrar of Contractors · 2023-04-06
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Unique Flooring LLC,
COMPLAINANT
v.
Scott Ward Custom Homes Inc
License No. ROC 267537,
RESPONDENT
No. 2022A-11060-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: March 17, 2023
APPEARANCES: Kristen Arguello appeared on behalf of Complainant Unique Flooring, LLC. Tricia Ward appeared on behalf of Respondent Scott Ward Custom Homes, Inc.
ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson
_____________________________________________________________________
FINDINGS OF FACT
1. On or about January 31, 2022, Complainant Unique Flooring, issued an invoice to Respondent Scott Ward Custom Homes, Inc., in the amount of $48,650.61, to install granite in the kitchen and several rooms at the “Davis Residence” for Respondent. See the Registrar’s Administrative Record, pgs. 78 to 71.
2. Complainant’s qualifying party is Kristen Arguello.
3. At all times relevant to this matter, Victor Arguello was an employee of Complainant.
4. Respondent’s qualifying party is Scott Richard Ward.
5. Tricia Ward is an officer of Respondent.
6. Luke Larson worked as the Superintendent on the Davis Residence project.
7. Complainant’s DBA is Supreme Stone.
8. On August 12, 2022, Respondent sent a text message to Mr. Arguello and Luke Larson stating that Mr. Arguello had agreed to complete granite work by August 31, 2022 and that Mr. Arguello had agreed to a $200 per day per diem charge for every day that the project was completed late. See the Registrar’s Administrative Record, pgs. 52-59. Respondent wrote that the per diem charge would be deducted from the invoice. See id. Luke Larson responded to the text with the message, “Roger that.” Mr. Arguello responded to the test chain with the following message, “ 10 4 boss.” See the Registrar’s Administrative Record, pgs. 52-59.
9. Complainant provided labor and materials for the construction project at the Davis Residence.
10. Complainant completed the job in on November 21, 2022. See the Registrar’s Administrative Record, pgs. 32-35.
11. On or about December 7, 2022, Complainant filed a complaint with the Arizona Registrar of Contractors (ROC or Registrar ) alleging that Respondent failed to pay the amount of $12,220.00 for labor and services provided by Complainant in connection with a residential remodeling contract.
12. On January 13, 2023, the ROC issued a Citation against Respondent’s license. Through the Citation, the ROC alleged that Respondent may have violated Arizona Revised Statutes (A.R.S.) 32-1154(A)(10).
13. Respondent filed a timely answer to the complaint. In its answer, Respondent stated that Complainant agreed to pay a per diem of $200 per day for every day that the project was delayed after August 31, 2022. See the Registrar’s Administrative Record, pgs. 32-33. Respondent asserted that the total amount of per diem charges was $15,800.00 because Complainant did not complete the project until 79 days after August 31, 2022. See id.
14. The matter was referred to the Office of Administrative Hearings for an evidentiary hearing.
15. A hearing was held on March 17, 2023.
16. At hearing, Ms. Arguello testified on behalf of Complainant. Ms. Arguello’s husband, Victor Arguello, testified on behalf of Complainant. Respondent presented the testimony Scott Ward, Tricia Ward, and Luke Larson.
17. At hearing, Ms. Arguello explained that Complainant agreed to perform work for Respondent, however, Respondent has failed to pay the full balance. Ms. Arguello stated Complainant never agreed to pay a per diem amount for every day that the work was not completed after August 31, 2022. Ms. Arguello also contended that Mr. Arguello did not have authority to enter into contracts for Complainant. Ms. Arguello also testified that Respondent caused many delays in construction.
18. Ms. Arguello provided no evidence that she notified Respondent that
Mr. Arguello had no authority to enter into payment and service agreements on behalf of Complainant.
19. Ms. Arguello stated that he is an employee of Complainant. Mr. Arguello acknowledged at hearing that he received a text message from Respondent regarding the per diem agreement. Mr. Arguello stated that he never responded to the text. When asked by Ms. Ward on cross-examination whether he responded to the text with the language “10 40”, Mr. Arguello stated that he was responding to a different text message the following day. However, Mr. Arguello did not explain the nature of the purported separate text message.
20. I do not find Mr. Arguello’s testimony to be credible.
21. Ms. Ward is one of Respondent’s officers. Ms. Ward stated that Respondent never entered into a written contract with Complainant, however, Respondent hired Complainant to perform work for Respondent. Ms. Ward stated that there were specific dates set for performance and Complainant delayed in completing the job. Ms. Ward stated that Mr. Arguello held himself out to be Complainant’s owner. Ms. Ward stated that Respondent agreed to the August 31, 2022 deadline because
Mr. Arguello stated that he could complete the job by August 31, 2022. Ms. Ward stated that due to Complainant’s delays, Respondent lost its tile setter. Complainant also stated that it was important that Complainant complete the job by the deadline because the homeowner would have trouble obtaining financing due to the delays.
22. Mr. Ward stated that Mr. Arguello held himself out to be the owner of Complainant. Mrs. Arguello held herself out to be the in store liaison for customers to pick out materials. Mr. Ward stated that Mr. Arguello is the point of contact. Mr. Ward stated that he had several conversations with Mr. Arguello regarding the scheduling of the work along with Jenny Hayeck. Mr. Ward stated that he asked Mr. Arguello to give him a date of completion. Mr. Arguello stated that he could complete the job by August 31, 2022. Mr. Ward stated that he pleaded with Mr. Arguello to complete the job.
23. Mr. Ward stated that Mr. Arguello was the main point of contact for the project and that Mr. Arguello greed to complete the job by August 31, 2022 or pay a per diem of $200 per day for every day that the project was incomplete. Mr. Ward asserted that Respondent did not owe money to Complainant because the amount of the per diem amount exceeded the amount that Complainant alleges is outstanding.
24. Based on the evidence of record, the Administrative Law Judge finds that Complainant, through Mr. Arguello who acted as an agent of Complainant, agreed to have a $200 per diem charge deducted from the invoice for the Davis project for every day that the project was completed late after December 31, 2022. The Administrative Law Judge further finds that the per diem amount exceeded the amount that Complainant has alleged is due in the complaint. Therefore, there is no amount owed under the contract.
CONCLUSIONS OF 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. A.A.C. 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.” A.R.S. § 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.” A.R.S.. § 1-211(B).
The purpose of the ROC’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).
A.R.S. § 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. 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 . . . 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.”
9. Payment for “[s]ervices rendered in connection with the licensee’s operations as a contractor” does not include interest, finance charges, lien charges, or other charges that are based solely on contract terms.
10. The preponderance of the evidence does not show that Respondent violated A.R.S. § 32-1154(A)(10) as alleged. The preponderance of the evidence shows that Complainant owed Respondent at least $15,800 for the per diem charges, and as a result, there was no amount owed under the contract.
RECOMMENDed order
Based on the foregoing, it is recommended that on the effective date of the Registrar of Contractors’ Order, Complainant’s complaint be dismissed.
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.
Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.
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 forty (40) days from the date of that certification.
Done this day, April 6, 2023.
/s/ Velva Moses-Thompson
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Martín Quezada, Director
Registrar of Contractors
Scott Ward Custom Homes Inc
2420 Jacob Row
Lake Havasu City, AZ 86404
[email redacted]
Martín Quezada
Registrar of Contractors
c/o Legal Department
1700 W. Washington Street, Suite 105
Phoenix, AZ 85007
[email redacted]
Unique Flooring LLC
1680 Acoma Blvd W
Lake Havasu City, AZ 86403
[email redacted]
[email redacted]
By: OAH Staff