ALJDEC - Licensing
2023A-00163-NPC-ROC · Registrar of Contractors · 2023-04-26
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
L B Contracting LLC,
COMPLAINANT
v.
Clout Construction LLC
License No. ROC 336894,
RESPONDENT
No. 2023A-00163-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: April 10, 2023
APPEARANCES: Orville Larry Bryan appeared via Google Meet on behalf of Complainant L B Contracting LLC. Davis Reed appeared via Google Meet on behalf of Respondent Clout Construction LLC.
ADMINISTRATIVE LAW JUDGE: Adam D. Stone
_____________________________________________________________________
FINDINGS OF FACT
On March 6, 2023, the Registrar of Contractors (“ROC”) issued a Notice of Hearing on Contested Case setting the above-captioned matter for hearing on April 11, 2023 at the Office of Administrative Hearings.
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 Clout Construction LLC on January 24, 2023.
Through the citation and Notice of Hearing, ROC alleges that Respondent may have violated Ariz. Rev. Stat. section 32-1154(A)(10).
Respondent holds License No. 336894 issued by ROC. Davis Reed is Respondent’s qualifying party and an officer in the corporation.
Complainant is L B Contracting LLC.
In December 2022, Respondent hired Complainant to perform site work, grading, asphalt and underground utilities for a project in which they were involved, specifically Caliber Collision in Casa Grande, Arizona. The parties entered into a contract as well as agreeing to two change orders.
In January 2023, Complainant filed with ROC a complaint against Respondent alleging that Respondent owed Complainant $69,786.04.
At hearing, Mr. Bryant testified on behalf of Complainant and offered six exhibits into evidence.
Mr. Bryant testified that he believed that the contract was not valid as it did not comply with Arizona statutes, and that Respondent was in violation of the Arizona Prompt Pay Act.
In addition, Mr. Bryant testified that he was not paid in full for the September 2022 and November 2022 bills which amounted to $69,786.04. Further, Mr. Bryant testified that while his other invoices were paid, they were paid late.
Also, Mr. Bryant disputed the deductive change orders contained in Complainant’s Exhibit 4, as they were unsigned, and there was no proof of payment incurred by Respondent.
Mr. Bryant testified that a small portion of the earthwork was not completed, the storm drain system was not fully completed, and the sewer line was missing one connection, thus not fully completed. Mr. Bryant testified further that his company demobilized in October because his foreman had a planned vacation in October, so he informed Respondent that it would need to hire another contractor to perform the asphalt work.
Finally, Mr. Bryant testified that he would have paid the equipment rental to Pacwest Rentals in the amount of $10,668.94 had he been paid on his September invoice.
Mr. Reed testified on behalf of Respondent. He believed that based upon his calculation, Complainant owed Respondent approximately $19,000.00 excluding other contractual fees for the corrective work which needed to be done as well as the work to finish the project when Complainant demobilized.
As to the deductive work charges in Exhibit 4, Mr. Reed testified that he had all proof of the charges as well as the payments thereon in a hyperlink contained under the “Description” section. Further, Mr. Reed testified that he had a right under the contract to make the deductive change orders without approval from Mr. Bryant.
As to specific deductions for the work, Respondent paid $5,485.00 for the catch basin; $2,500.00 to backfill the trenches and grading; $7,600.00 for the grade subgrade; $2,596.55 to Central Mechanical Services for the sewer line camera; and finally $3,946.56 to finish the sewer work.
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).
At the outset, the tribunal wants to make clear that this matter only concerns a possible violation of Ariz. Rev. Stat. § 32-1154(A)(10). This recommended decision and subsequent decision by ROC does not limit any further remedies either party may have in this matter.
The preponderance of the evidence demonstrates that Complainant did not fully complete the project and therefore, Respondent should not have to pay the full balance of $69,786.04 as requested by Complainant. First, there was no dispute that Respondent paid $10,668.94 for the Pacwest rental, which was Complainant’s responsibility had it been paid on the September invoice, thus, that amount shall be deducted from the amount owed. Further, the tribunal finds that Respondent had to pay a total of $22,128.11 as described in paragraph 16 above, to complete or repair Complainant’s work. Therefore, the tribunal finds that a deduction of $32,797.05, is appropriate in this matter. Thus, the amount owed by Respondent is $36,988.99.
The preponderance of the evidence shows that Respondent has violated section 32-1154(A)(10).
Respondent’s license should be suspended until it pays to Complainant $36,988.99.
RECOMMENDED ORDER
IT IS RECOMMENDED that Clout Construction LLC’s license number 336894 be suspended until the Registrar receives proof that it has paid to L B Contracting LLC $36,988.99.
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 26, 2023.
/s/ Adam D. Stone
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Martín Quezada, Director
Registrar of Contractors
L B Contracting LLC
5511 Lemonmint Ln
Prescott, AZ 86305-3820
[email redacted]
Clout Construction LLC
820 3rd Ave W
Bradenton, FL 34205
[email redacted]
By: OAH Staff