ALJDEC - Licensing
2023A-06672-NPC-ROC · Registrar of Contractors · 2023-10-17
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
AZ Pool Supplies,
COMPLAINANT
v.
Bleuwave General Contracting LLC
License No. ROC 311039,
RESPONDENT
No. 2023A-06672-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: September 28, 2023
APPEARANCES: Mark Teachout, Chief Financial Officer of Bleuwave General Contracting LLC, appeared on behalf of Respondent. Jeremy Lily, appeared on behalf of AZ Pool Supplies, Inc.
ADMINISTRATIVE LAW JUDGE: Brian Del Vecchio
FINDINGS OF FACT
Bleuwave General Contracting LLC (Respondent) was the holder of License No. 311039 issued by the Registrar of Contractors (Registrar).
On or about June 1, 2023, AZ Pool Supplies, Inc. (Complainant) filed a Complaint against Respondent with the Registrar which alleged Respondent failed to pay Complainant the sum of $7,380.16 for pool equipment provided on invoice 233342.
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).
On March 9, 2023, Mark Teachout placed an order for, among other things, a pool pump, filter, and in-floor cleaner heads on Complainant’s website. Mr. Teachout input his personal address for billing and Respondent’s address for shipping; Mr. Teachout paid for the order with his personal Discover credit card.
Sometime after the March 9, 2023, order Complainant’s employee Jamie Lily called Mr. Teachout because the order did not appear to make sense. The online order attempted to put together all the plumbing and equipment necessary to install a residential pool; however, the products ordered were mismatched. Certain brands of pumps, vacuums, and in-floor cleaner heads only work with their proprietary products and Mr. Teachout’s order mixed proprietary products. If Complainant fulfilled the order the system would have been incapable of operating.
Mr. Teachout explained he intended to build a pool at his home and was attempting to acquire all the necessary components. Mrs. Lily cancelled the online order and requested detailed information about Mr. Teachout’s pool for the purpose of producing a new invoice with proper matching parts. During the conversation, Mr. Teachout informed Mrs. Lily of his ownership in Respondent and discussed the possibility of future business between the parties. Mr. Teachout told Mrs. Lily that Respondent had future plans to get into the pool building business.
On March 10, 2023, Mr. Teachout sent an Arizona Form 5000, transaction privilege tax exemption certificate, to Complainant. In Box A, Purchaser’s Name and Address, Mr. Teachout listed Respondent’s information, and in Box B, Mr. Teachout checked the single transaction certificate box. The form was electronically signed by Mr. Teachout on March 10, 2023, and included his CFO title.
On or about March 13, 2023, Mrs. Lily emailed Mr. Teachout, on his personal email, a new quote. The billing and shipping information reflected only Mr. Teachout’s personal information and not Respondent’s. Notably the invoice did not charge Mr. Teachout any taxes. Mr. Teachout, once again, paid the March 13, 2023 invoice with his personal Discover card.
Sometime after Mr. Teachout paid the March 13, 2023, invoice, the products were personally delivered to Mr. Teachout’s home by Mr. Lily’s daughter. Mr. Teachout installed the pool equipment in his home. There was some dispute as to whether Mr. Teachout received all the items ordered. Also, after the pump was installed, it began to leak.
On August 14, 2023, Mr. Lily received a merchant dispute letter from Discover informing him Mr. Teachout disputed the $7,380.16 charge and because the card was not present at the time of the transaction; the charge was reversed.
At hearing, Complainant’s exhibits 1 through 5 and Respondent’s exhibits 1 through 11 were admitted. Mr. and Mrs. Lily testified on behalf of Complainant. Mr. Teachout and Andrew Deneke testified on behalf of Respondent.
At hearing, Mr. Lily testified he and Mr. Teachout had several conversations regarding current and future potential business. Mr. Lily was under the impression order 233342 was placed by Respondent for two reasons. First, Mr. Teachout’s March 9, 2023, online order shipping information was Respondent’s. Second, Mr. Teachout submitted a signed Arizona Form 5000 which included Respondent’s information thereby waiving state and city taxes and the single transaction certificate box checked.
At hearing, Mr. Teachout testified he spoke with Mr. Lily about potential future business. Mr. Teachout is a minority share owner in Respondent and currently serves as its Chief Financial Officer. Mr. Teachout testified he paid for the pool equipment, but he alleged some items were never delivered, some were damaged, and some were unnecessary. After some discussion with Mr. Lily, they were unable to come to a resolution. Mr. Teachout testified because they could not come to a resolution, he disputed the transaction with Discover. After Discover completed their investigation, they reversed the transaction and refunded Mr. Teachout. Furthermore, at no point did Mr. Teachout communicate with Complainant from his company email nor did he ever use his company credit card.
At hearing, Andrew Deneke, testified he worked in Respondent’s accounting department. Respondent’s company credit cards were all Visa cards issued by Chase Bank. At the time, Mr. Teachout had a company credit card, however, there were no transactions with Complainant on the company credit card.
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.
The evidence established that Respondent did not owe a total of $7,380.16 for the merchandise. Respondent was never a part of the transaction. Mr. Teachout was a minority shareholder in Respondent and represented that future business may be conducted between Complainant and Respondent. Mr. Teachout at all times communicated with Complainant from his personal email account. Mr. Teachout never used Respondent’s Chase Visa card to make any purchases; rather, he used his personal Discover card to complete multiple transactions. The only transaction which had Respondent’s shipping information was cancelled. Furthermore, Complainant testified his daughter personally delivered the merchandise, not to Respondent’s address, but to Mr. Teachout’s home personally. Finally, the Arizona form 5000 was submitted by Mr. Teachout, however, this was used by Mr. Teachout for two reasons, first to establish a potential future business relationship between Complainant and Respondent and to avoid paying city and state taxes on his multi-thousand dollar personal purchase.
Therefore, Complainant failed to establish that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant $7,380.16 for materials rendered in connection with Respondent’s business.
RECOMMENDed order
It is recommended that on the effective date of the Registrar’s final order in this matter, the Registrar close Complainant’s complaint in Case No. 2023-06672 against Respondent’s License No. 311039.
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, October 17, 2023.
/s/ Brian Del Vecchio
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole
Director
Registrar of Contractors
c/o Legal Department
1700 W. Washington Street, Suite 105
Phoenix, AZ 85007
[email redacted]
AZ Pool Supplies
[email redacted]
Bleuwave General Contracting LLC
[email redacted]
By: OAH Staff