ALJDEC - Licensing

2023A-06983-NPC-ROC · Registrar of Contractors · 2024-02-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Alfredo's Drywall LLC,

COMPLAINANT,

Bjelde Construction LLC,

License No. ROC 260364,

RESPONDENT.

No. 2023A-06983-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 18, 2023 and January 23, 2024; record review concluded January 31, 2024.

APPEARANCES: Edwin A. Mejia for Alfredo’s Drywall LLC. Attorney Robert S. Porter for Bjelde Construction LLC.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: Registrar Notice of Hearing with attachments (101 pages); Complainant’s pages supplemental filing (51 pages); Respondent’s supplemental filing (17 pages).

_____________________________________________________________________

FINDINGS OF FACT

Bjelde Construction LLC. (Respondent) is the holder of License No. 260364, General Dual KB-1 Dual Building Contractor, issued by the Registrar of Contractors (Registrar) on December 31, 2009. Lyle Nils Bjelde (Bjelde) is the Qualifying Party.

In June 2023, Alfredo's Drywall LLC (Complainant or Mr. Mejia) filed a Non-Payment Complaint Form (Complaint) against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the total amount of $161,156.90 on eleven projects over the period of January 2023 through April 2023. Complainant provided copies of multiple invoices to Respondent along with several contracts for work to be performed for Respondent that are signed by Bjelde.

On July 10, 2023, the Registrar issued to Respondent a Citation for Alleged Violation of A.R.S. § 32-1154(A)(10).

Respondent filed an Answer on July 25, 2023.

The matter was not resolved informally between the parties.

Neither party filed a pre-hearing disclosure to the Tribunal.

At the time of the first hearing session, neither party presented any documentation in support of their testimony. Therefore, at the end of the first hearing session, the Tribunal held the record open for the submittal of the referenced supporting documents by a date certain. However, neither party made their filing.

The Tribunal again allowed a time period for the parties to make their supporting document submissions and the parties each filed documents. Given the need for further clarification of the submissions, the Tribunal scheduled/rescheduled a further hearing (i.e., the Supplemental hearing session).

At the first hearing, Complainant testified regarding that he first met Bjelde when Complainant was working a small job and Bjelde stopped by that site to talk with him.

At the first hearing, Bjelde testified that Mr. Mejia walked up to him at a job in Scottsdale, essentially seeking work, saying he could work “from the ground up,” which Bjelde stated meant to him Complainant could do concrete, plumbing, electrical, framing, insulation, tile, kitchens, bathrooms, etc.

Complainant did several small jobs for Respondent. At the first hearing, Mr. Mejia testified that, after those small jobs, Bjelde began asking Complainant to do the work on larger projects and to provide other contractors for the various parts of those larger projects. Complainant further indicated that prior to doing these larger projects, Bjelde required Mr. Mejia to come to the Respondent’s office and sign documents and certify that Complainant had an ROC license and that Mr. Mejia had made it clear to Bjelde that Complainant’s ROC license was only for drywall. Complainant noted that Bjelde did not “require” any other of those contractors to present their licenses to Respondent.

At the first hearing, Mr. Mejia testified that, when Bjelde asked him to start doing the work on larger projects, Bjelde would ask Complainant if Complainant had money to front the work and then Bjelde would promise Complainant to pay Complainant back once Bjelde got paid. In this regard, Mr. Mejia testified that he had text messages from Respondent about Bjelde having signed the letter(s) promising to pay Complainant those fronted monies once the jobs were finished.

At the first hearing, Mr. Mejia testified that he personally talked with Mr. Santos, Mr. Gammage, and Mr. Hicks who each advised Mr. Mejia that they had paid Respondent.

At the first hearing, Respondent asserted that, as a result of Complainant’s work on projects, multiple issues arose that had to be fixed. Bjelde alleged that the cost of these repairs and construction work which Bjelde had subsequently done were, in fact, higher than the amounts remaining unpaid to Complainant. At this hearing, Bjelde verbally “estimated” that Complainant owed Bjelde “maybe 18,000.00.”

At the first hearing, absent any documentation, Bjelde estimated Respondent’s “loss” on various projects, then stated there were some issues as to the projects and asserted that Bjelde had to fix various things after Complainant’s work was done. In this regard, Bjelde asserted the following losses: (a) Santos project loss to be $20,000.00; (b) Hicks project loss to be $10,000.00; (c) Moon project loss to be $6,000.00; Lauchnor project loss to be $4,000.00; Wyman project loss to be $4,000.00; Wayman project loss to be “undetermined” but “maybe” $1,500.00; and Gammage project loss to be “undetermined” but “maybe” $4,000.00 to $6,000.00. On those and multiple other projects, Bjelde testified that he was “not really sure” on these matters because a project manager had worked those jobs.

At the hearings, Bjelde testified that he had insisted that Complainant use licensed contractors and he further indicated that he did not pay Complainant’s invoices because those other subcontractors “did not have licenses.” Additionally, Bjelde’s overall position is that Respondent was required to perform additional corrective work regarding the construction work that Complainant had performed and, thus, Respondent does not owe Complainant the alleged sum.

Complainant’s supplemental documentation of phone texts [beginning on April 23, 2023 through June 20, 2023] demonstrates that the parties had verbally agreed on certain payments for certain work. These agreements were to be documented in two letters, one regarding the Santos project and one regarding the Gammage project. There were some additional language changes in the letter. Some of the expected payments to Complainant were being made from progress payments Respondent was receiving. At the end of April and thereafter, Complainant was continuing to request the expected payment(s). The last text provided to the hearing record, dated June 20, 2023, indicated that Complainant was going to take other action regarding the expected payments.

Mr. Santos testified at the hearing session on January 23, 2024. Mr. Santos contracted with Respondent in December of 2021 for construction work in a total amount of $103,000.00. The Santos construction work did not begin until September of 2022 and apparently was completed around June 2023. At the end of that project, and after filing an ROC Complaint against Respondent, Mr. Santos and Respondent negotiated a final payment to Respondent which was less than what would have been a full final payment to Respondent. With regard to the workers that had come to the project, Mr. Santos did not recall anyone being there except the workers Complainant brought or provided, mentioning Cesar (sp), Tony, and Pablo; however, while Complainant indicated that Cesar was the plumber but he did not provide Tony or Pablo.

Regarding the Santos project, Complainant noted that it had never received any invoice from Respondent with regard to any “corrective” work that allegedly needed to be done.

On the Complaint, Mr. Mejia indicated that Respondent owed him $21,800.00 for the Hicks project (Invoice 567, dated April 8, 2023).

For the supplemental hearing session, Complainant provided two written statements from Mr. Hicks regarding that project. In a letter dated June 19, 2023, Mr. Hicks wrote that he had paid Respondent $119,179.44 for draws and change orders. In a letter dated October 31, 2023, Mr. Hicks wrote of a change order (CO) for work on the front patio and mentioned the ensuing March 1, 2023 rain storm; he noted that Complainant had performed the repairs on that rain-damaged area and that no one from Respondent’s company had worked on those repairs. Mr. Hicks specified that the CO had been paid in full to Respondent, while the work thereunder had not been completed. Mr. Hicks noted that, in May 2023, due to Respondent not having completed the Hicks-Respondent contract, he attempted to renegotiate with Respondent but the parties then terminated the contract relationship.

On the Complaint, Mr. Mejia indicated that Respondent owed him a remaining amount of $1,850.00 for the Lauchnor project (Invoice 539, dated March 11, 2023).

For the supplemental hearing session, Complainant provided a written statement from Mr. Lauchnor regarding that project. In an e-mail dated November 1, 2023, Mr. Lauchnor wrote that he had no issues with the Complainant’s construction work and that he had paid Respondent in full.

For the Supplemental hearing session, Respondent posited that Complainant should not be paid for work that had occurred on any/all the projects that was actually “unlicensed” work by Complainant. Respondent culled out from the contracts, the amounts of “drywall” and “painting” work in the amount of $9,840.00 and noted that was really the total monies remaining unpaid to Complainant. By Respondent’s supplemental calculations, he argued that Complainant should not be paid for $151,316.90 in “unlicensed” work (such as concrete, framing, roofing, HVAC, electrical and plumbing).

For the Supplemental hearing session, Respondent presented a series of handwritten “back charge invoices” totaling $71,509.00 and argued, thus, that Complainant actually owed him $61,669.00.” Respondent’s “back charge invoices” numbers 1 through 14 are each dated November 3, 2023.

The hearing record contains no evidence that Respondent created any change orders or back charge invoices regarding Complainant’s work while Complainant was doing the work. Bjelde testified that he thought Kevin Brown may have done that, but Bjelde added that he (i.e., Bjelde) and Mr. Mejia had “talked more than once.”

At the hearings, Respondent did not assert that it lacked the capacity to pay Complainant the various invoices amounts.

The majority of Complainant’s unpaid Complainant’s invoices were the result of Complainant’s work prior to Respondent asking Complainant to work on the Santos, Gammage and Hicks projects, which appear to have begun in April 2023.

Pursuant to the Registrar’s public records, Respondent’s ROC License No. 206234 is revoked, and there are multiple open complaints against Respondent’s ROC License No. 206234.

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 credible documentary evidence established that Respondent owed Complainant a total of $161,156.90 for the various projects.

Respondent’s November 3, 2023 back charge orders provide no credible evidence of any repeat or corrective work performed by Respondent after Complainant’s work was completed. Additionally, Respondent did not file any complaint with the Registrar regarding the alleged workmanship issues concerning Complainant’s work.

The only issue remaining is whether Respondent demonstrated the statutory justification or excuse for failing to issue payment to Complainant. Respondent failed to establish by a preponderance of the evidence that it lacked the ability to pay Complainant for the work performed or that it had not received sufficient payment for the particular construction work projects or operation for which Complainant’s services were rendered. Rather, the hearing evidence demonstrated, regarding the three major projects of Santos, Gammage, and Hicks, that those owners had, in fact, paid Respondent for the majority if not all of the work performed by Complainant. Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant $161,156.90 for services and 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 Respondent’s License No. 260364 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $161,156.90 in certified funds.

It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $161,156.90 in certified funds, the Registrar may close the Complaint in Case No. 2023-06983.-54864001

001

-137160-45720000

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, February 13, 2024.

/s/ Kay A. Abramsohn

Administrative Law Judge

Transmitted electronically to:

Tom Cole, Director

Registrar of Contractors

c/o Legal Department

[email redacted]

Alfredo's Drywall LLC

[email redacted]

Robert S. Porter, Esq.

PORTER LAW FIRM

[email redacted]

By: OAH Staff