ALJDEC - Licensing

2023A-07832-NPC-ROC · Registrar of Contractors · 2023-12-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Floyd's Plumbing LLC,

COMPLAINANT

v.

Big Kahuna Construction Corp

License No. ROC 226900,

RESPONDENT

No. 2023A-07832-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 23, 2023 and October 27, 2023

APPEARANCES: Floyd Davis appeared on behalf Complainant. Scott Klarkowski appeared on behalf of Respondent.

ADMINISTRATIVE LAW JUDGE: Brian Del Vecchio

EXHIBITS ADMITTED INTO EVIDENCE: Registrar’s electronic file and Respondent’s exhibits 1 through 14.

FINDINGS OF FACT

Big Kahuna Construction Corp (Respondent) is the holder of License No. 226900 issued by the Registrar of Contractors (Registrar).

On July 6, 2023, Floyd's Plumbing LLC (Complainant) filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $5,278.00 on invoices 1286, 1287, and 1288 for plumbing materials and services. The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a Citation alleging a violation of Ariz. Rev. Stat. § 32-1154(A)(10).

At hearing Floyd Davis, owner of Complainant, testified on behalf of Complainant. Scott Klarkowski (Scott), owner of Respondent, Julie Klarkowski (Julie), Office Manager for Respondent, and Conner Klarkowski (Conner), Project Manager for Respondent, testified on behalf of Respondent.

Mr. Davis testified his company was hired by Respondent to provide plumbing services and install materials at three separate project sites. Mr. Davis submitted invoice 1286 (Concho), invoice 1287 (Dusty Trail), and invoice 1288 (Limousine) to Respondent at the conclusion of each project. Mr. Davis admitted he failed to fully complete any of the projects.

On March 27, 2022, Mr. Davis submitted the Concho estimate to Respondent. It is unknown who approved Mr. Davis’ estimate; however, Conner confirmed the approval by text message on April 5, 2022. Conner testified the approval text was simply to let Mr. Davis know they wanted to hire him for the Concho job, not that the estimate he submitted was approved. On April 11, 2022, Mr. Davis walked the jobsite with Conner and planned out the demo associated with the underground work. Sometime after the start of the project, Mr. Davis spoke with Conner and requested time off to move to a new home. Mr. Davis gave no moving date and Conner approved Mr. Davis’ request. Prior to moving, Mr. Davis completed the underground work, ran water mains, and purchased the materials for the rough-in. After Mr. Davis purchased the materials for the rough-in, he stored them at the jobsite. Mr. Davis admitted he only completed part of the rough-in before he moved.

On July 7 2023, Connor text Mr. Davis “I don’t see a bill from you yet for the underground at Concho can you let me know what it is so I can run a check to you.” Sometime in August of 2023, Mr. Davis took his approved time off and moved. On September 6, 2022, Mr. Davis returned to the jobsite, but the project had been completed by another contractor, and the materials Mr. Davis purchased were no longer at the jobsite; Mr. Davis assumed they were installed. Mr. Davis then sent invoice 1286 to Respondent with a due date of September 13, 2022. The total invoice amount was $3,500.00 for materials and work completed prior to Mr. Davis’ move. Mr. Davis received no payment on the Concho invoice.

On February 6, 2022, Mr. Davis submitted the Dusty Trail estimate to Respondent. The estimate total was $6,588.00. On February 8, 2023, Julie approved only a portion of the estimate in the amount $3,060.00. Mr. Davis was paid $2,000.00 by check and began work on Dusty Trail. Mr. Davis testified he completed the rough-in and the underground portions of the estimate. Mr. Davis admitted he did not complete the project and reduced the invoice accordingly.

On February 6, 2022, Mr. Davis submitted the Dusty Trail to Respondent. The estimate total was $3,620.00 and Julie approved on February 22, 2022. Mr. Davis was paid $2,000.00 by check and work began on Limousine. Mr. Davis testified he completed the rough-in, began work on the trim-out of the Roman tub and master sink, but did not complete the trim-out. Mr. Davis demonstrated he completed the rough-in through the photos submitted by Respondent. Mr. Davis admitted he did not purchase or install the “p trap” for the hall bathrooms. Because Mr. Davis did not complete the trim-out, he reduced the invoice accordingly. On September 13, 2022, Mr. Davis sent Respondent invoice 1288. The remaining balance, less the $2,000.00 deposit, on Limousine was $1,370.00. No additional payments were received regarding Limousine.

Scott testified Complainant abandoned the jobs and Respondent had to hire another plumber to complete said jobs. Scott, Julie, and Conner testified they implored Mr. Davis to complete the jobs, however, the majority of their communication was conducted by phone or in person conversation. Scott testified Mr. Davis was paid for the work he completed and he was not paid for the jobs he abandoned.

Scott and Julie testified Complainant was never paid for Concho because Respondent never received an estimate for Concho. When hiring a subcontractor, Respondent’s normal business practice was to approve an estimate and pay a deposit. Scott and Julie claimed Mr. Davis never received a deposit because he failed to submit an estimate. Julie testified, that if she had seen the Concho estimate she would have negotiated with Mr. Davis on the Concho estimate. Several of the line item charges for parts and labor were greater than the other jobs even though Concho had less fixtures than the other projects. Furthermore, Julie testified Mr. Davis did not complete some of the line items in his invoice because another vendor was scheduled to perform some of the same work at Concho. Julie testified the invoice from the plumber hired to complete the Concho job was within a few hundred dollars of Mr. Davis’ estimate.

Conner testified Mr. Davis was not paid for Concho because the work he allegedly completed was actually completed by Conner and the plumber hired to complete Concho. Conner also testified there were failed inspections at Concho due to Mr. Davis’ poor workmanship, specifically failure to secure PEX lines. Conner testified when the demo requested by Mr. Davis was completed, Conner coordinated with the new plumber to install the lines Mr. Davis allegedly completed.

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.

A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.”

Ariz. Rev. Stat. § 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 owed a total of $5,278.00 for plumbing materials and services. Mr. Davis credibly testified the line items of the invoice he completed were billed. The line items which he failed to complete were reduced on each of the corresponding invoices. Mr. Davis evidenced he was approved to start work on all 3 jobs, invoiced Respondent for the work he completed, and the work he failed to complete he reduced the final invoice.

Regarding Concho, Scott, Julie, and Conner testified no work had been completed at Concho; however, the inspection of the jobsite failed due to poor workmanship. This shows Mr. Davis completed work at Concho, albeit poorly. The failed inspection noted the PEX was improperly secured. The fact that PEX was installed evidenced Mr. Davis completed work at Concho because he was the only plumber on the job at the time.

Regarding Dusty Trail and Limousine, Respondent supplied photos of the work completed by Mr. Davis. Changes were made after Mr. Davis completed said work, however, again Respondent showed work was in fact completed.

The evidence established that Mr. Davis completed work, but was not paid for that work when the invoices were due. No payments were made on the Concho invoice. No additional payments were made to Complainant after initial deposits on Dusty Trail and Limousine invoices.

Respondent failed to establish by a preponderance of the evidence that it lacked the ability to pay Complainant for the work performed.

Therefore, Complainant established that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10) by failing to pay Complainant $5,278.00 for services or materials rendered in connection with Respondent’s contracting business.

Based upon Respondent’s violation of the provisions of Ariz. Rev. Stat. § 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 Big Kahuna Construction Corp’s License No: 226900 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $5,278.00 in certified funds.

It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $5,278.00 in certified funds, the Registrar may close the Complaint in Case No. 2023A-07832.

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, December 21, 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]

Big Kahuna Construction Corp.

[email redacted]

Floyd's Plumbing LLC

[email redacted]

By: OAH Staff