ALJDEC - Licensing

2023A-08571-NPC-ROC · Registrar of Contractors · 2024-06-27

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Innovative Contractor Solutions Inc.,

COMPLAINANT

v.

J Walters Const Co LLC

License No. ROC 268707,

RESPONDENT

No. 2023A-08586-NPC-ROC

2023A-08571-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: June 12, 2024

APPEARANCES: Clinton Trauter and Jackie Trevizo appeared via Google Meet on behalf of Complainant Innovative Contractor Solutions Inc. Mickell Summerhays appeared on behalf of Respondent J Walters Const Co. LLC.

ADMINISTRATIVE LAW JUDGE: Adam D. Stone

EXHIBITS ADMITTED INTO EVIDENCE: Complainant’s Exhibits 1-21 and Respondent’s Exhibits 1-21 were admitted into evidence.

_____________________________________________________________________

FINDINGS OF FACT

Background and Procedure

On or about July 26, 2023, Complainant filed a complaint with the Registrar alleging that Respondent had failed to pay invoices pursuant to the parties’ contract for work performed on the “C-3 Project Glendale”. The total amount owed as alleged by Complainant was $19,964.10, and was given complaint number, and subsequently case number, 2023A-08571-NPC-ROC.

Complainant also filed a Complaint on July 26, 2023, alleging that Respondent had failed to pay invoices pursuant to the parties’ contract for work performed on the “Merit Deer Valley” project in the amount of $5,476.00, and on the “Quick Quack” project in the amount of $18,336.00. These complaints were given complaint number, and subsequent case number, 2023A-08586-NPC-ROC. There were also several other complaints included with the two above, however those matters were resolved prior to hearing.

The Registrar subsequently issued Citations for Alleged Violation of A.R.S. § 32-1154(A)(10) against Respondent’s license in both matters, and Respondent answered the Citations.

Notices of Hearing were issued in both matters, and the cases were later consolidated into the above action.

After several continuances, hearing was held on June 12, 2024.

Ms. Trevizo testified as to the above amounts, and testified that while other invoices had been paid, these three remain outstanding.

Further, Ms. Trevizo testified that it was her belief and understanding that Respondent had been paid on the “Merit Deer Valley” project and the “Quick Quack project”. However, Ms. Trevizo testified that she was unsure if Respondent had been paid on the “C-3 Project Glendale”.

Mr. Trauter testified that Respondent required that Complainant sign an unconditional waiver and release prior to releasing the check, something that Mr. Trauter was uncomfortable with.

Further, Mr. Trauter admitted that he signed the release contained in Respondent’s Exhibit 17, however, he never received the payment.

Darin Waters testified on behalf of Respondent. Mr. Walters was Respondent’s Vice President.

As to the “C-3 Project Glendale”, Mr. Walters testified that Respondent did not received any payments, and was in the process of perfecting its lien, and preparing for a lawsuit. Mr. Walters pointed to section 5.3.3 in its Exhibit 1, which stated that the sub-contractor would only be paid once the general contractor was paid.

As to the “Merit Deer Valley” project, Mr. Walters testified that he received final payment on June 4, 2024, and was willing to pay Complainant, provided Complainant signed a final waiver.

Finally, as to the “Quick Quack” project, Mr. Walters testified that he was paid on this project too. However, while he believed that Complainant was paid on this invoice, he was unable to find a cancelled check from his bank or other proof of payment.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish cause to discipline Respondent’s contractor’s license by a preponderance of the evidence. Respondent bears the burden to establish affirmative defenses by the same evidentiary standard.

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

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.”

Respondent acknowledged that the amounts Complainant alleged were correct. However, Respondent argued that it is excused from paying Complainant on the “C-3 Project Glendale” as it had not received its own final payment, and the parties’ contract prevented the same.

For the foregoing reasons, Complainant has established that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant $5,476.00 on the “Merit Deer Valley Project”, and $18,336.00 on the “Quick Quack” project. However, the tribunal finds that Respondent has an affirmative defense, at least in this forum, for its failure to pay on the “C-3 Project Glendale”, as it had yet to receive payment from the owner.

RECOMMENDED ORDER

Based on the foregoing, it is recommended that thirty calendar days after the effective date of the final order in this matter, License No. ROC 268707 of Respondent J Walter Const Co LLC shall be suspended until Respondent pays Complainant Innovative Contractor Solutions LLC the sum of $23,812.00.

It is further recommended that if, prior to thirty calendar days after the effective date of the final order, the Registrar receives proof in writing from Respondent that it has paid Complainant $23,812.00 in certified funds, the Registrar shall not suspend Respondent’s license but, instead, shall close Case No. 2023-08586.

It is further recommended that the Registrar close Case No. 2023-08571, as Respondent established an affirmative defense, and its license should not be suspended.

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, June 27, 2024.

/s/ Adam D. Stone

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Tom Cole, Director

Registrar of Contractors

Innovative Contractor Solutions Inc.

[email redacted]

Richard K. Mahrle, Esq.

[email redacted]

By: OAH Staff