ALJDEC - Licensing

2023A-09671-NPC-ROC · Registrar of Contractors · 2024-02-13

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

AWAD of AZ, LLC,

COMPLAINANT,

v.

NRG Building Specialists, LLC

License No. ROC 274856,

RESPONDENT.

No. 2023A-09671-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 22, 2024, with Status Update due January 31, 2024

APPEARANCES: Jeffery Erzig appeared on behalf of Complainant AWAD of AZ, LLC. Kris Husa appeared on behalf of Respondent NRG Building Specialists, LLC.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

EXHIBITS ADMITTED INTO EVIDENCE: No Exhibits were offered. Administrative Notice was taken of the Agency Record.

FINDINGS OF FACT

NRG Building Specialists, LLC (“Respondent”) is the holder of License Number 274856, issued by the Arizona Registrar of Contractors (“Registrar”).

In August 2023, AWAD of AZ, LLC (“Complainant”) filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $19,777.85 for materials, consisting of windows and doors, provided by Complainant to Respondent.

The parties were unable to resolve their differences.

On September 15, 2023, the Registrar issued a Citation charging Respondent with the alleged violation of A.R.S. § 32-1154(A)(10). Respondent timely filed an Answer to the Complaint.

A Notice of Hearing was issued on September 25, 2023, advising the parties that a hearing would convene before the Office of Administrative Hearings on November 14, 2023, at 9:00 a.m. On the date and time set for hearing, Jeffery Erzig appeared on behalf of Complainant. Kris Husa appeared on behalf of Respondent. The parties participated in a prehearing discussion outside of the presence of the Administrative Law Judge. As a result of that discussion, the parties entered into a settlement agreement, however, required additional time in which to execute the terms of their agreement. Therefore, the hearing was continued and set for a Status Update due by December 20, 2023.

Both parties submitted written Status Updates stating that they were unable to resolve their dispute. Consequently, the matter was re-set for hearing on January 22, 2024, at 9:00 a.m. Once again, Mr. Erzig appeared on behalf of Complainant and Mr. Husa appeared on behalf of Respondent.

The matter proceeded to hearing.

Mr. Erzig testified that Respondent placed an order for the delivery of windows and doors for the Matthews residence. The current contract price was $62,316.85. The remaining balance on the contract is $19,777.85. Mr. Erzig testified that initially, Complainant quoted Respondent a price that included installation of the windows and doors. However, because Complainant is not licensed to perform such work, Complainant had revised the contract price, removing the cost of installation.

Mr. Husa testified that Complainant initially acted as a general contractor and performed the installation of windows and doors on another project, the Red Rock Project, notwithstanding that Complainant is not licensed and is “just a supplier.” Further, the parties agreed that Respondent has paid Complainant in full for the Red Rock project. Mr. Husa testified that Respondent was back charging Complainant for work that still needs to be performed on both the Matthews and Red Rock projects.

After the initial hearing setting, on December 7, 2023, Mr. Husa sent Mr. Erzig a check in the amount of $13,647.21 that represented the outstanding balance due on the Matthews contract minus a ten percent withholding until Complainant performed the remaining work on both the Red Rock and Matthews projects. Mr. Husa asserted that Complainant still needs to perform final trim out and provide the locks, hardware, and screens for both projects.

Mr. Erzig testified that he considered the remaining items on both projects to be “warranty issues.” Mr. Erzig further testified that Complainant had “not serviced [the Red Rock project] because [Respondent’s] account is not in good standing.” Mr. Erzig testified that Complainant will not perform the “warranty work” until Respondent pays Complainant in full. Mr. Erzig asserted that the “warranty work” can be “handled by the manufacturer.” Mr. Erzig acknowledged receiving the $13,647.21 check from Respondent, but did not deposit it or cash it.

Mr. Husa testified that he called the manufacturer of the windows and doors and was told to contact Complainant for the performance of the remaining work and for the missing materials. Mr. Husa asserted that Respondent acted in good faith by paying Complainant all but ten percent of the contract price for the Matthews project given that Respondent paid Complainant in full for the Red Rock project which has peeling paint on the windows and a sliding door that needs repair, and the Matthews projects still requires all hardware, including locks on the doors, final adjustments need to be made, and the sliding door is warped. Ms. Husa testified that the homeowners requested that Respondent withhold monies from Complainant until the project is complete.

Upon the conclusion of the presentation of the parties’ respective cases, and during a recess outside of the presence of the Administrative Law Judge, the parties participated in another settlement discussion. As a result of that discussion, the parties believed they reached a resolution, however, needed additional time in which to execute the terms of the resolution. The parties stipulated that in the event the parties were unsuccessful in resolving the matter, the parties would notify the Office of Administrative Hearings and a Decision and Order would issue based upon the evidence presented at hearing.

The Administrative Law Judge set the matter for another Status Update due January 31, 2024.

On January 30, 2024, and January 31, 2024, both Complainant and Respondent filed Status Updates indicating that the matter in dispute remained unresolved.

CONCLUSIONS OF LAW

This matter lies within the Registrar’s jurisdiction.

Complainant bears the burden of proof to establish Respondent’s statutory violation(s) 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.”

A.R.S. § 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license:

Failure 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.

Complainant asserted that Respondent owes Complainant $19,777.85 for materials supplied for the Matthews project. Respondent paid Complainant $13,647.21, however, Complainant has not negotiated the check. Respondent held back ten percent of the contract price until Complainant completes the project. The credible evidence presented at hearing established that Complainant has not completed the project as Complainant has not provided some of the materials for the Matthews project, including all hardware, such as the locks for the doors, final adjustments need to be made, and the sliding door is warped. Complainant did not dispute that these issues exist but instead, asserted that they fall under “warranty work” and that it would not perform further until it received payment in full. However, the evidence established that the project was not yet complete as items were missing and the door was defective upon installation. The Administrative Law Judge concludes that these items cannot be considered “warranty” items, as the project remains incomplete. Complainant failed to establish what amount, if any, Respondent owes Complainant. Consequently, Complainant failed to establish that Respondent violated A.R.S. § 32-1154(A)(10), and therefore, grounds do not exist to impose discipline against Respondent’s license.

RECOMMENDed order

Based on the foregoing, it is recommended that the Registrar dismiss the Complaint in Case Number 2023-09671.

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/ Sondra J. Vanella

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

NRG Building Specialists, LLC

[email redacted]

AWAD of AZ, LLC

[email redacted]

By: OAH Staff