ALJDEC - Licensing
2023A-10455-NPC-ROC · Registrar of Contractors · 2023-12-18
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Beebe Plumbing Inc.,
COMPLAINANT
v.
Morgan Taylor Homes LLC
License No. ROC 241477,
RESPONDENT
No. 2023A-10455-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: November 28, 2023
APPEARANCES: Tara Simmons appeared on behalf of Beebe Plumbing Inc. Mike Demore appeared on behalf of Morgan Taylor Homes LLC.
ADMINISTRATIVE LAW JUDGE: Brian Del Vecchio
EXHIBITS ADMITTED INTO EVIDENCE: Hearing Packet submitted by the Registrar of Contractors
FINDINGS OF FACT
Morgan Taylor Homes LLC, (Respondent) is the holder of License No. 241477 issued by the Registrar of Contractors (Registrar).
On or about April 12, 2021, Respondent and Beebe Plumbing, Inc. (Complainant) entered into a Master Subcontract Agreement. The parties agreed Respondent would withhold payment required to replace incorrect work or damaged material. Furthermore, Complainant agreed that when Respondent notified them of a workmanship issue, Complainant would immediately, at its own expense, act to satisfactorily address the workmanship issue.
On or about August 8, 2021, Complainant submitted a Bid Response Form to Respondent. The bid was for labor and materials for plumbing installation. The terms of the bid required Complainant to bill Respondent upon completion of the tasks. Payment was due thirty days from billing date. The bid was accepted by Respondent and work began on the project shortly thereafter.
On or about September 7, 2023, Complainant filed a complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $90,541.50 for plumbing materials and services rendered pursuant to Respondent’s construction projects.
The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a Citation for an alleged violation for Alleged Violation of Ariz. Rev. Stat. § 32-1154(A)(10).
At hearing, Tara Simmons and Terry Ruffing testified on behalf of Complainant. Mike Demore testified on behalf of Respondent.
Complainant’s representative, Tara Simmons, testified that Complainant hired Respondent to provide plumbing materials and services pursuant to Respondent’s residential construction projects. Initially, Ms. Simmons testified there was approximately $30,000.00 in unpaid invoices. The invoices were sent to Respondent and the amount paid by Respondent was less than the invoiced amounts. Respondent informed Ms. Simmons the reason for the reduced payment was for charge backs associated with repairs and return trips.
Ms. Simmons clarified the amount allegedly owed by Respondent was “$7,787.57 worth of invoices that are still open, as of today, on my books, open, not paid.” The $7,787.57 was the sum total of five invoices 20235428, 20234449, 20235433, 20235476, and 20236449. Ms. Simmons testified that if these invoices were paid the parties could “move on from this whole situation.”
The total amount for invoice 20235428 was $6,825.00, but nothing was paid. The invoice was for trim materials repurchased and delivered to Respondent’s jobsite because the original materials were stolen. The invoice was sent via email to Respondent on October 10, 2023.
The total amount for invoice 20234449 was $350.00, but nothing was paid. The invoice was for a return trip to install a valve and complete piping to a fireplace and was sent via email to Respondent on August 10, 2023. Ms. Simmons testified the due date for invoice 20234449 was September 9, 2023.
The total amount for invoice 20235433 was $175.00, but nothing was paid. The invoice was for a trip charge regarding an inspection of alleged leaks. The homeowner and Complainant scheduled an appointment for the inspection, but the homeowner was not present at the appointment time. Because the homeowner was not present at the appointment, Complainant’s employee left without conducting an inspection. Complainant charged Respondent for the trip. The invoice was sent via email to Respondent sometime in March of 2023.
The total amount for invoice 20235476 was $175.00, but nothing was paid. The invoice was for a return trip charge to the same job from invoice 20235433, for inspection of alleged leaks. The homeowner was present at the appointment. No leak was detected, therefore, only the return trip charge was invoiced. Complainant provided no evidence of when the invoice was sent to Respondent.
The total amount for invoice 20236449 was $262.50, but nothing was paid. The invoice was for an inspection and trip charge. No leak was detected and therefore only the inspection and trip charge was invoiced. The reason the trip charge on invoice 20236449 was greater than invoices 20235476 and 2023543 was because the distance Complainant’s employee needed to travel to get to the jobsite was greater. Complainant provided no evidence of when the invoice was sent to Respondent.
Mike Demore testified the issue was a civil dispute and not within the purview of the Registrar. Mr. Demore denied Complainant’s allegation that money was due on any of the invoices. Regarding invoice 20235428, Mr. Demore testified industry standard made the subcontractor responsible for all materials until the materials are affixed. When the materials were stolen they were not affixed and therefore Respondent was not responsible for the stolen materials. Regarding invoice 20236449 the need for an inspection was due to Complainant’s poor workmanship. Complainant was required to complete the job in a workmanlike manner per the contract. Complainant’s poor workmanship was the reason for the trip, therefore, the trip was covered by the original contract, which was paid in full. Mr. Demore testified invoices 20235433 and 20235476 were not industry standard charges and therefore Respondent was unwilling to pay for non-industry standard charges.
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 did not owe more than $750.00 for unpaid invoices. Although the original complaint alleged $90,541.50 in unpaid invoices, Complainant failed to provide sufficient evidence to establish the relevant unpaid invoices exceeded $750.00 when the complaint was filed. After the complaint was filed, Ms. Simmons testified Respondent paid all invoices with the exception of invoices 20235428, 20234449, 20235433, 20235476, and 20236449 totaling $7,787.50.
Ms. Simmons testified all invoices were paid with the exception of invoices 20235428, 20234449, 20235433, 20235476, and 20236449; however, only invoices 20235433, 20235476, and 20236449 were unpaid when the September 7, 2023, complaint was filed. Invoices 20235428 and 20234449 were either not issued or not due at the time of the September 7, 2023, complaint.
Invoices 20235428 and 20234449 were not relevant to Complainant’s September 7, 2023, complaint because said invoices were not due at the time of the complaint. Ariz. Rev. Stat. § 32-1154(A)(10) states a licensee may be disciplined for “failure. . . to pay monies in excess of $750 when due for materials and services” (emphasis added). Respondent sent invoice 20235428 on October 10, 2023, with a due date of November 9, 2023. The Registrar received Complainant’s complaint on September 7, 2023. Because the invoice was not due until approximately two months after the complaint was filed, invoice 20235428 was not relevant. Respondent sent invoice 20234449 on August 10, 2023, with a due date of September 9, 2023. Because the invoice was due two days after the complaint was filed, invoice 20234449 was not relevant.
The sum total of the alleged unpaid invoices was below the statutory minimum threshold. In the Master Subcontractor Agreement, the parties agreed that all workmanship related repairs were to be completed at the Complainant’s expense. Mr. Demore testified Complainant was dispatched to the customers’ houses to address workmanship related repairs. Ms. Simmons testified there were no workmanship related repairs because no leak was found at the conclusion of their investigations. Assuming there were no workmanship related repairs, only invoices 20235433, 20235476, and 20236449 were relevant, therefore, the total combined amount of unpaid invoices was $612.50; this amount was $137.50 short of the $750.00 statutory minimum. Because the relevant invoices were below the $750.00 statutory minimum Complainant failed to establish Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10).
RECOMMENDed order
Based on the foregoing, it is recommended that the Registrar dismiss Complainant’s complaint.
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 18, 2023.
/s/ Brian Del Vecchio
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole
Registrar of Contractors
c/o Legal Department
1700 W. Washington Street, Suite 105
Phoenix, AZ 85007
[email redacted]
Beebe Plumbing, Inc.
19155 N. 83rd Ave.
Peoria, AZ 85382
[email redacted]
Morgan Taylor Homes, LLC
10045 E. Dynamite Blvd., Suite 200
Scottsdale, AZ 85266
[email redacted]
By: OAH Staff