ALJDEC - Licensing
2024A-00028-NPC-ROC · Registrar of Contractors · 2024-04-22
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Listol Painting Inc,
COMPLAINANT
v.
Seabold Construction Co Inc
License No. ROC 255678,
RESPONDENT
No. 2024A-00028-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: April 9, 2024
APPEARANCES: Liz Listol appeared on behalf of Complainant. Hailey Owens appeared on behalf of Respondent.
ADMINISTRATIVE LAW JUDGE: Amy M. Haley
EXHIBITS ADMITTED INTO EVIDENCE: Administrative Notice was taken of the Notice of Hearing packet and all of its documents contained therein.
_____________________________________________________________________
FINDINGS OF FACT
Seabold Construction Co Inc (Respondent) is the holder of License No. 255678 issued by the Registrar of Contractors (Registrar).
Respondent contracted with Listol Painting Inc. (Complainant) for the painting of a commercial project. Complainant completed the project in September 2023.
On or about January 2, 2024, Complainant filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $59,945.92 for painting services.
The parties were unable to resolve their differences, and Complainant requested an administrative hearing. The Registrar then issued a Citation alleging a possible violation of Ariz. Rev. Stat. § 32-1154(A)(10).
Complainant was not paid for its July 2023, August 2023 and September 2023 invoices, in addition to being owed its retention amount of $25,320.30.
The original contract was for $363,000.00. There were additional change orders amounting to $143,406.00 throughout the course of the project. Therefore, the total amount of the project was $506,406.00.
Respondent made payments totaling $467,653.54, leaving a balance of $38,752.46.
Respondent had not been paid by the owner since June 2023 for work on the project, to include Complainant’s work completed in July 2023, August 2023, and September 2023.
Respondent is currently going out of business and has begun the process of “actively winding down,” though not yet in bankruptcy status.
HEARING EVIDENCE
Liz Listol, corporate financial officer, testified that Complainant was hired to work at The Pines in Prescott Valley, a commercial assisted living facility. The contract was to perform painting services. The project completed in September 2023. She further testified that the total due to Complainant was $56,945.92. However, when asked to justify the method in which this amount was calculated, Ms. Listol was unable to articulate consistent numbers that would add up to $56,945.92. Ms. Listol testified that Complainant was owed $707.35 for application #14, $11,141.60 for application number #15, a retention amount of $25,263.97, and a change order amount of $19,833.00. However, Ms. Listol did not provide any documentation with respect to application #14 and the retention amount Ms. Listol testified to differed from the documents submitted. Ms. Listol was unable to clarify the confusion.
Hailey Owens, corporate secretary, testified on behalf of Respondent. Ms. Owens acknowledged that Respondent owed Complainant $38,752.46. This amount stemmed from a retention amount of $25,320.30 and unpaid balances for work done in July 2023, August 2023, and September 2023 totaling $13,432.14.
Ms. Owens further testified that Respondent received payments from the owners of the facility through June 2023, after which a dispute arose and the parties then resorted to litigation. Thus, Respondent had not been paid since June 2023 for work on the project by the owners. Ms. Owens further testified that Respondent was also owed its retention amount from the owners, and therefore Respondent did not have an ability to pay Complainant.
Ms. Owens further testified consistently with the preceding Findings of Fact set forth.
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.
Emphasis added.
The evidence established that Respondent owed a total of $38,752.46. The credible evidence established that the original contract was for $363,000.00. There were additional change orders amounting to $143,406.00 throughout the course of the project. Therefore, the total amount of the project was $506,406.00. Respondent made payments totaling $467,653.54, leaving a balance of $38,752.46.
Respondent established that it had not received sufficient monies as payment for the particular construction work on the project.
However, Respondent failed to establish, by a preponderance of the evidence, that it lacked the ability to pay Complainant for the work performed. A statement of “actively winding down,” in and of itself and without more, is not enough to establish the lack of capacity to pay Complainant.
Therefore, Complainant established that Respondent violated Ariz. Rev. Stat. § 32-1154(A)(10) by failing to pay Complainant $38,752.46 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 Seabold Construction Co Inc’s License No. 255678 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $38,752.46 in certified funds.
It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $38,752.46 in certified funds, the Registrar may close the Complaint in Case No. 2024-00028.
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, April 22, 2024.
/s/ Amy M. Haley
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
Seabold Construction Co Inc.
9965 SW Arctic Dr.
Beaverton, OR 97005
Listol Painting Inc
196 Sheffield Dr
Prescott, AZ 86303
[email redacted]
By: OAH Staff