ALJDEC - Licensing
2024A-05596-NPC-ROC · Registrar of Contractors · 2024-09-30
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Canyon State Barricade Service LLC,
COMPLAINANT,
v.
Stormwater Pros LLC
License No. ROC 269340,
RESPONDENT.
No. 2024A-05596-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: September 9, 2024.
APPEARANCES:
For Complainant: Larry Herrera.
For Respondent: Attorney Chad Hester.
ADMINISTRATIVE LAW JUDGE: Samuel Fox
EXHIBITS ADMITTED INTO EVIDENCE: Administrative notice was taken of the Notice of Hearing Packet submitted by the Registrar of Contractors. Complainant’s Exhibits A through O. Respondent’s Exhibit’s 1 through 6. Respondent’s Post-Hearing Exhibits 1 through 14.
_____________________________________________________________________
FINDINGS OF FACT
Stormwater Pros LLC (Respondent) was the holder of License No. 269340, issued by the Arizona Registrar of Contractors (Registrar) on November 22, 2010.
On or about November 14, 2023, Respondent requested a quote for barricade services from Canyon State Barricade Service LLC (Complainant).
On or about November 16, 2023, Complainant quoted $14,242.89 for the following scope of work: “Delivery,setup,tear down or pickup of traffic control per approved traffic control plan (TCP).Changes made outside the scope of work will require a change order and will be billed time & materials. Price subject to change based on the approved traffic plan.”
Respondent accepted the quote.
The contract included the following terms:
The number of days listed on the quote was an estimate. Respondent was to be billed for actual days used unless accepted in writing by Complainant.
The quote included only items listed. Additional devices were to be charged separately.
Invoices were to be based off the actual ticketed equipment and/or labor delivered to the job.
The quote provided a list of excluded items: “Municipal Plan Review Fee, Permit Fees, Shadow Truck, Project Specialty Signs, Concrete or Water Filled Barrier Wall, Flagman, Police Officers, Stand by Time, ADA Ramp. Public info directional access signs, radar/speed sensing trailers, and other applicable Intelligent Transportation System type devices.”
On or about February 4, 2024, Complainant sent an updated quote for $17,332.56, which increased the cost of submitting the traffic control plan and road closure. The updated quote also added a changeable message board. Although the updated quote was not labeled a change order, it was a change order.
Complainant testified that Respondent verbally agreed to the change order. At some point, Respondent did agree to pay the increased amount.
Complainant testified that the increased road closure cost was because Fountain Hills required that increase; Complainant also testified that the road closure fee was not a city fee.
On or about May 15, 2024, Complainant filed a Licensed Complaint Form with the Registrar, claiming Respondent had failed to pay five invoices, amounting to $41,125.46.
On June 27, 2024, the Registrar issued a Citation, alleging that Respondent violated Arizona Revised Statutes (A.R.S.) § 32-1154(A)(10).
Respondent filed a timely answer to the Citation on July 12, 2024.
On July 29, 2024, Respondent paid Complainant $24,850.00.
The matter was referred to the Office of Administrative Hearings for an administrative hearing. A hearing was held on September 9, 2024.
At hearing, Complainant presented the testimony of Larry Herrera. Respondent presented the testimony of Jill Pederson and Juan Fletes.
Complainant had some inconsistent testimony regarding the amounts due, but Complainant testified that Respondent should only have been charged for the days that Respondent worked, not for every day that the equipment was on site. Respondent believed that they would only be charged for days worked.
The evidence is inconclusive regarding the number of days Respondent worked at the project site. The preponderance of the evidence supports that work was only done on the project for 13 days, when police officers were on site.
The invoices have pervasive inaccuracies, and Complainant did not provide underlying documents to support the contested fees.
The Tribunal reviewed the invoices and removed charges for the days when Respondent did not work at the project site. The following is a summary of the invoices:
Invoice No. 00003572: 1/22/2024 to 2/4/2024
Respondent worked 0 days during this period.
Respondent owed 0 for rentals.
Respondent owed 0 for police officer and patrol car.
Respondent owed $240.00 for other one-time purchases.
Respondent owed $647.50 for trucks and labor, $647.50 of which was included in the scope of the contract but not quoted or included in a change order.
Invoice No. 00003604: 2/5/2024 to 2/11/2024.
Respondent worked 2 days during this period.
Respondent owed $1,523.20 for rentals, $123.20 of which was never quoted or included in a change order.
Respondent owed $1,472.50 for police officer and patrol car, $180.00 of which was never quoted or included in a change order.
Respondent owed $195.50 for other one-time purchases, $195.50 of which was never quoted or included in a change order.
Respondent owed $2,090.00 for trucks and labor, $2,090.00 of which was included in the scope of the contract but not quoted or included in a change order.
Invoice No. 00003642: 2/12/2024 to 2/18/2024.
Respondent worked 5 days during this period.
Respondent owed $3,762.10 for rentals, $369.25 of which was never quoted.
Respondent owed $5,925.00 for police officer and patrol car, $975.00 of which was never quoted or included in a change order.
Respondent owed $0 for other one-time purchases.
Respondent owed $1,320.00 for trucks and labor, $1,320.00 of which was included in the scope of the contract but not quoted or included in a change order.
Invoice No. 00003681: 2/19/2024 to 3/3/2024.
Respondent worked 3 days during this period.
Respondent owed $2,096.55 for rentals, $221.55 of which was never quoted.
Respondent owed $3,305.00 for police officer and patrol car, $555.00 of which was never quoted or included in a change order.
Respondent owed $0 for other one-time purchases.
Respondent owed $0 for trucks and labor.
Invoice No. 00003707: 3/4/2024 to 3/6/2024.
Respondent worked 3 days during this period.
Respondent owed $2,159.70 for rentals, $284.70 of which was never quoted.
Respondent owed $3,555.00 for police officer and patrol car, $585.00 of which was never quoted or included in a change order.
Respondent owed $178.50 for other one-time purchases, $178.50 of which was never quoted or included in a change order.
Respondent owed $2,675.00 for trucks and labor, $2,675.00 of which was included in the scope of the contract but not quoted or included in a change order.
The February 4, 2024, estimate did not accurately represent the cost of work. It failed to provide estimates for known costs such as delivery, set-up, tear down, and cost of rental police vehicle while implying that the quote included those costs. Complainant failed to provide change orders to reflect additional equipment that was required once the final plan was known.
Administrative notice was taken of Respondent’s prior License record on September 26, 2024. According to that record, Respondent’s License No. 269340 was active, and the above-entitled matter is the only complaint against the license.
CONCLUSIONS OF LAW
This matter lies within the Registrar’s jurisdiction.
Complainant bore the burden of proof to establish Respondent’s statutory violations by a preponderance of the evidence. Respondent bore the burden of proof to establish an affirmative defense 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,
[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.
Statutes should be interpreted to provide a fair and sensible result and “be liberally construed to effect their objects and to promote justice.”
Ambiguous contracts should be interpreted against the drafter.
For 10 days of work, Respondent agreed to pay $17,332.56 for (1) daily traffic control – road closure, (2) changeable message board, (3) traffic control plan – design/submittal, and (4) off duty police officer. Those costs were for the stated scope of work, which included delivery, setup, and tear down.
The contract stated that Respondent would only be “billed for actual days used.” The preponderance of the evidence established that “actual days used” meant the days that Respondent worked at the site.
The project took 13 days, but the invoices charged for more days than that. When adjusted for days worked, the invoices should have totaled $31,145.55.
The contract quoted that the police officer would cost $110.00 per hour. No change order was made to increase the hourly rate or notifying Respondent that it was required to rent a police vehicle. Accordingly, $2,295.00 was overcharged.
The contract stated that “additional devices will be charged separately.” Accordingly, the unquoted rental amounts were permissible.
The contract stated that “[c]hanges made outside the scope of work will require a change order and will be billed time & materials.” The contract does not address changes inside the scope of work. That does not mean that the contractor has free reign to charge for any potentially in-scope services without the need for change orders.
Change orders protect both parties to a contract. They ensure that the service-providing contractor has a record of work done and a documentary basis for payment; they also ensure that the service-receiving contractor consents to work being done and amount charged for the service. Material increases in work or costs without consent from both parties may not be enforceable or a basis for discipline. Accordingly, if a service-providing contractor knowingly failed to include material costs in an estimate or contract and failed to provide change orders to reflect such costs, the service-receiving contractor may not be responsible for those charges.
The contract stated that delivery, setup, and tear down were included in the scope of work. However, Complainant clearly failed to include that amount, $6,732.50, in the quote or to provide change orders. The contract would have been approximately 30% more if Complainant had included those costs.
The contract stated that “[i]nvoices will be based off the actual ticketed equipment and / or labor delivered to the job,” but the contract is ambiguous as to whether the delivery, setup, and tear down costs were included in the estimate or were to be a separate and unbid portion of the work. Due to that ambiguity, the cost of delivery, setup, and tear down are deemed included in the estimate and should not have been treated as a separate cost.
The preponderance of the evidence established that Respondent owed $22,118.05 and paid $24,850.00. Therefore, the preponderance of the evidence did not show that Respondent violated A.R.S. § 32-1154(A)(10) as alleged.
Therefore, the Administrative Law Judge did not find grounds to impose discipline against Respondent’s license.
RECOMMENDED ORDER
Based on the foregoing, it is recommended that on the effective date of the Registrar’s Order, Complainant’s complaint be closed.
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, September 30, 2024.
/s/ Samuel Fox
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
Canyon State Barricade Service LLC
[email redacted]
Chad Hester
Wallin Hester, P.C.
[email redacted]
By: OAH Staff