ALJDEC - Licensing

2024A-06025-NPC-ROC · Registrar of Contractors · 2024-09-23

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

CMTZ Construction, LLC,

COMPLAINANT,

v.

Legacy Construction and Consulting, LLC

License No. ROC 296890,

RESPONDENT.

No. 2024A-06025-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: September 6, 2024

APPEARANCES: Carlos Martinez appeared on behalf of Complainant CMTZ Construction, LLC. Morgan Seegmiller, Esq. represented Respondent Legacy Construction and Consulting, LLC. William Keshishi was also present on behalf of Respondent Legacy Construction and Consulting, LLC.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

EXHIBITS ADMITTED INTO EVIDENCE: None; Administrative Notice taken of Agency Record

FINDINGS OF FACT

Legacy Construction and Consulting, LLC (“Respondent”) is the holder of License Number 296890, issued by the Arizona Registrar of Contractors (“Registrar”). William Keshishi is Respondent’s owner and Qualifying Party. Mr. Keshishi is also the owner of Express Truss. Caleb Riley is a partner in Express Trust.

In May 2024, CMTZ Construction, LLC (“Complainant”) filed a Complaint against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the sum of $73,462.50 for framing work performed by Complainant.

The parties were unable to resolve their differences.

On June 24, 2024, 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. The Registrar forwarded the matter to the Office of Administrative Hearings, an independent State agency, to conduct an evidentiary hearing.

In September 2022, Respondent contracted with Complainant for Complainant to perform the framing for the Century Complete Project that encompassed multiple housing developments. The contract was a form contract generated by Respondent and signed by Mr. Riley on Respondent’s behalf.

Express Truss manufactured the trusses and wall panels that were used in the framing performed by Complainant.

Carlos Martinez, owner of Complainant, testified that he framed approximately sixty homes for Respondent pursuant to their contract, Respondent has paid Complainant $323,240.75 over the course of the contract, and that all payments have been made through Express Truss. Mr. Martinez testified that the majority of his dealings were with Mr. Riley, as Mr. Keshishi had instructed him to send all email correspondence and invoices to Mr. Riley. Mr. Martinez further testified that he negotiated the terms of his contract with Mr. Keshishi while Mr. Riley was present at Respondent’s office.

Regarding the unpaid invoices, Mr. Martinez credibly testified that Complainant performed the framing work for which Complainant invoiced Respondent, specifically for the Chaparral jobsite. Complainant sent Respondent three invoices as follows:

Invoice: 1214

Date: 1/6/2023

Total Amount: $ 38,304.00

Invoice: 1215

Date: 1/18/2023

Total Amount: $ 17,128.50

Invoice: 1221

Date: 2/13/2023

Total Amount: $ 18,030.00

Mr. Martinez testified that he sent the invoices to Mr. Riley, as was the customary practice, and none have been paid. Mr. Martinez testified that he was told by Mr. Riley that all of the homes for which he invoiced are completed and have been sold.

Mr. Martinez testified that he questioned Respondent regarding the lack of payment and that Mr. Keshishi asked Mr. Martinez to “give me a couple of weeks” and because of their working history, he gave Respondent “the benefit of the doubt.”

Mr. Martinez acknowledged that he “has no idea if [Respondent] has been paid by the owner of the project.” However, Mr. Martinez testified that Respondent is currently constructing four houses in Eloy, that they are almost complete, and that all are for sale.

Mr. Keshishi testified that he owns both Respondent and Express Truss and that Mr. Riley was a partner in Express Truss. Century Complete Homes, the developer of the project, contracted with Express Truss to build the trusses and wall panels. Mr. Keshishi asserted that Respondent was “not involved in the project” and that Express Truss hired Complainant to install the wall panels and trusses. Mr. Keshishi testified that Century Complete Homes ordered the wall panels and trusses for forty homes. However, when the interest rates increased, it reduced the prices of the homes, resulting in Century Complete Homes being unable to pay Express Truss for the materials. Mr. Keshishi testified that all of the trusses and wall panels that had been built “were dumped in the desert in Eloy” and they cannot be sold because they were made for certain home models.

Mr. Keshishi testified that the lumber and nail suppliers have begun to sue him, that he is over $1 million in debt, Express Truss is no longer in business, Mr. Riley left town, and he is dealing with the lawsuits.

Mr. Keshishi acknowledged that Complainant performed the work, however, he testified that he was unaware of the contract between Respondent and Complainant. Mr. Keshishi testified that Respondent has no assets and is also being sued. Mr. Keshishi asserted that he would have paid Complainant if Century Complete Homes had paid him.

Respondent did not submit any documentary evidence establishing that it lacks the capacity to pay Complainant and that it has not received sufficient monies from the owner of the project.

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.

Respondent’s arguments were twofold: i) Respondent was not aware of the contract executed with Complainant; and ii) Respondent was not paid by the developer/owner of the project and lacks the capacity to pay Complainant. The Administrative Law Judge finds both arguments unpersuasive.

Respondent’s business partner and the individual with whom he instructed Mr. Martinez to communicate executed the contract on Respondent’s contract documents. Further, Mr. Keshishi acknowledged the work was performed and that his other business entity, the truss and wall panel manufacturer, issued payments to complainant throughout the course of the contract performance. Further, the two entities owned by Mr. Keshishi, Respondent and Express Truss, were intertwined as Express Truss issued all payments on Respondent’s behalf. Therefore, the Administrative Law Judge concludes that Mr. Keshishi’s testimony in this regard was disingenuous.

Respondent argued that it lacks the capacity to pay Complainant and it was not paid by the owner of the project. Respondent failed to present any credible evidence to prove that it lacks the capacity to pay and has not received sufficient monies as payment for the project. Respondent did not present any documentary evidence establishing that it filed bankruptcy, or other pending lawsuits against Respondent, or any documentary evidence establishing that Century Complete Homes did not pay Respondent. Mr. Keshishi’s testimony in this regard was self-serving and Respondent, as the licensee, failed to produce any corroborating evidence to establish an inability to pay Complainant.

The Administrative Law Judge concludes, based upon the credible evidence presented at hearing, that Respondent owes Complainant a total of $73,462.50 for the framing work performed by Complainant.

Respondent failed to establish by a preponderance of the evidence that it lacked the ability to pay Complainant for the work Complainant performed or had not received sufficient monies as payment for the project at issue to pay Complainant.

Therefore, Complainant established that Respondent violated A.R.S. § 32-1154(A)(10) by failing to pay Complainant $73,462.50 for services rendered in connection with Respondent’s contracting business.

Based upon Respondent’s violation of the provisions of A.R.S. § 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 Respondent’s License Number 296890 issued by the Registrar until it has provided to the Registrar, and the Registrar has accepted, documents that establish that it has paid Complainant $73,462.50 in certified funds.

It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant $73,462.50 in certified funds, the Registrar may close the Complaint in Case Number 2024-06025.

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 23, 2024.

/s/ Sondra J. Vanella

Administrative Law Judge

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

Tom Cole

Registrar of Contractors

c/o Legal Department

[email redacted]

Legacy Construction and Consulting, LLC

[email redacted]

CMTZ Construction, LLC

[email redacted]

By: OAH Staff