ALJDEC - Licensing

2024A-06951-NPC-ROC · Registrar of Contractors · 2024-10-22

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Three Little Angels Inc.,

DBA: Above the Rim Plumbing & Repair,

COMPLAINANT,

v.

Freedom Construction & Design, LLC

License No. ROC 333418,

RESPONDENT

No. 2024A-06951-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: October 2, 2024.

APPEARANCES:

For Complainant: Patrick Vinson and Tyler Stoppe.

For Respondent: Attorney Megan Schandle.

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 to F. Respondent’s Disclosure Statement Exhibits.

_____________________________________________________________________

FINDINGS OF FACT

Freedom Construction & Design, LLC, (Respondent) was the holder of License No. 333418, issued by the Arizona Registrar of Contractors (Registrar) on May 19, 2021.

Respondent entered into agreements with Three Little Angels Inc. (Complainant) for several projects, including the projects at issue in this matter: Stockmens (also known as Albright), Northstar, and Gagliardi.

It was undisputed that Complainant did not complete the full scope of work on all three projects; although, the Parties disagreed about how much work was incomplete and whether it mattered.

On or about June 17, 2024, Complainant filed a Non-Payment Complaint Form with the Registrar, claiming Respondent had failed to pay three invoices, amounting to $9,082.00 for Northstar, $4,500.00 on Stockmens, and 5,450.00 on Gagliardi.

Respondent submitted a Response to the Complaint on June 26, 2024.

On July 30, 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 August 13, 2024.

The matter was referred to the Office of Administrative Hearings for an administrative hearing. A hearing was held on October 2, 2024.

At hearing, Complainant presented the testimony of Tyler Stoppe and Patrick Vinson. Respondent presented the testimony of Melissa Obermeyer and Tom Welch.

The parties did not enter into written contracts for any of the jobs. Accordingly, the Parties did not agree to payment schedules, payment for partial work, or other arrangements to dictate unwinding of their business relationship on any of the projects.

Complainant testified that Respondent stopped timely paying their bills, so Complainant stopped working on the projects. Respondent testified that it timely paid its bills, but money was not yet due to Complainant on the bills at issue in this matter. Complainant stated that Respondent was having financial trouble, and Respondent denied that allegation.

Respondent and Complainant testified that Complainant did a significant amount of work on each project at issue, but Complainant did not complete the projects.

Complainant testified that the discounts offered to Respondent, and included in the complaint, were fair discounts, reflecting the work it did not complete on each project. However, Respondent demonstrated that more work was left incomplete than Complainant was aware of, and when asked if the discount was still fair, Complainant said it was still fair.

Respondent testified that Complaint’s work was poor.

The proposals in Complainant’s Exhibit A provided descriptions of the work to be completed and prices for that work. They did not include any other contractual provisions or details.

Administrative notice was taken of Respondent’s prior License record on October 17, 2024. According to that record, Respondent’s License No. 333418 was active, and Respondent’s license had two open cases and two resolved/settled cases.

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.”

Written contracts protect all parties to an agreement, and for contractors, they ensure that each contractor has a record of work to be done and a documentary basis for payment. Although written contracts are not required to engage in contracting, agreements without one surrender control of the agreement’s details to third-parties, such as this Tribunal, which will not impose obligations without a legal basis for doing so. Obligations such as payment schedules, partial payment requirements, or late fees cannot be unilaterally imposed after a disagreement occurs.

The preponderance of the evidence does not establish a legal basis for payment on an abandoned project. The proposals are not for hourly work or for completion of work phases, they provide an amount due for a specific and detailed scope of work.

This Tribunal is not a court of equity, and this matter is only a licensing discipline action. The Tribunal must look at what money was due under the contract.

The preponderance of the evidence failed to establish that Respondent owed Complainant money on the projects in violation of A.R.S. § 32-1154(A)(10) because Complainant failed to establish that payment was due under the contract for abandoned work.

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, October 22, 2024.

/s/ Samuel Fox

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

Megan N. Schandle, Esq.

[email redacted]

Three Little Angels Inc.

[email redacted]

By: OAH Staff