ALJDEC - Licensing

2024A-09907-NPC-ROC · Registrar of Contractors · 2024-12-30

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Ligon Excavation Inc.,

COMPLAINANT,

v.

NRG Building Specialists LLC

License No. ROC 274856,

RESPONDENT.

No. 2024A-09907-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: December 10, 2024.

APPEARANCES:

For Complainant: Ann Harkness and Terry Ligon.

For Respondent: Kris Husa.

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.

_____________________________________________________________________

FINDINGS OF FACT

NRG Building Specialists LLC (Respondent) was the holder of License No. 274856, issued by the Arizona Registrar of Contractors (Registrar) on September 19, 2011.

On or about November 16, 2022, Respondent entered a contract with Ligon Excavation Inc. (Complainant) for over $60,000. The scope of work was described in minimal detail as a list of items, including “final grade w/ retention + swales to subgrade.” The contract price excluded “Solid Rock Excavation, taxes, survey, testing costs, export or import other than specified up above, water supply (spigot to be on job), utilities past the property line.” It also required changes orders: “Any alteration or deviation from above specifications involving extra costs will be executed only upon written order, and will become an extra charge over and above the estimate.”

The contract used by the parties was Ligon Excavation, Inc.’s.

On or about August 28, 2024, Complainant filed a Licensed Complaint Form with the Registrar, claiming Respondent had failed to pay three invoices, amounting to $4,539.67.

On September 12, 2024, the Registrar notified Respondent of the complaint.

Respondent filed a timely answer to the Citation on September 10, 2024.

A Citation, alleging that Respondent violated Arizona Revised Statutes (A.R.S.) § 32-1154(A)(10), was issued on September 19, 2024.

The parties had a settlement conference on October 7, 2024, which did not resolve the matter.

The matter was referred to the Office of Administrative Hearings for an administrative hearing.

A hearing was held on December 10, 2024.

The parties informed the Tribunal at hearing that Respondent paid Complainant $980, addressing invoice number 8574. Therefore, $3559.67 remained due: $2,979.67 from invoice number 1105, dated April 8, 2024, and $580.00 from invoice number 1204, dated April 9, 2024.

It was undisputed that there were no change orders.

At hearing, Complainant presented the testimony of Ann Harkness. Respondent presented the testimony of Kris Husa.

Ms. Harkness testified that all of the charges at issue were for removing and disposing of materials from the worksite, including materials outside of Complainant’s scope of work, such as stucco, broken up concrete, and other random building materials. She referred the Tribunal to the agreement, which excluded “export or import other than specified up above.”

Mr. Husa did not disagree that export was excluded, but he stated that when the work at issue was being done, the job had already been completed and he was not able to pass the costs on to the homeowner. Mr. Husa testified that the amounts being charged were caused by Complainant’s mistake. He stated that Complainant did not complete their work properly the first time, forgetting to complete a portion of the final grade. Complainant had to return after the project failed inspection, incurring additional costs, for which he did not believe he should be responsible.

Mr. Husa also argued that there were no change orders. Ms. Harkness testified that Complainant and Respondent had worked together for 15 years without change orders, instead relying on text messages and phone calls.

At hearing, Ms. Harkness mentioned providing bills and other information to demonstrate the costs incurred. She did not request an extension of time to provide additional information, and as stated in the Notice of Hearing,

At least seven calendar days before the hearing, each party must prepare and serve a disclosure statement on all other parties, and file it with the Office of Administrative Hearings. A.A.C. R4-9-118; A.A.C. R2-19-108. The disclosure statement must include any exhibit the party will use at the hearing. A party’s failure to timely disclose any witness or exhibit, without good cause, may result in the administrative law judge excluding those witnesses or exhibits from being used at the hearing. A.A.C. R4-9-118(C).

Administrative notice was taken of Respondent’s prior License record on December 16, 2024. According to that record, Respondent’s License No. 274856 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.”

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.

The preponderance of the evidence established that there were no change orders for exporting materials outside of the designated scope of work.

The preponderance of the evidence failed to establish that Respondent agreed to have Complainant remove materials from the work site outside of Complainant’s scope of work.

The preponderance of the evidence established that Respondent owed Complainant an indeterminable amount for export of materials within Complainant’s scope of work. However, the preponderance of the evidence failed to establish a specific amount because Complainant hauled materials off the worksite that were not part of its scope of work, such as stucco debris.

Accordingly, 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, December 30, 2024.

/s/ Samuel Fox

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

NRG Building Specialists LLC

[email redacted]

Ligon Excavation Inc.

[email redacted]

By: OAH Staff