ALJDEC - Licensing
2024A-10723-NPC-ROC · Registrar of Contractors · 2025-03-03
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Walker Excavation LLC,
License No. ROC 336248
COMPLAINANT,
v.
Multi-Gen Development LLC,
License No. ROC 344827,
RESPONDENT.
No. 2024A-10723-NPC-ROC
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: February 10, 2025.
APPEARANCES:
For Complainant: Attorney Samuel Wang.
For Respondent: Attorney Lawrence Slater.
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 G. Respondent’s Exhibits A through E.
_____________________________________________________________________
FINDINGS OF FACT
Multi-Gen Development LLC (Respondent) was the holder of License No. 344827 issued by the Arizona Registrar of Contractors (Registrar) on May 5, 2025. Respondent was hired as a subcontractor by VKW Construction LLC (VKW) for the Ritz Carlton Casitas project (Project).
On or about January 16, 2024, Walker Excavation LLC (Complainant) entered into a contract with Respondent for, among other things, grading on the Project. Complainant and Respondent also entered at least one Change Order for additional work.
On or about September 19, 2024, Complainant filed a Non-Payment Complaint Form with the Registrar, claiming Respondent had failed to pay invoices for on-site grading, storm drains, and manhole adjustments, amounting to $127,595.00.
On or about September 25, 2025, the Registrar notified Respondent that it had received a complaint and the Complainant could raise issues and defenses by October 2, 2024.
On November 1, 2024, the Registrar issued a Citation, alleging that Respondent violated Arizona Revised Statutes (A.R.S.) § 32-1154 (A)(10). An answer was due by November 16, 2024. Respondent timely submitted an Answer on November 13, 2024, stating the work was not completed and that Respondent had already overpaid Complainant.
The matter was referred to the Office of Administrative Hearings for an administrative hearing. The Notice of Hearing was issued on November 26, 2024, setting the hearing for January 2, 2025, at 10:30 AM. On December 23, 2024, the parties agreed to a continuance, and the hearing was reset for February 10, 2025.
At hearing, Complainant presented the testimony of Marty Walker. Respondent presented the testimony of Ed McDonald and Kitty Harding.
Mr. Walker testified that Complainant submitted invoices after work was completed, and Complainant submitted invoices 1079, dated March 18, 2024, and 1080, dated March 20, 2024, after it completed the work identified in each invoice. Mr. Walker testified that some of the photographs in Exhibit D showed completed work that Complainant had done, specifically photographs 7 and 8 in the “Ritz Carlton - Daily Field Report” dated January 21, 2024. Mr. Walker testified that elevation markers were not required to finish the work that Complainant was doing. Mr. Walker testified that the payment application documents in Exhibit C, for the pay period of March 1, 2024, through March 31, 2024, further showed that Complainant completed their work. He also testified that after Respondent left the job around March 2024, Complainant directly contracted with VKW.
Ms. Harding testified about how the billing process worked. Respondent accepted representations from each of its subcontractors about the work that would be completed in that month and put those estimates on the application. Those amounts could be revised down based on work completed. She testified that Complainant’s invoices were revised down because the work was not completed. She testified that VKW did not pay the March application, which is subject to ongoing litigation. She testified that she believed Complainant’s bills were improper.
Mr. McDonald testified that the original payment application had an estimate of work that will be completed and that number was revised down based on what was actually completed. He testified that grade staking is necessary because that was the only way to confirm elevation changes in the grading; he testified that without staking, the project would be considered “at risk,” which was not in the contract. He testified that VKW acknowledged the adjustments for 88 of 166 storm drains and manhole covers, approximately 53%. He testified that the photographs in Complainant’s Exhibit D were from January and did not show completed grading work. He testified that Respondent left the job around March 1, 2024, but he could not recall the exact date.
In the original payment application by Respondent to VKW for work completed in March 2024, “APPLICATION NUMBER: 6,” the Storm Drain (line item 11) was shown at 100% completion and Site Grading (line item 20) was shown at 100% completion. The payment application was subsequently revised several times, at the request of VKW, to reflect work completed. Line items 11 and 20 were both revised down and, in the end, reflected that Storm Drains were 53% complete and Site Grading was 65% complete. Not all of the work reflected in those line items was done by Complainant; other contractors were also engaged to do some of that work. VKW did not pay any of the amounts requested under APPLICATION NUMBER 6 and its revised versions. In the payment application by Respondent to VKW for work completed in February 2024, “APPLICATION NUMBER 5,” the Storm Drain (line item 11) was shown at 40% completion and the Site Grading (line item 20) was shown at 65% completion.
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.”
The evidence on record may be given more or less weight toward establishing a preponderance depending on the indicia of credibility associated with that evidence and its source. Misrepresenting information may result in a source of information being deemed less credible, to varying degrees depending upon the misrepresentation.
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.”
The purpose of the ROC’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.
It is an affirmative defense for a Respondent to demonstrate both (1) that it lacks the capacity to pay for work completed by Complainant and (2) that it has not received sufficient payment for the particular construction work performed.
Respondent did not demonstrate by a preponderance of the evidence that it lacked the capacity to pay for work completed.
The preponderance of the evidence demonstrated that work was done at Project in March 2024; it is plausible that Complainant nearly completed nearly 100% of its work. However, the parties disagreed about what work was completed and whether it was completed appropriately. Mr. Walker, Complainant’s primary witness, incorrectly testified that photographs in Complainant’s Exhibit D showed relevant completed work; however, those photographs were taken on or before January 31, 2024, and Complainant’s claims derived from work allegedly completed in March 2024. The Tribunal does not find Mr. Walker’s testimony lacked credibility in its entirety, but the misrepresentation seemed intentional, reducing the value of Mr. Walker’s testimony.
The preponderance of the evidence did not establish how much of the Site Grading work was completed, and therefore, did not establish how much was “due” under the contract. The preponderance of the evidence supports that Complainant completed Site Grading work for which it was not paid, but no specific amount was proven by the necessary burden.
The preponderance of the evidence established that 53% (88 of 166) of the Storm Drain adjustment work was completed and was due under the contract. While it is probable that more is due, a specific amount was not proven by the necessary burden. Neither party provided a copy of the change order for the storm drain and manhole cover adjustment work, so a specific dollar amount could not be identified.
The preponderance of the evidence did show that Respondent violated A.R.S. § 32-1154(A)(10).
RECOMMENDED ORDER
Based on the foregoing, it is recommended that Complainant be required to provide an executed copy of the Change Order reflecting the adjustment of storm drains and manhole covers within 30 days of receipt of this Order.
It is then recommended that once the executed Change Order is received, Respondent be given 30 days to pay 53% of the value of the Change Order. If Respondent fails to do so, it is recommended that the Registrar suspend Respondent’s License Number 344827 until it has provided to the Registrar, and the Registrar has accepted, documents that establish that Respondent has paid Complainant 53% of the value of the Change Order in certified funds.
It is further recommended that when and if the Registrar receives and accepts Respondent’s evidence that it has paid Complainant, the Registrar close the Complaint.
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, March 3, 2025.
/s/ Samuel Fox
Administrative Law Judge
Transmitted by either mail, e-mail, or facsimile to:
Tom Cole, Director
Registrar of Contractors
Samuel Wang, Esq.
Law Offices of Samuel Wang, PLLC
[email redacted]
Lawrence B. Slater, Esq.
Slater & Associates
[email redacted]
By: OAH Staff