ALJDEC - Licensing

2024A-11101-NPC-ROC · Registrar of Contractors · 2025-02-05

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

ARC Coatings Inc.

COMPLAINANT,

v.

McAllister Company

License No. ROC 336264,

RESPONDENT.

No. 2024A-11101-NPC-ROC

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 16, 2025

APPEARANCES: Brian Burk appeared on behalf of ARC Coatings, Inc. (hereinafter “Complainant”). Lawrence Felder, Esq. appeared on behalf of McAllister Company (hereinafter “Respondent”).

ADMINISTRATIVE LAW JUDGE: Velva Moses-Thompson

EXHIBITS ADMITTED INTO EVIDENCE: Complainant’s Exhibits ARC-1 through ARC-31. Respondent’s Exhibit A (the Registrar’s administrative record: 105 pages).

_____________________________________________________________________

FINDINGS OF FACT

1. Complainant agreed to perform remodeling work in a house and garage owned by Respondent, for the amount of $23,445.00. See Respondent’s Exhibit A, pgs. 14-15.

2. The invoice for the work provided as follows:

Hybrid Epoxy flooring for to include. Diamond grind all area’s, patch flooring as needed. Prime flor using epoxy primer with 9 Psi, apply FB-4104 Turquoise Hybrid flakes followed by 2 coats of Polyaspartic topcoat

$10,150

Grind and seal along with filling in designed saw cuts. Clean saw cuts and fill using patching tbd. Grind floor and apply 2 or 3 coats of waterbased urethane low sheen. This would include all interior floors

Rate $12,680

Stem wall coating cut off end of floor felt and caulk between wall and floor 9 cartridges of poly caulking and 3.5 hours of labor

Rate $615

Errors in original.

3. Brian Burk owns Complainant.

4. Mike McAllister owns Respondent.

5. On August 14, 2024, Complainant started work.

6. Respondent paid Complainant a deposit in the amount of $6,849.00 pursuant to their agreement.

7. On or about August 24, 2024, Complainant stopped work.

8. On August 24, 2024, Mr. McAllister gave Mr. Burk a check in the amount of $16,596.00 after Complainant performed grinding sealant work to the floors.

9. Approximately two days later, Mr. McAllister stopped payment on the check.

10. On September 2, 2024, Mr. McAllister notified Mr. Burk by text messages of the following problems with the floor:

Uneven grinding between the edge of the floor and the field

Swirling patterns and tool marks

A border of about 6-8 inches out runs around the walls

Underfilled caulking

11. Complainant performed corrective work on September 2, 2024 and sent photographs of the work to Mr. McAllister. However, the photographs showed that the floor was uneven and a chunk of filler was missing from the cracks.

12. Mr. Burk responded by text message the same day, “the caulking is as good as it will get, it [sic] a two part that moves with the floor.”

13. Mr. McAllister disputed that the floor was moving.

14. On or about September 27, 2024, Complainant filed a complaint with the Registrar of Contractors (hereinafter “Registrar”) alleging that Respondent failed to pay for labor and materials provided by Complainant when payment became due.

15. On November 6, 2024, the Registrar issued a Citation against Respondent license alleging that Respondent violated Arizona Revised Statutes (A.R.S.) 32-1154(A)(10).

16. Respondent filed a timely answer to the Citation.

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

18. A hearing was held on January 16, 2025.

19. At hearing, Mr. Burk testified on behalf of Complainant. Mr. McAllister testified on behalf of Respondent.

Testimony of Mike McAllister

20. On August 24, 2024, Mike McAllister observed deficiencies in the floors after they were completed by Respondent. Mr. McAllister told Mr. Burk about those deficiencies. However, Mr. Burk told Mr. McAllister that the floors would look better the next day. Mr. McAllister wrote a check to Mr. Burk in the amount of $16,596.00.

21. On August 25, 2024, Mr. McAllister observed the floor and noticed that the deficiencies were still present. Mr. McAllister observed dryrolling, missing caulking, the corners that were not grinded. Mr. McAlllister observed that the garage was overfilled with clear coat, bubbles were in the floor, chips had been piled up around the edges that had been swept and clear coated over throughout the garage. Mr. McAllister relayed his concerns about the floor to Mr. Burk the same day. Mr. McAllister stated that Mr. Burk told him that he would not be able to return for three weeks, but he would send Caesar to review the floor.

22. The following day, Caesar came to Respondent’s property to review the floor. Mr. McAllister stated that Caesar told him that he was present to apply another coating of sealant. Mr. McAllister alleged that after Caesar walked the floor and thereafter concluded that the deficinces could not be corrected with an additional coating.

Testimony of Brian Burk

23. Mr. Burk denied that he told Mr. McAllister that he would not return for three weeks. Mr. Burk contended that he contracted with Respondent to apply a thin-filmed product. Mr. Burk stated that Respondent’s floor was not “high-end.” Mr. Burk stated that once the sealant is applied, it shows all deficiencies in the floor.

CONCLUSIONS OF LAW

A party asserting a claim, right, or entitlement bears the burden of proof; a party asserting an affirmative defense has the burden of establishing the affirmative defense. The standard of proof on all issues in this matter is that of a preponderance of the evidence. A.A.C. R2-19-119.

“At a hearing on an agency action to suspend, revoke, terminate or modify on its own initiative material conditions of a license or permit, the agency has the burden of persuasion.” A.R.S. § 41-1092.07(G)(2).

A preponderance of the evidence is:

The greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.

Black’s Law Dictionary 1373 (10th ed. 2014).

Statutes should be interpreted to provide a fair and sensible result. Gutierrez v. Industrial Commission of Arizona, 226 Ariz. 395, 249 P.3d 1095 (2011)(citation omitted); State v. McFall, 103 Ariz. 234, 238, 439 P.2d 805, 809 (1968) ("Courts will not place an absurd and unreasonable construction on statutes.").

“Statutes shall be liberally construed to effect their objects and to promote justice.” A.R.S. § 1-211(B).

The purpose of the Registrar’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995).

A.R.S. § 32-1154(A) provides that:

The holder of a license or any person listed on a license pursuant to this chapter shall not commit any of the following acts or omissions: .... 10. Failure by a licensee or agent or official of a licensee to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee's operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

8. 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 . . . to pay monies in excess of seven hundred fifty dollars when due for materials or services rendered in connection with the licensee’s operations as a contractor when the licensee has the capacity to pay or, if the licensee lacks the capacity to pay, when the licensee has received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.”

9. Payment for “[s]ervices rendered in connection with the licensee’s operations as a contractor” does not include interest, finance charges, lien charges, or other charges that are based solely on contract terms.

10. Complainant has failed to establish by a preponderance of the evidence that payment in the amount of $16,596.00 became due. It is undisputed that Complainant grinded some of the floor and applied a sealant. However, the testimonial and photographic evidence presented at hearing shows that the construction had many deficiencies including, but not limited to missing caulking, dry rolling, and portions of the floor that were not grinded. Respondent has met its burden of establishing the affirmative defense that that payment in the $16,596.00 was not due as the result of the deficiencies in the floor.

11. Complainant has failed to establish that $16,596.00 became due as alleged in the complaint. Therefore, the preponderance of the evidence does not show that Respondent violated A.R.S. § 32-1154(A)(10) as alleged.

ORDER

IT IS ORDERED that the Citation and Complaint in Case No. 2024A-11101 is dismissed.

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, February 5, 2025.

/s/ Velva Moses-Thompson

Administrative Law Judge

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

Tom Cole, Director

Registrar of Contractors

ARC Coatings Inc.

[email redacted]

Lawrence Felder, Esq.

[email redacted]

McAllister Company

[email redacted]

By: OAH Staff